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Green Investment Bank privatisation threatens to undermine UK economic recovery
[24 June 2015] E3G, the think tank that originally developed the idea of the UK Green Investment Bank (GIB), today condemned plans by the Government to sell off a 70% stake in the institution as reckless. As the GIB prepares for its annual meetings in Edinburgh and London this week, E3G warned that plans to sell off a majority stake in the world’s first dedicated green public bank would carry the following major risks:
Selling more than 51% would damage investor confidence in the institution and in the Government’s commitment to developing a low carbon economy. This would lead to lower levels of private investment in the UK’s green economy.
The GIB could lose the remaining £1.8 billion already committed by the Government. This would also undermine investor confidence and reduce the value of GIB shares being sold.
The GIB’s green purposes could be diluted.
The GIB’s unique dual purpose of achieving both profit and green outcomes could be replaced with a primary duty to maximise profits. This could weaken its ability to leverage private investment into more risky low carbon energy projects that are critical for the UK’s energy and climate security.
Creating the GIB was among the most successful environmental and economic initiatives of the previous government. Widely copied around the world it has invested £2 billion of public money in 50 projects leveraging an additional £6 billion in private capital and generating a return on investment of 9%. Nick Mabey, Chief Executive of E3G said: Selling off a majority stake in the GIB would be completely reckless. 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.
Tom Burke, Chairman of E3G on +447710 627616 or Sepi Golzari-Munro on
or +44207 593 2020