MEPs challenge government on post-Brexit investment in clean energy

As the government faces a legal challenge over the sale of the Green Investment Bank to the Australian investment bank Macquarie, a cross-party group of MEPs is also keeping up the pressure by demanding to know how the government plans to fund investment in clean energy post-Brexit [1]. The written question to Nick Hurd, Minister for Climate Change and Industry, follows the plan to privatise the Green Investment Bank (GIB) and the fact the UK could find itself without access to European Investment Bank (EIB) funds after the UK leaves the EU.

The legal challenge, by London-based investment fund Sustainable Development Capital, on the grounds that the bidding process has not achieved value for money for the taxpayer, is the latest setback for the government and follows the Environmental Audit Committee warning the sell-off of the GIB would strip the bank of its legal requirement to invest in green projects. Green MP Caroline Lucas has strongly opposed the sell-off of the GIB and Lib Dems and Labour have also voiced opposition. In particular, concerns have been raised about preferred bidder, Australian investment bank Macquarie, over its track record of asset-stripping.   

The MEPs also express fears that EIB investment could decline dramatically after the UK exits the EU, if the UK ceases to be a shareholder in the EIB. Currently, only EU member states can be EIB shareholders.  The UK relies heavily on EIB funding, which provided more than £5.5bn for UK-based projects last year. Climate investment forms around a quarter of EIB total loans, with the UK being the single largest recipient of clean energy lending in the past five years. 

Molly Scott Cato said:

“Our commitment to the Paris Agreement means we must rapidly reduce our carbon emissions. It is therefore incomprehensible that we are set to deprive ourselves of the funds of the EIB, where we have been so successful, and simultaneously dismantle the Green Investment Bank. The preferred bidder, Macquarie, has a worrying and dubious track record of asset stripping and has dismal environmental credentials. Not only that, we now have a legal challenge on the basis that this is a bad deal for tax payers. 

“Climate change is one of the biggest challenges we face and if the government remains committed to tackling it we need to know how it proposes to invest in clean energy in future.”

[1] Letter to Nick Hurd, Minister for Climate Change and Industry, signed by Molly Scott Cato MEP (Green), Anneleise Dodds MEP (Labour), Catherine Bearder MEP (LibDem) and Seb Dance MEP (Labour).