Dáil Éireann Debate, Wednesday - 16 October 2019
141. Deputy Robert Troy asked the Minister for Business, Enterprise and Innovation following the announcement in budget 2020 of a no-deal Brexit support fund for enterprises totalling €110 million, the details of the monetary amount that will be made up of financial instruments (details supplied) in tabular form. [42373/19]
View answerAs announced last Tuesday as part of Budget 2020 my Department will have immediate access to €110 million of the Brexit contingency fund in the event of a no-deal Brexit scenario. A suite of measures will be activated to support businesses that are most affected. Importantly, this package is an initial tranche, which will be built upon as required.
There are currently a range of grant supports, vouchers and other direct payments available to firms, and there will continue to be grant-aid supports available for ‘vulnerable but viable’ firms as part of the mix of supports for firms in a post-Brexit scenario. In 2018 alone EI approved €74m to Brexit impacted firms in grant support.
Experience to date and indications from businesses are that the immediate issues are going to be in relation to acute liquidity issues, whether that is to deal with currency, supply chain delays or loss of orders, and hence the need for short terms support for a broad base of firms.
In addition to the existing range of grant and other supports from the agencies and the LEOs, several new schemes were announced as part of Budget 2020 that will be activated in a No Deal scenario. The form of support will be bespoke to the circumstances of individual firms and thereby where permissible the funding will be a mix of grants or loans and equity. These are set out in the table.
My objective in the provision of support through the development agencies and bodies such as Micro-Finance Ireland is to ensure that we use the most appropriate mix of supports for individual firms to address their needs. It is important that interventions can be spread across the broadest base of firms as possible.
|
DBEI Scheme |
Form of Support |
|
Rescue and Restructuring fund - €42 million |
Loans or Equity |
|
Transition Fund - €45 million |
Grants, Loans and/or Equity |
|
Transformation - €8 million |
Grants |
|
Emergency Brexit Fund for Micro Enterprises - €5 million to MFI - €5 million to LEOs |
Repayable Grants and Loans |
The remaining €5 million in the €110 million initial no-deal Brexit contingency fund for my Department will be allocated to InterTrade Ireland (€2 million) to support firms in the border region, North and South; and to Regulatory Bodies (€3million) to meet additional demands in the areas of market surveillance, accreditation and conformity. These bodies include the National Standards Authority, the Irish National Accreditation Board, the Competition and Consumer Protection Commission and the Health and Safety Authority.
Rescue and Restructuring Fund – €42 million
This fund is for the worst-case scenario. It will rescue firms with acute liquidity or insolvency problems and support them to put a restructuring plan in place to adjust to their new reality with investment support potentially of up to €10m under state aid rules for firms of all sizes depending on circumstances.
The funding will be provided in the form of equity or loans (as required by State aid rules) through Enterprise Ireland and it will be available to eligible EI, IDA Ireland and Údarás na Gaeltachta clients, as well as non-agency clients.
Transition Fund – €45 million
This Fund will support businesses in the manufacturing and internationally traded services sector, ranging from food and engineering firms to business process outsourcing firms. It will help those businesses to adapt their business model as needed and adjust to the new trading reality. It is targeted at businesses with 10 or more employees.
The funding will be provided through grants, equity and loan support of up to €1m dependent on the circumstances of individual firms. Similar to the Rescue and Restructuring Fund, it will be delivered through Enterprise Ireland and available to eligible Enterprise Ireland, IDA Ireland and Údarás na Gaeltachta clients, as well as non-agency clients.
Transformation Fund - €8 million
This Fund will be administered by Enterprise Ireland.
The funding will be provided as grants supporting larger indigenous firms to transform their business to develop new products and processes, to achieve a step-up in levels of competitiveness and innovation and to assist in diversifying to new markets. There will be initial funding of €5 million for primary food processing companies and €3 million for non-food companies, for example, in traditional engineering sectors. Additional funding for food transformation is also being made available through the Department of Agriculture, Food and the Marine.
Emergency Brexit Fund for Micro Enterprises - LEO repayable grants – €5 million
The LEOs will operate a new “Micro-Enterprise Emergency Brexit Fund”.
The funding will be provided in the form of a repayable grant at a 0% interest rate, which is how the LEOs currently provide grants, worth up to €50,000 through their LEO.
This support is linked to the MFI support below. Enterprises will have first recourse to MFI and then, if required, they may avail of further support in the form of a repayable grant worth up to €50,000 through their LEO.
Microfinance Ireland (MFI) – €5 million
This funding will allow Microfinance Ireland to increase the amount it can lend to microenterprises from €25,000 to €50,000 over a 2-5 year period at a competitive interest rate.
