Michael McGrath (Cork South Central, Fianna Fail)
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122. To ask the Minister for Finance the status of Activate Capital; the amount of funding provided each year since its creation to residential construction projects; the number of residential housing units provided per year since its creation; the number of projects currently in construction; his views on whether the State can do more to ensure the construction sector has access to finance to build the required homes and office accommodation around the country; and if he will make a statement on the matter. [33755/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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The National Treasury Management Agency inform me that Activate Capital (Activate) is a €500 million joint venture established by the Ireland Strategic Investment Fund (ISIF) and global investment firm KKR, and financed through a €325 million senior loan note from ISIF and a €175 million junior loan note from KKR. 

Activate advances up to 90% of the project funding requirement, including: (i) for the acquisition of land; (ii) to bring projects through the planning process; and (iii) to build out development. It is targeting new residential development in Dublin, the greater Dublin area, Cork, Limerick and Galway which have been identified as the areas of greatest demand.

Given Activate Capital has private shareholders, it would not be appropriate to disclose the Fund’s commercially sensitive information, including the level of drawdown from the fund. This approach is in line with the normal commercial confidentiality principles applying to all private companies.

By the end of July 2017, Activate will have made site and working capital facility commitments to customers on 22 residential development sites. The ISIF’s share of these commitments is €216 million.

These 22 sites have an aggregate capacity for 3,661 homes. 13 of the sites are currently under development, with the remainder being progressed through the planning process.

As part of its commitments in Rebuilding Ireland, the NTMA and NAMA are currently undertaking a number of initiatives in relation to housing and the wider property sector:

- ISIF has total investment commitments to housing investment vehicles of €404 million of which €325 million in Activate Capital, €25 million in the Ardstone Residential Partnership and €54 million to student accommodation in DCU.

- In addition ISIF has committed €125 million in total to more general real estate investment vehicles, including €75 million to the Wilbur Ross Cardinal Commercial Real Estate Mezzanine Debt Fund and €50 million 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.

(i) ISIF-supported Fund for Housing

ISIF and the NTMA have made progress in examining the feasibility of establishing a new funding vehicle capable of delivering mixed-tenure residential developments in a way which is both off-balance sheet and commercially viable.

(ii) ISIF Enabling Infrastructure Fund

ISIF will support the delivery of housing-related enabling infrastructure in large scale priority development areas. Initial ISIF engagement with local authorities and private sector developers indicates that infrastructure financing requirements will be in the order of €250 million.

(iii) NAMA related delivery

Acting within its commercial mandate NAMA will support the delivery of 20,000 additional residential units before the end of 2020. Some 90% of these residential units will be in the Greater Dublin Area, where the demand for housing is greatest. Approximately 75% of these units will be houses, primarily starter homes. The overall cost of the programme is expected to be €4.5 billion. NAMA will utilise its own cash resources to fund this necessary expenditure.

(iv) Local Infrastructure Housing Activation Fund (LIHAF)

The Local Infrastructure Housing Activation Fund has been established to provide targeted investment in enabling local public infrastructure to unlock sites for large scale residential development from 2017 to 2019.

A total of €226 million has been allocated from LIHAF, split on a 75:25 basis between Exchequer (€170 million) and the local authorities (€56 million) funding. Although this represents a slight (13%) overrun on the original €200 million allocation.

The approved LIHAF projects are expected to deliver 22,830 units by 2021 and potentially deliver housing output of 69,240 in the long run. In Dublin, LIHAF is expected to support the delivery of up to 14,000 additional housing units by 2021 and potentially deliver over 37,000 units in the long run.