Green Bank to go private

Business Secretary Sajid Javid is to announce plans to bring private capital into the Edinburgh-based bank, which was launched in 2012 as the first of its kind in the world.

The move was attacked as “reckless” by opponents.

The Bank has invested £2bn of public money in 50 green infrastructure projects and seven funds in 240 locations around the UK

Mr Javid, who will address the bank’s annual review event in London, 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 bank will still be green, still be profitable, still be a market-leader in financing environmentally sound infrastructure. But free from limitations on where it can borrow money and EU regulations on state aid, the bank will be able to access a much greater volume of capital.

“This is the right decision for the Green Investment Bank, the right decision for the environment and the right decision for taxpayers.”

Chancellor George Osborne said: “In 2012 we set up the Green Investment Bank to support important investment in the UK’s green infrastructure and since then it’s gone from strength to strength.

“That is why we can now begin exploring options for moving the bank into the private sector to enable it to access larger pools of capital and act more freely to invest in a broad range of green sectors.

“We want the Green Investment Bank to attract more investment and we will use the money we raise to pay down the national debt and deliver lasting economic security for working people.”

Lord Smith of Kelvin, who chairs the Bank, said: “In two and a half years of operations GIB has established a successful business model. We have played an important role in strengthening energy supply and security, reducing energy demand and decarbonising our economy. We have achieved all of this by investing profitably.

“Our challenge now is to build a funding strategy which provides us with the capital to match our investment ambitions. The UK Government led the world in their vision and commitment in setting up the world’s first dedicated green investment bank, so we are delighted to have their support as we enter a new phase and seek additional investors in our business.”

Caroline Lucas, Green MP for Brighton Pavilion, said: “The Government’s rash and irresponsible plan to sell off a large chunk of the Green Investment Bank calls into question their commitment to investing in a low carbon economy.

“At precisely the time when we should be leading the world in the fight against climate change our Government appears to be in retreat. The Government should keep at least a majority stake in the Green Investment Bank to ensure investor confidence is upheld and the commitment to low-carbon lending remains.”

Think-tank E3G said a sell off would be “reckless”, damage investor confidence and dilute the bank’s purpose.