Green Investment Bank
Several constituents have contacted me recently about the Green Investment Bank.
The UK Green Investment Bank plc was created and launched in 2012 as part of the Government's overall strategy for meeting its climate change and energy targets, with the specific role of investing on fully commercial terms to mobilise additional private sector finance into green infrastructure sectors that are suffering from a lack of investment. It is currently funded by 100 per cent equity from the Government.
The Green Investment Bank has proven to be a pioneering venture into sustainable investment and has now committed £2.6 billion of capital to 79 green projects across the UK, mobilising a further £7.8 billion of private investment in projects that significantly reduce greenhouse gas emissions, reduce energy demand, increase recycling and divert waste from landfill.
However, the Government believes that private investment in the Green Investment Bank is needed if it is to fund its ambitious plans to double the size of its business, expand into new parts of the green economy and deliver more environmental benefits.
Indeed, the Government has always been clear that the Green Investment Bank was designed with a view to a possible transfer to the private sector. The company was designed to leverage the maximum amount of private capital into green sectors for the minimum amount of public money. Moving the company into private ownership is a natural development that further delivers this aim.
It is with this in mind that plans to explore the privatisation of the Bank were announced in 2013. Since then, the Government and Green Investment Bank have continued to work together to facilitate the introduction of private capital into the Bank, and a two stage auction process was formally launched in March 2016.
The Green Investment Bank's management fully support privatisation plans - there is market interest and the Government believe the time is now right to proceed.
While the detail of the sale process is commercially confidential, I can assure you that the Government has no interest in selling to an asset stripper. Potential investors have been asked to confirm their commitment to the Green Investment Bank's green values and investment principles, and how they propose to protect them, as part of their bids for the company. In addition, the Government has approved the creation of a special share, held by independent trustees, to protect the Bank's green purposes in future.
The Government intends to proceed with a sale as soon as practicable to achieve the benefits that the introduction of private capital will bring and there has been strong interest from a range of large scale and long term investors.
The subject was debated on 25 January and you can read the proceedings in full here: http://tinyurl.com/jj7ezrf