Investor Panel: Mobilising international capital to finance the transition to Net Zero

Underlying premise

• Our underlying premise is that Scotland could be better at attracting mobile capital. It is clear that the scale of the Scottish Government's ambition to transition to net zero will require financial investment that is far greater than anything that has been accomplished to date
• Providers of infrastructure capital are conservative, have long term horizons and a defined risk appetite. Consequently, they are ideal partners for long-term, stable projects which operate at scale
• Scale matters, for reasons of return and costs of transaction
• There is limited appetite among major investors for sub-scale, overly complex or piecemeal transactions
• While seen as an investible market with similar risk characteristics to the rest of the UK and Europe, Scotland suffers from its size relative to competing investment destinations. By way of illustration, its population is less than any of the largest fifteen cities in China. Consequently, it is harder for it to attract attention and there are fewer opportunities of scale
• However, the Panel believes that Scotland's intimacy and devolved powers could allow it to differentiate itself positively from other markets by being proactively 'investor-friendly'. This could be achieved by being more agile in decision making and adopting proven practices of small states which have attracted investment
  at scale
• If achieved, this should increase the pool of capital available for investment in Scotland and decrease its cost. As the competition for capital becomes even more intense globally as other countries seek finance for their own transition, this would be an important national advantage