Plans to privatise the UK’s Green Investment Bank have been confirmed by the country’s Business Secretary, Thursday, who said it was time to move the bank into private ownership.
Speaking at the Green Investment Bank’s (GIB) Annual Review event Thursday in London, UK Business Secretary Sajid Javid announced the plans to bring private capital into the bank.
“The Green Investment Bank has shown that investment in green technologies can be a profitable business,” said Javid. “The challenge now is to build on this success.”
The Green Investment Bank has committed £2 billion to 50 UK renewable energy projects since its inauguration in 2012, with 22 of those projects occurring in 2014/15. In total, the projects backed by the GIB are now worth £8 billion, and upon completion will generate enough renewable electricity to power the needs of approximately 4.2 million UK homes annually.
“In two and a half years of operations GIB has established a successful business model,” said Lord Smith of Kelvin, Chair of the Green Investment Bank, who also spoke at the event. “We have played an important role in strengthening energy supply and security, reducing energy demand and decarbonising our economy. We have achieved all of this by investing profitably.”
Critics from within green groups and the green technology sector have spoken up against the move.
“The government should think twice before making dramatic change to the ownership of the Green Investment Bank,” said Matthew Spencer, director of Green Alliance. “A sell-off would be self-defeating since it would drive the bank to lower risk projects and lead it to compete with private finance.”
However, Chancellor of the Exchequer George Osborne made the argument that privatisation would actually benefit the GIB.
“In 2012 we set up the Green Investment Bank to support important investment in the UK’s green infrastructure and since then it’s gone from strength to strength,” he said. “That is why we can now begin exploring options for moving the bank into the private sector to enable it to access larger pools of capital and act more freely to invest in a broad range of green sectors.”