MS, Cabinet Secretary for
Economy, Energy and Planning: The Wales Flexible Investment Fund
plays a central role in ensuring that businesses across Wales can
access the capital they need to start, strengthen and grow. By
extending the fund's recycling period, we are enabling the
Development Bank of Wales to continue providing stable,
predictable finance for customers - supporting investment
decisions, safeguarding jobs and helping firms navigate
challenging economic conditions. This approach reinforces the
Development Bank's core mission: to increase the supply of
finance to Welsh businesses and to deliver long‑term value for
the Welsh economy.
Building on recommendations from the mid‑term review of the Wales
Flexible Investment Fund (WFIF), I have therefore agreed that
capital allocated to the Development Bank of Wales for fund
delivery can be recycled to enable more investment into Welsh
businesses over a longer timeframe.
This decision completes work that was clearly set out in the
Development Bank's 2021 Remit Letter, which required a mid‑term
review in 2025–26 to inform decisions on recycling. The review
has now concluded, as scheduled, and provides the evidence base
for action. It also follows confirmation from HM Treasury earlier
this year that no budgetary solution would be offered to address
the impacts of the Bank's reclassification on Welsh Government
budgets. In that context, extending recycling is a proportionate
and efficient way to maintain access to finance for Welsh
businesses delivery while maximising value for money from public
capital.
Specifically, I have taken decisions to:
- extend the recycling of Financial Transaction capital across
the full 25‑year period available to Welsh Government;
- extend the repayment profile of general capital allocated to
the fund, facilitating recycling of capital over time; and
- introduce a four‑year review cycle so each incoming Welsh
Government can assess ongoing benefit of the fund's delivery.
The mid‑term review confirms the fund is performing strongly: low
default rates, high job creation, and significant leverage of
private capital. Since inception, WFIF has invested nearly £260
million, supported more than 11,500 jobs created or safeguarded,
and maintains a forecast of 100% capital repayment. Extending its
recycling capacity allows us to maintain that momentum and ensure
the fund can operate on a sustainable basis over the medium term.
This is about good financial stewardship—making sure capital
already invested continues to work for Welsh businesses.
Providing stable and predictable access to finance safeguards the
Development Bank's core offer, supports business confidence, and
underpins longer‑term investment decisions across the economy.
Reviews every four years will ensure transparency, accountability
and alignment with future programme priorities.
