Dáil Éireann Debate, Tuesday - 21 May 2024
226. Deputy Rose Conway-Walsh asked the Minister for Finance to outline the criteria that must be met in order allow expenditure from the proposed infrastructure, climate and nature fund; and if he will make a statement on the matter. [19843/24]
View answerI published the Future Ireland Fund and Infrastructure, Climate and Nature Fund Bill 2024 on 25 March 2024. The Bill passed all stages in Dáil Éireann on 15 May.
The Infrastructure, Climate and Nature Fund (ICN Fund) is one of the two new funds being established under this Bill.
Under the proposed legislation, each year from 2024 to 2030, it is intended that €2 billion will be transferred into the ICN Fund. From 2026, it will be possible to make withdrawals from the Fund to support State expenditure in certain circumstances.
The Bill provides for two mechanisms to draw down from the Infrastructure, Climate and Nature Fund. Section 14(2) outlines its aims, to support expenditure by the State:
• in any year from 2026, where there has been, or is likely to be in the subsequent year, a significant deterioration in the economic or fiscal position of the State; and
• in the years 2026 to 2030, on designated environmental projects.
Under the first mechanism, up to 25% of the fund can be used to support State expenditure in a year where the Minister for Finance is satisfied that there has been, or is likely to be a significant deterioration in the economic or fiscal position of the State. This will be determined following an annual assessment by the Minister for Finance. The Minister shall have regard in his assessment to a report prepared by the Irish Fiscal Advisory Council on the same issue, and shall consult with the Minister for Public Expenditure, National Development Plan Delivery and Reform. Withdrawals from the fund for this purpose will be subject to a Dáil resolutions first pausing the payments to the Future Ireland Fund and the Infrastructure, Climate and Nature Fund for that year.
The counter-cyclical element in the ICN Fund has substantial value in cushioning future economic shocks and maintaining growth-enhancing investment through periods of lower or negative growth and often where capital expenditure is reduced as a response to fiscal pressures. These resources will be drawn down from the Fund to the Exchequer and will be allocated through the normal budgetary process.
In terms of the climate and nature aspect of the ICN Fund, the process outlined in the Bill provides for the designation of projects as “environmental projects”, where a relevant Minister is satisfied that the project contributes directly or indirectly, or is likely to so contribute, to:
• A reduction of greenhouse gas emissions in the State;
• The achievement of environmental objectives derived from a number of EU Water Regulations (including those related to the quality of surface water, ground water and marine water);
• The achievement of conservation objectives or the implementation of conservation measures or administrative and contractual measures, established under the Birds and Habitats Directive, or
• The implementation of a plan, programme or strategy, the National Biodiversity Action Plan or guidelines under the Wildlife Act 2000 .
The allocation of funding for “designated environmental projects” will be an administrative process overseen by the Minister for Public Expenditure, NDP Delivery and Reform in consultation with relevant Ministers in line with the standard Estimates process. The Department of Public Expenditure, NDP Delivery and Reform will engage with Departments in this regard.
