UK Green Investment Bank privatisation process launches

The UK Government confirmed yesterday it was launching the UK Green Investment Bank plc (GIB) sale process today.

The transaction will involve both the sale of existing shares owned by the Government and also the commitment of additional capital for GIB by new investors.

The Government published today details in a report to Parliament and the Devolved Administrations.

UK GIB has committed £2.6bn of capital to almost 70 green infrastructure projects across the UK. It is the most active investor in UK green infrastructure with leading market share and a clearly identified near-term UK pipeline of new transactions. GIB is well placed to play a leading role in a large and growing global market with compelling long term dynamics.

GIB’s existing portfolio of assets is performing strongly and is well diversified across different financial products, sectors, structures, technologies and counter-parties. GIB has a proven track record of enhancing the value of assets under its management.

GIB’s ‘green purposes’ will continue to be independently protected through the creation of a Special Share. The intentions of potential investors to commit to and protect GIB’s green values will be taken into account in the Government’s assessment of bids.

GIB’s current asset base offers investment returns producing a portfolio-wide forecast Internal Rate of Return of over 10%. The business has strong and stable projected cash flow generation, and costs that are below or in line with industry benchmarks for a business of this kind.

The bank has around 85 investment specialists in a wider team of 129 staff located at GIB’s headquarters in Edinburgh and an office in London.

GIB has already established a third party asset management business with over £800m raised for the UK GIB Offshore Wind Fund, the UK’s largest renewable energy fund.

The bank is also working overseas through a £200m international joint venture with the UK’s Department for Energy and Climate Change.