UK government complete sale of Green Investment Bank to Macquarie Group
The UK Climate Change and Industry Minister, Claire Perry has confirmed that the sale of the Green Investment Bank (GIB) to Macquarie Group Ltd has been completed. New owner Macquarie has committed to the GIB’s target of leading £3 billion of investment in green energy projects over the next three years and announces name change to Green Investment Group (GIG) in order to facilitate overseas investment.
According to statement August 18, the £2.3 billion (≈ EUR 2.56 billion) deal which was announced in April, ensures that “all the taxpayer funding invested in GIB since its creation, including set-up costs, has been returned” with a gain of approximately £186 million (≈ EUR 203.6 million).
As well as fully meeting the government’s objectives, the deal “secures the future” of the GIB with an ambitious new owner committed to growing the business. The Edinburgh office will be home to a new revenue-generating business as well as providing services to the green energy portfolios of both Macquarie and GIB in the UK.
We led the world in setting up the Green Investment Bank and it is now being copied by others. Now that it’s in the private sector, it will be able to operate on an international level to tackle the global challenge of climate change. It is also perfectly placed to help us finance green initiatives for our Clean Growth Plan and realise the commitments set out in the Paris Agreement, said Minister Perry in a statement.
The government decided that moving it into the private sector now would free it from the constraints of public sector ownership allowing it to increase investment in green infrastructure as the country transitions towards a green economy. GIB’s independent Board supported the government’s decision to sell the business to Macquarie.
The green ‘special share’ held by the Green Purposes Company Limited also comes into force now. Five independent trustees have the power to approve or reject any proposed changes to GIG’s green purposes in the future. The government will continue to hold an interest in a portfolio of a small number of GIB’s existing green infrastructure investments. These assets will continue to be managed by GIB until they can be sold on in a way which returns best value for taxpayers’ money, said Minister Perry.
Macquarie and GIB also announced that the company will now be known as the Green Investment Group (GIG) so that it will be able to make overseas investments in a bid to build on the company’s success within the private sector.
Exciting times for renewables
Commenting on the closure, the renewables industry urges the new owners to maintain its social purpose, namely to help mainstream new technologies that will decarbonise the energy sector and build new industries.
As we have seen with wind and solar, renewables are now cost competitive following government support and industrial innovation. Prices have come down massively after being deployed at scale and we still believe there are more technologies that have a huge future if backed. The new owners should continue the Bank’s aim of providing finance to early-stage innovative technologies. We expect that the on-going Government CfD auction for “less developed” renewable energy technologies will highlight the amazing diversity and cost reductions of new systems that are coming onto the market. Support such as that the Bank can provide is vital if emerging technologies are to deliver on their potential for jobs and lower energy costs, said James Court, Head of Policy for the Renewable Energy Association (REA).