The government intends to sell a stake over the next year, with Javid believing it is the right time to begin the process of moving the GIB into private ownership.He 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 GIB puts funds into wind, biomass and other low-carbon projects – dedicated to “greening the economy”. The institution was created in 2012 and just announced its first profits – making £3.2m in the second half of its 2014-15 financial year. The government put up £3.8bn of capital for the GIB across 50 projects. Some £2bn has been invested so far and its funding has also resulted in £6bn of private funds being infected into those projects too. The most recent was a sewage heat recovery system to provide energy for buildings, based in Scotland. Other investments have included £236m to build and then run the Rampion wind farm off the coast of Brighton and £2.5m to replace boilers in sheltered housing. The government’s plans are predicted to see between 51 per cent and 100 per cent of the stake sold off.
Javid said that the bank “will still be green, still be profitable, still be a market-leader in financing environmentally sound infrastructure”. He said this move would help it to be “free from limitations on where it can borrow money and EU regulations on state aid” enabling it to “access a much greater volume of capital”. EU state aid rules prevent governments from crowding out private investors and unfairly favouring local firms over foreign rivals. This progression would mean the GIB has increased flexibility to invest in sectors like the energy grid and electric cars. The GIB is moving into investing in the construction phase and the government said the assets should increase in value as they become operational – so the sale price should give the bank a higher value than the amount invested by the taxpayer so far. Somewhere between £800m and £1bn will be invested for 2015 – taking the total near to £3bn, which could mean the sale values the GIB at more than £3bn. Read more on green initiatives:
- Most British SMEs overlook commercial benefits of going green
- Sustainability might be a buzz word but Ricoh’s focus on bees shows benefit of agenda
- Why you should have plants in the office
Share this story