The Scottish government has approved plans for the council to borrow £18.9m through Tax Incremental Financing.

With this the council hopes to lever in a further £125m of private investment for infrastructure improvements to fund its vision for the wider Oban area and generate hundreds of construction jobs.

Under TIF, councils fund infrastructure by borrowing against future business rate income generated by the resulting regeneration and development.

The five year plan includes extending Oban North Pier, upgrading road links to established industrial areas, renewable energy projects and creating new business space at Oban airport.

The Scottish Futures Trust, set up by the Scottish Government to deliver value for money across public sector infrastructure, has spearheaded the development of the TIF model for use in Scotland.

Deputy First Minister Nicola Sturgeon said: “The Argyll and Bute TIF will allow major construction developments across the area over the next five years, which will unlock significant economic development and regeneration.

“It will allow Argyll and Bute to maintain and grow a number of industries and sectors that are important nationally such as renewable energy, aquaculture and marine tourism.

“We will continue to use every lever at our disposal, within our devolved powers, to boost capital spending and through innovative financing schemes such as TIF, support jobs, apprenticeships and help the Scottish economy.

“Scotland needs independence so the Scottish Parliament can have full control over taxation, borrowing and spending to determine investment priorities according to the needs of the Scottish economy and public services, to promote growth, employment and opportunities for all to flourish.”

Argyll and Bute Council leader Dick Walsh said:

‘’This is fantastic news, both for the people of Oban and the surrounding area, as well as the people of Argyll and Bute as a whole.

“This investment has the potential to create in excess of 1,000 jobs and is going to have a hugely positive impact on the lives of the people of Oban and the surrounding areas, bringing huge private sector investment to the area.

“I would like to thank our partners in both the public and private sectors, particularly those at Scottish Futures Trust, who threw their support behind the TIF bid. They saw, as we do, that the key to sustainable economic growth is investment in vital infrastructure.”

Tony Rose, infrastructure director at the Scottish Futures Trust, said: “SFT continues to lead the way with the development of TIF across Scotland as an innovative way to unlock future economic growth, as every £1 invested by the public sector has the potential to attract a further £6 from the private sector.

“We have worked closely with Argyll & Bute Council on finalising this agreement since recommending approval of its TIF Business Case and very much look forward to the positive impact that the investment will make to this region and adjacent areas.”