The GIB was created in late 2012 to help finance riskier green infrastructure projects which are unable to get funding from the private sector alone. Since then it’s invested £2.6 billion in almost 70 projects across the UK.
Plans to privatise the bank were initially floated by the previous government in the 2013 autumn statement, although the first firm proposals weren’t laid out until June last year.
The government has now begun the first of a two stage process for privatisation, by inviting potential investors to put forward non-binding initial bids.
The bids will undergo an assessment and investors which are deemed to have passed muster will go through to the second stage. They will then be given access to confidential data about the bank and invited to submit binding final offers.
Chair of the GIB Lord Smith of Kelvin said: “Attracting new investors is vital if the GIB is to fund its ambitious plans to double the size of its business, expand into new parts of the UK green economy and deliver a growing green impact.
“I am confident that the sale process will provide GIB with good new owners who will support the GIB’s continued growth and leadership role in the global green economy long into the future.”
The Department for Business Innovation and Skills (BIS) said the size of stake to be sold has not yet been decided and will depend on the outcome of “confidential commercial discussions with investors”. It said it would not be “necessary or beneficial in its own right” for the government to retain a stake in the bank.
The government has committed to having the bank reclassified as being in the private sector and under EU rules will therefore not be able to exercise any meaningful control over the corporate policy of the bank.
In an effort to ensure the bank maintains its focus on green investments, the government is planning to create a special share, which would enable the holder to reject any changes to the banks ethos as laid out in its articles of association. The share would be held by an independent company, created specifically for this purpose.
Business Secretary Sajid Javid said: “The GIB was a world first, and it is a sign of its success that the idea is being copied across the world. Having proven the business model works, we now want to make an even greater impact.
“The challenge presented by climate change is clear – it is imperative we mobilise more funding for green energy projects. The special share structure protects the bank’s green mission meaning the GIB will continue to do exactly what it says on the tin.”