The UK government said it agreed to sell its Edinburgh-based UK Green Investment Bank (GIB) to Macquarie Group of Australia for a total of £2.3 billion.
The £2.3 billion comprises a £1.7 billion transaction price and £600 million of estimated future funding commitments for existing GIB projects.
GIB chairman Robert Smith said: “There is a compelling logic in the world’s first green bank joining forces with the world’s largest infrastructure investor.
“When we embarked on this process, we were determined to find a new owner who would build on GIB’s successful history – an owner who would have access to deep pools of capital, a commitment to expand GIB’s activities, and a respect for the unique role GIB has played in the market.
“Macquarie will bring all of this to GIB, along with its own impressive track record of green investments.
“Its vision for the future growth of GIB demonstrates a redoubling of its commitment to a low carbon economy.”
The UK government said that since it was launched in 2012, GIB has supported nearly 100 green infrastructure projects in the UK.
For every £1 it has invested, it has attracted another £3 of third party capital.
It said total UK government funding provided to GIB since 2012 was £1.5 billion and that “the transaction price at the date of signing represents a £160 million premium on total government funding.”
The UK government said GIB will 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.
Macquarie published a series of commitments for the future of GIB under its ownership, including:
- 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 of Macquarie Group, said: “The addition of the Green Investment Bank, its people and expertise, strengthens Macquarie’s commitment to the green energy sector.
“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.”
Nick Hurd, the UK’s Climate Change and Industry Minister said: “The Green Investment Bank has been very successful in attracting private capital to the UK’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.”
As part of the transaction, a number of GIB assets will be moved into a new offshore wind investment vehicle which will be managed by GIB, which will retain a 25% stake.
Investors in this investment vehicle will be long-term institutional investors Macquarie European Infrastructure Fund 5 (MEIF5) and the Universities Superannuation Scheme (USS).