Green Investment Bank chief: privatisation a "goldilocks moment"

Written by Jessica Wilkins on 29 October 2015 in News
News

Shaun Kingsbury tells the Environmental Audit Committee that time is right to hand coalition-era bank to the private sector – but E3G warns against “rushed privatisation”

Privatising the Green Investment Bank (GIB) in the current market feels like a “goldilocks moment” and the civil service “needs to get on with it,” the bank’s chief has told MPs.

The GIB was established in 2012 by Lib Dem business secretary Vince Cable with a budget of £3.8bn, and given the task of encouraging investment in clean energy infrastructure projects. But Cable's successor Sajid Javid announced plans to privatise the GIB after the Conservatives won the general election.

Javid argued that moving the GIB – which is entirely government-owned at present – into the private sector would allow it to have a bigger impact by borrowing more "without this having an effect on public sector net debt".


Green Investment Bank to be privatised, Sajid Javid confirms
PM congratulates Green Investment Bank on success on 2nd Anniversary​
Knocking on the public sector’s door


CIB chief executive Shaun Kingsbury told MPs this week that he was confident privatising the bank now would attract British and foreign investors, and said taking the bank out of the public sector felt “just right”.

However, he cautioned against developing a debt-based model and said the bank would instead focus on raising equity.

“We need to have much stronger earnings coming through as the projects get built out, which will be in two or three years’ time,” Kingsbury told the Environmental Audit Committee.

Raising equity would be the next step for a successful privatisation of the bank, but Kingsbury admitted he was “agnostic” about if there would be majority or minority shares on offer.

“Two or three years from now, with a much stronger income line, we will be well positioned to raise debt,” he added.

Kingsbury said there were plenty of areas for the GIB to invest in over the next few years, and was positive that the government’s environmental policy would not hinder the bank's plans.

The GIB would, Kingsbury said, soon “run out of government funded money” leaving the bank without the capital required to sponsor £700-800m of green energy projects or employ its team.

The CEO told MPs it was up to the government whether the bank would be shaped by a “minority or majority of private capital” but Kingsbury said he needed to access private capital in order to sustain the investment route the bank had set up.

While the GIB has enjoyed cross-party support, some witnesses at the Environmental Audit Committee cautioned against the pace of privatisation.

Ingrid Holmes, director of environmental group E3G, warned against “rushed privatisation” and told MPs there was a “compelling case to take a breath and pause” before selling off the bank to private investors.

About the author

Jessica Wilkins reports for Civil Service World

Share this page

Further reading in our policy hubs

Add new comment

Contact the author

The contact details for the Civil Service World editorial team are available on our About Us page.

Related Articles

Related Sponsored Articles

Keeping UK cities’ heads above water
3 April 2014

AECOM’s Associate Director of Sustainability, Michael Henderson, considers the...

A radical re-think for public sector transformation
2 November 2015

With the ‘low-hanging fruit’ exhausted, the public sector must approach new government saving...

BYOD: The critical balancing act
3 April 2014

How can organisations allow employees to use their own devices to access corporate information...

Bringing government data to life
8 June 2016

Microsoft shows a few of the ways that governments can turn data into insight