BY KATIE - MYGREENPOD, 20 April '17

Australian investment bank Macquarie to buy Green Investment Bank for £2.3 billion

The Green Investment Bank (GIB) has been sold to Macquarie Group Limited (Macquarie) in a £2.3 billion deal confirmed today (20 April) by Climate Change and Industry Minister Nick Hurd.

‘Best of both worlds’?

Created in 2012, the GIB is the first bank of its kind in the world. It was set up by the UK government and capitalised with public funds, used to back green projects ranging from offshore wind farms and hydropower projects to LED street lights and new boiler systems for sheltered housing.

The GIB has backed 99 green infrastructure projects, committing £3.4bn to the UK’s green economy into transactions worth £12bn.

According to the government, the sale means all taxpayer-funded investment in the bank, including set-up costs, has been returned with a profit.

‘This deal gives us the best of both worlds. We have secured fair value for the UK taxpayer. GIB has a well-funded new owner that is committed to the Bank’s green mission, with a track record of success in green investment and an ambition to grow the business. The UK will benefit from increased investment in our green infrastructure as we make the transition to a green economy.’

NICK HURD
Climate Change and Industry Minister

Protecting the mission

GIB will become the primary vehicle for Macquarie’s renewable energy investment in the UK and Europe, with a commitment to target £3 billion of new green infrastructure investment over the next three years.

In a series of published commitments, Macquarie has pledged to maintain GIB’s green purpose and green objectives, and to make use of the skills of employees in Edinburgh and London.

‘There is a compelling logic in the world’s first green bank joining forces with the world’s largest infrastructure investor. When we embarked on this process, we were determined to find a new owner who would build on GIB’s successful history – an owner who would have access to deep pools of capital, a commitment to expand GIB’s activities, and a respect for the unique role GIB has played in the market.’

LORD SMITH OF KELVIN
Independent chairman of the Green Investment Bank

Opposition

Lord Smith of Kelvin, the GIB’s independent chair, said the deal was the best available route to securing its long-term future, but the sale has faced a wave of opposition from campaigners.

Green Party co-leader Caroline Lucas criticised the ‘reckless decision’ to privatise the bank as ‘undermining the low-carbon economy’, while Greenpeace UK policy director Doug Parr called the sale ‘a disaster’.

He said the government has ‘given away one of our key tools for advancing green technologies’ at a time when it ‘should be shoring up low-carbon industry for post-Brexit Britain’, and that the hole left by the GIB ‘will slow our transition to a clean energy system, set us back on reaching our climate targets and mean more of the jobs from new sectors will go elsewhere.’

‘If the government picks up its pace, the UK could be a world leader in renewable and green technology. But selling a great British success story, which levered private money into eco-projects, to a controversial Australian bank known for asset-stripping, is a disaster. We need investment in the booming clean technology industry in the UK, for skilled jobs, fairer bills and a healthy economy to see us through the next uncertain few years and in to the future.’

DOUG PARR
Greenpeace UK policy director

Karen Ellis, WWF’s chief adviser on economics and development, has called on Macquarie to guarantee that the green mission of the bank is protected and maintained, and that ‘substantial new capital for green investments’ is made available.

‘Numerous market failures are constraining the availability of finance for green investment, so to ensure the Green Investment Bank continues to deliver on its mandate, it should invest in novel green projects, which are less likely to be funded privately; it needs to focus on crowding in additional finance by reducing the barriers to investment. Green growth has the ability to power our economy, create more jobs and dramatically reduce emissions, and we should not miss out on the opportunities it offers..’

KAREN ELLIS
Chief Adviser on Economics and Development at WWF

Click here for Nick Hurd’s official statement to parliament on the sale of the GIB.