The man dubbed the UK’s highest-paid public servant last year has fulfilled his first ambition, to head the world’s first Green Investment Bank. But Shaun Kingsbury’s next goal is to set another record, by privatising the Edinburgh-based bank within four years of inception.

His £325,000 salary (and a £500,000 bonus in the green pipeline) was said by the government to be way below the £1million he might earn in the private sector, and the ebullient Northern Irelander has a way of making you believe he’s worth it.

He went straight from a business degree in Belfast to work for Shell and spent nearly10 years in the US, Europe and Africa. “I had seen capital projects worth billions of pounds with 20-year supply chains across multiple countries, and I started getting interested in renewables when the technology was just emerging, but the access to pools of capital wasn’t there at the time.”

In 2001 he left big corporate and helped set up Windforce to take advantage of growing global demand for wind power, targeting projects in three countries worth £500m. By 2005 he was “entrepreneur in residence” at private equity giant 3i, hunting down deals in the sector, which led to him joining GES, global leader in construction and maintenance and for the wind and solar industry, which led to an approach from Hudson Clean Energy Partners. Now he was helping a New Jersey-based private equity outfit focused on renewables to raise a $1bn fund.

“I had changed from being an industry person to being an investor and I became the private equity partner investing the $1bn.”

Next Mr Kingsbury was instrumental in setting up the Low Carbon Finance Group of leading UK practitioners, aimed at “talking to government about what was necessary to build out this green infrastructure, what type of structures, guarantees, support mechanisms, what happens in other places in the world”.

At that time in the UK, “people would say lets go and talk to the City, and it might be an analyst who covers Centrica”, he says.

Mr Kingsbury became the group’s first chairman, and helped draft a report for the then shadow energy minister Greg Barker into the notion of a green investment bank – which after the 2010 election was instantly enshrined in the coalition’s working agreement.

“I continued merrily on, chairing the group, investing the Hudson fund, and two years later got a tap on the shoulder from a head-hunter asking me if I’d heard of the GIB.... and who might be a good candidate – they twisted my arm and I put my name forward.”

So why take such an apparently large pay cut? “I decided to come and take the very generous pay offer here, but certainly less than I was earning, because it was an important thing, an interesting thing, and I love challenges. There was a great opportunity to build something new and innovative, the world’s first green investment bank, nobody had done it before.”

When Edinburgh beat off competition from half a dozen other cities to host the bank’s headquarters, there were murmurings about a pre-referendum political fix, and certainly the bank’s London office now houses 65 of its 110 staff.

But the chief executive says all head office functions are run from Scotland. “Edinburgh has been a huge success, it’s a great financial centre if I am looking for accountants and in the finance sectors, it’s a great place to build a business, and I’m very comfortable with the two offices.”

There was also scrutiny at Holyrood about the paucity of Scottish investment projects in the bank’s first year. But it can now show six projects where it has invested £200m and mobilised at least £450m – that’s 10 per cent of its total capital commitment.

They include £2.5m for boiler replacement in three distilleries, £150m towards community-scale projects such as run of river hydro schemes, and loans of £41m for two energy plants in Moray (combined heat and power) and West Lothian (waste to energy).

There is also a £6.3m loan to instal LED 10,000 street lights along Glasgow’s main arterial roads, using half the energy and cutting the council’s greenhouse gas emissions by 18,000 tonnes over 18 years. That brings into focus why GIB is needed. “I would argue that street lighting technology is low risk,” Mr Kingsbury says. “But people want to see someone who is an expert to take that risk, and we have technology guys and engineers as well as finance guys.” This project may be small-scale, but UK local authorities spend £300m a year on lighting.

“What we try to do is de-risk so other people can come in beside us – we now have 70 co-investors in our 54 transactions.” They include the five biggest UK banks and seven overseas banks – a far cry from 2012 when GIB launched, the chief executive recalls.

“Capital was still very tight in the banking world and committing to 15-year debt was a real problem for them – we stepped into a number of projects which had been completely due diligenced by high street banks who said they could only provide it for seven to eight years. In 2015 the world’s a different place, the banks are back. In the first year 60per cent of our deals were debt, last year 70per cent were equity.”

GIB’s biggest coup has been to raise £463m for the UK’s first offshore windfarm, and with two-thirds of the government’s initial £3bn already invested, and the bank almost up to its optimum £800m a year spend, private capital will soon be needed. “We will quickly run out of money,” Mr Kingsbury says. “Fortunately I thought about that a couple of years ago....you can access different types of capital whenever you are profitable and successful.”

The bank moved into profit in the second half of last year, making £3m, and recording its first full-year profit of £100,000.

Mr Kingsbury adds: “We will be off the government balance sheet. Then we could also borrow – we are the only bank with no borrowings.”

That will also free GIB from state aid rules, allowing it to invest in a broader range of desirable projects – such as battery power for London’s fleet of black taxis.

Executive bonuses including his own £500,000 will pay out in 2017 if investment targets, and green outcomes, are met.

He says: “The last two and a half years has been incredible fun, building a great team, making sure the business model works, and demonstrating there was a finance gap and filling it profitably – green and profitable, it’s really important to be both....Now the government will have to decide when is the right moment to maximise a sale.”

CV

Armed with a business degree from his home university in Belfast, Mr Kingsbury spent almost 10 years at Shell, then in 2001 set up Windforce, later joining ITI Energy. In 2005 he was lured to 3i, then after a spell with GES he moved into financing with Hudson Clean Energy Partners, and set up the Low Carbon Finance Group. As its chair in 2010 he helped draft the proposal for a green investment bank, and was headhunted to run the GIB from its launch in November 2012.