Andrew Doyle (Wicklow, Fine Gael) | Oireachtas source

I move: "That the Bill be now read a Second Time."

I welcome this opportunity to present the European Investment Fund Agreement Bill 2018 to the House. This short technical Bill will enable the Minister for Business, Enterprise and Innovation and the Minister for Agriculture, Food and the Marine to enter into agreements with the European Investment Fund, known as the EIF, to facilitate access to finance for qualifying enterprises.

The new future growth loan scheme was announced in the budget as part of the Government's response to Brexit, and enactment of this Bill will allow us to launch the scheme in early 2019. The future growth loan scheme will be an important support for Irish businesses throughout the country that are facing challenges arising from Brexit. It will be available to SMEs, including those in the primary agriculture and the seafood sector.

To bring this loan scheme to the Irish market in early 2019, it is imperative that we as Ministers are granted the necessary powers to enter into the agreement with the EIF this year, which includes providing the necessary Exchequer funding. This scheme is an important component of the Government's Brexit mitigation measures for businesses as it will provide businesses with the opportunity to borrow for periods between eight to ten years to support long-term capital investment. The tenure of borrowing currently available on the market for SMEs is typically anywhere from three to seven years. The future growth loan scheme has been developed to address a gap in the market for longer-term loans up to ten years. It will support those enterprises that wish to invest and diversify their business by ensuring they have appropriate and affordable financing available to them. This in turn will fuel future economic growth in our important indigenous sectors by helping them to remain competitive. Given the particular exposure of the food sector to Brexit, the scheme, which will be 40% funded by the Minister for Agriculture, Food and the Marine, will also be available to primary producers.

To unlock the EIF counter-guarantee, which will be used to leverage funding of up to €300 million for the future growth loan scheme, the Department of Business, Enterprise and Innovation and the Department of Agriculture, Food and the Marine will collectively contribute €62 million in Exchequer funding over a five-year period. This counter-guarantee with the EIF is a bespoke agreement, which is wider in scope than those available through the European Commission and offers 64% risk cover rather than the standard 40%. It represents the first time that the Ministers have entered into such an agreement, although there is the potential for further such agreements in the future if needed. The Attorney General has advised that primary legislation is needed to provide the necessary powers to both Ministers to enter into such an agreement. The Department of Agriculture, Food and the Marine will contribute 40% of the loan fund on the basis that it is anticipated that at least 40% of the scheme will be used by food businesses and primary producers. The remaining 60% will be channelled through the Department of Business, Enterprise and Innovation's Vote in 2018 and subsequent years.

I will now go through the heads of the Bill. Section 1 defines the relevant Minister as the Minister for Business, Enterprise and Innovation or the Minister for Agriculture, Food and the Marine as they are the Ministers entering into the agreement with the EIF for the future growth loan scheme.

Section 2 provides the Minister for Business, Enterprise and Innovation and the Minister for Agriculture, Food and the Marine with the power to enter into agreements with the EIF with the consent of the Minister for Finance and the Minister for Public Expenditure and Reform. This includes providing the necessary financial contribution from the Irish Exchequer and limiting this to an aggregate total of €75 million should the Ministers wish to implement additional schemes concurrently. It also includes the discharge of any additional fees and expenses. Definitions of qualifying enterprise, SME and small mid-cap are also referenced here.

Section 3 provides for a review of the operation of the Act four years after its passage. Section 4 provides that expenses incurred in the administration of the Act be paid out of moneys provided by the Oireachtas. Section 5 provides for the Short Title and the commencement provision.

This short Bill is important as it will allow the Minister for Business, Enterprise and Innovation and the Minister for Agriculture, Food and the Marine to enter into an agreement with the EIF to implement the future growth loan scheme, which is a critical component of the Government's response to Brexit. Essentially, the future growth loan scheme is a longer-term Brexit loan scheme. If we want to ensure our businesses throughout the country succeed and prosper in the face of fundamental challenges like Brexit, it is essential that we take the necessary steps to ensure appropriate financial supports such as this scheme are in place for businesses. I look forward to hearing Deputies' contributions.

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