UK committee raises concern about former GIB's green committment

The Public Accounts Committee (PAC) today criticised the UK government for selling the former Green Investment Bank Plc (GIB) without making sure that the rebranded entity would continue to pursue its original ambitions.

The GIB, known as the Green Investment Group (GIG) after it was sold to Macquarie Group Ltd (ASX:MQG) last summer, was established in 2012 with the purpose of attracting and encouraging green investments, such as in offshore wind. The bank was supposed to assist the UK in achieving its climate change objectives, but the Public Accounts Committee believes that it failed to live up to those ambitions.

"Government did not carry out a full assessment of the Bank’s impact before deciding to sell, nor did it secure adequate assurance over the Bank’s future role,” said Geoffrey Clifton-Brown MP, Committee Deputy Chair.

At this point, it is unclear whether the rebranded bank would still support the government’s energy policy as the change of ownership eliminated the legislation that protected the bank’s green investment obligations. Now, GIG is not bound to invest in technologies that support the UK’s climate goals, Clifton-Brown commented further.

"We believe that it was a misjudgement that the Department has so little assurance over GIG’s future investment in the UK and in emerging technologies, which will be crucial to ensuring that the UK’s green commitments are met," PAC says.

What is more interesting, Macquarie has told the committee that keeping the bank’s commitments would not have affected the price it was ready to pay as part of the acquisition, according to Clifton-Brown.

When announcing the closing of the transaction in August 2017, the UK government said that GIG would continue to pursue its target of leading GBP 3 billion (USD 4.2bn/EUR 3.4bn) of investment in green energy projects over the coming three years.

(GBP 1.0 = USD 1.395/EUR 1.128)

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