Climate minister Nick Hurd told bank’s portfolio will be broken up and asset-stripped by Australia’s Macquarie

This article is more than 3 years old

This article is more than 3 years old

The prospect of the UK Green Investment Bank being stripped of its assets in a sale to Australian investment bank Macquarie is “deeply troubling”, Scottish ministers have told Westminster.

The sale of the Edinburgh-based bank, which supports offshore windfarms and other green projects, is expected to be agreed in January. But the Labour party, Liberal Democrats, Greens and former Conservative ministers have all raised concerns in recent weeks that privatisation may see the bank lose its environmental purpose.

In an unpublished letter to the business department, seen by the Guardian, the Scottish cabinet secretary for the economy said he was “frustrated” at being kept in the dark over a sale of the £3.8bn publicly owned bank.

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“Reports have indicated that the completion of the transaction process will result in the complete break-up of the current Green Investment Bank portfolio and may result in an asset-stripping exercise with significant financial rewards for any new owner. This is deeply troubling,” said Keith Brown in the letter to Nick Hurd, the climate minister.

Brown continued: “The Scottish government does not believe that the approach to privatisation being reported is in line with the reassurances given in the autumn of 2015.”

While the Scottish government issued a statement voicing its concerns just before Christmas, the letter reveals the extent of its frustration, with Brown saying he was disappointed Hurd had not taken a call from him, and warning he would continue to press ministers on the issue.

Vince Cable, who as former business secretary launched the bank in 2012, told the Guardian he “fully shared” Scotland’s concerns.

“The Scottish government has a perfectly legitimate wish to be properly consulted on the matter. The problem is that because it’s a bidding process they’ve [the government] wrapped themselves in commercial confidentiality and it’s getting in the way of having a proper policy discussion.”

He added: “Under no circumstances should they be allowing a decision to proceed which involves a potential break-up of the bank, it’s been a big success story.”

Although not officially confirmed, Macquarie was chosen as the government’s preferred bidder last autumn, after beating off a bid from the Sustainable Development Capital consortium. Sources close to the London Stock Exchange labelled the Australian bank an “asset-stripper” when it bid for the exchange 12 years ago.

Clive Lewis, Labour shadow secretary of state for business and energy, said: “Privatising the GIB makes no sense whatsoever. The bank is both a great success as a public institution and providing a healthy return to the taxpayer. It’s been multiplying our ability to build substantial low carbon infrastructure and fight climate change.”

Sepi Golzari-Munro, who has closely monitored the bank’s sale and is head of the UK programme at thinktank E3G, said: “The GIB is a strategic national asset that can and should be used to achieve those ends, rather than used by foreign banks to make a windfall at the taxpayer’s expense.”

A BEIS spokeswoman said: “This is a commercially sensitive process and therefore it is inappropriate for us to comment while the process is ongoing.”

The Green Investment Bank declined to comment.