London (CNSNews.com) – A fiercely debated process of selling Britain’s first nationally-owned bank for green investments took another step forward Friday with a court decision supporting the British government.
Launched in 2012 under then-Prime Minister David Cameron – whose Conservative Party was in a coalition government with the smaller Liberal Democrats – the Green Investment Bank claims to be the first of its kind in the world.
Owned by the state, it is a for-profit institution whose stated mission is to accelerate the transition of the United Kingdom to a greener economy.
So far, the bank says in its literature it has backed 99 green infrastructure projects, which have committed £3.4 billion ($4.2 billion) to investments in off-shore farms, plants transforming waste into energy, and towns building more efficient street light systems.
In early 2016, the government began the process of privatizing the bank, which it said would see investors bring in new capital and allow the firm to continue and to grow.
To protect its original mission, the bank would create a “special share” in the company, held by a separate company and run by independent trustees. Once the privatization process is complete, the government said its green goals would only be able to be altered with the agreement of this special shareholder.
However, this has not been enough for a number of politicians and environmental groups, who have spoken out in parliament and in the press about their fears that the bank could be stripped of its assets once privatized, or have its green mission diluted.
Last fall it was widely reported, but not officially confirmed by the government for commercial reasons, that the preferred bidder for the company was Macquarie, a global investment bank based in Australia.
Caroline Lucas, leader of the Green Party, told parliament in January that she thought Macquarie had a ”very, very worrying” track record as an investment firm.
”The [Green Investment Bank] has been widely recognized as a true success story, kick-starting truly innovative low-carbon projects across the UK,” she said. “Yet the preferred bidder, Macquarie, not only has a dismal and terrible environmental record but an appalling track record of asset-stripping.”
Greenpeace has also charged that the ”special share” would have limited legal powers to enforce the green purposes of the bank and no power to veto investments before they were made.
In January, Macquarie responded strongly to critics. It said it is one of the world’s largest investors in renewable energy, having invested or arranged more than $10.5 billion (£8.5 billion) of investment into renewable energy projects since 2010.
These projects have spanned the globe and Macquarie said it is committed to investing in forms of energy that result in low carbon emission.
“Our support for the renewable energy and clean technology sectors is part of a broader commitment to infrastructure,” it said in a statement. “Macquarie has more than £78 billion [$96.7 billion] of infrastructure assets under management globally and co-invests alongside the world’s leading institutional investors including public sector pension funds. Most of these investors, like Macquarie, have long-term investment horizons.”
In Friday’s court decision, the High Court in London ruled against a request by Sustainable Development Capital LLP, a firm that had also reportedly bid for the bank, for a judicial review of ministerial decisions about the sale.
Nick Hurd, Minister for Climate Change and Industry, told lawmakers early this year that the government was not being naïve when it came to selling off the bank, and that potential investors would have to buy into its green business plan.
He said that private, not public capital would make the difference in making the major changes in infrastructure that will be needed for clean energy in Britain.
“We want this to go into the private sector, so that it can do more of what it is doing – unfettered by the inevitable restrictions that the state has to put on it at this stage,” Hurd said.
The government’s Department of Business, Energy and Industrial Strategy said Sunday it welcomed the High Court decision.
“As we have said, any government decision on the sale of the Green Investment Bank will be driven by what best achieves our objectives, including continued investment in the green economy and a sale which is in the best interests of the taxpayer. ” it said.
In light of the commercially sensitive nature of the process, the department said it would have no further comment.