Scotland’s National Investment Bank has reported a pre-tax loss of £20.2mn for the last financial year, almost doubling its losses from the previous year. The bank suffered £17.8mn in “unrealised losses” primarily due to the collapse of Circularity Scotland, the company tasked with administering the government’s recycling scheme. The bank had invested £9mn in Circularity Scotland, which collapsed in June. The setback is seen as a blow to Scotland’s ambition to achieve a net-zero economy by 2045.
The collapse of Circularity Scotland, which administered Scotland’s deposit recycling scheme, has led to increased losses for Scotland’s National Investment Bank. The bank, established in 2020 to fund projects that reduce carbon emissions and promote innovation, suffered £17.8mn in “unrealised losses” due to the collapse. The value of the bank’s investment in Circularity Scotland was written down by £4.5mn due to the risk of delays in the scheme. The collapse of the company, coupled with the postponement of the recycling scheme until at least October 2025, has dealt a blow to Scotland’s goal of achieving a net-zero economy by 2045.
Critics of Scotland’s National Investment Bank argue that its government mandate could lead to unwise investment decisions. They claim that politically motivated investments, such as the investment in Circularity Scotland, could compromise the bank’s financial success. However, the bank’s CEO, Al Denholm, maintains that there has been no political interference in the bank’s decision-making. Despite the setback, the bank deployed £151.9mn in the last financial year, though falling short of its target to lend £2bn to businesses over a decade. It is expected to take a significant amount of time for the bank to reach its lending goals.