UK GIB plans to raise private capital

The UK government has announced its intention to bring private capital into the UK Green Investment Bank (GIB).

Chancellor of the Exchequer, George Osborne comments: '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. 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.

'We want the Green Investment bank to attract more investment and we will use the money we raise to pay down the national debt and deliver lasting economic security for working people.
Since its inception in 2012, GIB has committed £2 billion and helped to finance 50 green infrastructure projects including helping to finance first-of-a-kind projects that use innovative technologies in waste management and offshore wind power.'

The UK Business Secretary, Sajid Javid, adds: 'The Green Investment Bank has shown that investment in green technologies can be a profitable business. The challenge now is to build on this success. The bank will still be green, still be profitable, still be a market-leader in financing environmentally sound infrastructure. But free from limitations on where it can borrow money and EU regulations on state aid, the bank will be able to access a much greater volume of capital. This is the right decision for the Green Investment Bank, the right decision for the environment and the right decision for taxpayers.'

The UK GIB has reached profitability after 2.5 years of operations.

The bank backed 22 new green energy projects in 2014/2015 committing £723 million (€ million) of its own capital to projects with a total value of £2.5 billion. GIB has now committed £2 billion to 50 UK projects worth over £8 billion. Once built, these investments will produce enough renewable energy to power the electricity needs of 4.2 million UK homes each year.

'We are now very close to our expected long-term investment rate of £800 million to £1 billion per year,' says GIB CEO Shaun Kingsbury. 'While capital from the UK Government was an important start it will not be enough to sustain our level of investment. From the outset it was always part of the plan that we would need to raise additional capital from the private sector to supplement government funding.

'We have a range of funding options. We will keep investing our current share capital from the UK Government, we will recycle that capital, we will continue to raise capital for our fund and we will work to attract new equity investors. Attracting those investors is a key strategic step for GIB. It will not only ensure that we have the capital to grow but it will allow us to borrow and to invest in a broader range of green infrastructure projects.'

GIB has appointed advisors and says it is in the early stages of this work. The company does not expect to make an announcement in the short term.

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