United Kingdom

United Kingdom

UK fails to make case for GIB privatisation

UK: The UK government has not given sufficient reasoning in its decision to privatise the Green Investment Bank (GIB), a group of MPs has said, as the government considers a total sell off of the bank.

The report said the UK government has failed to provide sufficient evidence for its decision to privatise the GIB
The report said the UK government has failed to provide sufficient evidence for its decision to privatise the GIB

A report ion the future of the GIB by the parliamentary environmental audit committee has found the Government still needs to answer questions on the proposed sale.

In June, the chancellor, George Osborne, said the UK would sell a majority share of the bank in a bid to attract more private funding.

"We regret that the government has taken the decision to privatise GIB without due transparency, publication of relevant evidence, consultation, and proper consideration of alternatives. The government's case could have been strengthened if it had provided evidence that this is the right time to privatise the Green Investment Bank.

"The absence of this, coupled with the government's reliance on its view that this is merely the ‘natural next step’ for the bank, is likely to lead to the suspicion that the move and its timing are not evidence-based policy," the report said.

In its report, the committee also demanded the government publish a "robust" business case and impact assessment report to support its decision to sell and the timing of the sale.

The GIB's green identity must also be protected in the sale, the committee said. "We do not believe that the government's proposed protections are sufficient to ensure the GIB's green purposes in the long term... A privatised GIB could still gradually move its focus away from novel and complex projects, which struggle to find funding, in favour of easier and less complex projects. In doing so, it would lose its crucial role of offering leadership in emerging green markets,"

MPs also recommended the government remains a minority shareholder in the bank, after being told by the Minister of State for Small Business, Industry and Enterprise Anna Soubry that a total sell off of the bank is "the right thing to do".

"If the GIB is privatised, then the government must retain a minority stake in order to ensure the bank's long-term strength and to demonstrate the government's commitment to the green economy," the report concluded. Read the full report here.

The bank was launched in November 2012 by the government, with more than £3 billion (€3.7 billion at the time) of funding.

It was tasked with funding low-carbon infrastructure projects in a bid to attract private investment. Offshore wind has been a core focus of the bank.

The GIB has supported several offshore projects in the UK. E.on's 400MW Rampion, the 630MW London Array and RWE Innogy's 576MW Gwynt y Mor are among the projects to receive support from the bank. 

EU targets

The Environment Audit committee's report follows one published by the House of Lords – the UK's secondary legislative chamber.

The House of Lords' European Union committee said the UK government should be clearer on its long-term renewable energy strategy to sure up confidence in the sector.

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