Scotland’s state investment bank, the Scottish National Investment Bank (SNIB), will be launched before December 2020, according to Chairman Willie Watt.
Once launched, the bank will provide long-term capital to projects and companies that are part of the Scottish Government’s goals of cutting carbon emissions, reducing inequality, and addressing demographic change.
Watt told the Financial Times that the bank will fill gaps in the financing of infrastructure projects and small and medium-sized companies with growth potential and provide a “positive return” for Scotland.
Over the next 10 years, the Scottish Government has announced that £2 billion in capital will be provided in a push to transform the country’s economy, which has struggled to match UK-wide growth rates in recent years.
“We [will be] doing commercial investment that is additional to what the private sector is doing. Some people say if the private sector does not do it, then space doesn’t exist…but I’ve been investing for 35 years and I know that that’s not the case,” Watt told FT.
Plans for the bank were initially announced in February 2018 with hopes of tackling a lack of investment in Scotland. However, Covid-19 had raised a whole set of new challenges for businesses, and the bank could now serve the more important role of protecting firms against an economic downturn.
Brexit could also have an impact on investment in Scotland and the rest of the UK as Britain is likely to leave the European Investment Bank after the end of the transition period.
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Watt said that Covid-19 complicated the establishment of the bank. The last obstacle before launch is to gain approval from the European Commission under EU state aid rules.
“I would anticipate that we will launch in the final quarter of this year. I would be disappointed if it was December,” he said.
In August, the Scottish Government proposed three missions for the SNIB which include promoting the transition to net-zero carbon emissions economy, investing in regeneration schemes around the country to reduce inequality and funding innovation aimed at improving health and productivity.
In September, the government released its ‘Protecting Scotland, Renewing Scotland’ report into re-building the Scottish economy. In it, First Minister Nicola Sturgeon said that the government must consider “how we build back fairer and stronger” after Covid-19, and to “address with a renewed impetus many of the deep-seated challenges” facing the country.
“We must take that opportunity,” she said.