Eoghan Murphy (Dublin South East, Fine Gael)
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118. To ask the Minister for Finance if he has considered any vendor financing options for the implementation of new infrastructural projects here as an alternative to new borrowing or the use of national investments funds for same given that major international companies maintain capital reserves for investment in such projects. [55533/13]

Michael Noonan (Limerick City, Fine Gael)
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As the Deputy is no doubt aware, in July 2012 the Minister for Public Expenditure and Reform, Brendan Howlin T.D., announced on behalf of the Government a €2.25 billion Infrastructure Stimulus Programme aimed at promoting jobs and growth.

It is intended that projects in the Stimulus Programme to a value of €1.4 billion will be provided through Public Private Partnerships (PPPs). The funding of the PPPs is expected to come from the European Investment Bank (EIB), Ireland’s National Pensions Reserve Fund (NPRF), domestic banks and other sources of funding such as institutional investors, and is additional to the existing Exchequer-funded investment programme. The planned PPP investment will be directed towards projects that meet key infrastructural needs and are in line with the priorities identified in the Government’s Investment Framework, covering education, health, justice and transport.

In relation to the funding to be made available to PPPs by the NPRF, the Government has announced the creation of the Ireland Strategic Investment Fund (ISIF) to channel investment from the NPRF towards productive investment in sectors of strategic importance to the Irish economy. Within its existing statutory investment policy and in line with the ISIF announcement, the NPRF has undertaken a number of investments and initiatives under which NPRF capital will be invested on a commercial basis in Ireland. The NPRF has in particular committed to invest in infrastructure (€250 million) and PPP projects (€118 million). Legislation to establish the ISIF which will absorb the resources of the NPRF is being prepared and I expect to be in a position to bring it before the Oireachtas in the first quarter of this year.

The Deputy raised the use of vendor financing to fund infrastructure projects, a form of financing in which the vendor lends money to be used by the purchaser to buy the vendor's products or property. This is a model being adopted by the National Asset Management Agency (NAMA) who have announced plans to advance, over the years 2012 to 2016, at least €2 billion in vendor finance to purchasers of commercial property securing its loans. NAMA has agreed to fund six transactions with a combined value of €375 million through the vendor finance initiative and a number of other vendor finance transactions are at an advanced stage. NAMA has published an information guide on vendor finance, which is available on the NAMA website, . Clearly, vendor financing is an option particularly suited to NAMA’s function in selling off the property on its books. However, I am happy to confirm that the Government remains committed to exploring alternative means of financing capital projects, including vendor financing.