Noonan bids for €1bn in annual funding

Ireland hopes to secure up to €1bn per year in funding from the European Investment Bank after EU leaders agreed last week to boost the bank’s capital, Finance Minister Michael Noonan said yesterday.

Last week’s European summit agreed to increase the EIB’s capital by €10bn by the end of the year, boosting its lending capacity by €60bn to help stimulate the European economy.

The EIB has committed to provide up to €500m per year in funding to Ireland, but the Government hopes to double that, Mr Noonan said after a meeting with Werner Hoyer, the president of the EIB.

“At present they are committed to half a billion a year if you could get it flowing freely,” he said.

“If we could double that it would have an impact on the infrastructure and make the economy more productive.”

Mr Hoyer said €500m per year was not the EIB’s limit, but said the exact level of funding had not been decided.

An annual investment of €500m would be double the proportion of the bank’s lending relative to Ireland’s share of the EIB’s capital, but the EIB wants to help turn Ireland into a “success story”, Mr Hoyer said.

The funds will be released on a project-by-project basis.

Mr Hoyer was yesterday due to sign off on a €100m project to upgrade school buildings in Ireland.

Funds from the EIB will not be included in spending limits under Ireland’s EU/IMF bailout, so long as it can be categorised as a commercial investment, Mr Noonan said.

The EIB plans to use the €10bn pledged at the eurozone summit to raise an additional €20bn per year for three years on capital markets.

“If market circumstances deteriorate we will probably have to lower that. If things develop very well on the capital markets then it can be more,” Mr Hoyer said.

The EIB usually funds one-third of its investment projects, so €60bn would lead to a total investment of €180bn, he said.

Reuters

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