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Bidding opens for shares of UK Green Investment Bank

Government yesterday launched the sale of GIB shares as part of a privatisation that seeks to boost involvement of private investors in green energy projects.

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. A transfer to the private sector will allow the GIB to maximise investment into green energy projects by attracting greater private sector investment, which has so far been constrained by rules governing how public bodies can raise capital.

In the three years since it was launched 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 has a proven track record of enhancing the value of assets under its management with a strong portfolio that is well diversified across different financial products, sectors, structures, technologies and counter-parties. 

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 position in the market as an expert and highly flexible investor offering a wide range of financial solutions has created a unique market proposition. This has resulted in lower costs, strong partnership relationships and a balanced and well-diversified portfolio delivering attractive and sustainable investment returns.

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.

GIB provides a strong platform for growth and is well placed to expand into new sectors of the UK green economy in areas such as heat networks and energy storage. Privitisation will increase the ability of GIB to engage in projects at a local level supporting local authoirties realise their low carbon ambitions. 

 

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