Labour’s new National Wealth Fund has made its first move into Scotland, joining the Scottish National Investment Bank to co-fund a £62m support package to make biodegradable bottles.

The investment will enable Cambridge-based Pulpex to build its first commercial-scale manufacturing facility near Glasgow.

The NWF is committing £43.5m in direct equity, with £10m from the state-owned Scottish bank and the balance from existing investors. It will create 35 jobs.

Pulpex has developed a unique, fibre-based bottle, manufactured from wood pulp. It is designed to be recycled in the same way as paper or card in normal household recycling streams.

The NWF is the successor to the UK Infrastructure Bank with a broader mandate to support delivery of the wider industrial strategy in areas where there is an undersupply in private finance. 

At least £5.8 billion of the NWF’s capital will focus on the sectors announced in the manifesto: green hydrogen, carbon capture, ports, gigafactories and green steel. 

Chancellor Rachel Reeves, said that in the last six months the NWF has fuelled 8,600 jobs and unlocked £1.6 billion of private investment. “This latest NWF investment is welcome news, creating jobs, sustainable growth and opportunity in Scotland,” she said.

Scottish Secretary, Ian Murray, said: “I’m delighted to see this first investment in Scotland from the new National Wealth Fund.”

The support for Pulpex is also another notable joint Westminster-Holyrood project, drawing on the resources of both governments to support the economy.

Scotland’s Deputy First Minister Kate Forbes said: “This investment by the Scottish National Investment Bank will build on Glasgow’s rich history of innovation and deliver more green jobs for the future.

“To drive investment into Scotland, we have allocated £200 million to the Bank for the next financial year.

“The Bank has a strong track record of success and has generated more than £1.4 billion of private sector investment since opening for business in 2020.”

Pulpex chief executive Scott Winston said: “This investment will drive the decarbonisation of the packaging sector using leading edge Material Bioscience to ensure this much-needed alternative to glass and plastic will deliver its ambition.

“Accelerated by the incredible business ecosystem that flourishes within Glasgow, this will be a visible shining star demonstrating the scalability of Pulpex technology for partners to adopt globally.”

Pulpex currently operates out of its existing R&D and pilot production facility at its headquarters in Cambridge, and has existing partnerships with some of the largest global FMCG brands, including Diageo, PepsiCo, Unilever and Kraft Heinz, through which it is developing bespoke products for launch.

A move from plastic and glass to paper packaging will enable the UK to reduce the 38.5 million plastic bottles used every day, with around 16 million ending up in landfill, being burnt, or littering the environment and waterways, according to Water UK.