The Green Investment Bank (GIB) was designed with a view to transferring it to the private sector and “We see no benefit in trying to restructure and redirect GIB so that it remains in the public sector and operates on an entirely different basis,” the government said in response to concerns over the Bank’s planned sale. Nevertheless, the government tried to allay fears by promising to approve the creation of a “special share” in GIB, that would have the right approve any change to the Bank’s “green purposes”.
The promise came in a response to a report from the Environmental Audit Committee,which called for government to make the case for privatisation and show how it would maintain the Bank’s “unique position in the green economy”.
The government insisted that it “sees little benefit in delaying this wholly positive move” and said “To delay would simply extend the period in which 100% Government funding of GIB’s business is required and
prolong the period of uncertainty over its long-term funding beyond the life of the current Parliament.” It said existing mechanisms working alongside the GIB – naming venture capital and State Aid-approved concessionary finance among them – were a better approach than using the GIB for both purposes.
The government also rejected EAC’s call for it to retain a ‘green share’ that would have wide ranging powers within the Bank. It said “The proposition that the government could impose binding requirements and restrictions of this kind on the company without this resulting in it continuing to be classified as a public sector body is evidently wrong. ..any specific government control over GIB that was enshrined in legislation, including special shares, would represent continued state control over GIB and will prevent GIB from being re-classified to the private sector.” However, it promised to set up a company independent of government and the GIB that would have the right to approve any changes to GIB’s green Articles of Association.
Government also dismissed EAC’s call for it to retain a share in the Bank. One option under consideration would be 100% sale, it said.
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