Macquarie-led group to buy GIB for GBP 2.3bn

A consortium led by Macquarie Group Ltd (ASX:MQG) will buy the UK Green Investment Bank Plc (GIB) for GBP 2.3 billion (USD 2.95bn/EUR 2.74bn), making it Macquarie’s primary vehicle for renewable energy investment in the UK and Europe.

While announcing the agreement on Thursday, the UK government said that the deal will meet the previously outlined objectives, including securing value for money for the taxpayer and ensuring that GIB continues its green mission. Five independent trustees will hold the so-called “special share” in GIB, giving them the power to approve or reject any proposed change to the bank’s green mission. The UK government will continue to hold a GBP-130-million portfolio that includes a small number of existing GIB investments.

Aside from Macquarie, the purchasing consortium also includes Macquarie European Infrastructure Fund 5 (MEIF5) and Universities Superannuation Scheme (USS), both of which will invest in a new vehicle that will hold some of GIB’s existing offshore wind assets. GIB will manage this offshore wind investment vehicle and hold a 25% stake in it.

At the same time, GIB will establish two other investment vehicles -- a low carbon lending platform and a green infrastructure investment platform. USS and GCP Infrastructure Investments will invest in the low carbon lending platform.

The Australian financial services major said separately that it is committed to GIB’s newly-set target of GBP 3 billion of new green energy investments over the next three years, either directly or by arranging capital from other investors. Future investments will target energy efficiency, bioenergy, energy from waste, onshore and offshore wind, solar and tidal energy, as well as energy storage technologies, Macquarie said. The group plans to integrate its existing UK green energy principal investing business into GIB.

GIB’s independent chair Lord Smith of Kelvin welcomed the deal, including the involvement of USS and MEIF 5 as new investors, saying that “these types of institutions are well-suited to the long-term ownership of large-scale green infrastructure assets”.

GIB was created in 2012 with the purpose of accelerating private sector investment into the UK green economy. Since then, the bank has backed nearly 100 green infrastructure projects in the UK. Upon completion of its privatisation, GIB will manage or supervise more than GBP 4 billion of green infrastructure assets and projects.

The transaction, which is subject to certain regulatory approvals including EU merger clearance, is expected to close in about two months.

(GBP 1.0 = USD 1.284/EUR 1.192)

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