Bank on investment to make a positive impact in Scotland

In an exclusive interview, Al Denholm, CEO of the Scottish National Investment Bank, talks about the organisation’s progress since it was established in 2020 and how impact investing is making its mark across a diverse range of key sectors

AS the Scottish National Investment Bank (the Bank) gears up for its much-anticipated annual conference in March, chief executive Al Denholm is keen to talk about the institution’s progress since it opened its doors for business in November 2020.

Mr Denholm, a stalwart of the investment industry with nearly 40 years under his belt including spells with ING, Prudential, Aviva, Blackrock, and Scottish Widows, declares: “We have been making a strong impact across Scotland.

“What I think is particularly exciting is the breadth of our portfolio and the pipeline of opportunities that is out there. We think that 2025 will be a significant year for the Bank.”

Now in it’s 5th year, Scotland’s investment bank was set up to help address Scotland’s ‘grand challenges’ by being a mission-led investor – backed by £2 billion of Scottish Government funding to be spent over 10 years. All of the investments the Bank makes support the UN’s Sustainable Development Goals.

With its aim to provide development capital to firms helping to deliver against the Bank’s three core missions – the drive to net zero, tackling place-based inequality, and supporting innovation – the Bank has, to date, deployed £682 million of capital investment into a portfolio of 39 businesses and projects, crowding in £1.4 billion alongside this capital. Each investment has a goal to contribute to its core missions.

So far, the investments provided have helped support around 1,850 jobs; 52,841 tCO2e has been avoided, reduced or removed across our portfolio – equivalent of 1,215 full capacity return flights from Glasgow to London; 24 out of 32 Scottish local authorities have benefitted from portfolio activity.

One example investment is Haventus, the energy transition facilities provider and owner of Ardersier Port, east of Inverness in the Moray Firth, which in May 2024 secured a £100m joint credit facility from the Bank and UK Infrastructure Bank (now National Wealth Fund), with £50m investment from each.

In the innovation sphere, meanwhile, pioneering Bellshill-headquarted EnteroBiotix has received a £6m investment from the Bank alongside other co-investors to raise £27m in funding.

It is looking at improving gut health to treat a range of conditions including irritable bowel syndrome (IBS), blood cancer, and liver cirrhosis and currently employs 50 people in highly skilled roles.

EnteroBiotix, which opened its new 20,000 sq ft manufacturing lab in Bellshill in 2022, is using the capital to progress key clinical trials that will add significantly to the quantity and quality of the data it gathers.

Securing £4m from the bank alongside a further £4.8m from other investors – Archangel Investors and Par Equity – is iGii, a Stirling-based company nanomaterial producer using the funds to accelerate customer projects and deepen its research and development capabilities to explore further applications of its patented Gii™ material.

Formerly known as Integrated Graphene, funding has enabled iGii to progress plans to increase its manufacturing capacity, and continue to create highly skilled local jobs. Investee businesses will be among those sharing their stories at the Bank’s conference – Investing with Impact: A Catalyst for Change – in Glasgow on March 3, in association with The Herald.

MISSION-LED

AL Denholm reiterates the point that the Bank is a mission-led development bank for Scotland, noting: “We are working to enable a just transition to net zero, scaling up innovation and technology, supporting companies to create better-paid and skilled jobs which leads to a more competitive and productive economy. We are also seeking to reduce place-based inequality by improving access to quality housing and amenities.”

In that respect, the bank has supported Thriving Investments (formerly PfP Capital) to help fund the development of 649 affordable, energy-efficient homes for rent across Scotland with more in the pipeline.

Mr Denholm notes: “Improving Scotland’s housing stock and building quality homes is so important – part of our role is to work with other parties to problem-solve – it’s about everyone rolling up their sleeves.”

While “impact investment” is not new, the topic has certainly been pushed up the agenda since the formation of the Bank. “We are a development bank, so we invest on a commercial basis,” Mr Denholm points out. “By doing so, we act as a catalyst to encourage private investors to invest alongside us..
“What also makes us different is that we come with an impact view,” he adds. “Businesses are really embracing what we do and the role we play – and there is a growing awareness now about impact investing. Where traditional models of investment are focused primarily on generating strong commercial returns, in recent years we have seen a growing interest in investments that meet rigorous ESG (environmental, social, and governance) standards.

“The Bank takes that a step further by using capital as a tool to create positive, demonstrable, social, or environmental change while still generating positive financial returns. It’s really a powerful idea.”

Some of these themes will be in the spotlight at the forthcoming Investing with Impact: A Catalyst for Change conference on Monday, March 3 at Glasgow’s Radisson Blu Hotel from 10.30am to 4.15pm, will focus on impact investing – what it means in reality, why it matters, and sources of capital

www.thebank.scot

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New port infrastructure is quay to unlocking potential

ONE of the highest-profile investments is Haventus, the energy transition facilities provider and owner of Ardersier Port, east of Inverness, which secured a £100 million joint credit facility from the Scottish National Investment Bank and UK Infrastructure Bank (now National Wealth Fund) with £50m from each.

The financing follows a £300m capital commitment announced in 2023 by leading energy investment firm Quantum Capital Group, when Haventus began the redevelopment of the key Ardersier Port in the Moray Firth.

This facility will underpin the creation of a nationally significant infrastructure facility to support industrial-scale deployment of fixed and floating offshore wind. Construction has begun on the site, which includes the development of a new 650-metre quay wall and associated quayside.

As a site within the Inverness and Cromarty Firth Green Freeport, Ardersier Port will offer a 450-acre site with quayside access and suitable infrastructure for marshalling, integration, manufacturing, and assembly of offshore wind components.

It will be the largest dedicated offshore wind deployment port facility in Scotland, capable of hosting and supporting gigawatt scale projects.

At full capacity, it is estimated that the site has potential to enable around 3,000 jobs and re-skilling opportunities for the community.

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Glasgow gathering will be a ‘Catalyst for Change’

THE ‘Investing With Impact: A catalyst for Change’ conference on Monday, March 3 at Glasgow’s Radisson Blu Hotel from 10.30am to 4.15pm, will focus on impact investing – what it means in reality, why it matters, and sources of capital.

A panel discussion will feature a range of speakers, including:

■ Nick Moon, Chair, Circulate Capital and NXD, Scottish National Investment Bank
■ Anna Shiel, Chief Investment Officer, Better Society Capital
■ Emma Thorne, Partner, Private Equity, Bridges Fund Management

In a session titled ‘Scaling up businesses for international markets’, speakers will explore how businesses can attract overseas investment and operate in international markets. Participants include the entrepreneur Mark Bamforth.

Another session, focusing on housing and market creation, will centre on housing the workers for the industries of the future and solving challenges for existing communities, as well as driving social and economic impact along with opportunities for commercial returns.

The chair of the Scottish National Investment Bank, Willie Watt, will also address the conference which will be hosted by Zara Janjua and introduced by The Herald editor Catherine Salmond.