MPs have criticised the government for selling the Green Investment Bank to a private investment bank, claiming that the body had “failed to live up to its original ambitions”.
In a report published today, the Public Accounts Committee claimed that the sale of the Bank was completed before the government had been able to assess whether it had met its objective of encouraging investment in the green economy.
GIB, which was wholly-owned by government was set up in 2012 to provide matched funding for renewable energy projects.
The financing body was sold to global banking firm Macquarie Group in a deal worth close to £1.6 billion in August 2017 – and was rebranded Green Investment Group.
Since its inception the GIB helped to mobilise more than £10 billion of investment into over 70 projects covering offshore wind, energy efficiency and waste and bio energy, the government has said.
This included around £1.5 billion in backing from the government itself, as well as further investment from private sector partners.
The Bank committed to investments in the waste sector totalling £200 million in its first two years of existence including £64 million backing for Shanks’ energy from waste plant at Sinfin in Derbyshire, as well as £20 million investment in the West London Waste PFI project.
Other investments included £35 million of senior debt for Wheelabrator’s proposed Parc Adfer energy from waste plant in North Wales, £80 million for the Wheelabrator Kemsley (K3) CHP energy from waste plant and £28 million of debt finance package for FCC’s Millerhill energy from waste plant near Edinburgh.
According to the Committee, since the sale, it is “unclear” whether Green Investment Group will continue to support the government’s energy policy, or continue to have an impact on the UK’s climate change goals.
Commenting on the sale of the Bank, Public Accounts Committee Deputy Chair Sir Geoffrey Clifton-Brown, said: “Government set up the Green Investment Bank to grow investment in the green economy and thus help the UK meet its climate change obligations.
“The manner in which it was sold off is therefore deeply regrettable. Government did not carry out a full assessment of the Bank’s impact before deciding to sell, nor did it secure adequate assurance over the Bank’s future role.
“This was a UK initiative but the rebranded Green Investment Group is not bound to invest in the UK’s energy policy at all, nor to invest in the kind of technologies that support its climate objectives.”
The MP for the Cotswolds added that the sale of the Bank could have ‘secured a better return for taxpayers, and claimed that it was a mistake to repeal legislation protecting its green investment obligations.
He said: “Macquarie told us such commitments did not affect the price it was prepared to pay, indicating the government could and should have strengthened these commitments contractually.
“We expect the government to keep us updated on the GIG’s future activities in the UK but there are broader lessons here – not least for how government evaluates public assets and, when relevant, prepares them for sale.”