On 3 March 2016 the UK Government launched the process to move the Green Investment Bank into the private sector. Details were set out in statements from the UK Government and the Green Investment Bank.
The transaction will involve both the sale of existing shares owned by the UK Government and also the commitment of additional capital for the Green Investment Bank by new investors.
The Government published further details about the sale in a report to Parliament and the Devolved Administrations. This report set out details on the Government’s objectives for the sale of its GIB shares.
The independent Board of the Green Investment Bank supported the Government’s decision to move GIB into the private sector, believing that it would allow the organisation to deliver a greater green impact.
In response to the Government’s 3 March announcement, Lord Smith of Kelvin, independent chair of the Green Investment Bank, said:
“Attracting new investors is vital if the Green Investment Bank is to fund its ambitious plans to double the size of its business, expand into new parts of the UK green economy and deliver a growing green impact.
“I am confident that the sale process will provide GIB with good new owners who will support the Green Investment Bank’s continued growth and leadership role in the global green economy long into the future.
“This launch, and the wider plans to introduce new capital and new owners to GIB, has the full support of the Green Investment Bank’s independent Board.”
Shaun Kingsbury, chief executive of the Green Investment Bank, said:
“In three years the team at the Green Investment Bank have built a special business that is green, profitable and admired around the world. The Green Investment Bank is an exciting investment opportunity, providing new investors with predictable returns and significant growth opportunities. The business is perfectly placed to play a leading role as the world moves decisively towards an unprecedented programme of green infrastructure investment.”
The transaction process
The Green Investment Bank sale process has involved two separate rounds. In the first round, bidders were asked to submit non-binding initial bids based on an Information Memorandum containing detailed information about the business and its forward plans.
In the second round, selected bidders were provided with additional information to enable them to carry out due diligence on the Bank, concluding with the submission of formal, final and binding offers.
Bidder information has been published by the UK Government.
Maintaining our green purposes
A key debate in the privatisation process centred
on safeguarding the Bank’s “green purposes”.
These purposes set out the environmental criteria which all our investments must meet.
In response to concerns raised by the House of Lords, the House of Commons Environmental Audit Committee and others, the Business Secretary announced on 2 February 2016 that the Bank would create a 'special share' in the company. This share is to be held by a special shareholder, called the Green Purposes Company, run by independent trustees. The purpose of the special share is to ensure that, once the Green Investment Bank is in private ownership, its green purposes could only ever be changed with the agreement of the independent special shareholder.
The Green Investment Bank supported the creation of this special share and undertook a number of steps to implement it. Those steps culminated in the nomination of 5 independent trustees of the Green Purposes Company, who will formally take up their roles upon the completion of the privatisation transaction.