Scotland’s First Minister Humza Yousaf pledged to issue Scottish Government bonds for the first time, to fund infrastructure projects.

Bonds are the standard form of borrowing for governments and support spending including on major infrastructure projects, with buyers owed the value of the bond plus interest over a specific period of time.

The Scottish Government’s capital borrowing limits will increase with inflation from their current levels of £450 million per annum and £3 billion cumulatively.

Mr Yousaf has commissioned initial work with the aim of making the bonds available by the end of the current parliamentary session, including undertaking detailed analysis to ensure value for money, and consideration of investment opportunities in Scotland.

Infrastructure paid for by the bonds could include affordable housing, Mr Yousaf told the SNP conference.

He said the Scottish Government will go directly to the international bond market in its own right by the end of the current Scottish Parliament term, which would “raise Scotland’s profile” and attract investors, as well as proving “credibility to international markets” after independence.

SNP annual conference
Scottish First Minister and SNP leader Humza Yousaf making his keynote speech during the SNP annual conference (Andrew Milligan/PA Wire)

Mr Yousaf said: “Scotland has a wealth of investment opportunities. Issuing a bond will help raise Scotland’s profile and engagement with international investors to attract investment.

“This will be a first for the Scottish Government and is a significant undertaking. The next steps will involve the commissioning of detailed analysis and due diligence. Subject to successful completion, the first bond will issue by the end of this parliamentary session.

“This is an exciting opportunity to use the powers we already have to invest in infrastructure for Scotland’s future.

“Investment in infrastructure is key to supporting the three priorities I have outlined for the Scottish Government over the next three years – delivering high quality public services, boosting a green and thriving economy, and ensuring equality of opportunity for everyone.”