National Development Finance Agency
DELIVERING PUBLIC INFRASTRUCTURE
- The NDFA is delivering a range of education, health, justice and housing PPP projects with an estimated total capital value of €1bn. The over-riding objective is to ensure Value for Money for the taxpayer, consistent with on time and on budget project delivery.
- Significant progress was made on the construction of Schools PPP Bundle 4 providing 3,000 pupil places in Tipperary, Clare, Louth and Cork, which is scheduled for completion in mid-2016.
- Construction has commenced on the Courts Bundle PPP project involving the development of new courthouses and refurbishment and extension of existing courthouses in seven locations around the country. All courthouses are scheduled to be fully operational by December 2017.
- The NDFA delivered 15 “design and build” school projects (non-PPP) with a combined value of €80m providing 8,600 pupil places during 2015.
RESURGENCE OF INFRASTRUCTURE LENDING MARKET
- 2015 has witnessed a significant resurgence of the Irish infrastructure lending market with a substantial improvement in the funding costs available to PPP projects. All-in senior debt rates have fallen from 6.5% in early 2014 to under 3% at end-2015. A notable feature of the market is the emergence of international institutional investors.
WORKING WITH EIB TO PROVIDE COST EFFECTIVE FUNDING
- The NDFA continues to engage with the EIB to maximise the availability of cost effective funding for Irish infrastructure.
- In December 2015 the EIB provided a direct loan to the Exchequer of €200m for flood protection projects throughout Ireland. Since July 2012 the EIB has provided €750m in direct Exchequer loans.
- The EIB has provided significant support to PPP project financing through provision of funding and credit enhancement.
Progress on NDFA PPP Projects at End-2015
Projects being Procured by the NDFA
1. Schools Bundle 4
Four schools providing 3,000 places in Tipperary, Clare, Cork and Louth.
Scheduled for completion in mid-2016.
Projects where the NDFA is Financial Advisor
Design and construction of a new Arklow to Rathnew motorway, a 35km upgrade of the existing M11, and construction of Gorey Service Station.
Construction completed in July 2015.
The NTMA is designated as the National Development Finance Agency (NDFA) when providing financial advice to State authorities undertaking major public investment projects with a capital value of more than €20m and when procuring and delivering Public Private Partnership (PPP) projects in sectors other than transport and the local authorities.
Delivery of PPP Projects
The delivery of PPP projects, including those within the Infrastructure Stimulus Programme 2012, was the main focus of NDFA activity in 2015. The NDFA is responsible for delivering education, health, justice and housing PPP projects with an estimated total capital value of €1bn. Transport Infrastructure Ireland is responsible for procuring the various road PPP projects within the Stimulus Programme, with the NDFA as financial advisor across the entire PPP programme. The estimated capital value of the roads programme is €750m.
Significant progress was made on the various PPP projects in 2015 including Schools Bundle 4, which is scheduled for completion in mid-2016, construction commencing on the Courts Bundle, completion of the N7/M11 project and construction commencing on the M11 project.
Delivery of Devolved Schools Programme
At the request of the Department of Education & Skills the NDFA successfully delivered 15 ‘design and build’ school projects (non-PPP) providing over 8,600 pupil places in Carlow, Cork, Dublin, Kerry, Kildare, Limerick, Louth and Meath. These schools have a combined value of €80m and were all completed and occupied on schedule and on budget during 2015.
Contract Management Services
At the request of the Department of Education and Skills, the NDFA took over the PPP contract management of all operational PPP schools. At end-2015 the NDFA was managing the contracts for four operational schools projects covering 23 schools on behalf of the Department. Working under a Service Level Agreement, the support provided involves monitoring the relevant PPP companies in the performance of their obligations under the PPP contract. This activity is central to the realisation of the long-term Value for Money objective which underlies the PPP business case.
Other Advisory Work
In addition to its work on PPP projects, the NDFA is providing financial advice on a range of other infrastructure projects being procured by State authorities including the National Broadband Plan and a number of health projects including the National Maternity Hospital and Radiation Oncology Centres. It acted as financial advisor to the OPW on the sale of shares in the Convention Centre Dublin by the liquidator, Grant Thornton.
Infrastructure Lending Market
During the latter half of 2014 and through 2015 there was a significant resurgence of the Irish infrastructure lending market with both international and domestic funders expressing an interest in lending to Irish projects. The NDFA has seen a number of new participants including international institutional investors in the market and also a welcome recovery of the long-term debt market. Consequently, there has been a substantial improvement in the funding costs available to Irish PPP projects with all-in senior debt rates falling from 6.5% in early 2014 to under 3% at end-2015.
The NDFA continues to engage with multilateral funders such as the European Investment Bank (EIB) and Council of Europe Development Bank (CEB) in order to maximise the availability of cost effective funding for Irish infrastructure. In December 2015 the EIB provided a direct loan to the Exchequer of €200m for flood protection projects throughout Ireland. Overall, since July 2012, the EIB has provided €750m in direct Exchequer loans. The EIB has provided funding for the M11 road project and is also a potential funder for the DIT Campus at Grangegorman and Primary Care PPP projects.