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Campaigners alarmed over plans to sell stake in Green Investment Bank Campaigners alarmed over plans to sell stake in Green Investment Bank
(about 5 hours later)
The government is set to sell a majority stake in the Green Investment Bank, the project that was a central promise in the Conservatives’ 2010 manifesto, in a move that has drawn immediate criticism from environmental groups.The government is set to sell a majority stake in the Green Investment Bank, the project that was a central promise in the Conservatives’ 2010 manifesto, in a move that has drawn immediate criticism from environmental groups.
Industry sources said Sajid Javid, the business secretary, would announce the plan at the bank’s annual review meeting on Thursday. The government is likely to keep a stake in the bank but it could sell off as much as 70%.Industry sources said Sajid Javid, the business secretary, would announce the plan at the bank’s annual review meeting on Thursday. The government is likely to keep a stake in the bank but it could sell off as much as 70%.
The bank featured in the Conservatives’ 2010 election manifesto and was the first of its kind in the world. It was launched in 2012 to invest in wind, biomass and other green schemes that struggle to gain funding elsewhere because they are considered too risky or long-term for the private sector. The bank featured in the Conservatives’ 2010 election manifesto and was the first of its kind in the world. The Conservatives have often cited the bank as evidence of their commitment to the environment.
The bank, which started with £3.8bn of government-funded capital, has attracted private money but has been limited by the Treasury’s unwillingness to let it borrow. It announced its 50th investment on Wednesday, taking total project funding to more than £2bn and attracting another £6bn of private capital. The bank, based in Edinburgh with an office in London, was launched in 2012 to invest in wind, biomass and other green schemes that struggle to gain funding elsewhere because they are considered too risky or long-term for the private sector.
The bank, which started with £3.8bn of government-funded capital, has attracted private money but has been limited by the Treasury’s unwillingness to let it borrow. It announced its 50th investment on Wednesday – £2m to extract heat from waste water to provide energy for buildings in Scotland.
The project took the bank’s total investments to more than £2bn. It has also attracted another £6bn of private capital for investment in projects worth as little as £2m and as much as £1bn.
The bank’s other investments have included £236m to build and run the Rampion wind farm off the coast of Brighton, £2.5m to replace boilers in sheltered housing and a £6.3m loan to install low-energy bulbs in Glasgow’s streetlights.
E3G, the thinktank that developed the idea for the bank, said selling a majority stake would cast doubt on the government’s commitment to a low-carbon economy, deterring private investment in green schemes. It also warned that the bank’s green remit could be diluted by greater demands for profits.E3G, the thinktank that developed the idea for the bank, said selling a majority stake would cast doubt on the government’s commitment to a low-carbon economy, deterring private investment in green schemes. It also warned that the bank’s green remit could be diluted by greater demands for profits.
Nick Mabey, chief executive of E3G, said: “Selling off a majority stake in the Green Investment Bank would be completely reckless. The Green Investment Bank is not just the government’s most lauded innovation in the war against climate change. It has kept investment in the real economy going at a time when bank lending had fallen to an all-time low. It has played a critical role in supporting the UK economic recovery.”Nick Mabey, chief executive of E3G, said: “Selling off a majority stake in the Green Investment Bank would be completely reckless. The Green Investment Bank is not just the government’s most lauded innovation in the war against climate change. It has kept investment in the real economy going at a time when bank lending had fallen to an all-time low. It has played a critical role in supporting the UK economic recovery.”
David Powell, senior economics campaigner at Friends of the Earth, said: “Releasing the Green Investment Bank from the Chancellor’s penny-pinching clutches may be a small mercy – his refusal to let it borrow money underlined his green-bashing reputation. But privatising the bank could be a catastrophe without clear new rules in law to force it to invest in genuinely clean technology, whoever owns it.”David Powell, senior economics campaigner at Friends of the Earth, said: “Releasing the Green Investment Bank from the Chancellor’s penny-pinching clutches may be a small mercy – his refusal to let it borrow money underlined his green-bashing reputation. But privatising the bank could be a catastrophe without clear new rules in law to force it to invest in genuinely clean technology, whoever owns it.”
Friends of the Earth helped launch the campaign to establish the bank. It called for shares to be sold to members of the public.Friends of the Earth helped launch the campaign to establish the bank. It called for shares to be sold to members of the public.
Caroline Lucas, the Green MP for Brighton Pavilion, said: “The government’s rash and irresponsible plan to sell off a large chunk of the Green Investment Bank calls into question their commitment to investing in a low carbon economy. At precisely the time when we should be leading the world in the fight against climate change our government appears to be in retreat.”
Shadow business secretary Chuka Umunna said the bank was initiated under the last Labour government to attract funding to projects which would not otherwise receive finance.
“Since it began operating in 2012 it has made a significant contribution, investing billions of pounds in green projects,” he said. “But because the government has refused to give the GIB the borrowing powers it needs, it has never been allowed to reach its full potential.”
Umunna said it was unclear how the GIB could continue to perform its unique function if it was sold off and it would be “incredibly short-sighted” if the important role it currently plays was lost.
“We need to see the government doing all it can to support sustainable technology and green industries, rather than undermining the achievements of the past decade,” he added. “And this government’s poor record on asset sales, after the botched fire sale of Royal Mail in 2013, does not inspire confidence.”
Jeremy Purvis, the Lib Dem energy and climate change spokesperson in the House of Lords, said the establishment of the GIB and its location in Edinburgh had been a significant achievement of his party in government.
“Any move by the Tories to diminish capability or to reduce the UK’s ability to support renewable tech will be fiercely opposed by the Lib Dems,” he said. “We believe it should be strengthened and its remit widened and as recently as last week I called on the Government to do just that.”
Tim Farron, MP for Westmorland and Lonsdale and a Lib Dem leadership candidate, said the government should retain a majority stake in the investment bank. He said: “The decision is incredibly reckless and will damage investor confidence in the sector,” he said. “But more than that, it will bring into question the Tories commitment to the low carbon economy.”