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GIB sale to Macquarie confirmed

The £2.3bn sale of the Green Investment Bank (GIB) to Australian investment group Macquarie has been announced by the Government. 

GIB

GIB

The controversial move – criticised by opponents for undermining the bank’s original ‘green’ credentials – is said to meet Government objectives of securing value for money while “ensuring its green mission, free from the constraints of public sector ownership”.

The Government has created a ‘special share’ which it said would preserve the bank’s environmental direction.

In January, Mary Creagh, chair of the Environmental Audit Committee (EAC), wrote to Nick Hurd, minister at the Department for Business, Energy and Industrial Strategy (pictured), urging him to appear before MPs. He declined.

Announcing the sale, Hurd said: “The GIB has been a real success story since it was created in 2012 – the world’s first dedicated green investment bank, established to accelerate private sector investment into the UK green economy.

“It has fulfilled that mission, supporting almost 100 green infrastructure projects in the UK so far, and attracting £3 of third party funding for every £1 it invests.

“It has shown, as it set out to do, that green investment can be both green and profitable. Having demonstrated its success, the Government decided to move the bank into the private sector where it can continue its success on an even greater scale.”

In a statement, the EAC said: “The GIB is a unique institution and the largest green energy investor in Europe. The Government has decided to sell it without transparency or consideration of the alternatives. Macquarie executives and ministers need to give concrete guarantees about the bank’s future and the capital investments it will make.”

Lord Smith of Kelvin, independent chair of GIB, said: “The board supported the decision to privatise GIB as it believed that attracting new investors was the best available route to securing the long-term future of the business and its growing green impact.

“We believe Macquarie can be a good owner of GIB and we support the Government’s decision to sell GIB to Macquarie. We look forward to seeing these commitments from Macquarie delivered, in full, in the months and years ahead.”

The GIB will become the primary vehicle for Macquarie’s renewable energy investment in the UK and Europe. The Government will continue to hold a £130m portfolio of existing smaller GIB investments which will eventually be sold on.

Daniel Wong, head of Macquarie Capital Europe, said: “The GIB is a pioneering business with outstanding people, expertise, credentials, brand and networks. By combining the GIB with the largest infrastructure investor in the world, we will create a market-leading platform dedicated to investment in the low-carbon economy in the UK and beyond.

”We understand the responsibilities that come with this ownership, and we are fully committed to maintaining its green purpose as we grow the business.”

The transaction is expected to be completed in the first half of 2017 subject to regulatory approvals.

Special Share

The trustees (designate) of the Green Purposes Company (GPC) said: ”GPC has been established to hold a ‘special share’ that safeguards the green mission of GIB once it moves from UK government ownership to private ownership. The trustees will formally take up their role as trustees of GPC upon completion of the sale. The trustees look forward to working constructively with Macquarie to ensure that GIB continues to play a leading role in supporting green investment. We expect GIB to continue to act both in compliance with, and in the spirit of its green objectives.”

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