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Macquarie and USS in £2.3bn Green Investment Bank deal

Macquarie and USS in £2.3bn Green Investment Bank deal

A Macquarie-led consortium has signed a deal to acquire the UK's Green Investment Bank (GIB) from HM Government for £2.3 billion, it was annouced on Thursday.

Launched in 2012 as the brainchild of David Cameron's government, GIB has supported close to 100 green infrastructure projects in the UK to date.

News of the GIB's sale follows Prime Minister Theresa May's calling of a snap election earlier this week and marks the first large priviatisation of her tenure.

Already a substantial investor in the UK’s renewable energy sector, the acquisition, which is in partnership with the Universities Superannuation Scheme (USS), enables Macquarie to build a platform for investments in green infrastructure projects across both the UK and Europe and allows it to integrate its existing UK green energy business into the GIB.

On the sale the UK's climate change and industry minister, Nick Hurd, said: 'This deal gives us the best of both worlds. We have secured fair value for the UK taxpayer.

'GIB has a well-funded new owner that is committed to the Bank’s green mission, with a track record of success in green investment and an ambition to grow the business. The UK will benefit from increased investment in our green infrastructure as we make the transition to a green economy.'

Lord Smith of Kelvin, chair of GIB’s independent board, added there was 'a compelling logic' in the world’s first green bank joining forces with the world’s largest infrastructure investor. 

Macquarie  published on Thursday a series of commitments for the future of GIB under its ownership, including:

  • Maintaining GIB’s green purpose and green objectives, in line with the ‘special share’ arrangements to safeguard GIB’s green purpose which will be held by five independent trustees
  • Maintaining the GIB platform and brand, and to utilise the skills and experience of GIB employees in Edinburgh and London
  • GIB’s Edinburgh office will be home to a new revenue generating project delivery business providing services to the green energy portfolios of GIB and Macquarie in the UK

Completion of the transaction is conditional on certain regulatory approvals including EU merger clearance and is expected to take around two months.

The total value of the transaction at the date of signing is £2.3 billion;  a £1.7 billion transaction price and £0.6 billion in estimated future funding commitments for existing GIB projects.

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