Edinburgh-based Green Investment Bank generates profit for taxpayer in £2.3bn sell-off to Australian bank

The Edinburgh-based Green Investment Bank has been sold by the British Government to the Australian merchant banking group Macquarie for £2.3 billion.

This price is more than double the speculative reports published in London-based newspapers.

Announcing the sale, British energy and industry minister Nick Hurd, MP, said this was a ‘good value for <taxpayer’s> money deal that also has ‘the support of the bank’s independent board’.

He added: “The Green Investment Bank has been very successful in attracting private capital to Britain’s green economy.

“It now makes sense to move it into the private sector where it will be free from the constraints of public sector ownership, allowing it to build further on its success.

“This deal gives us the best of both worlds. We have secured fair value for the UK taxpayer. GIB has a well-funded new owner that is committed to the Bank’s green mission, with a track record of success in green investment and an ambition to grow the business. The UK will benefit from increased investment in our green infrastructure as we make the transition to a green economy.

“Today’s sale to Macquarie, with a transaction value of around £2.3 billion, ensures that on completion, all taxpayer funding invested in GIB since its creation, including set-up costs, has been returned with a profit.”

Set-up in 2012, the Green Investment Bank has supporting nearly 100 green infrastructure projects in the UK to date. For every £1 it has invested, it has attracted another £3 of third party capital.

It will now become the primary vehicle for Macquarie’s renewable energy investment in the UK and Europe, with a commitment to target £3 billion of new green infrastructure investment over the next three years, exceeding GIB’s track record of committing £3.4 billion of investment since it was established.

In the UK, Macquarie is involved in a number of green energy projects in offshore wind, solar, waste and bioenergy and tidal energy.

Macquarie also published a series of ‘commitments’ for the future of bank under its ownership, which include

  • Maintaining GIB’s green purpose and green objectives, in line with the ‘special share’ arrangements to safeguard GIB’s green purpose which will be held by five independent trustees
  • Maintaining the GIB platform and brand, and to utilise the skills and experience of GIB employees in Edinburgh and London
  • GIB’s Edinburgh office will be home to a new revenue-generating project-delivery business-providing services to the green energy portfolios of GIB and Macquarie in the UK

David Fass, Macquarie Group’s UK and European chief executive, added: “Our combined platform will build on the legacy of the Green Investment Bank and, alongside our knowledge of energy and infrastructure, will open further opportunities in low carbon investment both in the UK and further afield.

“We are excited by a business that will take a leading role in the green economy using the specialist knowledge of our teams in Edinburgh and London.”

Lord Smith of Kelvin, independent chairman of the Green Investment Bank, said: “Macquarie will utilise the market-leading expertise of the existing GIB team and will build on GIB’s deep commitment to Edinburgh.

“On the basis of these commitments, we believe Macquarie can be a good owner of GIB and we support the Government’s decision to sell GIB to Macquarie.

“We look forward to seeing these commitments from Macquarie delivered, in full, in the months and years ahead.

The SNP-led Scottish government has pledged to hold Macquarie Group to account to ensure it delivers on its commitment on safeguarding energy jobs in Edinburgh.

Scottish business minister Keith Brown, MSP, added: “I welcome Macquarie Group’s clear commitment to Scotland and the assurances we have received that it will maintain the Green Investment Bank’s unique identity and its focus on the green projects that are key to Scotland’s continued economic success.

“This, alongside Edinburgh’s leading role in the financial services sector, means Scotland is uniquely well placed to support investment decision-making in renewables and low carbon projects and I will continue to work with the Macquarie group to underline this.

“The Macquarie Group has indicated that staffing levels at the Green Investment Bank’s Edinburgh offices will be maintained and are likely to increase overall in the longer term. We will follow developments closely in the months and years ahead.”

See also:

Half of all UK jobs and turnover in onshore wind energy sector are in Scotland


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