MPs warn against privatisation
Green Investment Bank sale likely to tempt overseas investors
The Green Investment Bank could be acquired by Middle Eastern or Chinese investors as a committee of MPs say privatisation should not go ahead.
Business minister Sajid Javid (pictured) wants to see the Edinburgh and London based bank transfer to the private sector and it is expected to form part of a sale of public assets as Chancellor George Osborne seeks to reduce the public deficit.
Advisers from Bank of America Merrill Lynch have been working with Whitehall officials to offload a stake in the Bank, which has backed £2.3 billion in 60 big infrastructure schemes worth £10bn since its launch in 2012.
It launched a £1 billion bond earlier this year and the government wants to free it up to borrow money in order to invest in more projects.
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 initial external finance raised by the GIB towards the bond.
Chinese investors are also making their first forays into backing UK renewables assets. They backed a big UK wind turbine project and supported a scheme backed by property agent Savills.
Mr Javid first indicated a desire to privatise the bank in June but this weekend a committee of MPs has warned that a sale could threaten the bank’s purpose.
The Environmental Audit Committee now says privatisation could encourage the bank to shift its focus towards more conventional projects and away from more complex schemes which struggle to raise funding elsewhere.
It said if the government could not guarantee the bank’s green purposes it should not be privatised.
Committee chairman Huw Irranca-Davies said: “The Green Investment Bank has done a great job of getting capital flowing to the kind of innovative green projects that sometimes struggle to secure financial backing.
“The decision to privatise the bank appears rushed and ministers have not produced convincing evidence that it will achieve its aims better in the private sector.”
A spokesman from the Department for Business, Innovation and Skills said: “We have always been clear that GIB was designed with a view to a possible transfer to the private sector.
“Having already proved itself, the time is right to move it into private ownership where it can raise capital, grow and boost investment in the green economy while minimising the need for taxpayer support.
“We will look carefully at the committee’s recommendations and respond in due course.”