State aid: Commission approves creation of new national development bank Scottish National Investment Bank

The European Commission has approved, under EU State aid rules, Scottish plans to set up a new national development bank, the ‘Scottish National Investment Bank’ (‘SNIB’), to promote inclusive and sustainable growth in Scotland. The Scottish government will grant SNIB capital of up to £1.5 billion (approximately €1.7 billion) in the first five years and a subsidy of up to £25 million (approximately € 27.8 million) in the first three years. SNIB’s activities will target existing market failures in the Scottish financial markets. Concretely, SNIB will focus on improving access to finance for projects covering low carbon technologies and infrastructure, support for small and medium-sized enterprises, urban development and research and innovation in developing technologies. The ultimate aim is to power innovation and accelerate the move to a net-zero emissions, high-tech, connected, globally competitive and inclusive economy. The Commission found that the creation of SNIB is an appropriate and proportionate solution to provide additional financing to companies and projects that would otherwise remain underfinanced because of market failures. Furthermore, SNIB will implement safeguards to ensure that the State-supported institution does not crowd out private financial institutions. On this basis, the Commission concluded that the recapitalisation and the subsidy are in line with EU State aid rules, in particular Article 107(3)(c) of the Treaty on the Functioning of the European Union (TFEU), which enables the Commission to approve State aid measures implemented to facilitate the development of certain economic activities or of certain economic areas, subject to certain conditions. More information will be available on the Commission’s competition website, in the public case register, under the case number SA.54780.