Construction News

Tue April 13 2021

Related Information

Green Investment Bank to be privatised

25 Jun 15 The government has hung a ‘for sale’ notice on the door of the Green Investment Bank in a bid to move it into the private sector.

The government and Green Investment Bank will together meet potential investors in the Green Investment Bank (GIB) and explore the scope for a transaction. The detail and timing of any transaction will depend on the outcome of these discussions.

It is reported that the government expects to raise more than £1bn by selling at least a majority stake in the bank.

Since its inception in 2012, GIB has committed £2bn and helped to finance 50 green infrastructure projects including helping to finance first-of-a-kind projects that use innovative technologies in waste management and offshore wind power.

Chancellor of the exchequer George Osborne said: “In 2012 we set up the Green Investment Bank to support important investment in the UK’s green infrastructure and since then it’s gone from strength to strength.  That is why we can now begin exploring options for moving the bank into the private sector to enable it to access larger pools of capital and act more freely to invest in a broad range of green sectors.

“We want the Green Investment Bank to attract more investment and we will use the money we raise to pay down the national debt and deliver lasting economic security for working people.”

Related Information

Business secretary Sajid Javid said: “GIB has grown up. It’s time to let it go.”

Mr Javid said: “The bank’s business model has proved so successful that it is already in profit less than three years after opening its doors. The public money the bank has invested has been supplemented by almost three times as much private capital. And the rate of return on its portfolio is already at 9%. It’s an incredible record of success in an incredibly short time. The bank, I think it’s right to say, has exceeded all expectations.”

He continued:  “The challenge now is to build on this success, to give GIB the room and resources it needs in order to keep growing. It is no secret that we have always planned to bring private capital into the GIB when the time is right. With the great progress that the bank has made, and its healthy portfolio of profitable investments, it’s clear that time is now.

“So, along with my counterparts in the Department for Energy & Climate Change and the Department for the Environment, Food & Rural Affairs, we have decided to begin moving the Green Investment Bank into private ownership. The detail and timing will depend on the outcome of discussions, but our plan is now very clear: to sell at least a majority of the government’s shares to private investors during the lifetime of this Parliament.

“Now I’m sure some people will say this shows the Government is reneging on its environmental commitments, that we’re somehow throwing our green credentials into a coal-fired furnace. But such cynics could not be more wrong. The bank will still be green, it will still be profitable, it will still be a market-leader in financing environmentally sound infrastructure. But it will be free from limitations on where it can borrow money, and free from EU regulations on state aid. The bank will be able to access a much greater volume of capital and deploy it across a much wider array of green projects. And that means more money going into green innovations.”

Got a story? Email news@theconstructionindex.co.uk

MPU
MPU

Click here to view more construction news »