Green Investment Bank's environmental remit under threat

16th October 2015

Related Topics

Related tags

  • Mitigation ,
  • Generation ,
  • Renewable


Heidi Barnard

Legislation obligating the Green Investment Bank (GIB) to invest only in environmentally friendly projects will have to be repealed before privatisation goes ahead, business secretary Sajid Javid said.

In a written ministerial statement, Javid said that, in order for the GIB to be reclassified as a private sector enterprise, the controls imposed on it by the Enterprise and Regulatory Reform Act 2013 need to be repealed.

If this did not happen, there is a risk that the GIB would still be subject to government control over how it raises capital, Javid said. The need to repeal the legislation has only come to light since the decision was taken to privatise the bank, he added.

The business secretary insisted that the bank would continue to invest in green projects, however. He said the government "wants and expects" a privately owned GIB to continue its focus on the low-carbon economy. "It is clear from preliminary feedback that potential investors are interested in acquiring a stake in GIB precisely because of its unique green specialism and its green-focused business plan.

"As part of any sale process, we would expect potential investors to confirm their commitment to the GIB's green values and to set out how they propose to ensure these are protected," Javid said.

The government announced its intention to privatise the bank in June, saying it wanted the GIB to be free to borrow without the money being classed as public sector debt, and insisting that privatisation would allow the bank to lend to a wider range of sectors and have greater impact in mobilising investment in green projects.

According to Javid, sections of the 2013 Act that relate to the bank will be repealed through an amendment to the Enterprise Bill to be tabled at Lords committee stage.

E3G, the think tank that originally developed the idea of the GIB, said that the move would make the bank a competitor rather than a multiplier of private investment.

It called for the government to guarantee that the GIB will retain its statutory purpose to overcome market failures affecting financing of the UK's green infrastructure.

Nick Mabey, chief executive of E3G, said: "Creating the GIB was among the most successful environmental and economic initiatives of the previous government. Widely copied around the world, it has invested £2 billion of public money in 50 projects, leveraging an additional £6 billion in private capital and generating a return on investment of 9%."

Earlier this week, the GIB announced that its renewable energy fund had reached £818 million, close to its target of £1 billion, after a second round of fundraising secured investment of £355 million for its offshore wind fund.

Karl Smith, fund managing director at the GIB, said that confidence is growing from domestic and international investors in well-developed and managed offshore wind assets in the UK. "We are in advanced discussions with other potential investors and progressing quickly towards final close and reaching our £1 billion target."


Subscribe to IEMA's newsletters to receive timely articles, expert opinions, event announcements, and much more, directly in your inbox.

Transform articles

Weather damage insurance claims hit record high

Weather-related damage to homes and businesses saw insurance claims hit a record high in the UK last year following a succession of storms.

18th April 2024

Read more

The Scottish government has today conceded that its goal to reduce carbon emissions by 75% by 2030 is now “out of reach” following analysis by the Climate Change Committee (CCC).

18th April 2024

Read more

The Science Based Targets initiative (SBTi) has issued a statement clarifying that no changes have been made to its stance on offsetting scope 3 emissions following a backlash.

16th April 2024

Read more

While there is no silver bullet for tackling climate change and social injustice, there is one controversial solution: the abolition of the super-rich. Chris Seekings explains more

4th April 2024

Read more

One of the world’s most influential management thinkers, Andrew Winston sees many reasons for hope as pessimism looms large in sustainability. Huw Morris reports

4th April 2024

Read more

Alex Veitch from the British Chambers of Commerce and IEMA’s Ben Goodwin discuss with Chris Seekings how to unlock the potential of UK businesses

4th April 2024

Read more

Regulatory gaps between the EU and UK are beginning to appear, warns Neil Howe in this edition’s environmental legislation round-up

4th April 2024

Read more

Five of the latest books on the environment and sustainability

3rd April 2024

Read more

Media enquires

Looking for an expert to speak at an event or comment on an item in the news?

Find an expert

IEMA Cookie Notice

Clicking the ‘Accept all’ button means you are accepting analytics and third-party cookies. Our website uses necessary cookies which are required in order to make our website work. In addition to these, we use analytics and third-party cookies to optimise site functionality and give you the best possible experience. To control which cookies are set, click ‘Settings’. To learn more about cookies, how we use them on our website and how to change your cookie settings please view our cookie policy.

Manage cookie settings

Our use of cookies

You can learn more detailed information in our cookie policy.

Some cookies are essential, but non-essential cookies help us to improve the experience on our site by providing insights into how the site is being used. To maintain privacy management, this relies on cookie identifiers. Resetting or deleting your browser cookies will reset these preferences.

Essential cookies

These are cookies that are required for the operation of our website. They include, for example, cookies that enable you to log into secure areas of our website.

Analytics cookies

These cookies allow us to recognise and count the number of visitors to our website and to see how visitors move around our website when they are using it. This helps us to improve the way our website works.

Advertising cookies

These cookies allow us to tailor advertising to you based on your interests. If you do not accept these cookies, you will still see adverts, but these will be more generic.

Save and close