Meeting of the Parliament 21 January 2020
No, thank you.
The First Minister has committed to the bank’s primary mission being supporting the just transition to net zero carbon emissions. Harnessing private sector activity to achieve that has never been more important.
The bank is expected to have two other missions, based on examples in the implementation plan. One concerns taking advantage of technology and innovation to benefit Scotland’s people, particularly through responding to demographic challenges. The other will support improvements to places across Scotland. Those missions have been derived from Professor Mazzucato’s guidance in setting out how the bank could adopt missions, and from extensive engagement.
The bank will, of course, seek to make a sufficient financial return. That will enable it to reinvest its funds many times over, in successive generations of business. The bank will also, in time, cover its costs and not be reliant on the taxpayer. I recently updated the Economy, Energy and Fair Work Committee on the latest financial modelling for the bank. I provided indicative projections of the bank’s performance over the long term. Over a 50-year period, the bank is projected to make cumulative investments of £17.5 billion—and that does not account for investment leveraged from other sources. As a result, the initial £2 billion capitalisation would be recycled across the bank’s portfolio more than eight times across the 50-year period, including the initial investment. That is a significant goal that will be achieved only if we are patient with the bank, especially in its early years. We must allow the bank time to reach its full potential.