Green Investment Bank needs safeguards on green mandate before privatisation, says Mary Creagh, chair of the environmental audit committee

James Nickerson
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The Green Investment Bank was first set up under the coalition government in 2012 (Source: Getty)

Tough safeguards to make sure that the Green Investment Bank continues to invest in low-carbon projects are needed before it is transferred to private ownership, the head of a parliamentary select committee has said.

Chair of the environmental audit committee Mary Creagh said she welcomed "the secretary of state’s pledge to protect the bank’s green status with a special share, as my committee recommended, but I am concerned that without locking this in legislation it may not be secure".

"I will be supporting amendments to that effect when the sale is debated in the Commons this week. If the government cannot guarantee that the Green Investment Bank will continue to invest in smart, energy-efficient, low-carbon projects, then the sale should not go ahead," she wrote in the Guardian.

Read more: Javid fires the starting gun on Green Investment Bank sale for private investors

Her fear is that the privatisation of the Green Investment Bank could move its focus away from novel and riskier low-carbon projects in favour of easier, more commercial projects.

"I am not opposed to privatisation if it can be shown that it is the right policy tool to get the job done. But the decision to sell the Green Investment Bank seems to have been rushed through just to get it off the government’s balance sheet," Creagh wrote.

Last week business secretary Sajid Javid said that the government will invite private sector investors to register their interest in the bank, which specialises in investments in green energy projects.

Read more: Green Investment Bank says it has raised £818m for offshore wind farms

Javid first announced plans to bring private capital into the Green Investment Bank at the bank’s annual review event in London last June.

Back then Javid said that the privatised bank would "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".

The Green Investment Bank was first set up under the coalition government in 2012. Since then, the bank has helped to mobilise a total of £10.6bn of investment into nearly 70 projects. Sectors covered have included offshore wind, energy efficiency and waste and bio energy.

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