Mr. Conor O'Kelly:

I thankful for the opportunity to brief the committee. I do not intend to read my opening statement or go through my presentation. Members have been provided with a copy of our annual report which competes to be one of the heaviest annual reports in the State sector. They have also been provided with my presentation in which I seek to address some of the areas that I know are of specific interest to the committee and have been in the past. We can take questions on them later.

I will give a brief overview as events have moved on since 2015 and some things are already out of date, certainly in the case of the market base. I will start with the original and historical business of the NTMA - debt management.

As members know, we manage circa€200 billion of debt on behalf of the State. In that regard, 2015 was a significant year for a number of reasons. In that year we raised €13 billion at an average interest rate of 1.5% and with an average maturity of 19 years. To put the matter in perspective, that was approximately half the yield and about twice the average maturity in the previous year. The first year we were able to take advantage of the very low interest rate environment was 2015. We also issued Ireland's first 30-year bond, the bond with the longest maturity the State has issued up to that point, which raised €4 billion. We have since issued a 100-year bond for a small amount at a yield of 2.35%. It is interesting that in 2013 it was hard to get investors to lend us money for 100 days, yet today we can borrow money for 100 years. That says an awful lot about the current extraordinary interest rate environment, as much as it does about Ireland's credit rating, although the improvement in our credit rating has been a big feature in that respect.

On the rating agencies, Moody's upgraded us to the A category, meaning that all rating agencies now have Ireland in the A category. That is significant in the sense that some of the more conservative investors, in particular, can only lend money to sovereigns in the A category across their businesses.

While the interest rate environment for new borrowing is benign and very favourable for Ireland, it is worth remembering that our stock of debt has increased very considerably since 2007. That €200 billion figure was €47 billion in 2007, on which the interest bill which was €7 billion in 2015 was only €2 billion in 2007. The forecast in 2013 was that the interest bill in 2015 would be €10 billion. The €7 billion figure must be seen in that context. It is down from €7.5 billion, but it was on a trajectory to be considerably higher. We will talk later about the potential trajectory for interest rate savings and improvements. However, we have a very high stock of debt. We are still an ndebted nation and vulnerable to shocks and changes in the marketplace.

I will move on to our four other mandates. The Ireland Strategic Investment Fund, formerly the National Pensions Reserve Fund, has completed its first full year of operation. It has what we call a double bottom line - it must have a commercial return and an economic impact. The investment committee for oversight of the fund is independent and made up of two non-executives from the board of the NTMA, plus three independent non-executives. They have oversight of the investment process and approving the investment decisions. The fund invested €750 million in 2015 and a further €200 million so far this year in a variety of projects which I have outlined and are available on our website. I will highlight three of them to give members an example of the kinds of investment the fund is making. The first is a fund called Activate, of which some members may have heard and which is relevant in the housing sector. It is a €500 million fund. The Ireland Strategic Investment Fund has committed €350 million and provides all-in-finance for residential house builders who are struggling to get money from the banks. The banks will lend probably only about 60% of one's requirements, but the fund is set to lend 90% plus. It has put €40 million to €50 million into the market in the year to date to allow the building of about 1,000 units in three separate projects, all of which are in the Dublin area. Ultimately, the objective of the fund is to be capable of building around 8,000 houses in total.

The second project is at Dublin City University, DCU, where the fund has invested €50 million in student accommodation. It is part of a broader campus development worth €230 million. The significant part of our investment is that it released €70 million of European Investment Bank funding to DCU which required a local institutional investor to be part of the transaction. The Ireland Strategic Investment Fund, in putting in that €50 million, released €70 million from the EIB and essentially allowed the entire campus development project worth €230 million to take place.

The third project involves the Milplex fund, a product produced in co-ordination with Glanbia and Rabobank and a fund directed at dairy farmers. One of the reasons dairy farmers do not like to borrow money to invest is the unpredictability and volatility of the price of milk. The fund adjusts the term of a loan to the price of milk, such that if the price of milk is falling, the terms of the loan will extend to make it more palatable for buyers. It is a unique product which we think could be replicated in a number of ways. It is something we see as being applicable to other products.

Moving on to the National Development Finance Agency, NDFA, the matter relates to PPPs in the provision of accommodation. Any infrastructural transaction over €20 million is subject to financial advisory oversight by the NDFA which is involved in a number of PPPs in delivering court, school and primary care service accommodation. Fourteen primary care centres closed recently and we might talk about that particular example in more detail later.

We have NewERA which, essentially, is the State's in-house corporate finance advisory body. Its specific mandate centres on commercial semi-State companies where it provides advice for the shareholder on shareholding matters. In assessing a shareholder expectation framework, the idea is that all of the commercial semi-State companies will have the same template, meet the same standards whether it be a business plan, investment expectations, dividends policy and returns on capital. They will do this in a consistent, seamless way across the different semi-State companies. NewERA also advises Ministers on specific projects. For example, last year it would have advised the Minister for Transport, Tourism and Sport on the sale of the stake in Aer Lingus.

The final body is the State Claims Agency, of which Mr. Ciaran Breen is director. It manages claims on behalf of the State, both clinical and non-clinical. We are managing about 8,000 claims, for which the provision is around €1.8 billion in total. We are trying to get more into the business of risk management for all of the entities within our remit. The agency has grown significantly as a part of the NTMA. One third of the staff in the NTMA now work for the State Claims Agency.

The number of entries under our remit is now 130, up from about 30 three or four years ago. Therefore, this has been a significant area of growth. I know members will have plenty of questions for Mr. Breen. That is a tour of the businesses.