The UK Government has announced that it will sell its stake of over £1 billion (US$1.57 billion) in the Green Investment Bank (GIB) to the private sector.
The current government is determined to sell the stake in the bank before leaving office in 2020. In order for the GIB to be free of state aid restrictions, a minimum stake of 70% needs to be sold by the government, valued at roughly £1.4 billion (US$2.2 billion).
By selling its majority interest, the UK Government will remove state aid restrictions, giving the bank more freedom to borrow and enabling it to secure more capital while operating with less regulatory constraint.
George Osborne, First Secretary of State and Chancellor of the Exchequer, has commented:
"In 2012 we set up the Green Investment Bank to support important investment in the UK's green infrastructure and since then it's gone from strength to strength. That is why we can now begin exploring options for moving the bank into the private sector to enable it to access larger pools of capital and act more freely to invest in a broad range of green sectors.
We want the Green Investment Bank to attract more investment and we will use the money we raise to pay down the national debt and deliver lasting economic security for working people."
The move follows the UK's decision to cut subsidies to onshore wind projects as of 2016, as IPP Journal reported last week.
The UK Government launched the Green Investment Bank back in 2012 with £3.8 billion (US$6 billion) of government capital. The GIB backed 22 new green energy projects in 2014/2015, committing £723 million (US$1.1 billion) of its own capital to projects with a total value of £2.5 billion (US$3.9 billion). The bank recently announced that it has reached profitability after two and a half year of operations.