Ossian Smyth (Dún Laoghaire, Green Party) | Oireachtas source

The sums of money are accurate. There is some misunderstanding on the description of the investment. A private-equity investor considers all of his or her investments are equity, whether they are pure shareholding or pure debt. In the case of the funding model for NBI or the investment model, this was agreed in the contract. It is funded with 12% interest loans, but they are shareholder loans. They are not the type of loans one might imagine.

If one was to lend money to somebody, one would expect to see a repayment schedule, start date and maturity date and might expect to see some kind of security. However, this loan is only repayable when half the network has been delivered or, in other words, when half the houses have been connected. It is only repayable after 2024 and if NBI is in profit. In other words, this is the kind of loan one makes to somebody which is repayable when one has it. That is a very different kind of proposition from being made a loan and needing to make repayments on certain dates.

When a shareholder loan is tied to the performance of a company, its characteristics are more like a shareholder. That is why it is sometimes called a participating loan. It is a form of hybrid investment and very commonly used in infrastructure. This type of investment was specified and delineated in the contract, along with the interest rate. It is not an incredibly profitable investment for the investors in that they get this 12%, whereas they can only get a much smaller amount. There is a risk profile here, which is very similar to the risk profile for a shared investment.

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