Opposition parties condemn sale of Green Investment Bank

Wind turbines - credit: Fotolia

Opposition parties in Scotland have condemned the UK Government following confirmation that the Green Investment Bank (GIB) will be sold to a consortium led by investment bank Macquarie.

UK Climate Change and Industry Minister Nick Hurd yesterday confirmed the GIB – established by the coalition government in 2012 to support emerging green technologies – would be sold for around £2.3bn.

Speaking to Holyrood in January, Sir Vince Cable, who oversaw the GIB’s creation, warned the sale had been “clouded in secrecy and rumour” and that the bank risks being "broken up and destroyed".

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Following the announcement Scottish Lib Dem MSP Liam McArthur accused the Tories of letting “their friends cash in” on the bank, while Green MSP Andy Wightman warned “the green credentials of the supposed Green Investment Bank are now in tatters”.

But GIB chair Lord Smith of Kelvin backed the sale, pointing to commitments from Macquarie to maintain GIB as a discrete entity within its business, uphold its green investment principles and report transparently on GIB’s green impact.

Economy Secretary Keith Brown welcomed the decision to keep the bank in Edinburgh, alongside commitments from Macquarie that staffing levels would be maintained.

He said: “I welcome the Macquarie Group’s clear commitment to Scotland and the assurances we have received that it will maintain the Green Investment Bank’s unique identity and its focus on the green projects that are key to Scotland’s continued economic success.

“This announcement is testament to the talent and opportunity to be found here and I look forward to working with the Macquarie Group to ensure its ambitious plans for Scotland are realised.”

The GIB was created as a “for profit” bank, aiming to accelerate the UK’s transition to a greener economy, and to create an enduring institution, operating independently of government.

Macquarie committed to invest at least £3bn of new investment into the green economy over the next 3 years.

Nick Hurd said the deal will meet government requirements for a sale, providing value for the taxpayer while ensuring GIB continues its green mission in the private sector.

Lord Smith said the GIB Board provided views on the future prospects of the GIB, its continuing growth and its leadership role in green investment to ministers at key stages in the process.

He said: “Macquarie has made significant and important commitments to the UK Government to maintain GIB as a discrete entity within its business, maintaining GIB’s investment focus and approach with a target to invest more capital each year than GIB has historically. Macquarie will also uphold GIB’s green investment principles and report transparently on GIB’s green impact. Macquarie will utilise the market-leading expertise of the existing GIB team and will build on GIB’s deep commitment to Edinburgh.

“On the basis of these commitments, we believe Macquarie can be a good owner of GIB and we support the Government’s decision to sell GIB to Macquarie. We look forward to seeing these commitments from Macquarie delivered, in full, in the months and years ahead.

He added: “In the four years since its inception GIB has become an important business in, and for, the UK. It is widely admired, across the world, as a stand-out success story and has provided a model of good policy that other countries are now following.

“GIB in private ownership can, and should, continue to play an important leadership role in supporting the global low carbon transition and the UK Government’s ambitious plans for a strengthened industrial strategy and emissions reduction.”

The GIB has supported nearly 100 green infrastructure projects in the UK since 2012, attracting £3 of third party capital for every £1 it has invested.

McArthur said: "Since 2015 the Conservatives have scrapped the zero carbon homes scheme, abolished the Department of the Environment and Climate Change and now want to let their friends cash in on the Green Investment Bank.

“The Green Investment Bank should be an opportunity for the UK to lead by example in building a more sustainable future. On that basis, this sale is environmentally irresponsible, and on the eve of an election politically dubious.”

Andy Wightman said: “The green credentials of the supposed Green Investment Bank are now in tatters. Why would the new owners allow for genuine green investments to be made if they are going to impact on the profitability of the company’s previous investments? I don’t expect the public to fully trust that GIB will make the right investments in renewables project that could eventually make fossil fuel methods redundant.

“As an MSP for the capital, I’m pleased that jobs will remain in the city. Edinburgh has a proud history of financial prudence, which has been inappropriately rocked in recent times by unscrupulous banking practices. With this sale I hope to see it return to responsible lending and investing that will be carried out with the due diligence that consumers expect.”