Thursday, 26 September 2019

Ceisteanna (115)

Robert Troy

Ceist:

115. Deputy Robert Troy asked the Minister for Business, Enterprise and Innovation her views on issues raised in correspondence (details supplied) regarding the disruptive technologies innovation fund with respect to commercial activity not being funded under the fund issues in relation to pre-financing for SMEs under the fund and the absence of communication from the State agency under her remit regarding the funding process for the approved projects; and the reason there is such a lag in issuing funds to approved 2018 grant recipients. [39254/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Business)

The purpose of the Disruptive Technologies Innovation Fund (DTIF) is to see investment in the development and deployment of disruptive innovative technologies, on a commercial basis, targeted at tackling national and global challenges. It is a significant investment by this Government in research, development and innovation in Ireland with an allocation of €500 million in the period to 2027. Call 1 of the DTIF opened on 29 June 2018 and 27 successful projects were announced on 10 December 2018. In total, over €75 million of Government funding was committed to 104 separate organisations within these 27 collaborative projects over a three-year period. From the start, my Department has indicated that €20 million would be made available in 2019 to commence the first tranche of projects. That funding is currently being drawn down and it is expected that it will be allocated in full against profile by the end of the year. For the most part, enterprise partners in DTIF collaborations will draw down funding retrospectively following the submission of validated claims for vouched expenditure.

As regards certain commercial activity not being funded, my Department officials engaged in extensive dialogue with our agencies in advance of defining the eligibility criteria for Call 1 of the DTIF to ensure compliance with the provisions of the General Block Exemption Regulation scheme for R&D funding and to the national legislation under which funding is provided. When DTIF Call 1 opened in June 2018, those rules were included in the call documentation published on my Department's website. For Call 1, project bids that focused on "industrial research" were sought in order to provide clarity to applicants and to provide the optimal rate of State support across the board to all eligible companies (i.e. 50% matched funding). All successful projects were awarded funding subject to contract negotiations and complying with these State Aid rules. Whilst some commercialisation costs were allowed, not all were allowable due to these rules.

Enterprise Ireland (EI) is administering DTIF Call 1 on my behalf and, given the unique nature of the Fund, it needed to develop new consortia agreements to facilitate payments to constituent organisations. EI has engaged in intensive contract negotiations with participants in each project, checking that costs submitted were eligible under these State Aid rules and also justifiable for the work packages involved.

As regards the pre-financing of certain project costs, the DTIF Call 1 guidance document had indicated that pre-finance of up to one-third, subject to certain criteria, could be made available to small companies only, in line with the legislation governing the enterprise agencies of my Department. EI established a new process for assessing pre-finance applications for the DTIF. This process is now in place and payments to the SMEs approved for pre-finance are being processed once the formal legal documentation is signed off and returned to EI.

Collaborations of the scale and nature funded through the DTIF are a first for Ireland. Due to the unique nature of the Fund and the complexities involved, it has taken longer than anticipated to put the necessary arrangements in place and to conclude contract negotiations with all 104 organisations.

I acknowledge that this is causing difficulties for a number of organisations involved but I am very pleased to see the overwhelming support for this new Fund from small and large companies and from across the research system. We have taken the opportunity in Call 2 to refine our rules and procedures based on learnings from Call 1 and I am confident that the DTIF will continue to be welcomed as a key instrument for Ireland in helping to embrace and prepare for the new wave of technologies that will underpin our economic development into the future.