Govt’s green infrastructure bank sold in £2.3bn Australian takeover


The Government has sold the Green Investment Bank to a consortium led by Australia’s Macquarie Group in a controversial £2.3bn deal.

The Australian group is already the world’s largest manager of infrastructure assets, but currently has limited exposure to renewable energy assets.

The long-mooted deal has been criticised by opposition parties that argue Macquarie may not respect the ethos behind the bank, which invests via debt and equity in green infrastructure assets, and that 130 UK-based jobs could come under threat.

However, Macquarie confirmed it will enter a “special share” arrangement to safeguard the bank’s green purpose, which will be held by five independent trustees.

It also says it will maintain the bank’s Edinburgh office with a “substantial staff presence in the city”.

The deal represents the first privatisation to happen under Prime Minister Theresa May.

Climate change minister Nick Hurd says all taxpayer funding invested has been returned with “substantial profit”.

Hurd says the GIB has been a “real success story” since it was created in 2012 – becoming the world’s first dedicated green investment bank and supporting almost 100 green infrastructure projects in the UK and attracting £3 of third party funding for every £1 it invests.

“It has shown, as it set out to do, that green investment can be both green and profitable,” Hurd adds. “Having demonstrated its success, the government decided to move GIB into the private sector where it can continue its success on an even greater scale.”

Following completion of the deal, the bank will establish three new investment vehicles – an offshore wind investment vehicle, a low carbon lending platform and a green infrastructure investment platform.

Head of Macquarie Capital for Europe Daniel Wong says: “By combining the Green Investment Bank with the largest infrastructure investor in the world, we will create a market leading platform dedicated to investment in the low carbon economy in the UK and beyond.

“We understand the responsibilities that come with this ownership, and we are fully committed to maintaining its green purpose as we grow the business.”

The bank will become Macquarie’s platform for principal investments in green infrastructure projects in the UK and Europe.

Macquarie will maintain the bank’s target of £3bn of new investment in green energy projects over the next three years, either directly or by arranging capital from other investors. It will also continue the collaboration between the bank and UK Climate Investments.

Investments will span energy efficiency, bioenergy, energy from waste, onshore and offshore wind, solar and tidal energy and energy storage.

Macquarie is joined by the British pension fund Universities Superannuation Scheme in the purchase of the bank.

Macquarie’s asset management arm is its largest division and manages AU$502bn.

The deal is expected to complete in two months and conditional on certain regulatory approvals including EU merger clearance.