Green Investment Bank ‘controversially’ bought for £2.3bn

Australian finance giant Macquarie Group has concluded the contentious purchase of the UK Green Investment Bank for a total consideration of £2.3bn.

The Department for Business, Energy and Industrial Strategy confirmed the sale in a written statement to parliament this morning, while Macquarie confirmed that it planned to invest at least £3bn in the green economy over the next three years.

The £2.3bn deal is broken up as a £1.7 billion transaction price and £600m in future commitments to existing GIB projects.

The deal, which has sparked controversy and been subject to an unsuccessful legal challenge from a disgruntled rival bidder, received the backing of GIB’s independent board.

Macquarie has sought to appease those sceptical of the company’s intentions by agreeing to a series of commitments, including maintaining GIB’s purpose of investing in low carbon projects in line with special share agreements, maintaining the GIB ‘platform’ and brand while retaining existing employees in Edinburgh and London, and lastly the creation of a new revenue generating project delivery business at the bank’s Edinburgh office.

Climate change minister Nick Hurd heralded the GIB’s success in attracting private capital to the UK’s green economy, adding that it now “makes sense” to move the entity into the private sector.

“This deal gives us the best of both worlds. We have secured fair value for the UK taxpayer. GIB has a well-funded new owner that is committed to the Bank’s green mission, with a track record of success in green investment and an ambition to grow the business. The UK will benefit from increased investment in our green infrastructure as we make the transition to a green economy,” he said.

Having invested in almost 100 green infrastructure projects in the UK, the GIB will become Macquarie’s primary vehicle for renewable energy investment in the UK and Europe.

David Fass, chief executive for EMEA at Macquarie Group, believes that the deal has strengthened Macquarie’s commitment to the green energy sector.

“Our combined platform will build on the legacy of the Green Investment Bank and, alongside our knowledge of energy and infrastructure, will open further opportunities in low carbon investment both in the UK and further afield,” he said.

“We are excited by a business that will take a leading role in the green economy using the specialist knowledge of our teams in Edinburgh and London.”

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