Barry Cowen (Offaly, Fianna Fail)
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142. To ask the Minister for Finance the scope that exists to use the European Fund for Strategic Investments, EFSI, to increase Exchequer investment in public infrastructure by making better use of the flexibility that is built into the Stability and Growth Pact, in view of the stated position of the European Commission that it will take a favourable position on capital contributions to the fund in the context of its assessment of public finances under the pact. [6808/17]

Michael Noonan (Limerick City, Fine Gael)
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I presume that the Deputy's reference to flexibility under the Stability and Growth Pact is to the "investment clause", which allows for a temporary deviation from the required structural budgetary adjustment for capital investment, co-funded by the EU, that increases the potential growth of the economy.

Use of the clause is subject to strict criteria, the most important of which relates to the concept of "bad economic times".  This is defined as having negative GDP growth or that output is sufficiently below its potential to result in a negative output gap of over 1.5% of GDP. Therefore, Ireland is not eligible as GDP growth was strongly positive in 2015 and is forecast, in Budget 2017, to remain positive over the outlook horizon at 4.2% in 2016, 3.5% in 2017 and 3.4% in 2018.  In addition, according to the Commission's Winter 2017 forecasts the output gap is forecast to be positive this year and next.

I want to assure the Deputy that the Government is fully aware of the importance and need for capital investment.  In the 2016 Summer Economic Statement, the Government set out plans to invest an additional €5.14 billion over the period to 2021.  This increase is reflected in the gross voted capital projections.  The outturn for 2016 of €4.24 billion will increase to nearly €7.3 billion per annum by 2021.  My colleague, the Minister for Public Expenditure and Reform, is undertaking a capital review this year to ensure that capital spending is fully aligned with national economic and social priorities.  This increase in gross voted capital relies to a large extent on the capital smoothing feature used in the expenditure benchmark, a flexibility built into it to, inter alia, encourage increases in capital formation.  So the Government is making use of the flexibility in the Pact.

At EU level, Ireland supports the European Commission's €315 billion Investment Plan for Europe, which includes the European Fund for Strategic Investment (EFSI). EFSI commenced operations in July 2015 from which time it has been possible for any project promoter, either public or private, to engage with the European Investment Bank regarding the possibility of receiving loans or guarantees under EFSI for particular projects.

Since inception, Ireland has seen the main potential beneficiaries of EFSI as being in the private sector including entities such as PPP companies. In this regard, I am pleased that the Department of Health's Primary Health Care Centres PPP has successfully drawn down EFSI funds.  In addition, the Strategic Banking Corporation of Ireland (SBCI) has successfully engaged with European Financial Instruments such as the COSME and the InnovFin Guarantee Programme, both of which are made available under the EFSI SME Window. These support the financing needs of SMEs and aims to ensure that there is an adequate supply of affordable and appropriate credit to meet their needs.

President Juncker launched a Commission proposal to extend EFSI both in terms of time and financial capacity on 14 September last and Ireland is fully engaged in the discussions towards securing an agreement that will continue to support investment across the EU including in Ireland.

Barry Cowen (Offaly, Fianna Fail)
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143. To ask the Minister for Finance if the Exchequer or the NTMA has contributed towards, or will be contributing towards, the financing of specific projects or alternatively, participating via investment platforms under the European Fund for Strategic Investments; and if not, the reasons therefor. [6809/17]

Michael Noonan (Limerick City, Fine Gael)
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Since the enactment of the European Fund for Strategic Investments (EFSI) Regulation in July 2015, it has been possible for any project promoter, either public or private, to engage with the EIB regarding the possibility of receiving support for their project in terms of loans or guarantees under EFSI.

In general, Government Departments have existing relationships with the EIB so it has been a matter for each Department concerned to advance projects in coordination with the Government's Capital Plan as overseen by my colleague, the Minister for Public Expenditure and Reform.  As the Deputy will be aware, approval of Exchequer capital projects, PPP projects and borrowing-led investment by semi-states are the policy responsibility of the Minister for Public Expenditure and Reform and, in this context, he engages with each line Department on an ongoing basis to consider and assess projects and the full range of available funding options. 

EFSI is an important additional funding possibility alongside others such as the EIB's normal lending, the State's borrowings through the NTMA and other mechanisms such as PPPs and off-balance sheet vehicles. However it should be remembered that each EFSI loan entered into by the State pre-commits funding for the repayment of such loans, and has to be considered in the context of the expenditure benchmark under the EU's fiscal rules. The answer, therefore, is not simply about spending more; it is about matching the most appropriate source of funding with investment needs, and ensuring that taxpayers' money is spent wisely.

Since EFSI's inception, Ireland has seen the main potential beneficiaries of EFSI as being in the private sector including entities such as PPP companies. In this regard, I am pleased that the Department of Health's Primary Health Care Centres PPP has successfully drawn down EFSI funds. 

Also recently announced, the European Investment Bank (EIB) and Ireland Strategic Investment Fund (ISIF) agreed to support a €112 million investment in privately owned forests across Ireland. This new engagement with Dasos, a specialist forestry investment fund, represents the first forestry project in the E.U., to be supported by EFSI. The ISIF will provide €55 million and the EIB, through EFSI, will provide €28.5 million for the scheme. Additional support is expected from other investors as the initiative progresses.  The scheme will seek to address issues faced by small scale forests across the country by working to improve forest management and strengthen the supply of wood for commercial use. The investment will support crucial upgrades to Ireland's forestry infrastructure through the consolidation of its management.

Given my Department and the NTMA have limited capital expenditure, the EFSI SME window is of most relevance to my Department.  Through this window, the Strategic Banking Corporation of Ireland (SBCI) has successfully engaged with European Financial Instruments such as the COSME and the InnovFin Guarantee Programmes.  In 2016, the SBCI successfully applied for a €100 million guarantee facility under the COSME programme. The SBCI will use this facility to support the delivery of the Agri Cash Flow Support Loan Fund for Farmers as announced in Budget 2017, on behalf of Department of Agriculture Food and the Marine. The SBCI has also submitted an application for the InnovFin Guarantee Programme and is currently engaging with potential partner banks with regard to creating a pilot program for a guaranteed loan product.

There is a publicly available list of projects related to Ireland which have been approved for EFSI support by the EIB which is available on the EIB website at: . However, I would ask the Deputy to be aware that this list may not reflect Irish private sector project promoters participating in a project that could receive funding from EFSI loans/guarantees but which is led or based in another EU Member State.