The Strategist

British government transfers Green Investment Bank into private hands

04/21/2017 - 12:35

A group of investors from Australian bank Macquarie Group and the Universities Superannuation Scheme Foundation paid the British government 2.3 billion pounds ($ 3 billion) for Green Investment Bank, said Macquarie in a report.

The deal ended after a difficult reconciliation process. A number of members of the British Parliament opposed the privatization of the bank, which manages assets of more than 4 billion pounds. Representatives of Macquarie said that they intend to invest 3 billion pounds in ecological projects in the UK energy sector for three years.

Privatization will allow the bank, which main purpose is support environmentally friendly energy projects, to invest more funds abroad. The measure will also allow investing in technologies, use of which is currently prohibited by European norms, the bank’s Chief Executive Shaun Kingsbury added.

Potential new projects include electric vehicles and upgrading of grid capacity, Kingsbury said.

"Green Investment Bank is the first in the world, and a sign of its success is that this idea is being copied all over the world. Having proved that the business model is working, now we want to increase our influence", the agency quotes Sajid Javid, the country's Economy Minister.

Earlier, the government said that the deal would give the bank a necessary freedom to increase capital and expand investment in projects to reduce carbon dioxide emissions. These include offshore wind farms, street lighting and energy from plant waste.

Sajid Javid, the Minister for Business and Entrepreneurship of Great Britain, announced sale of the bank in July 2015. Before putting the assets on sale, it was required to change the legislation by removing ministerial control from the GIB. This transaction will allow the bank to obtain additional funds and expand investments in projects to reduce carbon-containing emissions.

The bank was founded in 2012 in order to accelerate the country's transition to renewable energy sources and abandon fossil fuels. The organization has invested in various projects, including biofuel gas stations and wind farms.