A €270m payment to Irish Water had no connection to the fact water charges were scrapped, the Government claimed.
The significant funding injection was revealed in company documents filed, this week, by Irish Water.
This State payment, early last week, was in addition to the expected €178m it will cost to refund water charges.
Both Taoiseach Leo Varadkar and Minister for Finance Paschal Donohoe have said water charge refunds will come from budget underspends by departments.
Mr Donohoe has said the refund, expected to be paid to households before the year end, does not put the same pressures on the exchequer as other measures, due to it being a one-off payment.
However, yesterday, the Department of Finance defended a separate €270m payment to Irish Water.
The department said the payment was part of the Irish Water business plan 2015-2021 which included capital investment of €5.5bn over 2014-2021, with €270m of the €5.5bn scheduled for 2017.
“This payment is not connected with the decision to end water charges. This separate issue will be considered as part of the overall fiscal arithmetic to be updated for Budget 2018 in October,” a department spokesperson said.
In exchange for the investment, the utility has issued and allotted new shares to both the departments of housing and finance.
The spokesperson added: “On foot of a request from the Department of Housing, the minister for finance consented to making the €270m equity contribution from the central fund and this transaction took place on Tuesday, 8 August.
“On the same day, the minister wrote to the directors of Irish Water asking for the issue and allotment of the shares. Share certificates for both of the ministers will be issued in the usual way.”
Irish Water confirmed it received the payment and said the money was “not for a specific purpose or project, rather for the continued work to transform Ireland’s water services in line with the business plan”.
Irish Water aims to invest €1.364bn on infrastructure by 2021 and a further €1.25bn each on drinking water capacity and wastewater quality over the same period.
The utility has also said it plans, by 2021, to have made capital investments of €950m on drinking water quality, and another €700m on wastewater capacity.
Dublin will receive the largest allocation, €827m, followed by Cork (€305m), and Donegal (€151m).
In a submission to the Joint Oireachtas Committee on the Future Funding of Domestic Water Supply earlier this month, Irish Water said it wants to reduce to zero the numbers at risk of contamination and the number of those on boil water notices.
However, the utility claimed that the overall scale of funding to carry out these projects would be a matter for Government
“The repair and upgrading of Irish Water’s water treatment plants, wastewater treatment plants, water and sewer network will require a multi-billion-euro investment programme over many years,” a spokesperson said.
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