Aberdeen City Council has revealed plans to raise funding through capital markets for its £1 billion capital programme.

Subject to market conditions, the council said it could become the first local authority in Scotland to generate cash via index-linked bonds.

The proceeds would be used to drive its capital programme, which includes investment in various infrastructure projects such as school/housing developments, roads construction, digital enhancements, a City Centre Masterplan and schemes designed to boost economic growth.

Previously, the local authority became the first Scottish council to be given a credit rating, with Moody's Investors Service confirming a Aa2 issuer credit rating on 07 October.


City Council Leader Jenny Laing said the prospect of a bond issue is potentially "one of the most significant events in the history of our city".

"A bond issue represents the best value for the city of Aberdeen and would reduce borrowing costs substantially as we continue on our journey towards creating a 'Smarter City'," she said.

"By being proactive in our approach to capital funding, we are clearly being mindful of our duty to protect the revenue budget which is the bedrock of our service delivery."

Cabinet Secretary Derek Mackay welcomed the council's plan to use capital markets as a financial route.

"Investment in infrastructure throughout the country is vital to Scotland's future and this bond issue has the potential to support a number of key projects in Aberdeen in the years ahead," he said.

"These key projects planned for Aberdeen in the years ahead will be good for the city, for the North-East and for Scotland as a whole."

(LM)