Pearse Doherty (Donegal South West, Sinn Fein)
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Question 97: To ask the Minister for Public Expenditure and Reform if following his commitments in the Infrastructure and Capital Investment 2012-2016 Medium Term Exchequer Framework, he will provide an update on his ongoing engagement with potential private sector investors, including pension funds. [11225/12]

Brendan Howlin (Wexford, Labour)
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Public infrastructure is funded primarily in two ways at the moment: Exchequer financing (the vast bulk of funding) and PPP-sourced funding for particular projects that are suited to the PPP approach while providing value for money for the State. Since the publication of the "Infrastructure and Capital Investment 2012-2016: Medium Term Exchequer Framework", my Department has intensified its engagement in a series of initiatives to maximise the sources of funding available for infrastructure investment. Some of these initiatives could provide lower-cost and/or longer-term substitution for existing sources of Exchequer borrowing for the Exchequer capital programme; some relate to financing solutions to close existing PPP deals; and some involve seeking new sources of private financing for public investment including via PPPs.

My Department is currently engaging with both the European Investment Bank (EIB) and the Council of Europe Bank (CEB) with a view to securing funding for a number of Exchequer funded capital projects including the Schools Building programme and the Water Services programme. I appreciate the support expressed by both institutions and the confidence shown by them in offering long term funding for important Irish infrastructure developments. This funding will not be additional to that provided for in the Medium Term Investment Framework but will provide funding on more favourable terms than are otherwise available to the State.

We are also continuing to pursue the PPP approach to deliver public infrastructure alongside more traditional procurement, where it makes sense and offers value for money. Of course I acknowledge that the private funding market for PPPs is very challenging. Bank credit is in short supply internationally; our sovereign debt situation presents its own difficulties. I am very open to hearing proposals that might provide a workable solution to those difficulties. My Department has been actively engaging with private institutional investors to see whether it might be possible to match our immediate funding requirements for projects with their long term income stream needs. My Department is also in consultation with our European counterparts to explore best practice and similar initiatives in other jurisdictions like the UK.

In conjunction with my Department, the National Development Finance Agency (NDFA) is working to progress pipeline PPP projects and to help unlock potential private sector investment.