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The UK’s Green Investment Bank is set to move into the private sector in order to access larger pools of capital with which to finance new sustainable investments.
The plans were outlined today by business secretary Sajid Javid at the bank’s annual review event, saying it “will still be green, still be profitable, still be a market-leader in financing environmentally sound infrastructure. But free from limitations on where it can borrow money and EU regulations on state aid, the bank will be able to access a much greater volume of capital.”
After two and a half years in operation the bank turned a modest profit in the last financial year in which it committed £723 million of its own capital to projects with a total value of £2.5 billion.
In total the bank has committed £2 billion to 50 UK projects worth over £8 billion.
“Our challenge now is to build a funding strategy which provides us with the capital to match our investment ambitions,” Green Investment Bank chair Lord Smith Kelvin said.
“The UK government led the world in their vision and commitment in setting up the world’s first dedicated green investment bank, so we are delighted to have their support as we enter a new phase and seek additional investors in our business,” he added.
A statement from the Department of Business said that it will begin consulting the market on the transaction which, according to reports in the Financial Times, could be as large as 70 per cent stake of the bank “depending on market appetite”.
The UK government is also expected to sell off stakes in Lloyds Banking Group, Royal Bank of Scotland and Royal Mail.
Treasury chancellor George Osborne said: “We want the Green Investment Bank to attract more investment and we will use the money we raise to pay down the national debt and deliver lasting economic security for working people.”
For the 2014/15 financial year the bank posted profits before tax of over £3 million in the second half of the year and a modest full year profit of £0.1 million.
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