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Guiding principles and goals of a new Scottish National Investment Bank have been set out by Benny Higgins, the banker appointed by the Scottish Government to lead the implementation of the plan.
The document, released today sets out the long term mission of the SNIB and sets the target level of capitalisation at £1bn for the first five years, to be followed by a further £1bn over years 6-10. The funds will be geared towards providing long-term, patient finance for both smaller firms and larger projects,
The plan also recommends that the bank should be a publicly-owned entity, though stresses that it should be operationally independent of Scottish Ministers, while aligning to the Scotland’s strategic economic priorities and promoting inclusive growth, while laying out a longer term goal that the bank raise its own capital to fund investments.
Companies that are aligned to Scottish Government goals of creating a low carbon economy and promoting regeneration are likely to be the initial beneficiaries of the new bank according to the document which states that “The initial area of focus recommended for the Bank is to develop products to support the transition to a low carbon economy, including infrastructure where financing can be scarce.”
“The Bank should also offer investment products that support mission-based investment (equity and debt) that enable and accelerate, at scale, place-making development activities, including housing development, regeneration and new business infrastructure and premises.”
Welcoming the report, First Minister Nicola Sturgeon 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.
“I thank Benny Higgins and the advisory group for their work to bring this aspiration a step closer. The Scottish Government will carefully consider his recommendations, as we move forward with the creation of the Scottish National Investment Bank.”
Benny 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 focussing 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.”
The report finds that a national investment bank should be established for Scotland with a vision to “provide finance and act to catalyse private investment to achieve a step change in growth for the Scottish economy by powering innovation and accelerating the move to a low carbon, high-tech, connected, globally competitive and inclusive economy.”
It also stipulates that the Bank’s strategic priorities for investment should be centred on “a core role of helping to address Scotland’s economic priorities in an inclusive and ethical way.”
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