Dáil Éireann Debate, Thursday - 14 December 2017
89. Deputy Michael McGrath asked the Minister for Finance the amount invested by Activate Capital in 2017; the average interest charged on the finance provided; the number of homes completed in each of the years since its creation including 2017; the way in which the rate of interest will compare to the new Home Building Finance Ireland rate; and if he will make a statement on the matter. [53748/17]
Amharc ar fhreagraThe ISIF have informed me that the Activate Capital is a €500 million fund, which is financed through a €325 million loan note from the Ireland Strategic Investment Fund (ISIF) and a €175 million loan note provided from KKR. It became operational in January 2016 with funding provided by Activate for 3,600 houses as at September 2017. As Activate's purpose is to provide funding for development but not to act as developer itself, ISIF can only share information on funding committed, not homes completed. The amount invested by Activate in 2017 is commercially sensitive and cannot be disclosed.
The Activate base lending rate depends on the extent of leverage advanced and the risk characteristics of each specific project and would typically range from 6% to 10%. Activate may provide up to 90% of the funding requirement for an individual project, and this may be reflected in the lending terms, including the interest rate. As would be expected for projects of this nature, there may be a small participation in equity upside if projects are successful so that Activate, and by extension taxpayers, share in any gains alongside the project promoter.
Given Activate Capital has private shareholders, it would not be appropriate to disclose the Fund’s commercially sensitive information, including the interest rates charged on specific projects or the amount of drawdown in 2017. This approach is in line with standard commercial confidentiality principles applying to all private companies.
In relation to the rate of interest charged by Home Building Finance Ireland (HBFI), I am not in a position to confirm specific product terms and conditions, as these will be set by the board of HBFI in due course. I can confirm that HBFI will be lending on commercial, market-equivalent terms and conditions, which would depend on the risk profile of each individual project, the quality of collateral and the creditworthiness of the borrower.
