UK Gov under fire for sale of Scots Green investment bank to fracking investors

Nathanael Williams

Green Investment Bank sold off in £2.3bn deal

THE SCOTTISH GREENS have criticised the UK Government’s sale of the Edinburgh-based Green Investment Bank (GIB) to a global investment banking organisation which has holdings in fossil fuel and fracking projects.

Macquarie Group, which bought the publicly owned body for £2.3bn, claimed it wanted to use the purchase to develop a reputation as one of the “key green investment channels” in Europe.

But environmentalists and the Scottish Green party have expressed concerns about the future green credentials of the GIB given the Macquarie Group’s other operations and investments.

Andy Wightman, Green MSP for Lothian, said: “The green credentials of the supposed Green Investment Bank are now in tatters. Why would the new owners allow for genuine green investments to be made if they are going to impact on the profitability of the company’s previous investments? I don’t expect the public to fully trust that GIB will make the right investments in renewables projects that could eventually make fossil fuel methods redundant.

“As an MSP for the capital, I’m pleased that jobs will remain in the city. Edinburgh has a proud history of financial prudence, which has been inappropriately rocked in recent times by unscrupulous banking practices. With this sale I hope to see it return to responsible lending and investing that will be carried out with the due diligence that consumers expect.”

The sale of the GIB is part of the UK Government’s long-term strategy of selling-off state assets it calls “liabilities” and reducing the government’s commitment to subsidising green investment in any way. Campaigners have already criticised the UK Government for cutting subsidies to windfarms in 2015 and early 2016.

“The green credentials of the supposed Green Investment Bank are now in tatters. Why would the new owners allow for genuine green investments to be made if they are going to impact on the profitability of the company’s previous investments?” Andy Wightman MSP

MPs such as the SNP’s George Kerevan were quick to argue that the GIB should “be kept in public ownership to support better infrastructure.”

Research by Market Forces has found Macquarie’s fossil fuel exposure is at least £1.55bn since 2008, including £255m provided for the Maules Creek Mine in Australia, for which some of the vast Leard State Forest was destroyed.

Macquarie was also a key player in the purchase of opencast coal mine assets in Europe, and was fined millions by the US financial regulator for backing a shell Chinese coal mining company.

As an early supporter of the global drive for shale gas, Macquarie is the largest shareholder of Hutton Energy, which holds fracking licenses in the UK.

But speaking to CommonSpace, Macquarie suggested that it could play a “vital” role in ensuring the private sector leads growth in renewables for Scotland, freeing up the Scottish Government to make other infrastructure spending plans. The group was also quick to commit £3bn of investment in green energy projects over the next three years, and to maintaining its green purpose.

Daniel Wong, head of Macquarie Capital, Europe, said: “It is a privilege to be selected by HM Government to acquire the Green Investment Bank. The Green Investment Bank is a pioneering business, with outstanding people, expertise, credentials, brand and networks. By combining the Green Investment Bank with the largest infrastructure investor in the world, we will create a market leading platform dedicated to investment in the low carbon economy in the UK and beyond. We understand the responsibilities that come with this ownership, and we are fully committed to maintaining its green purpose as we grow the business.”

Scottish ministers have pledged to hold the company to account to ensure it delivers on its commitment. The Scottish Government also stressed the importance of maintaining the Bank’s green focus, and the role it has played in the remarkable success of Scotland’s renewable energy industry.

Economy secretary Keith Brown said: “I welcome the Macquarie Group’s clear commitment to Scotland and the assurances we have received that it will maintain the Green Investment Bank’s unique identity and its focus on the green projects that are key to Scotland’s continued economic success.

“This announcement is testament to the talent and opportunity to be found here and I look forward to working with the Macquarie Group to ensure its ambitious plans for Scotland are realised.

“The latest statistics show the number of people employed in the renewable and low carbon industries here has risen to 58,500, highlighting the sector’s strong record of success in Scotland.

“This, alongside Edinburgh’s leading role in the financial services sector, means Scotland is uniquely well placed to support investment decision-making in renewables and low carbon projects and I will continue to work with the Macquarie group to underline this.”

 Picture courtesy of HCC

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