Michael McGrath
Ceist:60 Deputy Michael McGrath asked the Minister for Finance his plans for the future of the National Pensions Reserve Fund; and if he will make a statement on the matter. [21060/12]
Amharc ar fhreagraThursday, 26 April 2012
Ceisteanna (60)
Freagraí scríofa
The Government is committed to ensuring a continuing level of investment in Ireland in the interests of boosting economic activity and generating employment. It believes that the National Pensions Reserve Fund (NPRF) can make a significant contribution to that objective through its involvement in the Strategic Investment Fund and through investment opportunities in Ireland such as the new Irish infrastructure investment fund, as well as through commercial investment in projects in this country, such as the €450 million the Fund has committed to finance the national roll out of domestic water meters, and the Fund's continuing participation in Innovation Fund Ireland. The resulting greater concentration of investment in Ireland on the part of the NPRF is expected to require the amendment of the NPRF's investment policy, which is set out in the National Pensions Reserve Fund Act 2000. Officials of my Department are liaising with the National Treasury Management Agency, as the Manager of the NPRF, in identifying and drafting the necessary amendments to the legislation and I expect to bring forward proposals for amending legislation as soon as possible once that work is completed.
As background, I am informed by the National Treasury Management Agency, as Manager of the National Pensions Reserve Fund (NPRF), that the provisional total value of the Fund was €14.5 billion at 31 December 2011, comprising the Discretionary Portfolio, valued at €5.4 billion, and the Directed Portfolio, currently held at €9.1 billion pending completion of an independent valuation review of the Fund's investments in ordinary shares in Allied Irish Banks (provisionally valued at €0.01 per share) and in preference shares in Allied Irish Banks and Bank of Ireland.
It should be noted that the funds in the Discretionary Portfolio are not all readily accessible. The NPRF Commission has legally committed €1.2 billion to various fund investments, of which over €800 million is for investment in Ireland. The €800 million includes a commitment to provide funding on a commercial basis for the roll-out of the water metering programme subject to certain pre-conditions.
The establishment of the Strategic Investment Fund (SIF) was announced by the Government in September 2011. The SIF will channel commercial investment from the National Pensions Reserve Fund towards productive investment in the Irish economy. As well as money from the NPRF, the Fund will seek matching commercial investment from private investors and target investment in areas of strategic significance to the future of the Irish economy. It will comprise a series of sub-funds targeted at commercial investment in critical areas of the Irish economy, including infrastructure, venture capital and provision of long-term capital for SMEs. The NPRF will take a lead role in the development and implementation of each sub-fund.
The NPRF's investment in the SIF will, like its existing investments, be on a commercial basis. Accordingly, such investment will not be classified as General Government expenditure in statistical terms and there will be no implications for the continued achievement of the General Government Deficit targets we are committed to under the EU/IMF Programme of Financial Support to Ireland. Further investment by the NPRF in Ireland on a strictly commercial basis does not represent a material change in the purpose of the NPRF.
The NPRF announced in November 2011 a commitment of €250 million to a new Irish infrastructure investment fund which is seeking up to €1 billion from institutional investors in Ireland and overseas and which will invest in infrastructure assets in Ireland, including assets designated for disposal by the Government and commercial State enterprises and also new infrastructure projects. Marketing of this fund in Ireland by Irish Life Investment Managers and abroad by AMP Capital commenced in the first quarter of 2012. Normally the period from commencement of marketing of an investment fund targeting illiquid assets to closure of financial commitments by investors in such a fund can extend up to one year. In parallel, AMP Capital, the infrastructure manager of the fund, has commenced a process of building a pipeline of appropriate investment opportunities.
The NPRF has also committed €450 million to finance the national roll out of domestic water meters. In addition, the NPRF is actively supporting the development of the market for venture capital in Ireland through its continued participation in Innovation Fund Ireland in conjunction with Enterprise Ireland. On 15 March 2012, the Minister for Enterprise, Jobs and Innovation announced the commencement of the second call for expressions of interest from appropriately qualified international venture capital managers.