Minister confirms sale
Macquarie in £2.3bn deal for Green Investment Bank
The Green Investment Bank is to be sold in a £2.3 billion deal to a consortium led by Australian investment bank Macquarie.
Nick Hurd, the UK Climate Minister, confirmed the deal on Thursday morning.
The sale of the Edinburgh and London based bank, chaired by Lord Smith (pictured), is bound to prompt more criticism from opposition parties who believe it should remain in public hands and that the taxpayer is being denied the prospect of higher returns on its assets in the future.
Former ministers including Lord Barker and Vince Cable are among those who have spoken out against the sale.
There have been concerns that Macquarie wants to asset strip the bank which has invested billions in more than 85 renewables infrastructure projects since its launch in 2012. It has provided support for major developments from wind farms to biomass plants to ensure they got off the ground.
Mr Hurd argued that the taxpayer should no longer fund the bank and that safeguards have been put in place to protect its green credentials. Its new owner has said the bank will retain both offices.
Macquarie is understood to have put up £1.7bn to buy the bank, with a further £600m coming in part from the UK’s Universities Superannuation Scheme.
Lord Smith of Kelvin defended the sale process. He said: “The GIB 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.
“The UK Government has run the GIB sale process and has now reached a final decision on its outcome. The GIB Board has provided its views to Ministers at key stages.
“Those views related to the future prospects of GIB, its continuing growth and its leadership role in green investment. GIB is a highly valued institution and commitments over its future are important to its many stakeholders.
“Macquarie has made significant and important commitments to the UK Government to maintain GIB as a discrete entity within its business, maintaining GIB’s investment focus and approach with a target to invest more capital each year than GIB has historically.
“Macquarie will also uphold GIB’s green investment principles and report transparently on GIB’s green impact. Macquarie will utilise the market-leading expertise of the existing GIB team and will build on GIB’s deep commitment to Edinburgh.
“On the basis of these commitments, 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.
“In addition, the involvement of USS and MEIF 5 as new investors in GIB’s assets is positive; these types of institutions are well-suited to the long-term ownership of large-scale green infrastructure assets. This approach mirrors GIB’s recent success in raising a £1bn offshore wind fund and selling three GIB assets to that fund.
“In the four years since its inception GIB has become an important business in, and for, the UK. It is widely admired, across the world, as a stand-out success story and has provided a model of good policy that other countries are now following.
“GIB in private ownership can, and should, continue to play an important leadership role in supporting the global low carbon transition and the UK Government’s ambitious plans for a strengthened industrial strategy and emissions reduction.”
The Scottish Government welcomed commitments to retain the bank in Edinburgh.
The UK Government announced plans to privatise the Bank in 2015, a decision that wasn’t favoured by the Scottish Government.
The Macquarie Group has pledged to strengthen its commitment to Scotland by providing important new opportunities for the country’s low carbon industries and financial sector. Ministers have pledged to hold the company to account to ensure it delivers on its commitment.
Economy Secretary Keith Brown (right) said: “I welcome the Macquarie Group’s clear commitment to Scotland and the assurances we have received that it will maintain the Green Investment Bank’s unique identity and its focus on the green projects that are key to Scotland’s continued economic success.
“This announcement is testament to the talent and opportunity to be found here and I look forward to working with the Macquarie Group to ensure its ambitious plans for Scotland are realised.
““The Macquarie Group has indicated that staffing levels at the Green Investment Bank’s Edinburgh offices will be maintained and are likely to increase overall in the longer term. We will follow developments closely in the months and years ahead.”
Niall Stuart, Chief Executive of Scottish Renewables, said: “The Green Investment Bank has played a key role in securing investment for renewable energy, particularly in offshore wind where we needed to bring in significant levels of capital in a short space of time.
“We welcome Macquarie’s commitment to build upon the Bank’s achievements to date and to maintain its focus on the huge opportunities for further investment in the UK’s low-carbon energy infrastructure.”
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