Michael McGrath (Cork South Central, Fianna Fail)
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Question 61: To ask the Minister for Finance the current value, including a breakdown by asset type, of the National Pensions Reserve Fund and the amount of the remaining value of the fund that has been committed to further bank recapitalisation and any capital projects. [6061/11]

Michael Noonan (Limerick City, Fine Gael)
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The total value of the National Pensions Reserve Fund at 31 December 2010 was €24.4 billion. This figure comprised €9.5 billion in the Directed Portfolio (the value of investments in Bank of Ireland and Allied Irish Banks held on the direction of the Minister for Finance) and €14.9 billion in the Discretionary Portfolio (the balance of the Fund excluding directed investments). The National Pensions Reserve Fund Commission publishes a report on the performance of the NPRF at the end of each quarter on its website www.nprf.ie.

The following table sets out the asset allocation of the NPRF as at 31 December 2010:

*figures subject to rounding

The National Pensions Reserve Fund (NPRF) was established in 2001 under the National Pensions Reserve Fund Act 2000. The purpose in establishing the NPRF was to meet as much as possible of the cost to the Exchequer of social welfare pensions and public service pensions to be paid from the year 2025 until at least 2055. The NPRF Commission is responsible for the overall control, management and investment of the assets of the Fund.

The legislation was amended by the Investment of the National Pensions Reserve Fund and Miscellaneous Provisions Act 2009 and the Credit Institutions (Stabilisation) Act 2010 to allow the Minister for Finance to direct the NPRF Commission to invest in credit institutions in certain circumstances, to buy government and government-guaranteed securities and to make payments to the Exchequer in the years 2011 to 2013 to fund capital expenditure.

As announced on 28 November 2010, the assets of the National Pensions Reserve Fund are to be used as part of the State's €17.5 billion contribution to the €85 billion EU-IMF Programme of Financial Support for Ireland. It is envisaged that €10 billion of this amount will be sourced from the NPRF. On 23 February 2011, my predecessor directed the NPRF Commission to hold €5.5 billion in cash or comparable instruments as the first part of a phased de-risking of the €10 billion which is required from the NPRF under the Programme of Financial Support for Ireland.

The Government has indicated in its Programme for Government that it sees a significant role for the NPRF in providing funding for its National Development Plan on a commercial basis. We have also stated that we will construct a €100 million Microfinance Start-Up Fund that will provide start-up loans and equity that draws funding from the NPRF and private institutional funds.

The NPRF, in keeping with its commercial statutory remit, has (i) indicated that it has agreed in principle to fund a water metering investment programme up to an amount of €550 million (subject to certain pre-conditions) and (ii) in the context of a 5% allocation of the Discretionary Portfolio to infrastructure, indicated its preferred approach is to invest up to €500 million alongside third-party institutional investors in infrastructure assets in Ireland. The Fund has committed €125 million to Innovation Fund Ireland and has also made other investments in Irish venture capital projects.

With regard to further bank recapitalisation, the Government will not make a decision in relation to recapitalisation until the results of the Prudential Capital Assessment Review (PCAR) exercise are available. These results are to be published on Thursday, 31 March 2011.