Michael McGrath (Cork South Central, Fianna Fail)
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144. To ask the Minister for Finance the position in relation to a State aid complaint made against the National Asset Management Agency (NAMA) to the European Commission; his understanding of the nature of the complaint; the details of NAMA's engagement in the process to date; the role, if any, his Department has played in the preparation of NAMA's response to the complaint; if NAMA or his Department intends to publish the response submitted by NAMA; if he is confident of a decision in NAMA's favour; when a decision is expected on the matter; if any contingency plans are in place in the event of an unfavourable finding against NAMA; and if he will make a statement on the matter. [19565/16]

Michael Noonan (Limerick City, Fine Gael)
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As the Deputy will be aware, NAMA announced in December 2015 that it could, subject to commercial viability, facilitate the delivery of up to 20,000 new residential units, on sites securing its loans, by 2020.

Subsequent to this, a complaint was submitted to the Competition Directorate of the European Commission (DG Comp) by a small number of property developers, alleging that there may be state aid implications to NAMA's proposal to fund commercially viable residential projects under the control of its debtors and receivers.

While it would not be appropriate to comment on the details of what is an ongoing DG Comp investigation, I would point out the following:

- NAMA intends to extend funding to willing NAMA debtors and receivers on commercial arms-length terms where there is an expectation that such funding will enhance NAMA's recovery on the loan. NAMA requires that the projected return resulting from the provision of additional funding must be the value maximising strategy for the asset and this is fully in accordance with Section 10 of the NAMA Act. This means NAMA will facilitate the funding of development of only those sites that are commercially viable and where site development will deliver a better recovery than the sale of the undeveloped site.

- The rates offered to NAMA debtors and receivers by NAMA are unrelated to NAMA's own cost of funding. Where NAMA provides funding to facilitate development by its debtors or receivers, it is provided at appropriate market rates of interest.  

- NAMA and my Department are cooperating fully in their support of the Commission's work. As the primary relationship with the Commission is held by the State, the Department of Finance is fully involved with NAMA in a joint engagement with DG Comp. 

- NAMA has produced detailed evidence regarding the complaint which the Department of Finance has provided to DG Comp to assist in its investigation. Department of Finance and NAMA officials also have met with DG Comp to discuss this evidence and DG Comp's questions in detail. Senior Department officials maintain an open dialogue with DG Comp as they progress their work.

- The clear intention of NAMA's residential funding initiative is to enhance returns over and above any other viable strategy, provide funding on terms comparable to those available elsewhere in the market and ensure there is no impact on competition more generally.

I understand that Commission officials continue to review submissions and information received from all parties and have not yet reached a preliminary determination on the complaint.