With a process to privatise the UK Green Investment Bank still expected to go ahead despite Brexit, chief executive Shaun Kingsbury has described the lender’s 2015/2016 financial year as its “strongest single year performance so far” in its latest annual report.
GIB committed £770 million ($1.4 billion; €930 million) during the 12 month-period ending March 2016, more than any year since it launched in 2013, bringing its total portfolio capacity to 3.8GW. It was involved in 64 percent – by value – of the £6.4 billion worth of addressable transactions in its investment sectors, which comprise offshore wind, waste and bioenergy, energy efficiency and onshore renewables.
The period also saw it raise £818 million in capital for the GIB Offshore Wind Fund, allowing it to become the UK’s largest renewable energy vehicle.
Swedish life insurance and pension provider AM Pensionsforsakring AB and the UK’s £14 billion Strathclyde Pension Fund were among the investors that brought the fund to a second close at £355 million. Abu Dhabi Investment Authority, the Worcestershire County Council and West Yorkshire pension funds had previously pushed the fund to a first close, with GIB also contributing £200 million of its own money.
In three years, GIB has financed green projects worth over £10 billion as part of its mission “to accelerate the UK’s transition to a greener, stronger economy”.
The lender is in the midst of a privatisation process that aims to give it a stable and long-term funding strategy, free from government aid constraints and potentially involving raising debt, according to the report.
“GIB has had a year of strong performance as we prepared for a possible change of ownership and move into the private sector,” Lord Smith of Kelvin, GIB’s chair, said in a statement.
Its board first announced the plan to privatise GIB in June 2015, with the auction process officially started in March 2016.
Consortia selected for the final stage of the process, which submitted first-round offers on 27 April, include a tie-up between New York-headquartered KKR and UK renewables investment manager Temporis Capital, as well as team comprising London-based Sustainable Development Capital, the Pension Protection Fund, General Electric, US insurer John Hancock and Japan’s Mitsui, sources told sister publication Infrastructure Investor in May.
Entities belonging to Australia’s Macquarie Group are also understood to have been shortlisted.
“As I look forward,” Kingsbury said, “the expected privatisation of GIB will be the defining event of the year ahead for us. We have a market-leading team and a high performing business capable of significant growth at home and abroad”.