Macquarie vows to build on Green Investment Bank legacy

Australian group, Macquarie, has asserted that it wishes to build on the success of the UK’s Green Investment Bank, to make it into an investment vehicle for renewables throughout Europe.

The new owners of the GIB completed the à‚£2.3bn takeover this week and are to re-brand their acquisition to Green Investment Group in order to overcome regulatory barriers associated with the use of the term ‘Bank’.

When the initial deal was made in April, former founder of the group Vince Cable warned that Macquarie would look upon it as an asset-stripping exercise, and the government in general was accused of relinquishing a valuable tool in developing renewable energy.

However Macquarie stated on Friday that it should be seen as a positive sign of renewable energy evolving from an industry dependent on government support to one able to compete for mainstream international investment.

Edward Northam, who was head of investment banking for the GIB and will now take charge of the wider business for Macquarie, said the “market failure” that led the UK government to set up the bank had disappeared as green technology, such as wind and solar power, matured. “When we started in 2012ࢀ‰.ࢀ‰.ࢀ‰.ࢀ‰it was about proving to mainstream institutional investors that you can deliver a financial as well as an environmental return,” he told the Financial Times. “The industry is now different. It has proved its investability.”

The government also insisted that the à‚£2.3bn deal with Macquarie represented a profit on the public money invested in the fund and the Australian bank insisted it would build on the GIB’s legacy rather than dismantle it.

Mark Dooley, head of energy and infrastructure for Macquarie Capital in Europe, reiterated the pledge made by Macquarie in April to meet the GIB’s target to make at least à‚£3bn of new investments over the next three years. While expanding the fund’s reach into Europe for the first time, Mr Dooley, who is based in London, said much of the investment would continue to be made in the UK.

Lord Robert Smith, who was chairman of the GIB until completion of its privatisation on Friday, said Macquarie would provide a platform to access deeper pools of capital ࢀ” supporting global efforts to decarbonise the energy system. “If the Paris [climate] agreement is to be delivered, we need to see mature green infrastructure delivered quickly and at scale, alongside the rapid development of emerging technologies,” he said.

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