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Green Investment Bank sale faces legal challenge

Macquarie’s expected £2bn purchase of the GIB will now be subject to a judicial review following concerns over how the sale has been conducted.

The leader of the rival consortium to Macquarie’s bid for the UK’s Green Investment Bank has launched a legal challenge in a last-ditch attempt to block the lender’s controversial sale.

Sustainable Development Capital has begun proceedings in the High Court for a judicial review of the decision to name Macquarie as preferred bidder in the deal expected to fetch the UK government about £2 billion ($2.4 billion; €2.2 billion).

SDCL is the leader of a consortium that also includes the Pension Protection Fund, Mitsui, General Electric and John Hancock, while Macquarie’s bid is understood to be backed by the UK-based Universities Superannuation Scheme. SDCL has criticised the government’s handling of the sale, which was officially launched a year ago.

“SDCL understands that the preferred bidder’s bid was not compliant with the criteria set out by the government,” the firm said. “The fact that no deal was completed within the targeted timetable attests to the fact that the preferred bid was neither deliverable within the timeframe nor acceptable.

“SDCL has raised its concerns with the parties responsible for the process in the government since the final phase of the auction in September 2016. In the absence of a constructive dialogue, we have no alternative but to seek redress through the judicial review process.”

Infrastructure Investor understands that SDCL’s claim is based on concerns Macquarie’s bid does not deliver value for money for UK taxpayers as well as assertions that Macquarie plans to sell off some of the GIB’s valuable offshore wind assets under development. Sources close to the matter added that the legal challenge could focus on the repeated extensions of the exclusivity arrangements granted to Macquarie, with an original closing of the deal scheduled before the end of last year.

SDCL declined to expand in detail regarding its future investment plans for the GIB should it gain control, stating only that it will keep the GIB “British, green and growing”. Macquarie also declined to comment on the matter, although it is believed the firm’s plans could include investments in solar power and smart meters, to which the GIB currently has no exposure.

Nick Hurd, the UK’s Minister of State for Climate Change and Industry, was forced to defend the government’s handling of the deal in Parliament in January after calls from a number of MPs to cancel the planned sale. The department said today it will not comment on an ongoing legal matter.