Legislation to establish a Scottish National Investment Bank has been passed unanimously by the Scottish Parliament.

The bank is expected to be operational before the end of the year.

It will have an initial capitalisation of £2 billion over 10 years with the aim that it will ultimately become self-financing.

The Scottish Government said the new institution will direct investments that deliver economic, environmental and social returns — and help Scotland’s journey towards net-zero carbon emissions.

It will aim to increase innovation, give support to small and medium size enterprises (SMEs), and build a high-tech and inclusive economy.

Economy Secretary Derek Mackay said: “The Scottish National Investment Bank has the potential to transform Scotland’s society by powering innovation and building a high-tech, inclusive economy.

“Most importantly of all, the bank’s primary mission will be to face up to the global climate emergency by accelerating the just transition to net-zero carbon emissions.

“Harnessing private sector activity to achieve this has never been more important.

“We know from the experience of other countries that national investment banks can deliver real change, but this impact will not be delivered overnight.

“It will require determination, patience and support from partners right across Scotland.

“In passing this Bill today, the Scottish Parliament has taken the crucial first step towards creating an institution that is commercially minded and also publicly accountable to the people of Scotland.”

Opposition MSPs backed the legislation but raised some concerns about the Scottish Government’s plans.

Conservative MSP Dean Lockhart said the “transformational change” the bank could bring would “happen only if the bank is part of a coherent economic policy framework and where there is absolute clarity on strategy and objectives”.

Lockhart said “there is still much work to be done in this respect.”

Green MSP Andy Wightman said it was “disappointing” his party’s amendments, which would have included climate commitments on the face of the Bill, were voted down by the SNP and Tories.

He added: “They say they agree that tackling the climate emergency should be the Scottish National Investment Bank’s primary function but why then have they lacked the courage to put it on the face of the Bill?”