John Curran (Dublin Mid West, Fianna Fail)
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82. To ask the Minister for Finance the progress he is making with regard to establishing a special purpose vehicle, SPV, to provide off-balance sheet funding to support the provision of social housing; and if he will make a statement on the matter. [12440/17]

Michael Noonan (Limerick City, Fine Gael)
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As the Deputy will be aware, in line with Rebuilding Ireland commitments, the National Treasury Management Agency (NTMA), 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. The objective is to create an 'off-balance' mechanism which would facilitate investment which is additional to that being provided directly by the State and which does not impact on the General Government Balance. This investment could take the form of either funding or forward purchasing the delivery of new mixed-tenure residential developments.

While a major objective of any such funding vehicle is to leverage additionality in terms of social housing supply, it is envisaged that a substantial portion of the overall supply of new units may need to be for private housing to meet the commerciality test and to satisfy the requirements of an off-balance sheet investment model.  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.  

In exploring the development of this model there has been input from a wide array of actors, including my Department, ISIF/NTMA, the Department of Housing, Planning, Community and Local Government, CSO/Eurostat, the European Investment Bank and others.  To date, there have been a series of meetings between these actors at which useful clarifications were received from CSO/Eurostat and the European Investment Bank. 

NTMA/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. Detailed work on the design of a funding vehicle is ongoing, and the actual establishment, management and operation of such a vehicle will require further time, investment and engagement.