Bidding Begins for Green Investment Bank

Earlier this year the Business Secretary, Sajid Javid, announced that the Green Investment Bank (GIB) will be privatised. Since its launch in 2012, the GIB has funded dozens of waste and energy projects. Last week, three bidders were shortlisted to buy a majority stake in the GIB.

According to Sky News, one of the trio was a group including the Pension Protection Fund (PPF), the industrial giant General Electric, the Japanese trading group Mitsui and US insurance firm, John Hancock.

The bid, which is being led by London-based investment firm, Sustainable Development Capital Ltd, is being advised by HSBC and JP Morgan.

Another shortlisted bidder is Australian bank, Macquarie. Macquarie has been a prominent investor in British infrastructure in the last ten years. One of its biggest investments is arguably Thames Water. Royal Bank of Canada is advising Macquarie on its interest.

The third offer is being led by private equity company Kohlberg Kravis Roberts (KKR), which has provided capital for lending to UK green energy projects in the past.

Launched with £3.8bn of public funding, the GIB has so far contributed £2.6bn to 70 projects, including £35m to a renewable power facility in Tilbury, Essex, and £240m to Sheringham Shoal offshore windfarm near the Norfolk coast

The GIB announced the creation of a “special share” put in place to protect its green philosophy after criticism that privatising the organisation could cause risks to its original objectives.

Non-binding bids for the GIB were submitted several weeks ago and more formal offers are expected in the next two months. The shortlist of offers is not final and the make-up of the bidding groups could well change.