United Kingdom government sells Green Investment Bank to Macquarie
- Author: Todd Kelly Apr 21, 2017,
Apr 21, 2017, 0:30
"The Green Investment Bank has been very successful in attracting private capital to the UK's green economy", said Nick Hurd, Climate Change and Industry Minister.
"The hole left by the Green Investment Bank 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".
Together, the Green Investment Bank and Macquarie have led a combined £15 billion of investment in the United Kingdom low carbon economy during the past five years. Since then it has committed over £3.4 billion to green infrastructure projects, with most of the investment in the waste industry going to incinerators and other energy-from-waste facilities.
After it had announced it would be taking over the GIB, Macquarie said it would be selling up to £230 million of assets in the business it did not want.
Scottish Greens MSP for the Lothians Andy Wightman says the bank's new ownership leaves its environmental credentials "in tatters". "Macquarie executives and Government Ministers need to give concrete guarantees about the Bank's future and the capital investments it will make".
A USS spokesperson said that the pension scheme had invested in a newly established investment management vehicle that will hold all of the GIB's existing offshore wind investments. These assets will continue to be managed by GIB until they are sold on in a way which returns best value for taxpayers' money.
"The GIB is a unique institution, and the largest green energy investor in Europe", she said. The government has made a decision to sell it off without transparency or consideration of the alternatives.
The government has sold its Green Investment Bank to Macquarie for 2.3 bln pounds.
A&O also advised Macquarie as an interested party in the judicial review brought by unsuccessful bidder Sustainable Development Capital.
They include a "special share" held by five independent trustees who will be able to approve or reject changes to the bank's core mission.
Further, the UK Government will invest alongside the Green Investment Bank in a new green infrastructure investment platform which will comprise a small number of the Green Investment Bank's existing investments. The transaction, expected to complete in the first half of 2017 subject to regulatory approvals, will not be material to Macquarie Group's earnings and financial position, Macquarie said.
The bank, which was launched in 2012, will keep its brand and its employees in London and Edinburgh. It has so far backed 99 green infrastructure projects, committing £3.4bn to the UK's green economy into transactions worth £12bn.
"Numerous market failures are constraining the availability of finance for green investment, so to ensure the GIB 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".
"Macquarie will also uphold GIB's green investment principles and report transparently on GIB's green impact".
The sale requires the new owner to retain its name and team, headquartered in Edinburgh.