Big changes as Macquarie seals Green Bank deal

Robert Smith

Australia’s Macquarie Group said on Friday its consortium completed the acquisition of Edinburgh-based UK Green Investment Bank from the UK Government for £2.3 billion.

Macquarie said the Green Investment Bank will now operate under the name Green Investment Group, adding this is necessary “to overcome the legal and regulatory barriers to using the term ‘bank’ in many international markets.”

It said the team will continue to be based in Edinburgh and London.

Shaun Kingsbury will step down as chief executive officer and will not join Macquarie Group.

Macquarie said The Green Investment Group will be led by Edward Northam.

Northam joined the Green Investment Bank in 2012 and was most recently its head of investment banking.

Former UK business secretary Vince Cable slammed the sale as “environmentally irresponsible” saying it risked “setting the UK back years in its efforts to tackle climate change.”

But Robert Smith, chair of the Green Investment Bank up to the completion of the transaction, said: “Today marks the beginning of an exciting new chapter for the Green Investment Bank.

“Under Macquarie ownership, the business will have the support it needs to deliver a growing green impact, at home in the UK and now abroad.

“I’m confident that with this support the Green Investment Bank, nurtured so well through its early years by the UK Government, will go on to bigger and better things.

“If the Paris Agreement is to be delivered we need to see mature green infrastructure delivered quickly and at scale, alongside the rapid development of emerging technologies.

“To achieve this the world needs committed, innovative, specialist, experienced investors with access to deep and flexible pools of capital.

“The Green Investment Group will now have the platform to meet that market need and fulfil its full potential.”

Cable, leader of the UK’s Liberal Democrats, said: “The bank has done an extremely good job in supporting renewable energy, energy efficiency and low-carbon projects.

“It has managed to attract over £10 billion of private investment in these sectors that would not otherwise have happened.

“At a time when business confidence is falling and the Conservatives are giving mixed signals on their commitment to the environment, this is the worst time to undermine investment in the green economy.

“The Green Investment Bank’s environmental mission is in danger of disappearing under the ownership of a private Australian bank whose track record does not inspire confidence.”

The consortium comprises Macquarie Group Limited, Macquarie European Infrastructure Fund 5 (MEIF5) and Universities Superannuation Scheme (USS).

“Under Macquarie’s ownership, the Green Investment Bank will remain one of the leading investors in green infrastructure in the UK and Europe, with added scope to further expand internationally,” said Macquarie.

“Macquarie will adopt the Green Investment Bank as its primary vehicle for principal investment in green projects in the UK and Europe and will consolidate its own existing UK and European principal investment business into that vehicle.

“Macquarie Capital, the advisory, capital markets and principal investment arm of Macquarie Group, and the Green Investment Bank have together led over £15 billion of investment in the UK across a broad range of renewables technologies.

“These include: energy efficiency, bioenergy, energy from waste, onshore and offshore wind, low carbon transport, solar and tidal energy and energy storage.

“The Green Investment Bank, under Macquarie ownership, will work together with the Green Purposes Company Trustees to ensure all investments are aligned with its green purpose.

“This will include publishing an annual report, featuring details of its green performance, and holding an annual industry day for stakeholders; the first of which will be held prior to the end of 2017.

“As previously announced, Macquarie has committed to the Green Investment Bank’s target of leading £3 billion of investment in green energy projects over the next three years, operating in accordance with its established green purpose.”

Daniel Wong, Head of Macquarie Capital Europe, said: “Combined with Macquarie’s resources as the world’s largest infrastructure investor, the Green Investment Group will be uniquely placed to continue in its pioneering role in the world’s transition to a low-carbon economy.

“We look forward to growing the Green Investment Group’s capacity and its contribution to the UK and global renewables markets.”

Northam said: “This new chapter provides the best of both worlds: a deep sector specialism coupled with access to a global platform and deep pools of capital.

“We have ambitious plans for the growth of the Green Investment Group, starting with a continuation of our role as a leading investor in the UK and building on that through an additional international focus.”

Macquarie said the Green Investment Group will continue to collaborate with the UK’s Department of Business, Energy and Industrial Strategy in the joint venture UK Climate Investments LLP (UKCI).