Dáil Éireann Debate, Wednesday - 10 March 2010
108 Deputy Jack Wall asked the Minister for Finance if he foresees a future role for the National Pensions Reserve Fund making directed investments in infrastructure projects here which deliver a commercial rate of return; and if he will make a statement on the matter. [11645/10]
Amharc ar fhreagraThe National Pensions Reserve Fund (NPRF) was established in 2001 under the National Pensions Reserve Fund Act 2000. The purpose in establishing the NPRF was to meet as much as possible of the cost to the Exchequer of social welfare pensions and public service pensions to be paid from the year 2025 until at least 2055.
The Act provided for the establishment of the National Pensions Reserve Fund Commission. The Commission is solely responsible for the control, management and investment of the assets of the Fund (other than assets which the Minister for Finance has directed the Commission to invest in a listed credit institution under the provisions of the Investment of the National Pensions Reserve Fund and Miscellaneous Provisions Act 2009) and for determining the investment strategy for the Fund in accordance with Fund investment policy. The Commission is required to invest the assets of the Fund so as to secure the optimal total financial return, having regard to the purpose of the Fund and the eventual requirements on the Fund to make payments to the Exchequer, provided the level of risk to the moneys held or invested is acceptable to the Commission. It is open to the Commission to invest in infrastructure projects by way of participation in a public-private partnership. The Commission would of course have to satisfy itself that the investment was in accordance with its investment mandate.
I note that, in a recent letter to the Committee of Public Accounts, the National Treasury Management Agency stated that infrastructure, as a long-term investment, is a natural asset class for the NPRF and that the NPRF is keen to access PPP investments where the risk/return characteristics satisfy its statutory commercial investment mandate. Moreover, I understand that recent changes to the tendering process for PPPs will facilitate NPRF involvement in PPPs. However, because of the timing of current PPP projects, a potential funding opportunity for the NPRF is not expected until at least late 2010.
The letter also noted that the NPRF is committed to supporting domestic investment where the investment terms satisfy its risk and return requirements. It has had a particular focus on the venture capital sector and has to date made a total commitment of €68 million to four Irish venture capital funds.
