The Future Of The Green Investment Bank Is In Peril

With 2016 the hottest year on record, a climate-sceptic in the White House, and our (far from perfect) national climate targets in real danger, now is not the time to break up one of the UK most significant investors in clean, renewable energy.
Chris Radburn/PA Archive

The Green Investment Bank is a publicly-owned institution that funds low-carbon projects across the UK. From financing vast offshore wind farms to supporting innovative energy efficiency projects, the GIB is playing a crucial role in the transition the UK needs to make to a zero-carbon economy. With the Government talking boldly about leading the world on combatting climate change you might expect them to be guarding this institution and building it up but, instead, they're planning to flog it off.

The government's preferred buyers, Macquarie, have a deeply regressive approach to environmental issues, and, in selling off its stake without the appropriate safeguards, the Government is placing the GIB at risk of being dismantled - putting at risk all the green projects it has invested in.

From open-cast coal mines in China to fracking here in the UK, Macquarie has a track-record of supporting climate-wrecking projects. They also have a global reputation for being "asset strippers": taking over a company and selling off of its assets without regard for the company's future.

That's why I asked a number of questions in Parliament in December on the safeguards being put in place to protect the GIB - but the recent answers given by Ministers at the Department of Business, Energy and Industrial Strategy give no assurances that the bank will remain true to its green purpose or that it will endure as a single institution.

Today, further evidence has come to light that suggest the GIB is in peril. An investigation by E3G and Energydesk has revealed that over the last three months a number of significant changes have taken place within the internal structures of the Green Investment Bank. Between 22nd November and the 1st December 2016, the GIB established ten new subsidiary companies, each holding different assets that the GIB has invested in since its creation in 2012.

This kind of restructuring would allow the new owner of the bank to sell assets with ease and would signal the end of the GIB as we know it. Such changes have not taken place before, and that they took place in the weeks and months leading up to the planned sale of the GIB give more reason to believe these are far from harmless administrative undertakings.

Any asset sale that Macquarie is involved in will result in one thing for them: big fees and a large profit. It's their well-known business model. The GIB has commitments to 85 projects totalling £2.7billion - so, there's clearly money to be made. This new evidence strongly suggests that the GIB, under Macquarie ownership, will be stripped of its four largest assets, totalling almost £1billion.

It is astounding to think that the GIB itself has been complicit in a future asset-strip, and Ministers and the GIB must now urgently explain why these changes have taken place. The government must also provide details of the assurances they have received from Macquarie of their commitment to the future of the GIB as a significant funder of green projects in the UK.

Not only does selling the GIB to Macquarie put the bank at existential risk, it also represents an awful deal for the taxpayer. In 2016, the GIB started to make a profit and it is projected to deliver an annual return of 10% for the foreseeable future.

With 2016 the hottest year on record, a climate-sceptic in the White House, and our (far from perfect) national climate targets in real danger, now is not the time to break up one of the UK most significant investors in clean, renewable energy.

We need bold and dynamic investors who can give confidence and stability to those forward-thinking businesses looking to support the just transition: the GIB is exactly that. To sell GIB to Macquarie would be to sell our future, so let's save the GIB before it's too late.

Caroline Lucas is the co-leader of the Green Party and MP for Brighton Pavilion

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