Willie Watt, the bank’s chair, said once it is launched it will begin quickly providing long-term capital to projects and companies that serve the Scottish Government’s goals of cutting carbon emissions, reducing inequality and addressing demographic change.

Mr Watt told the Financial Times that the SNIB would make a “proper positive return”, filling gaps in the financing of infrastructure projects and small and medium-sized companies with growth potential.

The plans for the bank set out by the Scottish Government have taken nearly three years to realise and will provide the bank with £2 billion in capital over the next 10 years in a push to transform the Scottish economy, which has struggled to match UK-wide growth rates in recent years. 

Supporters of the bank have said that the relatively short investment horizons in the Scottish private sector often mean new companies and projects struggle to raise capital.

Mr Watt said: “We [will be] doing commercial investment that is additional to what the private sector is doing. Some people say if the private sector doesn’t do it, then the space doesn’t exist… but I’ve been investing for 35 years and I know that that’s not the case.”

The SNIB is a test case in the UK for what advocates call “mission-led” long-term investment of public funds to promote state goals while also generating a profit.

The UK government is currently working on plans for a state-owned infrastructure bank as the country is unlikely to remain a member of the European Investment Bank after the end of the Brexit transition period.

COVID-19 has complicated the process of establishing the bank as Mr Watt had to use video conferencing to recruit its board. He said the last big obstacle to launch the bank was the legal requirement to get approval from the European Commission under EU state aid rules.

He said: “I would anticipate that we will launch in the final quarter of this year. I’d be disappointed if it was December.”

In August, the Scottish Government proposed three missions for the SNIB which include promoting the transition to net zero carbon emissions economy, investing in regeneration schemes around the country to reduce inequality and funding innovation aimed at improving health and productivity.