Macquarie to buy UK’s Green Investment Bank
(13 October 2016 – United Kingdom) Australia’s fifth largest bank, Macquarie Bank is close to winning the auction for the UK’s Green Investment Bank in a privatisation worth about £2 billion (A$3.19 billion).
The group is understood to have beat a consortium called Sustainable Development Capital, made up of the Pension Protection Fund, the Japanese trading house Mitsui, General Electric, and John Hancock, the insurer.
The deal would see the first privatisation since Theresa May became prime minister in July.
When the sale was announced in June 2015 by Sajid Javid, former business secretary, he indicated the government would retain a substantial minority stake.
Instead, in a substantial U-turn, the government is now expected to sell the entire bank — maintaining only a symbolic golden share, which will be established in a separate company, run by independent trustees.
Among those concerned about the sale is Virgin Group founder, Sir Richard Branson.
“The UK Green Investment Bank is so important because it is a pioneering, government-backed national institution,” he said.
“It is only just getting started. That’s why it’s vital that it remains government backed and green post-privatisation, preferably with government retaining a stake.”
The £2 billion price consists of £1 billion in equity paid to the government, and a further £900 million that the GIB has committed but not yet paid to several construction projects. The buyer is also expected to commit £600m to £700m a year to future projects.
Macquarie’s assets in the UK include the M6 toll road, Thames Water and Arqiva, which owns television and radio masts.
The Green Investment Bank launched in November 2012 with £3.8 billion of government money to back eco-friendly projects that might not have attracted strong private sector interest.
The US and Australia have both since set up similar banks. In the UK, GIB has committed about £2.7 billion to 81 green infrastructure projects around the country.
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