Green Investment Bank privatisation hits a legal snag as the rival bidder to Macquarie seeks a judicial review
THE GOVERNMENT’S decision to award preferred bidder status to Australia’s Macquarie in the long-running privatisation of the Green Investment Bank (GIB) is being challenged in the high court.
Sustainable Development Capital (SDCL), a UK-based international consortium, has launched proceedings in the High Court for judicial review of the decision.
SDCL believes that the preferred bidder’s bid was not compliant with the criteria set out by the government given no deal was completed within the targeted timetable.
The GIB was set up in 2012 to encourage investment in clean energy in the UK. In 2015 the government announced it would be privatised and ran a process in 2016 to solicit bids. The original timetable envisaged a signing and/or closing by the end of last year. The delay coupled with objections and concerns, has led to questions in Westminster.
SDCL characterises its bid as “British, green and growing”. It is a London based investment firm that led the bid of an equity consortium including the Pension Protection Fund, Japan’s Mitsui, General Electric and insurer John Hancock.
The GIB, set up by former business secretary Vince Cable to mobilise private sector capital into the renewables sector, is seeking a new owner to boost investment into green technologies from wind farms to biomass. The Edinburgh-based bank has enjoyed some success so far, ploughing nearly £3bn into a diverse range of UK projects. But it needs more capital.
The scale of investment needed is huge: bidders are being asked to put in £1.8bn. A float of the bank is an option but seen as unlikely until it has built up some muscle, a process that could take a few years.
Ministers have a duty of care to get the best value for the taxpayer, who ultimately owns the bank. Not only would a duff deal leave the man on the street shortchanged, but the government, with lofty ambitions for its brand new industrial strategy, would be shooting itself in the foot.