Green Investment Bank sold for £2.3bn

20 Apr 17

The UK Green Investment Bank has been sold by the government for £2.3bn to the Australian business lender Macquarie Group.

The deal, confirmed today, sees the GIB - the first bank of its type in the world - go into private hands five years after it was set up to support green infrastructure projects.

Since it was set up it supported more than 100 renewable and low-carbon projects across the UK and raised £3 of third party capital for every £1 it invested.

Nick Hurd climate change and industry minister said: “The Green Investment Bank has been very successful in attracting private capital to the UK’s green economy.

“It now makes sense to move it into the private sector where it will be free from the constraints of public sector ownership, allowing it to build further on its success.”

He said the deal would secure “fair value for the UK taxpayer” and allow the GIB to flourish under a new owner that is committed to the bank’s green mission.

The £2.3bn sale figure includes a £1.7bn transaction price and £0.6bn in estimated future funding commitments for existing GIB projects to be paid by the Australian firm.

Macquarie have also committed to spending £3bn on green infrastructure investment over the next three years, exceeding the £3.4bn invested by GIB since 2012.

Lord Smith of Kelvin, chair of GIB’s independent board, said: “There is a compelling logic in the world’s first green bank joining forces with the world’s largest infrastructure investor.”

Kelvin said they wanted to find an owner “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”.

“Macquarie will bring all of this to GIB, along with its own impressive track record of green investments,” he added.

Since 2010 Macquarie has invested or arranged more than £8.5bn of capital into green energy projects globally, including offshore wind, solar, waste and bioenergy and tidal energy projects in the UK.

David Fass, chief executive of Macquarie Group, said: “The addition of the Green Investment Bank, its people and expertise, strengthens Macquarie’s commitment to the green energy sector.

“Our combined platform will build on the legacy of the Green Investment Bank and, alongside our knowledge of energy and infrastructure, will open further opportunities in low carbon investment both in the UK and further afield.”

The government will continue to hold a £130m portfolio of a small number of GIB’s existing green infrastructure investments, he added.

These will continue to be managed by GIB until they are sold on in a way which returns "best value for taxpayers’ money".

The UK Green Investment Bank was created by the UK government and capitalised with public funds to back green projects on commercial terms.

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