The new institution will direct investments that deliver economic, environmental and social returns, and help Scotland’s journey towards net-zero carbon emissions. It will aim to increase innovation, give support to small and medium-sized enterprises (SMEs), and build a high-tech and inclusive economy.

The bank is expected to be operational before the end of the year. It will have an initial capitalisation of £2 billion over 10 years with the aim that it will ultimately become self-financing.

Derek Mackay, economy secretary, said: “The Scottish National Investment Bank has the potential to transform Scotland’s society by powering innovation and building a high-tech, inclusive economy.

“Most importantly of all, the bank’s primary mission will be to face up to the global climate emergency by accelerating the just transition to net-zero carbon emissions. Harnessing private sector activity to achieve this has never been more important.

“We know from the experience of other countries that national investment banks can deliver real change, but this impact will not be delivered overnight. It will require determination, patience and support from partners right across Scotland.

“In passing this Bill today, the Scottish Parliament has taken the crucial first step towards creating an institution that is commercially minded and also publicly accountable to the people of Scotland.”