UK starts sale of Green Investment Bank

Robert Smith

The UK Government has started the process to sell off its Edinburgh-based Green Investment Bank (GIB), with analysts predicting it could eventually fetch a total price tag of up to £4 billion.

The government would consider selling its entire 100% stake in GIB — and the maximum stake it would retain would be 20-25%, according to Reuters.

The government wants an investor to pay a total of £4 billion, with the bank itself valued at around £2 billion and a further £2 billion expected to be pledged for future investments, Reuters reported.

The launch of the sale comes as GIB announced it has supported a new £10 million investment to acquire and expand a renewable energy plant and district heating network in Wick on the north coast of Scotland.

GIB was set up in 2012 and is the world’s first bank dedicated to green infrastructure investments.

Last month, GIB was part of a consortium including US investment giant BlackRock that bought one wind farm in Aberdeenshire and two off the coast of Lincolnshire from Centrica and EIG Global Energy Partners for an enterprise value of £423 million.

“The Green Investment Bank is a world first, and it is a sign of its success that the idea is being copied globally,” said UK Business Secretary Sajid Javid.

“Having proven the business model works, we now want it to make an even greater impact.

“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.”

The UK Government said that since being established, GIB has “helped mobilise a total of £10.6 billion of investment” into almost 70 projects covering sectors including offshore wind, energy efficiency and waste and bio energy.

It said moving GIB into private ownership will give it access to much more capital than if it remained in government hands, meaning it can increase its investments and have a bigger impact.

“Attracting new investors is vital if the Green Investment Bank 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,” said Robert Smith, Lord Smith of Kelvin, independent chairman of GIB.

“I am confident that the sale process will provide GIB with good new owners who will support the Green Investment Bank’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 the Green Investment Bank’s independent board.”

About the Author

Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.