Bernard Durkan (Kildare North, Fine Gael)
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37. To ask the Minister for Finance arising from recent experience in the bond market, the extent to which it might be found possible to issue specific bonds targeting investment leading to job creation such as the public housing building programme in view of the serious need in this area and the opportunities for a major boost in terms of job creation in the construction sector which is currently lagging way below normal economic requirements; and if he will make a statement on the matter. [1586/14]

Michael Noonan (Limerick City, Fine Gael)
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The proceeds of all borrowings by the Exchequer, as well as tax revenues, non-tax revenues and other receipts are lodged to the Exchequer account at the Central Bank of Ireland to fund on-going Government expenditure.

The National Treasury Management Agency (NTMA) has advised that project-specific bonds issued by the State which are linked to a specific project and which are serviced and repaid from the Exchequer in the same way as standard Government bonds , may be of limited interest to investors as they would be concerned about a relative lack of liquidity. Investors in project-specific bonds would require higher yields than standard Government bonds to reflect the inferior liquidity.

The NTMA had advised that project-specific bonds which are serviced and repaid according to the performance of the project would be considered by investors to carry more risk than standard bonds issued by the State and serviced and repaid by the Exchequer. Investors in project-specific bonds would require higher yields to reflect the increased risk and a Government guarantee could be required in order to make a project viable.

I am happy to confirm that the Government remains committed to exploring alternative means of financing capital projects. The National Development Finance Agency (NDFA) is charged with advising on the optimal means of financing the costs of all public investment projects over €20 million in order to achieve value for money, including the €2.25 billion stimulus package announced by the Government in July 2012. NDFA continues to facilitate securing funding for both Public Private Partnerships (PPPs) and traditional projects from a wide range of sources including domestic and international banks, institutional investors and supranational organisations such as the European Investment Bank and the Council of European Investment Bank.

The Government has announced the creation of the Ireland Strategic Investment Fund (ISIF) to channel investment from the National Pensions Reserve Fund (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 funding structure for two current PPP projects involved the participation of the NPRF alongside EIB and Bank of Ireland. In addition, the NPRF continues to source investment opportunities, in preparation for the creation of the ISIF, a number of which are expected to involve construction activity.