UK’s Green Investment Bank sold to Macquarie

A consortium led by Macquarie has completed the acquisition of the UK’s Green Investment Bank.

Macquarie Group (Macquarie), Macquarie European Infrastructure Fund 5 (MEIF5) and Universities Superannuation Scheme (USS) have paid the UK government £2.3 billion to purchase the institution, which was set up in 2012 to fund renewable and low-carbon projects.

According to a statement from Macquarie, the new ownership will give the bank added scope to expand internationally while remaining a leading investor in green infrastructure in the UK and Europe.

The new owners have committed to the Green Investment Bank’s target of leading £3 billion of investment in green energy projects over the next three years.

Lord Smith of Kelvin, 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."

Mixed responses

There have been mixed reactions to the sale.

Vince Cable, who launched the Green Investment Bank in 2012 when serving as business secretary in the UK government, told the BBC that the sale of the bank was “irresponsible”. The current leader of the Liberal Democrats, Cable said that the sale sent mixed signals about the UK’s commitment to a green future.

"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,” he told the BBC.

"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."

Meanwhile, the Renewable Energy Association, which represents and promotes renewable energy producers in the UK, has urged the bank’s new owners to maintain its social purpose. At the same time the association points out that the sale comes at an exciting time for the renewables sector.

“As we have seen with wind and solar, renewables are now cost competitive following government support and industrial innovation. Prices have come down massively after being deployed at scale and we still believe there are more technologies that have a huge future if backed. The new owners should continue the Bank’s aim of providing finance to early-stage innovative technologies,” said head of policy for the REA, James Court.

“Deep geothermal is a good example of new technologies that the bank can support. Britain has plentiful geothermal resources and the potential to develop an industry, particularly in Cornwall, but a lack of historic projects means that the existing investor community hesitates to provide funding.

“We expect that the on-going Government CfD auction for “less developed” renewable energy technologies, which closes today, will highlight the amazing diversity and cost reductions of new systems that are coming onto the market. Support such as that the Bank can provide is vital if emerging technologies are to deliver on their potential for jobs and lower energy costs.”