By Margot Patrick and Ben Dummett

LONDON--The U.K. government sold the Green Investment Bank PLC for GBP2.3 billion ($2.93 billion) Thursday to a consortium led by Australian bank Macquarie Group Ltd., in a deal that was delayed by political opposition to the sale of the state-backed renewable energy fund.

Macquarie, already a big investor in the U.K.'s energy infrastructure, said it will combine its existing investments with those of made by the Green Investment Bank. GIB, which is essentially a fund and not a licensed bank, will oversee more than GBP4 billion in "green" infrastructure and assets such as wind farms, Macquarie said.

Investors including a Macquarie infrastructure fund, the U.K.'s Universities Superannuation Scheme and the U.K. government will invest in some of the projects, Macquarie said.

Nick Hurd, U.K. climate change and industry minister, said the government will make a profit of around GBP160 million on the sale, after providing GBP1.5 billion to fund GIB since 2012. The headline value of GBP2.3 billion includes GBP600 million the government had committed to the bank but now won't have to fund.

In a written statement to Parliament, Mr. Hurd said Macquarie will target GBP3 billion in new investments for GIB over the next three years, more than the government had been contributing.

The plan to sell GIB was announced in March 2016, 3 1/2 years. The fund was set up in November 2012 as a vehicle to pump government money into environmentally-conscious projects.

But the salewas held up by political wrangling, though, as some government officials raised concerns that GIB could be sold too cheaply or change its green mission. A rival bidder to Macquarie, Sustainable Development Capital LLC, made a legal attempt to block Macquarie's winning offer, saying taxpayers could get a better deal, but failed last month in getting a court to intervene.

No one from SDCL was immediately available to comment Thursday.

The sale comes at a time when governments globally face significant costs to replace aging infrastructure and curb their carbon footprints. Infrastructure investment across transport, energy and water systems is estimated to total $93 trillion over the next 15 years to achieve these two goals, the OECD said in a December 2015 report on Green Investment Banks, which also exist in several U.S. states and countries including Japan and Australia.

At the same time, pension funds and other big infrastructure funds are increasingly targeting renewable projects, taking advantage of the growing demand for investment to fund these often-expensive projects.

For the fiscal year ended March 31, 2016, the U.K.'s GIB made a 10% return, investing a total of GBP770 million in 30 projects including acquiring a 25% equity stake in the Galloper offshore wind farm off the coast of Suffolk in eastern England, and a project in Northern Ireland that produces energy from waste.

To appease concerns that the Green Investment Bank might stray from its environmentally-friendly mandate, a special share will be held by a committee of independent trustees that could block any attempt by the private owner's to change the green purposes of the fund.

Macquarie said GIB will become its platform for investing in green infrastructure in the U.K. and Europe. Existing investments include the building of the world's largest bioenergy plant in northeast England,and the installation of more energy efficient street lights in the English city of Nottingham.

Write to Margot Patrick at margot.patrick@wsj.com and Ben Dummett at ben.dummett@wsj.com

(END) Dow Jones Newswires

April 20, 2017 09:05 ET (13:05 GMT)

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