Dáil Éireann Debate, Thursday - 28 September 2017
91. Deputy Michael McGrath asked the Minister for Finance the average interest rate charged by a company (details supplied) for the funding of residential construction projects, including projects to build social and affordable housing; if the company utilises development management agreements; and if he will make a statement on the matter. [41192/17]
View answerI am informed by the Ireland Strategic Investment Fund (ISIF), which is a co-investor in Activate Capital, that the Activate base lending rate depends on the extent of leverage advanced and the risk characteristics of each specific project and would typically range from circa 6% to 10%. Activate may provide up to 90% of the funding requirement for an individual project, and this may be reflected in the lending terms, including the interest rate.
As would be expected for projects of this nature, there may be a small participation in equity upside if projects are successful so that Activate, and by extension taxpayers, share in any gains alongside the project promoter. Given that Activate Capital has private shareholders, it would not be appropriate to disclose the Fund’s commercially sensitive information, including the interest rates charged on specific projects. This approach is in line with standard commercial confidentiality principles applying to all private companies.
Activate is focused on lending to private residential development projects in Ireland’s main urban centres. The majority of housing units funded by Activate are aimed at the starter home market and, in accordance with legislative requirements, 10% of units are set aside by Activate’s developer customers to meet Part V social and affordable housing requirements.
Activate does not utilise Development Management Agreements as an element of its lending terms.
