Renewables part of privatisation plan
Government poised to sell shares in Green Investment Bank
Chinese and Middle Eastern investors are expected to be attracted to the sale which forms part of the the Conservative government’s privatisation plan, a key element in rebalancing the public finances.
Daily Business revealed in April that the Abu Dhabi Investment Authority, owned by the Emirate of Abu Dhabi, provided almost a third, or £150 million, of the external finance so far raised by the GIB towards a £1 billion pot for the world’s first dedicated offshore wind fund.
It was also revealed in Daily Business last week that wealthy Chinese investors are beginning to pour money into UK renewables projects. Advisory firm, China ZhuangHe Investments is putting its clients funds into turbines designed by Orenda Energy Solutions.
Advisers from Bank of America Merrill Lynch are now said to be working with Whitehall officials to sell a stake in the Green Investment Bank, which has backed a number of big infrastructure schemes since its launch in 2012.
George Osborne is expected to confirm the plan to introduce private investors to the bank in his Summer Budget on 8 July.
Sajid Javid, the Business Secretary (pictured), will attend a GIB event this week where he will speak alongside Lord Smith of Kelvin, its chairman, and Shaun Kingsbury, chief executive.
Offloading shares in the GIB will coincide with similar privatisation programmes for Lloyds Banking Group and Royal Bank of Scotland, as well as the remaining 15% shareholding in Royal Mail. Unlike these sales, it is thought shares in the GIB will be offered directly to institutions.
Former Business Secretary Vince Cable said before the election that a range of options were under consideration for bringing private capital into the Green Investment Bank, and to give it greater operational freedom and enable it to borrow in capital markets.
Plans to sell shares in the bank comes only days after the UK Government controversially announced that it would subsidies for onshore wind projects a year earlier than planned.
It was launched with £3.8bn of taxpayer funds and has so far committed more than £2bn to 50 projects which include a number of giant wind farms.