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Australian group Macquarie eyes sell off of UK-based Green Investment Bank’s assets

The UK’s Green Investment Bank (GIB )is set to be stripped of its prized assets once Australia’s Macquarie Group seizes control of the state-owned British lender later this month, according to media reports in The Sunday Times.

The Australian bank has ­already lined up suitors for some of the Green Investment Bank’s most valuable assets — even though it has yet to seal the £3.8bn takeover.

The Edinburgh-based lender’s wind farm and biomass ­projects are understood to be on the block. Macquarie bankers have in recent weeks held talks with several potential buyers.

The program of sell-offs is likely to amplify concerns over the privatisation of GIB, which was created by former British business secretary Sir Vince Cable in 2012 to kick-start Britain’s renewable energy industry.

Macquarie’s apparent desire for quick disposals may also raise questions over whether the ­government is selling off GIB too cheaply.

The National Audit Office, Britain’s spending watchdog, will review the deal once it is completed.

Concern

In a Guardian comment piece, financial commentator Nils Pratley criticised the plan. He said: “We should be alarmed. That is not only because of weekend stories about Macquarie lining up buyers for GIB projects in an “asset stripping” exercise. Investments do not have to be held for infinity, of course, and GIB itself is sometimes a seller. But the real worry here is subtler and more serious: can Macquarie be made to recycle the proceeds of any disposals into GIB-style renewable infrastructure in the UK?

“The short answer is: no. After a sale, the government is virtually powerless. “It is not open to the government to impose binding conditions on the future GIB requiring it to act in a particular way,” conceded the March paper. Instead, the government created a “special share” arrangement, and a panel of five experts to police it, to ensure that any investments meet the renewable criteria.

“But what if Macquarie thinks GIB is worth more dead than alive? What if it pays £2bn for GIB, liquidates most of the assets at a handsome profit and then decides the capital is better deployed elsewhere?

“The government seems to be grossly naive about this possibility. The March paper spoke cheerfully about how potential investors were interested in GIB because of its green specialism and declared: ‘It would make no sense to buy the company only to move it away from this focus.’ Wake up.”





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