Britain puts green bank up for sale
By Freya Berry and Karolin Schaps
LONDON (Reuters) - Britain on Thursday will set in motion a process to sell off its Green Investment Bank that invests in renewable energy projects, with a potential total price tag of around 4 billion pounds.
The sale process, announced by business secretary Sajid Javid on Wednesday, aims to give greater access to funding for the bank, which was set up in 2012 and is the world's first bank dedicated to green infrastructure investments. The announcement confirms an earlier report by Reuters.
The government will consider selling its entire 100 percent stake, two sources familiar with the discussions said. The maximum stake the government would retain would be 20-25 percent, the sources added.
The government is looking for an investor to pay around 4 billion pounds, with the bank valued at around 2 billion pounds and a further 2 billion pounds expected to be pledged for future investments, one of the sources said.
It is now inviting bidders to make their interest known and a full bidding process will follow later this year, the government said in a statement.
Potential bidders could include private infrastructure funds, one of the sources said.
The government has come under pressure to guarantee the bank's environmental objectives under private ownership.
A report by the Environmental Audit Committee in Britain's parliament recommended the state keep a minority stake to ensure the bank's objectives as well as its long-term strength.
A so-called "Special Share" would be established to protect the bank's green investment strategy, the Green Investment Bank said in a separate statement. The Bank said last month this structure meant that an independent company would have to consent to any changes to its environmental aims.
"The intentions of potential investors to commit to and protect GIB's green values will be taken into account in the government's assessment of bids," it said.
The bank has helped to invest 10.6 billion pounds into almost 70 projects, including offshore wind farms and waste-to-energy plants.
The Bank said its internal rate of return on investments was more than 10 percent and that it expected a long-term investment rate of 800 million-1 billion pounds per annum.
The government is expected to publish further details when it reports to parliament about the sale on Thursday.
(Additional reporting by Susanna Twidale. Editing by Jane Merriman)
