Written answers
Tuesday, 16 January 2018
Department of Finance
European Investment Bank
Brendan Howlin (Wexford, Labour)
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188. To ask the Minister for Finance the extent of State borrowing from the European Investment Bank; the average rate and duration of such borrowing; the advantage to the State of such borrowing over direct Exchequer financing; the projects that have received funding to date and on which there are outstanding amounts, in tabular form; and if he will make a statement on the matter. [54538/17]
Paschal Donohoe (Dublin Central, Fine Gael)
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In relation to the current extent of State borrowing from the European Investment Bank (EIB), I am advised by the EIB and the National Treasury Management Agency (NTMA) that the EIB has lent or contracted to lend directly to Ireland, acting through the NTMA, the amounts shown below:
| Loan Facility | Loan amount | Drawn amount (as of 31/12/2017) |
|---|---|---|
| Loan Facility | Loan amount | Drawn amount (as of 31/12/2017) |
| Irish Schools Programme | 100,000,000 | 100,000,000 |
| Irish Water Investment Programme | 100,000,000 | 100,000,000 |
| Irish Schools Programme II | 100,000,000 | 100,000,000 |
| Dublin LUAS Cross City | 150,000,000 | 150,000,000 |
| Irish Water Investment Programme - B | 100,000,000 | 100,000,000 |
| Irish Flood Prevention Programme | 200,000,000 | 200,000,000 |
| Irish Schools Programme III | 200,000,000 | 200,000,000 |
| National Children’s Hospital | 490,000,000 | 0 |
| Total | 1,440,000,000 | 950,000,000 |
The weighted average interest rate for this funding is 1.535%, based on the drawn amounts.
These loans are for durations of up to 25 years, although loans to Ireland are typically repaid over shorter periods.
The EIB has two outstanding loans to the Strategic Banking Corporation of Ireland as indicated in the table below.
| Loan Facility | Loan amount | Drawn amount (as of 31/12/2017) |
|---|---|---|
| Loan Facility | Loan amount | Drawn amount (as of 31/12/2017) |
| Strategic Banking Corporation of Ireland | 200,000,000 | 200,000,000 |
| Strategic Banking Corporation of Ireland | 200,000,000 | 200,000,000 |
| Total | 400,000,000 | 400,000,000 |
In addition, the EIB has provided information that the Housing Finance Authority (HFA) and certain local authorities have outstanding loans with the EIB. Issues relating to the HFA and local authorities would come within the purview of my colleague, the Minister for Housing, Planning and Local Government.
As regards the HFA, I understand that there are two outstanding loans, as shown in the table below.
| Loan Facility | Loan amount | Drawn amount (as of 31/12/2017) |
|---|---|---|
| Loan Facility | Loan amount | Drawn amount (as of 31/12/2017) |
| HFA – Irish Social Housing | 200,000,000 | 0* |
| HFA – Irish Social Housing Development | 150,000,000 | 100,000,000 |
| Total | 350,000,000 | 100,000,000 |
* The HFA expect to begin drawing on this facility later in the year and continue into 2019.
The two local authority loan facilities are set out in the table below.
| Loan Facility | Loan amount | Drawn amount (as of 31/12/2017) |
|---|---|---|
| Loan Facility | Loan amount | Drawn amount (as of 31/12/2017) |
| Local Authority Framework loan | 100,000,000 | 100,000,000 |
| Local Authority Framework Loan II | 90,000,000 | 90,000,000 |
| Total | 190,000,000 | 190,000,000** |
** I am also advised by the Department of Housing, Planning and Local Government that Limerick City and County Council and Fingal County Council have entered into financing agreements with the EIB. However, as of 31 December 2017, no funds have been drawn down in respect of these agreements.
The main advantages of such State borrowing over direct exchequer financing include diversification of sources of funding and, at times, greater cost-effectiveness than alternative sources of funds, including borrowing on the sovereign bond markets.
To assist the Deputy I have attached a link (below) to the EIB website which lists EIB loans to Ireland over a number of years.
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