High Court case made against Green Investment Bank purchase

A fund which wanted to buy the Green Investment Bank (GIB) has launched a High Court case questioning the Government’s decision to provisionally award the deal to Macquarie.

Sustainable Development Capital (SDC) has begun judicial review proceedings over Macquarie’s preferred bidder status, alleging that its bid was not compliant with the Government’s original criteria.

SDC explains that the fact that no deal was completed within the targeted timetable “attests to the fact that the preferred bid was neither deliverable within the timeframe nor acceptable.”

The threat of a court case adds to concerns which have been growing about Macquarie’s planned takeover of the Government-owned bank.

The GIB was originally set up in 2012 with £3.8bn of state funding to encourage private and public sector investment into environmentally friendly projects, but Macquarie is thought to be planning to sell some of the assets once the deal is complete.

Politicians from all political spectrums have lined up to voice doubts about the Australian bank’s commitment to maintaining the bank’s environmental credentials. In January, Ed Miliband, the former Labour leader, said there was “cross-party concern” about the sale process, while Conservative MP Peter Aldous called for the sale process to be halted until the Government had set up more safeguards.

But energy minister Nick Hurd defended the sale, arguing that the bank will be required to honour its green purpose after privatisation. “We want this to go into the private sector to do more of what it is doing, unfettered by the inevitable restrictions that the state has to put on it at this stage," he said, and vowed not to sell the GIB "to an asset stripper".

SDC has previously said it would take the GIB public without breaking it up, once the bank has grown its earnings and portfolio of environmental projects by the end of the decade.

The bank turned its maiden profit of £9.9m in the 2015/16 financial year and it hopes to generate a 10pc return on its portfolio of projects.

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