Dáil Éireann Debate, Tuesday - 24 April 2012
139 Deputy Pearse Doherty asked the Minister for Public Expenditure and Reform if following his commitments in the Infrastructure and Capital Investment 2012-2016 Medium Term Exchequer Framework he will provide an update on his on-going engagement with potential private sector investors. [20304/12]
Amharc ar fhreagraPublic infrastructure is funded primarily in two ways at the moment: Exchequer financing (the vast bulk of funding) and PPP-sourced funding for particular projects that are suited to the PPP approach while providing value for money for the State. The Exchequer capital programme for the next five years has been set at €17 billion. This will represent significant continued Exchequer investment in the maintenance of valuable infrastructure and the creation of new assets — especially for new schools and healthcare provision.
I am very keen that we look at how we can use private sector funding to supplement our Exchequer investment. As the Deputy will be aware, PPPs have been used in Ireland for over a decade, mostly in schools and roads projects — where they give value for money and are affordable. The global credit crunch has had a significant impact on the PPP funding market which has, in turn, had significant negative consequences for delivery of PPPs. My Department is actively exploring the potential to unlock additional monies to supplement bank funding. A range of potential solutions are being explored including domestic pension funds, the NPRF/SIF and new EU financial instruments. Direct dialogue with representatives of pension funds has intensified and is looking promising. Dialogue is now focusing in on how deals could be structured to encourage pension funds to provide debt funding for new infrastructure projects.
My Department is also having useful discussions with the NPRF and the investment managers of the Irish Infrastructure Fund, a sub-fund of the Strategic Investment Fund, about projects they might invest in. The NPRF has already agreed to fund a water metering programme and may commit further monies for investment in Irish PPPs. My Department is working with the Funds to identify potential projects that could be supported should a source of funding become available.
My Department is also examining, in conjunction with other Departments, how new Financial Instruments and other EU support mechanisms could help us to access private funding. We are actively engaging with European Institutions to see what assistance might be available to us including co-financing for PPP projects and loans from the European Investment Bank (EIB) and the Council of Europe Development Bank (CEB) for Exchequer funded projects; such funding would not be additional to that envisaged in the Medium Term Investment Framework but would provide funding on more favourable terms than are otherwise available to the State.
