The Scottish National Investment Bank has announced an unrealised, or “paper”, loss of £17.8 million on underperforming investments.

This includes £4.5m invested in the collapsed Circularity Scotland, the administrator for the deposit return scheme which was wound up when the government pulled the plug on the bungled recycling project.

An unrealised loss results from an investor retaining an asset whose price or value has depreciated but it has not been sold.

The bank is run independently of government but all investments must comply with the Scottish government’s green agenda, which means the transition to net zero, improving places and communities or harnessing innovation.

The loss before tax for the year rose to £20.2m (2022: £11.2m) predominantly due to the unrealised loss on investments referred to above. Excluding this figure, the bank made a loss of £2.4m compared to £7.8m the year before. It said this demonstrates the progress made towards operational financial self-sustainability.

Its second year revenue increased 463% to £10.7m over the past 12 months, while there was a 55.5% increase in committed Investment of £220.7m, taking the total over two years to £445m. A further £703m has been attracted from other sources over that time frame and it has supported 2,300 jobs.

Over the course of the last financial year its portfolio has expanded from 14 to 27 investments. It has secured the completion of 481 mid-market rental homes, helped support 43 patents and placed 30% of the total value of investments into 20% of the most deprived communities in Scotland

Companies that received support include pureLiFi, Elasmogen, North Star Renewables and Orbex.

Chief executive Al Denholm, who replaced the original CEO Eilidh MacTaggart in April, said: “These results show strong progress for the bank.

“I believe we can become one of the most respected impact investors in the industry, generating social, environmental and economic returns for the people of Scotland. I look forward to working with the team and our many stakeholders, on delivering the Bank’s missions on behalf of the people of Scotland.”

Chairman Willie Watt said: “Our capacity as an organisation to deliver insight, investment and impact has grown significantly.

“As an institution we are moving out of our start-up phase and are becoming an increasingly established organisation, delivering solidly against our business plans.

“The overall economic climate has been challenging for companies seeking to raise investment.

“As a development bank with a particular focus on long-term and strategic investment, we have worked to support innovative, growth-oriented businesses to navigate these conditions while delivering on their ambitious business strategies.

“Despite incurring our first investment loss after the end of this financial year, we continue to work towards a positive net return across our portfolio as a whole, demonstrating both responsible and productive stewardship of public capital.”