- Green Investment Bank sold to fracking investor – what could possibly go wrong?
- Green Investment Bank – started with public money – being sold by the government to an Australian company.
- The bank was set up in 2012 to fund renewable energy projects
by Michael Smith (Veshengro)
The Treasury secures £1.7bn through the process, with a further £600m of liabilities taken on by the Australia-based business lender, which has holdings in fossil fuel and fracking projects.
The bank was set up to fund renewable and low-carbon projects and has invested about £800m per year so far. That includes total government funding of £1.5bn since 2012. The deal with Macquarie should see that rise to £3bn per year over three years. I am not holding my breath on that one though and the reader will see why not by reading further.
The deal does requires the new owner to retain its name and headquarters team in Edinburgh. But, as far as we can see, there seems to be no requirement to actually continue the business of supporting green energy and other ventures.
Macquarie Group, which bought the publicly owned body, claimed it wanted to use the purchase to develop a reputation as one of the “key green investment channels” in Europe. (Yeah, and pigs fly!)
Environmentalists, however, have expressed concerns about the future green credentials of the GIB given the Macquarie Group's other operations and investments.
The sale of the GIB is part of the UK Government's long-term strategy of selling-off state assets it calls “liabilities” and reducing the government's commitment to subsidizing green investment in any way. Campaigners have already criticized the UK Government for cutting subsidies to windfarms in 2015 and early 2016.
Those “liabilities”, as far as the British Tory government is concerned, also includes, no doubt the National Health Service and other still publicly owned assets. Everything that does not give them backhanders and makes money for their cronies is, obviously, a “liability”.
The green credentials of the supposed Green Investment Bank are now in tatters. Why would the new owners allow for genuine green investments to be made if they are going to impact on the profitability of the company's previous investments? That would go against all capitalist business sense. (The track record of the Macquarie Group speaks for itself, as we will see below).
Research by Market Forces has found Macquarie's fossil fuel exposure is at least £1.55bn since 2008, including £255m provided for the Maules Creek Mine in Australia, for which some of the vast Leard State Forest was destroyed.
Macquarie was also a key player in the purchase of opencast coal mine assets in Europe, and was fined millions by the US financial regulator for backing a shell Chinese coal mining company.
As an early supporter of the global drive for shale gas, Macquarie is the largest shareholder of Hutton Energy, which holds fracking licenses in the UK.