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NTMA (Amendment) Bill: NewERA and €6.4bn Strategic Investment Fund

The following press release was issued by the Department of Finance on 13 June 2013. The release is accompanied by a presentation (592 KB, PDF format) and a technical note (138 KB, PDF format).

Maximising Investment and Creating Jobs
NewERA and €6.4 Billion Ireland Strategic Investment Fund (ISIF)

The Minister for Finance Mr Michael Noonan TD, Minister for Public Expenditure and Reform Mr Brendan Howlin TD, Minister for Communications Energy and Natural Resources Mr Pat Rabbitte TD and Minister of State with responsibility for NewEra Mr Fergus O’Dowd TD, have today provided an important update on The NTMA (Amendment) Bill 2013. This Bill will provide for the establishment of the Ireland Strategic Investment Fund (ISIF) by reorienting the National Pensions Reserve Fund and making the €6.4 billion in the Fund’s discretionary portfolio available for commercial investment in Ireland. The Bill will also formally establish NewERA which will identify new investment opportunities and will take a commercial approach with an emphasis on return on capital to the oversight of the Semi State Sector. This Bill delivers on a key programme for Government commitment, and will ensure that available resources are maximised to generate economic activity and create jobs in Ireland.

The ISIF will develop a clear Investment strategy which will deliver investment in areas of strategic importance to Ireland particularly in areas that support economic growth and job creation in the years ahead. The fund will seek to recycle its capital investments over time so as to be in a position to make new investments in line with its mandate. The NTMA Amendment Bill will put NewERA on a statutory footing. This will improve the way the State manages its oversight of semi-state companies within NewERA’s remit from a commercial perspective and ensure the efficient use of capital. NewERA will provide advice to Government in areas such as corporate finance, financial performance and capital investment plans.

It will also work with stakeholders to accelerate investment in sectors of strategic importance in order to boost economic activity and create employment.

Speaking at the launch Minister Noonan stated: “The overall objective of this Government’s approach is very clear  – creating jobs and opportunities now and providing the basis for sustainable jobs and growth for the future. This bill which provides for the establishment on NewERA, the establishment of a €6.4 billion Ireland Strategic Investment Fund, and the streamlining of the NTMA will maximise investment, generate economic activity and create jobs across the economy”.

Minister for Public Expenditure and Reform, Brendan Howlin TD added; “The overriding imperative is that we will have a well-resourced investment fund that we will use to grow jobs now and in the future.   This is the first time that we will have a dedicated fund available to support economic growth and development in Ireland. This fund will continue to attract investment and will make best use of our resources. Given the overall budgetary constraints in which we are operating, it is essential that we continue to ensure investment in jobs and growth in a sustainable way.”
 
Minister of State with responsibility for the NewERA project, Mr Fergus O’Dowd TD stated: “The establishment of NewERA on a statutory basis is an important element in the Government’s strategy to promote economic activity and employment. NewERA is charged with assisting in the development and implementation of Government plans for investment in key economic infrastructure in particular water, energy and next-generation telecommunications. I’m delighted that NewERA has already commenced work with the relevant Government Departments in these areas, including work on the initial financing of Irish Water, the establishment of the National Energy Efficiency Fund, financial evaluation of the potential for export wind and evaluation of the role that State entities can play in the delivery of the National Broadband Plan.”
 
The legislation will also streamline the NTMA’s governance structures through the establishment of a new over-arching Board which will be responsible to the Minister for Finance enabling a more integrated approach by the NTMA to the performance of its functions. No changes are proposed in respect of NAMA which will continue to have its own separate board.

Speaking at the announcement of the new legislation The NTMA Chief Executive, John Corrigan, said:  “While the Irish Strategic Investment Fund and NewERA represent new challenges for the NTMA, they are ones I am confident we can meet building on initiatives already undertaken by the NPRF and on NewERA’s work since its establishment on a non-statutory basis in 2011.  I particularly welcome the proposals in respect of the NTMA’s governance structures. The NTMA has taken on a range of additional responsibilities over the years since its original establishment as a single function debt management agency and this seemed to us an opportune moment to streamline the various boards and committees that currently oversee its various functions”
 
The required legislative changes and the development of the ISIF’s Investment Strategy coincide with the development of a medium-term economic plan where the ISIF has the potential to be a valuable resource. It is expected that all of these elements will be put in place this year
 
ENDS
13 June, 2013
 
Notes to the Editor

  • The NTMA (Amendment) Bill 2013, the draft heads of which were approved by Government last month, will be signed into law by the end of this year.
  • The programme for government includes two key initiatives designed to stimulate investment and job creation in the economy and this announcements allows for:
    – The establishment of a Strategic Investment Fund for Ireland
    – The establishment of NewERA on a statutory footing
  • The economy is showing signs of stabilising (return to GDP growth, exports continuing to grow and signs of modest improvement in domestic demand) and the ISIF will maintain and improve upon the hard-won gains to the economy’s competitiveness