UK may ‘scrap Green bank sale, opt for float’

Robert Smith

The UK government may cancel the planned sale of Edinburgh-based Green Investment Bank (GIB) to Australian investment firm Macquarie, and could push instead for a £3.8 billion stock market listing, according to a report in The Sunday Times.

The planned sale to Macquarrie has come under heavy scrutiny at Westminster and Holyrood amid fears the GIB could be broken up after the sale and lose its green mission to fund renewable energy projects.

A flotation of GIB could be even larger than the £3.3 billion stock market listing of Royal Mail in 2013.

The GIB’s chairman is veteran Scottish financier Robert Smith.

The proposed sale of the GIB had been facing increased political scrutiny following allegations by the Scottish government that the privatisation process could become an “asset stripping exercise with significant financial rewards for any new owner.”

Former UK business secretary Vince Cable had warned the UK government risked “effectively destroying” the GIB as an institution if it pressed ahead with its plan to sell the bank into the private sector.

Cable, who launched the bank in 2012 during his time as business secretary in the coalition UK government, told BusinessGreen he was concerned the GIB could be broken up after a sale and lose its green mission to fund renewable energy projects.

Clive Lewis, Labour’s shadow secretary of state for BEIS (business, energy and industrial strategy), told BusinessGreen the GIB was at risk of being “broken up, sold off and its green commitments forgotten.”

Former Conservative climate change minister Gregory Barker had tweeted: “Am increasingly alarmed that sale of GIB will now see it broken up so much it threatens its future as enduring institution.”

The Scottish government said on January 19 that it had received assurances from the UK government on the “strategic importance” of GIB.

“Cabinet Secretary for Economy, Jobs and Fair Work, Keith Brown, has received assurances from the UK government that the strategic importance of the Green Investment Bank to Scotland will be fully considered as part of ongoing discussions around its privatisation,” said the Scottish government.

Brown said he had spoken to the UK government’s minister of state for climate change and industry and had pressed for greater transparency around the GIB privatisation process and for confirmation that the bank will continue to be headquartered in Edinburgh.

“The Green Investment Bank plays a unique strategic role in funding innovative and higher risk low carbon projects in Scotland and the rest of the UK,” said Brown.

“It is my view that the sell-off of this key organisation will seriously threaten our green economy, which plays such an important role for Scotland …

“In 2015 the then Secretary of State for Business Innovation and Skills gave assurances the bank’s green purpose would be protected after privatisation.

“This is still central to my vision of how the bank will operate in the future and is something that I will continue to press.

“I have also made further representations to the UK Government about the importance of retaining the bank’s Edinburgh headquarters, which currently employs 55 highly skilled staff.

“I have reaffirmed my determination to ensure these roles are protected at a similar standing and scale as the present arrangement so that we can continue to drive forward the green agenda, promote future growth and create more jobs both within the organisation and the wider sector.

“This is the right thing to do, not only because Scotland already has the pool of expertise needed to support the bank, but also because it is symbolic of Scotland’s role as a leader within the green energy sector.”