"Exploring Options" to Bring in Private Investors- Green Investment Bank

Business Secretary Sajid Javid is due to tell the Green Investment Bank's annual meeting he will start "exploring options" to bring in private investors.

The bank, thought to be the first of its kind, has invested about £2bn of public money in about 50 projects.

But critics called a sale "reckless", and questioned the government's commitment to a low carbon economy.

It is unclear how much of GIB the government might sell, although the Financial Times has reported that it could be about 70% with a sale price of well above £1bn. 

The move is part of the government's plan to sell off assets to pay down the deficit, and comes after the disposal of stakes in Royal Mail and Lloyds Banking Group.

The Edinburgh-based GIB was launched in 2012, pledging loans to "green" projects that have also attracted private sector money. It has invested in wind power, bio-energy, and renewal projects.

But there are restrictions on its borrowing, and Mr Javid hopes that full access to the capital markets will increase its lending powers.

Mr Javid, who will address the GIB's annual review event in London on Thursday, is set to say the bank "has shown that investment in green technologies can be a profitable business. The challenge now is to build on this success.

"The bank will still be green, still be profitable, still be a market leader in financing environmentally sound infrastructure. But free from limitations on where it can borrow money and EU regulations on state aid, the bank will be able to access a much greater volume of capital."

'Rash and irresponsible'

Mr Javid's department has hired Bank of America Merrill Lynch to advise on the financial details and timetable for GIB's sale.

Critics argue that a sale would dilute the bank's purpose and undermine the UK's commitment to the green economy.

Caroline Lucas, Green MP for Brighton Pavilion, called the sell-off plan "rash and irresponsible" and said any such move calls into question UK commitment to investing in a low carbon economy.

"The government should keep at least a majority stake in the Green Investment Bank to ensure investor confidence is upheld and the commitment to low-carbon lending remains," she said.

Think-tank E3G, which advised on the original plans to established a green bank, said a sell-off would be "reckless" and damage investor confidence.

Chief executive Nick Mabey said: "The Green Investment Bank is not just the government's most lauded innovation in the war against climate change. It has kept investment in the real economy going at a time when bank lending had fallen to an all-time low. It has played a critical role in supporting the UK economic recovery.