Established in 2020, the state-backed bank aims to support projects in net zero, communities, and innovation. However, its annual report reveals potential shortfalls in all three areas, with projected spending at the lower end of its ranges.

Despite a slow start, the bank improved its performance in the 2023-24 financial year, investing £227m in green infrastructure and housing projects, up from £151.9m the previous year. It also achieved its first income surplus.

To date, SNIB has committed £696m to businesses and projects aligned with its missions, leveraging over £1.4bn in additional investment.

However, the bank faces challenges. For the 2024-25 financial year, it received £174m, significantly less than the expected £250m, due to strained public finances. A source close to the bank noted difficulties in deploying the full allocation within the remaining financial year, Financial Times reports.

The government now allocates approximately £200m annually, down from earlier expectations.

SNIB CEO Al Denholm emphasised the need for private sector investment to achieve its goals, stating the bank cannot act alone. Critics, including Professor Ross Brown of the University of St Andrews, argue that meeting the £2bn target is “mission impossible,” citing chronic underspending and a lack of focus in the lending portfolio.