The Committee slammed the government for taking the decision to privatise GIB “without due transparency”, publication of relevant evidence, consultation, or proper consideration of alternatives.
In a report, it said the government has not put robust enough safeguards in place to protect GIB’s green purposes, and called on the government to establish a “special share” to protect GIB’s green purposes.
Risks from privatisation include a shift in focus away from complex projects that struggle to find funding in favour of easier, more commercial projects, and investment in areas which may damage its reputation and undermine its leadership role in the green economy.
EAC chair Huw Irranca-Davies said: “The GIB has done a great job of getting capital flowing to the kind of innovative green projects that sometimes struggle to secure financial backing. The decision to privatise the Bank appears rushed and Ministers have not produced convincing evidence that it will achieve its aims better in the private sector.
“The government is currently relying on assurances from potential shareholders and the commercial case for retaining the GIB’s green purposes. That is not robust enough.
“The government must ensure the GIB continues to do what it says on the tin. If the government cannot guarantee that the GIB will retain its green purpose in the private sector then the sale should not go ahead.”
If the government goes ahead with privatisation, GIB should be sold as a “going concern”, the report said, and the government should retain a minority stake in order to demonstrate its commitment to the green economy and ensure the Bank’s long-term strength.
EAC concluded that, if GIB is not privatised, then it should be granted borrowing powers.