Joan Burton (Dublin West, Labour)
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192. To ask the Minister for Finance the amount of funding that has been made available through the Ireland Strategic Investment Fund for social and affordable housing provision; if he is satisfied with the current rates of interest being charged to borrowers through the fund; if he is reviewing the operation of the mechanisms through which credit is accessed from the fund; and if he will make a statement on the matter. [9932/17]

Michael Noonan (Limerick City, Fine Gael)
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As the Deputy will be aware, in the social and affordable market, in line with Rebuilding Ireland commitments, the Ireland Strategic Investment Fund (ISIF) and a number of key Government Departments are examining the feasibility of establishing a funding vehicle, in conjunction with the private sector, which could facilitate investment in social and affordable housing.

Key factors which must be addressed to facilitate ISIF involvement in such projects include: the commercial viability of proposals; Eurostat treatment of fund structures which receive a substantial proportion of their revenue from Government sources; and the ability to create off-balance sheet vehicles outside of the existing PPP model. Engagement with the other stakeholders in both the public and private sector, including with Eurostat, is ongoing.

ISIF informs me that whilst it has made progress in conjunction with the other stakeholders in the public and private sectors in respect of this opportunity, as well as other potential social housing investment opportunities, there are still considerable hurdles including commerciality and balance sheet treatment as identified in Rebuilding Ireland. These hurdles must be overcome before any such proposals can be brought to a successful conclusion.

Separately, ISIF is making a very substantial contribution to new private housing supply which is critical in terms of meeting the pent up demand for housing across all sectors of the market. In line with its double bottom line mandate, ISIF has already invested in a number of significant financing platforms and projects in the construction sector, and is actively examining other investment opportunities. 

ISIF has total investment commitments to housing investment vehicles of €404m comprising €325m in Activate Capital, €25m in the Ardstone Residential Partnership and €54m to student accommodation in DCU. In addition ISIF has committed €125m in total to more general real estate investment vehicles, including €75m to the Wilbur Ross Cardinal Commercial Real Estate Mezzanine Debt Fund and €50m to Quadrant Real Estate Advisors, both of which to date have completed some investment in housing. Through these ISIF-supported projects, a total of 8,400 housing units is expected to be delivered in the near term (a small portion of which has already been delivered).

In addition, ISIF's current near term pipeline of potential housing projects including in the build-to-rent sector and off-campus student accommodation as well as a smaller project that may have the ability to deliver some affordable housing, indicates potential to deliver a further 8,700 units in total.

ISIF is working with local authorities and private developers on the financing of housing-enabling infrastructure and its pipeline includes two pilot housing infrastructure financing projects which, if completed, will enable the development of a further 6,000 housing units.

ISIF is also currently engaging with a range of Higher Education Institutions ("HEIs") in respect of the provision by them of on-campus student accommodation. 

ISIF invests on a risk adjusted basis in the various housing financing platforms and these platforms, in turn, provide finance, also on a risk adjusted basis, to developers, which can be equity or debt according to the business model of each platform. The interest rate applied to any individual debt financing arrangement therefore relates to the level of risk and other investment factors in the underlying housing development proposal.