Deal that will cost Britain millions
Minister urged to block cheap Green Bank sell-off
THE controversial buyer of the Government’s Green Investment Bank will make hundreds of millions of pounds from the deal, it has been claimed.
Australian bank Macquarie – dubbed the vampire kangaroo for its ruthless tactics when buying firms – is set for a huge windfall at taxpayers’ expense, ministers have been warned.
A decision to sell the Governmentbacked bank, which is charged with investing in renewable energy projects, is expected within days.
But it is alleged that Macquarie will make millions more than has been estimated by buying two of the Green Investment Bank’s wind farms.
And it is claimed the Treasury is offering the bank on the cheap. Ministers are facing massive opposition to the plans for a sale and are reportedly considering a flotation instead.
In a letter to Business Secretary Greg Clark, seen by the Mail, former business secretary Vince Cable, who founded the GIB, and former energy minister Lord Barker, claim the Government is set to miss out on a massive windfall if they sell now.
They said: ‘GIB has been investing in the construction phase of a range of high-value infrastructure assets over the past few years.
‘A number of these assets are still under construction and are not yet operational. Once these assets have completed construction – and are thereby de-risked – those same assets will be worth significantly more than they are now. While it is not possible to calculate the exact amount without detailed information on two of the offshore wind assets currently under construction, it is clear that this could amount to a windfall of hundreds of millions of pounds to Macquarie, at the expense of the taxpayer.
‘It will therefore be Macquarie rather than the taxpayer that benefits from this significant value uplift.’
Two of GIB’s main assets are the Rampion and Galloper wind farms being built off Sussex and Suffolk, due to be finished in 2018. GIB has committed £306m for Rampion and £119m for Galloper. Experts believe that if they were bought now with the rest of the bank, the price paid would be about half what it would be when they are finished. Many opponents would prefer the bank to remain in state-ownership or be publicly floated.
A spokesman for the Department for Business, Energy and Industrial Strategy said: ‘Any decisions 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.
‘This is a commercially sensitive process and it is inappropriate for us to comment further while that process is ongoing.’
The Government has said it wants GIB to continue to invest in green sectors and would try to keep a veto.
Macquarie has declined to comment on the sale of GIB, but has pointed to its record of investing in renewable energy in the UK.
That includes £1.6bn in the Race Bank wind farm off the north Norfolk coast.