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SNP leader promises first bond to fund affordable housing in Scotland
The Scottish government will issue its first bond on capital markets by 2026, first minister Humza Yousaf has said.
“To fund vital infrastructure like affordable housing projects, we will issue Scotland’s first ever bond,” Mr Yousaf told the Scottish National Party (SNP) Conference in Aberdeen.
“In doing so, we will show the world not only that we are a country to invest in today. We will also demonstrate the credibility to international markets that we will need when we become an independent country.”
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Scotland will borrow money directly from investors to raise funds for affordable housing and other infrastructure projects.
Mr Yousaf said the bonds would also help to establish Scotland’s financial independence from the UK.
The Scottish government has had the right to issue bonds since 2015, when the Treasury granted Holyrood additional powers after the unsuccessful 2014 Scottish independence referendum.
Under the powers, the Scottish government can raise up to £450m a year and £3bn in total. Mr Yousaf did not say what the size of the first bond issuance would be.
As Scotland has no borrowing of its own, it is unclear how much investors will charge to lend it money. They could demand higher interest rates than the UK pays for its own bonds, known as gilts.
Mr Yousaf said he had commissioned due-diligence assessments with the aim of making the bonds available to the international market by the end of the current parliamentary session.
In his speech, Mr Yousaf also called for the UK government to commit to a refugee resettlement scheme for the people of Gaza.
He said the Scottish government’s private-rent freeze was helping tenants with the cost of living crisis and announced £400,000 of funding for the campaign to rejuvenate Union Street in Aberdeen.
