More than £15 million for affordable housing projects has been raised through an innovative funding scheme, supporting the development of over 200 homes for social rent across the country.

The Charitable Bond Investment Programme provides funding for new affordable housing. Any interest accrued on those bonds is donated to charity, which Scottish Ministers have committed to social housing. Almost £90m of bonds have been issued over the last two years, resulting in £15m of funding being made available for allocation.

Housing minister Kevin Stewart welcomed the funding on a visit to a development by Hillcrest Housing Association and builder Stewart Milne, at Countesswells in Aberdeen. As part the development, a £4m charitable donation will deliver 52 homes for social rent.

Mr Stewart said: “This innovative scheme firmly demonstrates our commitment to investing in affordable housing for people the length and breadth of Scotland. I am delighted to see what our support is providing for projects like the Hillcrest development.

“We are committed to delivering at least 50,000 affordable homes over this Parliament, backed by £3 billion of investment. These charitable donations and developments like Hillcrest’s are a great example of how we are meeting that commitment and giving people a helping hand onto the housing ladder – a core part of our drive to make Scotland fairer and more prosperous.”

John Low, managing director of Stewart Milne Homes North, said: “Having delivered over 200 homes through the National Housing Trust initiative, Stewart Milne Homes are proud to work with the Scottish Government and their agencies to deliver affordable homes through new initiatives.

“The launch of this charitable bond sees Stewart Milne Homes at the forefront of delivery of affordable housing in partnership with the Scottish Government and Hillcrest.”

The Scottish Government funds loans to housing associations by investing in Charitable Bonds – an ethical investment product where interest normally paid to the bond holder, or profit to shareholders, is released as donations for a charity of the investors choice.

Donation money is issued by Allia, a not-for-profit community interest organisation, who developed and operate the Charitable Bonds programme on behalf of Scottish Ministers. This is done in the same way as grant funding, with housing associations submitting a tender application for funding which is then managed in the same way as a standard social housing project by the Scottish Government.

The Hillcrest development is the second affordable housing development at Countesswells supported by the Scottish Government. On completion Countesswells is expected to deliver 3,000 new homes.