NICOLA Sturgeon has said the Scottish Government will “move at pace” to set up the new Scottish National Investment Bank (SNIB), which is hoped to be operating in “shadow form” by next year.
Speaking in Edinburgh after Tesco Bank CEO Benny Higgins unveiled his implementation plan for the project, the First Minister said it was “a very significant milestone”.
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Higgins said the bank should be supported by long-term capitalisation of at least £2 billion over the first 10 years of its life.
Sturgeon said the Scottish Government had already earmarked £500 million over the next three years, which she said was a “substantial down-payment”.
Under Higgins’s plan, the SNIB will provide “patient” funding for small to medium-sized enterprises (SMEs) and larger projects. After its initial £2bn injection of public cash it will aim to become self-sustaining in the longer term, raising its own capital to fund investments.
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He said the bank should be publicly-owned and mission-driven, with a focus on supporting Scotland’s economic priorities and inclusive growth, as well as operating in an ethical and transparent fashion.
Higgins said: “There is an incontrovertible case for creating the Scottish National Investment Bank.
“The economic and social wellbeing of our country will be enhanced by an institution that complements private sector investment, with a clear focus on SMEs and projects that require strategic patient capital.
“We have undertaken rigorous analysis through this process and engaged an extensive and broad group of individuals and bodies in both the public and private sectors.
“There is a strong consensus that there is an immediate and pressing need for the creation of the bank.”
First Minister Nicola Sturgeon welcomed his implementation plan for the bank, and said: “To realise our ambitions for Scotland’s economy, innovative companies need access to strategic, patient finance to grow and thrive, while the business environment must encourage our young people to be the entrepreneurs of the future.
“That is why I committed to a publicly owned national investment bank, which will act as a cornerstone for the economy.
“The Scottish Government will carefully consider his recommendations, as we move forward with the creation of the Scottish National Investment Bank.”
Friends of the Earth Scotland (FoES) welcomed the plan.
Campaigner Ric Lander said: “We’re encouraged that plans for the establishment of the Scottish National Investment Bank are progressing and commend the First Minister’s strong indication that the bank will be tasked with building the new low-carbon economy.
“The creation of a new publicly owned bank which invests to maximise social, environmental and ethical returns and intervenes fully in the economy to create and shape markets could be transformative in Scotland’s efforts to address climate change and inequality.
“However, for the SNIB to make a meaningful contribution to improving people’s lives, it should avoid financing economic growth as an end in itself and instead make investments that will realise wider public policy objectives.
“It must also be governed in the interests of everyone in Scotland, especially marginalised groups and communities.
“The SNIB must quickly mobilise the resources needed for a just transition to a zero-carbon economy and be closely aligned to key Government initiatives such as the promised publicly owned energy company.
“Public transport and energy efficiency are ready and waiting to be developed, whilst nascent technologies such as wave power need patient, sustained investment.
“Extending access to finance for community-owned businesses, social enterprises and businesses rooted in marginalised communities is much needed.”
Scottish Renewables chief executive Claire Mack said that while Scotland leads the world in developing devices which can capture energy from waves and tides, the sectors were at a difficult stage of their development.
She said: “We welcome comments made today by the First Minister that the new Scottish National Investment Bank will focus on delivering ‘patient long-term strategic investment’ to cater for ‘sectors that the market currently doesn’t’.
“With the right investment, our wave and tidal energy sectors can continue on the path towards full commercialisation, giving Scotland a huge first-mover advantage in an energy sector with enormous global potential.”
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