UK government to sell £1bn stake in Green Investment Bank
Government to privatise GIB in a bid to remove state aid restrictions and help it expand
The UK government will sell its stake of more than £1 billion in the Green Investment Bank (GIB) to privatise ownership and to help it expand, according to an announcement on Thursday.
GIB was created in 2012 to support renewable energy projects and to encourage private sector investment.
The government will need to sell at least a 70 per cent stake, worth an estimated £1.4 billion, in order for the GIB to be free of state aid restrictions.
The government has committed to selling the stake by the end of the current government's term in 2020.
The bank says it has put about £2 billion towards 50 projects such as waste management plants and offshore wind farms.
George Osborne, the First Secretary of State and Chancellor of the Exchequer, 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."
Osborne (pictured) added: "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."
Secretary of State for Business, Innovation and Skills Sajid Javid said the government will sell its majority stake removing state aid restrictions, giving the bank more freedom to borrow and enabling it to secure more capital.
The bank announced in its annual review on Thursday that it operated profitably in the financial year up to April 2015, making a pre-tax profit in the second half of the year of over £3 million.
The GIB was the first bank of its kind in the world, established under the coalition government with the Conservatives and Liberal Democrats.
The bank is based in Edinburgh and was launched with £3.8 billion of government capital.
Swiss bank UBS is advising the Green Investment Bank on the move, whilst Bank of America Merrill Lynch is advising the government.
