Dáil Éireann Debate, Thursday - 23 June 2016
31. Deputy Joan Burton asked the Minister for Finance the amount of funding made available through the Ireland Strategic Investment Fund, ISIF, for social and affordable housing provision; if he is satisfied with the current rates of interest being charged to borrowers through the fund; if he is reviewing the operation of the mechanisms through which credit is accessed from the fund; and if he will make a statement on the matter. [17522/16]
View answerThe Deputy may be referring to ISIF's investment in Activate Capital. Activate is not aimed at social and affordable housing but at residential housing shortages in the main urban centres. Activate's base lending rate is approximately 10% and, as would be expected there is participation in any equity upside if projects succeed. This means that ISIF and by extension the taxpayer shares in any gains.
In the area of social and affordable housing, ISIF is engaging across a wide range of stakeholders, including private sector investors, with a view to identifying opportunities to invest. This is in accordance with the recently published Social Housing 2020 strategy paper which references the ISIF as a potential source of capital for the sector.
Key factors which must be addressed to facilitate ISIF involvement in such projects include the commercial viability of proposals, Eurostat treatment of fund structures which receive the majority of their revenue from Government sources and the ability to create off-balance sheet vehicles, outside of the existing PPP model.
Commercial investment of scale in the social and affordable housing sectors in Ireland has not evolved to the same extent in Ireland as it has in the UK and elsewhere in Europe. To date no strategic and deliverable investments of scale have emerged. ISIF inform me that they are actively engaging on a range of potential investment opportunities which have the potential to evolve into investments which meet ISIF's statutory mandate to invest on a commercial basis in a way that supports economic activity in Ireland.
A review of the strategy of the ISIF will take place in the second half of 2016, after the first 18 months of the Fund's operations have elapsed. A decision to conduct a review was based on its unique mandate as a sovereign development fund, with its double bottom line which is to invest: (i) on a commercial basis; and (ii) in a manner designed to support economic activity and employment in Ireland. The review will be conducted in accordance with the NTMA (Amendment) Act 2014 which provides that ownership of the Fund rests with the Minister for Finance. The exact details of the process and timelines of the review have yet to be considered fully and decisions on these issues will be taken in the lead up to the review's commencement.
