The Green Investment Bank failed to live up to original ambitions and now there is no guarantee that it ever will because its green intentions are not sufficiently protected.
Since it was created in 2012, the UK Green Investment Bank plc (GIB) has been successful in attracting private investment into some sectors of the green economy, such as offshore wind projects. However, the Department for Business, Energy and Industrial Strategy does not know whether GIB achieved its intended objectives of encouraging investment in the green economy and creating an institution that lasts. Government chose to sell GIB before fully assessing its impact. In making decisions about GIB’s future, the Department prioritised reducing public debt and how much money could be gained from the sale over the continued delivery of GIB’s green objective.
In August 2017, the government sold GIB to Macquarie for £1.6 billion. The Department’s process for selling GIB took far longer than planned. The Department’s approach was reactive and it had to make a number of compromises to complete the sale. The measures the Department put in place to protect GIB’s Green Purposes are not sufficient to ensure that GIB is an enduring institution. It is unclear whether Green Investment Group (GIG; the rebranded GIB under Macquarie ownership) will continue to support the government’s energy policy, or continue to have an impact on the UK’s climate change goals. We believe that it was a misjudgement that the Department has so little assurance over GIG’s future investment in the UK and in emerging technologies, which will be crucial to ensuring that the UK’s green commitments are met.
14 March 2018