Business Secretary, Sajid Javid will confirm that the government will proceed with plans to bring private capital into the Green Investment Bank (GIB) during a speech at the Bank’s Annual Review event in London today (25 June 2015).
In his speech he will say that the time is right to begin the process of moving the GIB into private ownership. The intention to bring in private capital was first announced at Autumn Statement in 2013.
Business Secretary Sajid Javid said:
The Green Investment Bank has shown that investment in green technologies can be a profitable business. The challenge now is to build on this success.
The bank will still be green, still be profitable, still be a market-leader in financing environmentally sound infrastructure. But free from limitations on where it can borrow money and EU regulations on state aid, the bank will be able to access a much greater volume of capital.
This is the right decision for the Green Investment Bank, the right decision for the environment and the right decision for taxpayers.
Chancellor of the Exchequer George Osborne said:
In 2012 we set up the Green Investment Bank to support important investment in the UK’s green infrastructure and since then it’s gone from strength to strength.
That is why we can now begin exploring options for moving the bank into the private sector to enable it to access larger pools of capital and act more freely to invest in a broad range of green sectors.
We want the Green Investment Bank to attract more investment and we will use the money we raise to pay down the national debt and deliver lasting economic security for working people.
Since its inception in 2012, GIB has committed £2 billion and helped to finance 50 green infrastructure projects including helping to finance first-of-a-kind projects that use innovative technologies in waste management and offshore wind power.
Lord Smith of Kelvin, Chair of the Green Investment Bank, said:
In 2 and a half years of operations GIB has established a successful business model. We have played an important role in strengthening energy supply and security, reducing energy demand and decarbonising our economy. We have achieved all of this by investing profitably.
Our challenge now is to build a funding strategy which provides us with the capital to match our investment ambitions. The UK government led the world in their vision and commitment in setting up the world’s first dedicated green investment bank, so we are delighted to have their support as we enter a new phase and seek additional investors in our business.
The government and Green Investment Bank will now actively engage with potential investors in GIB and explore the scope for a transaction which will deliver value for money for the taxpayer. The detail and timing of any transaction will depend on the outcome of these discussions.
Notes to editors:
About the UK Green Investment Bank:
UK Green Investment Bank plc (GIB) was launched in late 2012. With funding from the UK government, it is the first bank of its kind in the world. It is a ‘for profit’ bank, whose mission is to accelerate the UK’s transition to a greener economy, and to create an enduring institution, operating independently of government.
GIB is wholly owned by HM Government. The company is not authorised or regulated by the Financial Conduct Authority or the Prudential Regulation Authority. A wholly owned subsidiary UK Green Investment Bank Financial Services Limited is authorised and regulated by the Financial Conduct Authority.