Green Investment Bank to be privatised, Sajid Javid confirms
Business secretary tells MPs that flagship coalition project will be moved out of the public sector to allow it to borrow more and "grow its business"
Sajid Javid has outlined plans to privatise the Green Investment Bank set up by his predecessor as business secretary, Vince Cable.
The GIB was established in 2012 with a budget of £3.8bn, and given the task of encouraging investment in clean energy infrastructure projects. According to the bank's latest annual report, it had committed some £1.8bn to 46 separate green projects and helped to channel almost £7bn of private money into the sector.
In a written statement to MPs published today, 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".
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"To meet our low carbon and green objectives, we know that we need to continue to see significant investment," he said.
"I want to see the GIB continue to play an important role in the transition to a green economy. Attracting private investment to GIB will, I believe, enable the company to do this.
"It will allow the bank to grow its business, giving the expert teams we have established within GIB access to a much greater volume of capital than would be the case if GIB were to remain in 100% government ownership.
"This will enable the company to have the greatest possible impact in mobilising investment and lead to more green projects getting financed more quickly than would otherwise be the case."
Although Javid did not give details on the timing of any transaction, the business secretary confirmed that the goverment was aiming for a deal that would "result in GIB no longer being classified as a public sector body".
Plans to dispose of the GIB have already come under fire from E3G, an environmental think tank which originally pushed for the Bank's creation.
"Selling off a majority stake in the GIB would be completely reckless," said E3G chief executive Nick Mabey.
"The Green Investment Bank is not just the government’s most lauded innovation in the war against climate change. It has kept investment in the real economy going at a time when bank lending had fallen to an all-time low.
"It has played a critical role in supporting the UK economic recovery. Privatisation threatens to destroy investor confidence which in turn will damage both energy security and the UK economy. On no account should more than 49% of the public stake in the GIB be sold now."
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