Infrastructure Finance & Programmes

SFT was asked to examine new profit-sharing finance structures, such as the Welsh Government’s Mutual Investment Model (MIM), with a view to adding to the range of infrastructure investment approaches to help secure the investment required for the National Infrastructure Mission.

In May 2019, SFT published its Options Appraisal recommending a Scottish version of MIM as the best value-for-money option to deliver additionality over and above current capital and public borrowing sources of investment, which crucially meets the current technical rules for private classification.

The recommended option is based on the Welsh Government’s MIM and replicates many of the value-for-money features delivered by the Scottish Non-Profit-Distributing model, including:

• Competitive tender processes to attract value-for-money project finance
• Focus on wider community benefits and economic stimulus
• Strong project and programme governance and resourcing in place to deliver
• Project diligence and scrutiny on the design and whole-life-cost of the asset
• Use of standard form contracts, assurance processes and robust conditions for funding, benefiting from previous revenue-funded programmes, experience and lessons learned.

The MIM investment model includes the public sector as a co-investor and co-owner of up to 20% of each project delivery company. 

SFT will continue its engagement with public and private bodies on the development of Scottish MIM as a delivery route in the coming months.