The British government is to start the state sell-off of the Green Investment Bank today (3 March) – a process that many independent observers in the Scottish energy and financial community fear will ultimately result in the de facto head office moving to London from Edinburgh.
The privatisation – backed to the hilt by the bank’s board – will involve both the sale of existing shares owned by the Government and also the commitment of additional capital for GIB by new investors.
Announcing the intention to sell the bank in his speech at last night at Lord Mayor’s banquet in the City of London, British Business Secretary Sajid Javid, said:
“The Green Investment Bank was a world first, and it is a sign of its success that the idea is being copied across the world. Having proven the business model works, we now want to make an even greater impact.
“The challenge presented by climate change is clear – it is imperative we mobilise more funding for green energy projects. The special share structure protects the bank’s green mission meaning The Green Investment Bank will continue to do exactly what it says on the tin.”
Lord Smith of Kelvin, independent chairman of GIB, said: “Attracting new investors is vital if GIB is to fund its ambitious plans to double the size of its business, expand into new parts of the UK green economy and deliver a growing green impact.
“I am confident that the sale process will provide GIB with good new owners who will support GIB’s continued growth and leadership role in the global green economy long into the future.
“This launch, and the wider plans to introduce new capital and new owners to GIB, has the full support of GIB’s independent Board.”
In the three years since the launch of the Green Investment Bank – the brainchild of former Liberal Business Minister Vince Cable – it has committed £2.6 billion of capital to almost 70 green infrastructure projects across the UK.
It is the most active investor in UK green infrastructure with leading market share and a clearly identified near-term UK pipeline of new transactions. GIB is well placed to play a leading role in a large and growing global market with compelling long term dynamics.
The bank’s ‘green purposes’ mission will continue to be independently protected through the creation of a Special Share. The intentions of potential investors to commit to and protect GIB’s green values will be taken into account in the Government’s assessment of bids.
Its current asset base offers investment returns producing a portfolio-wide forecast Internal Rate of Return of over 10%.