The attitude of some people to the Scottish National Investment Bank misses the whole point, writes Business Editor Ian McConnell.

There has been lots of water under the bridge since the Scottish National Investment Bank opened for business in November 2020.

SNIB reached a milestone this week, with a £10 million investment in Inverness-based Aurora Energy Services taking the total amount of capital it has committed in Scottish businesses and projects to more than £1 billion. 

As you would probably expect given the goldfish-bowl nature of the Scottish political scene, and the prevalence of others with ideological axes to grind, negativity towards SNIB has demoralisingly been the default position for many.

Detractors have seemed determined to get their monocles on, or magnifying glasses out, to scrutinise the track record and accounts of SNIB in some fairly concerted efforts to find fault.

And where they have detected what they perceive to be chinks in the armour, or indeed where SNIB has sustained sometimes significant losses on some of its investments, their glee has been almost palpable.

Of course, SNIB has sustained some major losses in its funding activities, notably in recent months on Glasgow-based M Squared Lasers. And the fall of pioneering Scottish space sector company Orbex into administration this month has been further bad news for SNIB, which backed this orbital launch services company significantly.

However, the simple fact of the matter is that the activities of SNIB, by their very nature, entail risk. And we should not ignore the employment provided by companies that are backed but ultimately fail and the broader impact of these businesses where they have, for example, helped cultivate progress in a particular field or led to other enterprises being formed.

What is more, SNIB is often providing funding to businesses in no small part because such finance is unavailable or difficult to obtain from other sources. And the activities of these enterprises have to chime with the institution’s “missions”.

SNIB describes itself as “an impact investor…focused on delivering both commercial returns and tangible benefits that align with at least one of its three missions".

These missions are: net zero, characterised as “addressing the climate crisis through growing a fair and sustainable economy”; innovation, specifically “scaling up innovation and technology for a more competitive and productive economy”; and “place”, which is defined as “transforming communities to make them places where everyone thrives”.

Surely no one could argue that these are not important “missions”.

It has been interesting to watch, on the one hand, people moaning not so long ago that SNIB was not been deploying its funds fast enough. And then, when companies it has funded run into trouble, sometimes the same people suggest that such losses might have been avoidable, seemingly arguing for caution on a scale which would surely slow deployment of funds and could essentially strangle SNIB’s attempt to fulfil its mission.

And it is surely worth observing that, in terms of losses sustained, hindsight is a wonderful thing.

SNIB describes itself as “Scotland’s development bank”.

It “exists to provide patient (long-term) debt or equity investments to businesses and projects that support the development of a fairer, more sustainable Scottish economy”.

In today’s world of short attention spans and turbulence, we should not underestimate the importance and value of patience.

SNIB is “wholly owned by Scottish Government ministers, on behalf of the people of Scotland, but operates independently from government”.

There has, it should be noted, been the frequency of change of chief executive that you might expect more at a top-flight football club either side of the Border.

However, private equity and fund management sector veteran Willie Watt has been chairman from the beginning. And the operation of SNIB under its three permanent chief executives, Eilidh Mactaggart, Al Denholm and current boss David Ritchie, and one interim holder of this post, Sarah Roughead, has come across as very professional. There have been plenty of good things said about SNIB from people who have had dealings with it over the years.

However, this steadiness has not stopped much stirring of the pot, notably in the wake of the departure of Ms Mactaggart, who eventually released a statement saying she had stepped down for “personal reasons”. Conservative MSP Douglas Ross, then leader of the party in Scotland, was in 2022 among those who threw in his tuppence worth over Ms Mactaggart leaving.

And critics made the most of losses for SNIB on its investment in Circularity Scotland, the company established to administer a Scottish deposit return scheme which did not go ahead as originally planned.

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However, Audit Scotland, which delivers financial and performance audits on public bodies and the management of public services, policies and major projects, said in May 2025 of SNIB: “The bank has been well run to date. It has a rigorous process for investing public funds and has laid good foundations for reporting on its impact. It generated over £19 million in income in 2023/24, more than covering its operational costs for the first time.”

The Scottish Government has committed to capitalising SNIB with £2bn in its first 10 years. 

Over time, as the initial investments are repaid, the plan is that SNIB “will reinvest those funds in more businesses and projects, creating a perpetual investment fund to support the Scottish economy in the long term”.

Deputy First Minister Kate Forbes this week highlighted the amount of funding drawn in from the private sector and other public sector investors as the £1bn milestone was flagged by SNIB.

The figure for the amount invested alongside SNIB is £1.7bn, which is certainly not to be sniffed at.

Ms Forbes said: “Reaching £1 billion in committed investment and helping drive over £1.7 billion of third-party co-investment is a significant milestone for the Scottish National Investment Bank and for Scotland's economy. The bank plays a vital role in supporting businesses and investments that are driving innovation, transforming communities and accelerating Scotland’s transition to net zero.”

She observed SNIB had supported more than 50 companies.

SNIB noted this week that its investment in Aurora, which provides support for the energy transition and maximising the lifespan and performance of onshore and offshore assets and employs more than 100 people in Scotland, “is one of many” that have contributed to the “key milestone” of £1bn of committed investment.

And SNIB observed that, “seeing significant potential in the housing industry”, it recently backed Octopus Capital’s affordable housing fund and builder Whiteburn.

It highlighted the fact that it had also supported “key infrastructure projects”, such as Highview’s long-duration energy storage solution at Hunterston, the Deep Water Terminal at Stornoway Port, and Pentland Floating Offshore Wind Farm, which it noted is “the only floating project in Scotland to have secured a contract for difference in the recent AR7 round”.

There are certainly plenty of impactful projects which have been, and are being, backed by SNIB.

On the general point of people displaying over-exuberance when losses are sustained by SNIB in its funding activities, there have been plenty of calls from the same quarters for the Scottish Government to deliver on the economy and for a national investment bank which will make a difference.

The signs are that SNIB is making a difference and hopefully the benefits which flow from its decisions will accrue over years and decades.

And people should accept that, if we want to have such a national investment bank making big calls for major effects, some losses will come with the territory. This is obviously not a risk-free business but the hope is that the rewards far outweigh the losses.

© Herald Scotland