Row breaks out as government completes £2.3bn deal to sell Green Investment Bank to private sector
3 min read
The Government has completed the sale of the Green Investment Bank for £2.3bn.
Australian bank Macquarie has now taken over the institution, which will be renamed the Green Investment Group.
The Government said the deal would “free it from the constraints of public sector ownership” – but critics have argued that the privatisation of the bank, which was set up by the Coalition, will “undermine investment in the green economy”.
The GIB was established in 2012 to finance environmentally friendly investment projects in the UK.
Claire Perry, a minister at the Department for Business, Energy and Industrial Strategy, said the sale price meant taxpayers had gained £186m on its investment in the bank.
“We led the world in setting up the Green Investment Bank and it is now being copied by others,” said Ms Perry.
“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.”
Five independent trustees will retain a “special share” in the Green Investment Bank, which gives them the power to veto proposed changes to the institution’s green mission.
IRRESPONSIBLE
But Liberal Democrat leader Vince Cable, who set up the GIB when he was business secretary, described the sell-off as “environmentally irresponsible” and warned it could hinder efforts to tackle climate change.
He said: “The Bank has done an extremely good job in supporting renewable energy, energy efficiency and low-carbon projects. It has managed to attract over £10bn of private investment in these sectors that would not otherwise have happened.
“At a time when business confidence is falling and the Conservatives are giving mixed signals on their commitment to the environment, this is the worst time to undermine investment in the green economy.
“The Green Investment Bank's environmental mission is in danger of disappearing under the ownership of a private Australian bank whose track record does not inspire confidence.
“Sadly, this is another of the positive legacies of the Liberal Democrats in government that the Conservatives are now burying.
“Parliament must ensure that commitments to protect the Bank's green objectives are fully honoured in both spirit and letter.”
ASSET-STRIPPING
Green co-leader Jonathan Bartley said it was “disastrous news for everyone who cares about the future of renewable energy”.
He added: “This was a bad deal for the taxpayer and a bad deal for the planet. In 2016, the GIB started to make a profit and it was set to deliver an annual return of 10%.
“The Government was repeatedly warned that selling the GIB to Macquarie could result in asset-stripping and leave the bank unfit for purpose. The sale means taxpayers no longer have a say if this turns out to be true.
“As we grapple with soaring temperatures and a climate change denier in the White House we need to be investing in green energy, not flogging off our future security to the highest bidder."
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