Corporate

UK Green Investment Bank announces 2014/15 results and plans to raise private capital

25 Jun 2015

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  • The UK Green Investment Bank plc (GIB) backed 22 new green energy projects in 2014/15 committing £723m of its own capital to projects with a total value of £2.5bn;
  • GIB has now committed £2bn to 50 UK projects worth over £8bn. Once built these investments will produce enough renewable energy to power the electricity needs of 4.2m UK homes each year;
  • GIB has announced that, after 2 ½ years of operations, it has reached profitability;
  • The UK Government has also announced its intention to bring private capital into GIB.
Speaking at the Bank’s London Annual Review event Lord Smith of Kelvin, Chair of the Green Investment Bank, will say:

In two and a half years of operations GIB has established a successful business model. We have played an important role in strengthening energy supply and security, reducing energy demand and decarbonising our economy. We have achieved all of this by investing profitably.

Our challenge now is to build a funding strategy which provides us with the capital to match our investment ambitions. The UK Government led the world in their vision and commitment in setting up the world’s first dedicated green investment bank, so we are delighted to have their support as we enter a new phase and seek additional investors in our business.


Also speaking at GIB’s Annual Review event in London today, the UK Business Secretary, Sajid Javid will say:

The Green Investment Bank has shown that investment in green technologies can be a profitable business. The challenge now is to build on this success.

The bank will still be green, still be profitable, still be a market-leader in financing environmentally sound infrastructure. But free from limitations on where it can borrow money and EU regulations on state aid, the bank will be able to access a much greater volume of capital.

This is the right decision for the Green Investment Bank, the right decision for the environment and the right decision for taxpayers.


Chancellor of the Exchequer, George Osborne said:

In 2012 we set up the Green Investment Bank to support important investment in the UK’s green infrastructure and since then it’s gone from strength to strength.

That is why we can now begin exploring options for moving the bank into the private sector to enable it to access larger pools of capital and act more freely to invest in a broad range of green sectors.

We want the Green Investment bank to attract more investment and we will use the money we raise to pay down the national debt and deliver lasting economic security for working people.

Since its inception in 2012, GIB has committed £2 billion and helped to finance 50 green infrastructure projects including helping to finance first-of-a-kind projects that use innovative technologies in waste management and offshore wind power.


Commenting on the funding strategy GIB chief executive Shaun Kingsbury said:

We are now very close to our expected long-term investment rate of £800m to £1bn per year. While capital from the UK Government was an important start it will not be enough to sustain our level of investment. From the outset it was always part of the plan that we would need to raise additional capital from the private sector to supplement Government funding.

We have a range of funding options. We will keep investing our current share capital from the UK Government, we will recycle that capital, we will continue to raise capital for our Fund and we will work to attract new equity investors.

Attracting those investors is a key strategic step for GIB. It will not only ensure that we have the capital to grow but it will allow us to borrow and to invest in a broader range of green infrastructure projects.

We have appointed advisers to support us on this. We are in the early stages of this work and do not expect to make an announcement in the short term.


2014/15 Results

Key highlights of the year include:

 

  • GIB backed more green energy infrastructure projects with more capital than the previous year. GIB remains the UK’s most active investor in green projects.
  • 22 green energy infrastructure projects across the UK, from a £240m investment in offshore wind to a £1.5m investment in an anaerobic digestion plant in rural Northern Ireland to a £6m investment in low energy street lighting in Glasgow.
  • GIB committed £723m of its own capital, taking its running total to over £2bn of capital commitments, backing projects with a value of over £8bn (at 25 June 2015).
  • For every £1 invested by GIB it attracts £3 from other private sector investors.
  • 2014/15 was the year in which GIB began operating profitably with Profit before Tax of over £3m in the second half of the year and a modest full year profit of £0.1m.

During the year GIB, through its FCA regulated subsidiary, reached a first close of £463m on the world’s first offshore wind fund, attracting investments from a sovereign wealth fund and UK based pension funds.


GIB also published a Green Investment Handbook, which is intended to help raise industry standards in the assessment, monitoring and reporting of green investments.

Contacts

Stephen Moir, UK Green Investment Bank: stephen.moir@greeninvestmentbank.com / 07827 239 197

Ross Nisbet, UK Green Investment Bank: ross.nisbet@greeninvestmentbank.com / 07825 504 533

Jayne Scott, Department for Business Innovation and Skills: jayne.scott@bis.gsi.gov.uk/ 0207 215 5950


Notes to editors

About the UK Green Investment Bank

UK Green Investment Bank plc (GIB) was launched in late 2012. With funding from the UK Government, it is the first bank of its kind in the world. It is a “for profit” bank, whose mission is to accelerate the UK’s transition to a greener economy, and to create an enduring institution, operating independently of Government.

GIB is wholly owned by HM Government. The Company is not authorised or regulated by the Financial Conduct Authority or the Prudential Regulation Authority. A wholly owned subsidiary UK Green Investment Bank Financial Services Limited is authorised and regulated by the Financial Conduct Authority.

www.greeninvestmentbank.com