UK govt sells green bank in £2.3 billion deal

The UK Green Investment Bank (GIB) is to be sold to Australian financial services firm Macquarie Group in a £2.3 billion deal

The UK Green Investment Bank (GIB), created by the British government to fund environmental projects, is to be sold to Australian financial services firm Macquarie Group in a £2.3 billion deal, the government said Thursday.

Under the deal, worth $2.6 billion (2.7 billion euros), Macquarie has vowed to invest at least £3 billion of new funds into Britain's green economy over the next three years.

The government, GIB's sole shareholder, launched the sales process to privatise the fund last year.

"The Green Investment Bank has been very successful in attracting private capital to the UK's green economy," said Nick Hurd, Climate Change and Industry Minister.

"It now makes sense to move it into the private sector where it will be free from the constraints of public sector ownership".

Macquarie Group's David Fass said the deal "will open further opportunities in low carbon investment both in the UK and further afield."

The GIB was created in 2012 to attract private investment and has so far helped fund around 100 green projects with a total capital expenditure of around £3.4 billion, including more than £1 billion in large infrastructure projects.

The fund has invested in six offshore wind farms and a new energy-from-waste plant in North Wales.

The £2.3 billion deal comprises a £1.7 billion transaction price and a £0.6 billion commitment for existing projects.

Robert Smith, chair of GIB's board, said there was "compelling logic" behind the deal.

"We were determined to find a new owner...who would have access to deep pools of capital, a commitment to expand GIB's activities, and a respect for the unique role GIB has played in the market."