The National Wealth Fund has agreed a £38.4m loan to the City of Edinburgh Council to finance enabling works for the initial stage of the Edinburgh Granton Waterfront scheme.

Granton Waterfront is among Scotland's largest brownfield regeneration projects, set to transform a former industrial site into a coastal neighbourhood in north Edinburgh. In total, the programme is expected to deliver about 3,500 energy-efficient homes to help address the city's housing emergency.

The Fund's support will allow the council to put in place essential infrastructure that can crowd in private capital during the first phase. Funding will cover land remediation, new roads and utility connections, and improvements to the public realm.

By offering cost-effective finance, the intervention will create serviced plots so the council's development partner can build homes for sale, in turn catalysing an additional £160m of private investment. The bespoke low-cost lending facility also strengthens the scheme's overall financial viability.

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Enabling works are in progress for phase one, which will comprise 847 homes, including 214 new social houses, alongside a new primary school and space for 14 ground floor retail units. This initial phase sits within a wider £1.3bn programme that will ultimately provide 3,500 homes, new leisure facilities and Scotland's largest coastal park.

Oliver Holbourn, CEO of the National Wealth Fund, said: "It's great to be working with leaders at the City of Edinburgh Council to help deliver their ambitious local growth plans, including through regeneration projects like Granton Waterfront, delivering meaningful change to people, places and businesses in the region."

City of Edinburgh Council Leader Jane Meagher said: "We are grateful to the National Wealth Fund for its support through a cost-effective loan, which is helping to enable the works for the first phase of this ambitious project.

"Phase 1 forms part of a wider £1.3 billion programme to regenerate Granton, transforming what was once a neglected part of the city into a thriving and desirable place to live, work and visit.

"As the largest public sector led project of its kind in Scotland, it will continue to set the standard for sustainable economic growth in Edinburgh for years to come, whilst responding to the ongoing housing emergency."

Granton Waterfront is one of seven priority strategic sites in the Edinburgh and South-East Scotland City Region Deal and a key location in the city's planning framework. The Scottish Government has designated it a national development in National Planning Framework 4, underscoring its importance to delivering Scotland's spatial strategy.