The government has confirmed its intention to sell stakes in the Green Investment Bank (GIB) at the bank’s Annual Review on Thursday.

The move is designed to raise private capital as part of the Conservative government’s push to tackle the UK’s budget deficit. 

The Department for Business, Innovation and Skill claims that the decision to bring in private shareholders to GIB will give the bank “greater freedom to borrow, lend and grow”. 

Commenting on the announcement, chancellor of the exchequer, George Osborne said that GIB had gone from “strength to strength” since its launch in 2012. “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”, added Osborne. 

The chancellor claimed that he would use any money raised from the sale to “pay down the national debt and deliver lasting economic security for working people”. 

Business secretary, Sajid Javid said that GIB had “shown that investment in green technologies can be a profitable business”. 

In an attempt to allay fears that the intention to attract private investment would adversely impact GIB’s operations, Javid claimed that “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”, continued Javid. 

The government has not confirmed how much of GIB will be offered for sale, only that it “will now actively engage with potential investors and explore the scope for a transaction that will deliver value of money for the taxpayer. The detail and timing of any transaction will depend on the outcome.” The Financial Times reported on Wednesday that as much of 70% of GIB could be up for grabs as part of the proposed sale. 

Lord Smith of Kelvin, chair of GIB concluded: “Our challenge now is to build a funding strategy which provides us with the capital to match our investment ambitions.”