Pat Rabbitte (Dublin South West, Labour) | Oireachtas source

I propose to take Questions Nos. 97, 133 and 140 together.

Energy efficiency is internationally recognised as the most cost effective means of delivering greenhouse gas abatement. It is equally important in the current fiscal climate that energy efficiency offers an opportunity to stimulate economic activity and employment and improve national competitiveness. Extensive studies undertaken by the European Union and the International Energy Agency have demonstrated the positive environmental and economic impact of energy efficient measures.

For several years the Government has invested nearly €250 million of Exchequer funding in energy efficiency programmes in the domestic and non-domestic sectors. While this approach has leveraged a significant additional spend in the economy of more than €250 million, it requires continued Exchequer support. This is neither necessary nor sustainable as a funding source. The programme for Government commits to a transition from Exchequer funded grants to sustainable financing initiatives. My Department, with the Sustainable Energy Authority of Ireland, is working intensively to create innovative mechanisms by which energy efficiency projects can be financed. These mechanisms must deliver demonstrable energy bill savings to incentivise individuals and entities to avail of them.

Last week the Taoiseach launched the 2013 Action Plan for Jobs. The energy efficiency fund is one initiative in the plan that will help to deliver jobs not just this year but also in future years. In broad terms, the fund will be established with the aim of providing at least €70 million to finance energy efficiency initiatives in the public and private sectors. Some €35 million of the fund is being provided through residual moneys arising from the closure of the carbon windfall levy account. Matching funding in excess of €35 million is being sought from private investors. Investments by the fund have the potential to create significant employment across a broad range of construction related sectors. Experience from the existing grant schemes suggests that based on an induced labour spend almost 450 jobs are directly supported for a year for every €10 million of expenditure, rising to 675 jobs when indirect employment is included. This is before competitiveness impacts owing to reduced energy costs are taken into account. NewERA has been asked by the Government to facilitate the creation of the fund and has been actively meeting potential investors and fund managers in the past few months. At this juncture I am not in a position to indicate who the investors will be so as not to prejudice the discussions.

The State is investing in the fund for a number of reasons. First, there is a well established shortage of finance in the market. The fund will be set up to bridge this gap. Second, where finance is available, the process by which moneys are lent can be extremely complicated, in part owing to the nature of the projects but also a lack of knowledge within the financial sector. The fund will redress this scenario through the development of expertise in financing energy efficiency, ideally becoming the lender of choice for such projects. I anticipate that the fund will lend to all sectors.

The fund will be supported by the creation of a national energy performance contracting policy framework which will standardise energy performance contracting in Ireland and provide a robust process for establishing investment ready projects. Work on the framework is well advanced, with a public-private group established late last year. I intend to launch the details of the fund alongside the second national energy efficiency action plan later this week, but first I wanted to mention it in the House.

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