The government is facing renewed criticism after pushing through the “disastrous” sale of the Green Investment Bank (GIB) to the Australian bank Macquarie, as fresh concerns are raised over its commitment to environmental projects.
A consortium led by Macquarie agreed to buy the GIB, which was established in 2012 by the coalition government to fund green infrastructure projects such as windfarms and a waste and bioenergy power plant. The consortium also includes Macquarie’s in-house infrastructure fund and the Universities Superannuation Scheme, a pension fund for British higher education institutions.
Sir Vince Cable, the Liberal Democrats leader, who started the bank as business secretary when in coalition with David Cameron’s Conservatives, said the deal was “a sad day for environment and green investment in the UK” and that he had “little confidence that new private owners have a green mission”.
Cable previously suggested in the Guardian earlier this year that the sale could be the “final nail in the coffin” for green Conservatism, before Macquarie was selected as the government’s preferred buyer in April.
The government said the £2.3bn deal ensured that all the taxpayer funding invested in the GIB since its creation, including set-up costs, would be returned with a gain of approximately £186m. Macquarie said it wanted the bank to “remain one of the leading investors in green infrastructure in the UK and Europe, with added scope to further expand internationally”.
The government said Macquarie had committed to the GIB’s target of lending £3bn of investment in green energy projects over the next three years. “Now that it’s in the private sector, it will be able to operate on an international level to tackle the global challenge of climate change,” said the climate change minister, Claire Perry.
However, the privatisation leaves Britain without a key vehicle for supporting green projects, while fears have been raised that the bank could be broken up once taken into private hands. Concerns over Macquarie’s intentions for the bank and criticism of the government’s commitment to the environment have lingered since the deal was first announced.
“The government was repeatedly warned that selling the GIB to Macquarie could result in asset stripping and leave the bank unfit for purpose,” said the Green party co-leader Jonathan Bartley. He said the completion of the sale was “disastrous news for everyone who cares about the future of renewable energy” and criticised the government for “flogging off our future security to the highest bidder”.
Ministers helped create a “special share” in the GIB to be held by a company with five independent trustees, who have the power to approve or reject any changes to the GIB’s green purposes in the future, in an effort to allay fears over the bank’s future involvement in green projects.
The government said it would continue to hold an interest in a small number of the GIB’s existing green infrastructure investments, managed by the bank under its new owners until they can be sold in future.