Mick Wallace (Wexford, Independent)
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Question 10: To ask the Minister for Jobs; Enterprise and Innovation when the development capital scheme outlined in the action plan for jobs will be operational; the way Enterprise Ireland will identify indigenous companies eligible for the scheme; if consideration has been given to targeting indigenous companies operating in unemployment blackspots such as the south east; and if he will make a statement on the matter. [11569/12]

Mick Wallace (Wexford, Independent)
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Question 42: To ask the Minister for Jobs; Enterprise and Innovation if priority will be given to indigenous companies located in unemployment blackspots such as the south east in addressing the funding gap for mid-sized, high growth indigenous companies with significant prospects for jobs and export growth, as per the development capital scheme outlined in the action plan for jobs; if he will detail the time frame for the design and launch of this scheme; and if he will make a statement on the matter. [11570/12]

Richard Bruton (Dublin North Central, Fine Gael)
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I propose to take Questions Nos. 10 and 42 together.

The development capital scheme as outlined in the Action Plan for Jobs 2012 has been developed to complement the existing range of financial supports offered by Enterprise Ireland. Other initiatives are already in place for the provision of capital at the early stage and scaling phases and a clear market failure was identified in the availability of risk capital for established companies seeking to sustain growth and achieve greater scale. Longer term investment capital is not readily available to growth-focused companies in the form of debt or equity and there is little private equity funds or debt available to innovative small and medium-sized enterprises, SMEs. This situation has resulted in an equity gap, which is constraining the development of a key cohort of established growth companies. Development capital can be defined as equity funding for the expansion of established and profitable firms, that is, those that have passed the start-up stage.

It is proposed that the scheme will be launched and marketed by end of the first quarter of 2012. This will entail a call by Enterprise Ireland for expressions of interest from fund managers followed by a three-month period prior to a closing date. The timing of actual investments under the scheme will depend on the ability of the fund managers selected from the expressions of interest to raise the matching funding to "close" their funds and to commence investing. While both funds are development capital funds - there are two tranches - aimed at established companies, they will be managed by separate managers, thereby generating competition in the market. Investment in two funds also allows Enterprise Ireland to commit to two funds with slightly differing investment strategies, thereby benefiting the market.

The scheme will be demand led and will target the cohort of companies that are growth focused. It will be open to all firms in that cohort regardless of their location in Ireland. However, under the south-east action plan, Enterprise Ireland is taking steps to target opportunities for start-up and expansion among enterprises in the region. These are the sort of growth-focused companies that would avail of the fund.

Mick Wallace (Wexford, Independent)
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We are all aware that Ireland is organised in a centralised fashion and it is not easy for the Minister to address counties individually. Instead, he must discuss the south-east region. County Wexford's population is 145,000 whereas County Waterford's is 113,000, yet no town in Wexford could even dream of having the benefits enjoyed by Waterford city. Wexford loses out due to the centralised way Ireland is organised.

The unemployment rate in the south east is 18.9% whereas the national average is 14.2%. In the Action Plan for Jobs 2012, the section on assisting indigenous business to grow by accessing finance reads: "Design and launch a new Development Capital Scheme, aimed at addressing a funding gap for mid–sized, high–growth, indigenous companies with significant prospects for jobs and export growth." I have asked the Taoiseach and the Minister for Finance about this matter, but a strategic investment bank as promised in the programme for Government would be of significant benefit to many people in the indigenous business sector. Will the bank ever come on stream or has there been a change in plan?

Michael Kitt (Galway East, Fianna Fail)
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I must call the Minister, as we are almost out of time.

Richard Bruton (Dublin North Central, Fine Gael)
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The proposal on a strategic investment bank is being studied within Government. A series of banking products are emerging from the Government, for example, the micro-finance product, the partial loan guarantee product, the development capital product and the innovation funds. We are providing products across the range of SME needs to respond to what is recognised as a market failure in the banking system. The banks are risk averse and are not meeting businesses' needs. Maybe they never did. They need to be refocused on the needs of export-led, small companies.

A strategic investment fund is being established. This will tap into the National Pensions Reserve Fund, NPRF, and make funds available to be drawn down by small companies. While it is not a bank in the strictest sense, we are introducing a range of banking products to complement what is available from the banking system and to address the issues raised by the Deputy.