€6.8 billion Ireland Strategic Investment Fund (ISIF) is open for business and actively seeking commercial investment opportunities in Ireland
€6.8 billion ISIF will make commercial investments that support economic activity and Job creation in Ireland
The Government is committed to investing in Economic growth and job creation and enactment of this priority piece of legislation is expected before summer recess
The National Treasury Management Agency (Amendment) Bill 2014 was published today (15th May 2014). This key piece of legislation, once enacted, will establish the €6.8 billion Ireland Strategic Investment Fund (ISIF) and will put NewEra on a statutory footing. This ISIF & NewEra are a central part of this Government’s strategy to maximise the impact from investment in economic growth and job creation.
This legislation, a key priority in the Programme for Government, will now commence its route through the Houses of the Oireachtas.
Welcoming the publication of the Bill, the Minister for Finance Michael Noonan stated: “The Ireland Strategic Investment Fund will have €6.8 billion in funding available for investment in the Irish economy. The ISIF is open for business and is exploring and making investments that meet its dual mandate of investment return and economic impact. I am confident that the legislation underpinning these important reforms will ensure that ISIF & NewEra operate to their maximum capacity, generating a return for this and future generations and most importantly driving economic growth and job creation in key sectors throughout the country.”
Minister Howlin also welcomed the decision to establish the ISIF and added, “The fact that NewERA is to be put on a statutory footing is most welcome. NewERA already manages the shareholder function in relation to ESB, Bord Gáis, EirGrid, Bord na Mona, and Coillte, providing specialist investment and financial advice to the shareholding Ministers on the corporate governance of these commercial State companies. Formalising this arrangement in legislation will copper fasten the progress that has been made to date in terms of reforming the manner in which Government manages its commercial State companies, while also facilitating the development by NewERA of proposals for investment in the economic sectors where they are active, to support economic activity and employment.”
The Minister also welcomed the fact that the Bill also establishes a Legal Costs Unit within the State Claims Agency to advise on costs awarded by the Mahon (planning matters) and Moriarty (payments to politicians) Tribunals to help minimise the State’s exposure and deliver significant savings to the exchequer.
Minister of State with responsibility for the NewERA project, Mr Fergus O’Dowd TD stated: “The establishment of NewERA on a statutory basis is an important element in the Government’s strategy to promote economic activity and employment. NewERA is charged with assisting in the development and implementation of Government plans for investment in key economic infrastructure in particular water, energy and next-generation telecommunications.”
Ends
Notes to editors
The legislation has four important functions
Firstly, it provides for the establishment of the €6.8 billion Ireland Strategic Investment Fund (ISIF). This fund has a dual to make commercial investments that deliver a return for the fund and generates an economic impact i.e. creates jobs
Secondly, it established NewEra on a statutory footing,
Thirdly, restructure the corporate governance of the entities making up the NTMA group
Finally, it establishes a Legal Costs Unit within the State Claims Agency to deal with third-party costs arising from certain Tribunals of Inquiry – Minister Howlin announced this important reform a number of weeks ago
What is the Ireland Strategic Investment Fund (ISIF)?
The ISIF will absorb the NPRF and its €6.8 billion in resources will be channelled towards productive investment on commercial terms in the Irish economy. An outline investment strategy is being developed which will address the sectors and range of assets to be considered for investment.
The mandate for the ISIF will be to invest on a commercial basis to support economic activity and employment in Ireland. This means the ISIF will have a dual objective –investment return: and economic impact.
What is NewERA?
NewERA has a centralised shareholder advisory role from a financial and commercial perspective in respect of corporate governance matters for five commercial semi-state companies: ESB, Bord Gais Eireann (including Irish Water), EirGrid, Bord na Mona, and Coillte. The semi-state companies within NewERA’s remit generate €6 billion in revenues and have capital employed of €13.6 billion. The NewERA role involves advising on activities such as capital expenditure plans, corporate strategy, and acquisitions and disposals. NewERA is already working closely with the relevant Government Departments and companies in this regard. The Shareholder Executive approach is designed to provide the Government with a portfolio view of investment returns from the sector and with a means of assessing the likely impact of commercial developments in the sector on long-term Government investment plans.
NewERA is also charged with assisting the development and implementation of Government plans for investment in energy, water and next-generation telecommunications with the long-term objective of employment creation and has been working with relevant Government Departments in these areas
Investments of NPRF in anticipation of the establishment of the ISIF
In anticipation of the establishment of the Ireland Strategic Investment Fund (ISIF), the National Pensions Reserve Fund (NPRF) has committed to a number of investments in Ireland including infrastructure, water, long-term financing for SMEs (both credit and equity) and venture capital.
Included in these investments is –
€375m to three new long-term funds which will provide equity, credit and restructuring/recovery investment for Irish small and medium sized businesses (SMEs);
A collaboration with Silicon Valley Bank which will lead to US$100 million of new lending commitments to fast-growing Irish technology, life science, cleantech, private equity and venture capital businesses over five years;
A fund of US$100 million established with China Investment Corporation (CIC) which will make minority equity investments in fast-growing technology companies in Ireland that have a substantial presence or strategic interest in China;
a financing facility of €250 million to Irish water;
Stand-by credit facilities that facilitated the delivery of two Public-Private Partnership projects, the N11 and Schools Bundles 3, with a combined projects size of €286 million;
A commitment of €250 million to the Irish Infrastructure Fund, a three way partnership between NPRF, AMP Capital, and Irish Life Investment Managers;
A commitment of €125 million to The Innovation Fund Ireland, a Government initiative - led by Enterprise Ireland and the NPRF - to attract leading international venture capital fund managers to Ireland and to increase the availability of capital to Irish early-stage and high-growth companies;
A commitment of €81 million to Local Venture Capital Funds; and
In addition, the Fund has been working closely with NewERA in respect of investment opportunities in the areas of water, energy and broadband.
NPRF and 3rd Party Irish Commitments 31/12/2013
NPRF and 3rd Party Irish Commitments 31/12/2013 NPRF Commitment Capital (€m) 3rd Party Capital (€m) Total Project Size
(€m)
SME Equity Fund - Better Capital 50 50 100
SME Equity Fund - Cardinal Carlyle 125 125 250
SME Credit Fund - BlueBay 200 250 450
China Technology Fund (Note 1) 72 36 72
Innovation Fund Ireland 125 125 250
Local Venture Capital Funds 81 320 401
Silicon Valley Bank (Note 2) 36 72 72
Irish Water 250 - 250
Irish Infrastructure Fund 250 66 316
Irish Forestry 35 187 223
Committed to Date 1,225 1,231 2,384