Overview

The Green Investment Group (GIG) was established as the UK Green Investment Bank in 2012 by the UK Government, which provided the business with its initial investment capital. The GIB was wholly owned by the UK Government until April 2017, when the UK government agreed to sell the GIB to a consortium led by Macquarie, an Australia-based investment bank, and its name was changed to the Green Investment Group. The GIB Chairman’s response to the sale is published here.

As one of the most active investors in the UK Green Economy, GIG has funded the creation of new, modern and green infrastructure across the UK. GIG’s approach is to back projects that have a double bottom-line of being green and profitable. GIG profitability is an important signal to other investors and helps attract new investors and higher levels of investment to UK green infrastructure.

The GIG 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.

Activities

GIG primarily supports energy efficiency, waste and bioenergy, offshore wind, and onshore renewables projects. GIG uses innovative financial products to deploy new renewable technologies that have led to new and innovative ways of financing green projects and technology. Each investment GIG makes must offer returns against the green and financial double bottom line – it must make a positive contribution to GIB’s five green purposes and it must provide commercial returns in line with the project’s risk. GIG’s five green purposes are: (1) the reduction of greenhouse gas emissions, (2) the advancement of efficiency in the use of natural resources, (3) the protection or enhancement of the natural environment, (4) the protection or enhancement of biodiversity and (5) the promotion of environmental sustainability.

Another example of GIG activities is the Green Loan program, designed for local authorities to increase the installation of LED technology in the UK street lighting market as well as help councils reduce their streetlight energy bills. The loan finances capital expenditure for LEDs and central management systems for smart LED systems. It offers local authorities a low, fixed-rate financial arrangement over a period of up to 20 years with sculpted loan repayment options.

GIG has invested in new waste facilities across the UK, ranging from small scale anaerobic digestion plants, processing food and garden waste, to large scale waste-to-energy plants, diverting large amounts of household waste from landfill and generating renewable energy.

Additionally, GIG has focused on distributed energy generation, including onshore renewable power projects across the UK. GIG focuses in particular on mature renewable technologies, including wind, solar and hydro-electric, and offers investment options in the areas where finance needs are greatest, such as long-term construction financing and unlevered equity.

In 2015, the GIG also announced a £200m international pilot programme in partnership with the UK Government’s Department for Energy and Climate Change. The programme’s current scope covers renewable energy and energy efficiency projects in South Africa, East Africa and India.

Impact

As of June 2017, the GIG had backed 100 green infrastructure projects with a capital commitment of nearly GBP 3.5 billion (USD 4.5 billion).  GIG investments have all together mobilised GBP 12 billion (USD 15.5 billion) to support large and small green infrastructure projects across the whole of the UK. In FY 2015-2016, the GIG realised a pre-tax profit of GBP 9.9 million (USD 12.7 million). As of July 2016, GIG reported an average annual projected impact of: 2.3 million tonnes of landfill avoided, 4.8 million tonnes CO2e emissions avoided, and 20.3 TWh renewable energy produced.

Last updated 01 September 2017

Additional Reference 

GIG News and Insights

GIG Transaction Summary

Annual report 2016

Smarter Greener Cities Report; Ten Ways to Modernise and Improve UK Urban Infrastructure

District Energy Finance Guide: District heating in smarter, greener cities – a guide to commercial structuring and financing