Thursday, 12 July 2012

Ceisteanna (16, 17)

Mary Lou McDonald

Ceist:

14 Deputy Mary Lou McDonald asked the Minister for Jobs, Enterprise and Innovation if he will provide an update on the progress of the development capital fund scheme. [33858/12]

Amharc ar fhreagra

Mary Lou McDonald

Ceist:

37 Deputy Mary Lou McDonald asked the Minister for Jobs, Enterprise and Innovation when funding will be made available through the development capital fund scheme. [33857/12]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Minister for Jobs, Enterprise and Innovation)

I propose to take Questions Nos. 14 and 37 together.

The Development Capital Scheme as outlined in the Action Plan for Jobs has been developed to complement the existing suite of financial supports offered by Enterprise Ireland. A range of other initiatives are already in place for the provision of capital at the early stage and scaling phases, and a clear market failure was identified in the availability of risk capital for established companies seeking to sustain growth and achieve greater scale.

Longer-term investment capital is currently not readily available to Irish growth focused companies in either the form of debt or equity, and there is very limited private equity funds/debt available to innovative SMEs. This situation has resulted in an equity gap, which is constraining the development of a key cohort of established Irish growth companies. Development Capital can be defined as equity funding for the expansion of established and profitable firms, that is, those that have passed the start-up stage.

The exchequer funding requirement for this scheme is €50m over 10 years. It is proposed that EI will commit €25m each to two funds which will leverage a further €50m each from the private sector. Any fund investments supported by EI under this scheme would be made with the State sharing equally in the risks alongside other investors. The proposed scheme will focus on funds that provide equity or quasi debt of between €2m to €10m per investment although it is likely that many investments would be in the €2m to €5m range.

The Scheme was launched on the 12th April 2012 and a call was issued by Enterprise Ireland for ‘ expressions of interest’, from fund managers, with a closing date of 16th July 2012, for receipt of expressions.

Enterprise Ireland is currently in discussion with a number of fund managers, both local and international, regarding their interest in the scheme. On completion of the call, valid applications will be evaluated based on the published criteria and a recommendation made to the Board of Enterprise Ireland. The final commitment to invest will be made by the Board of Enterprise Ireland. Once the selected fund managers have raised sufficient capital to ‘close' their fund, funding under the Development Capital Scheme will be available to invest.