Over the last two years, the UK Green Investment Bank has seen success in unlocking private sector investment in key low-carbon and green sectors. The GIB has helped develop markets and shown that investment in green projects is good business. I want to see this success continue and to see the GIB continue to accelerate investment across the UK’s green sectors.
To meet our low-carbon and green objectives, we know that we need to continue to see significant investment. I want to see the GIB continue to play an important role in the transition to a green economy.
Attracting private investment to GIB will, I believe, enable the company to do this. It will allow the bank to grow its business, giving the expert teams we have established within GIB access to a much greater volume of capital than would be the case if GIB were to remain in 100% Government ownership. This will enable the company to have the greatest possible impact in mobilising investment and lead to more green projects getting financed more quickly than would otherwise be the case.
In the debate on the Budget in March, the then Secretary of State for Business updated Parliament about work to explore options for bringing in additional capital into the Green Investment Bank as a way to ensure it is an enduring institution and has the operational freedom for investment across the green economy. We have therefore been exploring options for how best to get that capital and, with my right hon. Friends the Secretary of State for Energy and Climate Change and the Secretary of State for the Environment, Food and Rural Affairs, we have concluded that the best approach is to move GIB into private ownership subject to ensuring we achieve value for money. This should bring a number of important benefits, giving GIB greater freedom to operate across a wider range of green sectors in accordance with its green purposes, which are enshrined in legislation.
It has always been our intention that GIB should leverage the maximum amount of private capital into green sectors for the minimum amount of public money. Moving the company into private ownership is a natural development for GIB that further delivers this aim. Our aim is that a transaction should result in GIB no longer being classified as a public sector body. This would mean GIB would be free to borrow capital so as to achieve its business ambitions without this having an effect on public sector net debt.
The detail and timing of any transaction will be set out in due course.