The government has invited private sector investors to register interest in buying the Green Investment Bank (GIB).
The government announced the privatisation of the bank last year, saying it wanted the GIB to be free to borrow without the money being classed as public sector debt. It also claims that privatisation would allow the bank to lend to a wider range of sectors and have greater impact in mobilising investment in green projects.
Critics claimed that the original purpose of the bank would be lost after business secretary Savid Javid said legislation obligating the bank to invest only in environmentally friendly projects would have to be repealed for the GIB to be classified as a private sector enterprise.
To alleviate this concern, the government announced last month that a ‘special share’ in the privatised GIB would be created as part of the privatisation process.
A company independent of both the GIB and the government would hold the share and the bank would not be able to make changes to its green mission unless the special shareholder gave its consent, the government said.
Nick Molho, executive director of the Aldersgate Group said that the bank’s success so far had come from its focus on projects that were not getting sufficient support from mainstream private investors. This focus had allowed the bank to help tackle important market failures in the area of green infrastructure and should be maintained, he said.
‘Identifying investors with a clear plan and commitment to maintain this current focus must be an important part of the GIB sale process,’ he said.
The launch of the sale came as the bank announced that it had supported a new £10 million investment to acquire and expand the renewable energy plant and district heating network in Wick, Scotland. Since its creation in 2012, the bank has mobilised £10.6 billion, helping to fund almost 70 projects, including offshore wind, energy efficiency and waste and bio energy.