Ireland in line for high-speed broadband funding under European scheme

A SCHEME to make millions of euro available for nationwide high-speed broadband, cheap green energy and fast transport links to the centre of Europe has been welcome by the Government as a vital step toward creating growth and jobs.

The scheme would use EU money to make it attractive and almost risk-free for private investors to get involved in projects worth about €50 billion across the EU over the next six years.

Europe is lagging behind in fast broadband, which covers less than 3% of users compared to 12% in Japan.

A 10% increase in broadband penetration could increase GDP by up to 1.5% and create jobs, according to studies.

Communications, Energy and Natural Resources Minister Pat Rabbitte said the funding would help end the isolation of certain ”economic islands” and was most welcome at a time when industry and government was working to provide high-speed broadband.

The preliminary list of projects for investment that would cover Ireland include broadband; high-speed rail links between Dublin, Cork, Belfast and Limerick; and energy projects including the Northern seas offshore grid, electricity and gas interconnections linking the country to mainland Europe as well as smart grids to integrate renewable energy generated off-coast.

The inclusion of these projects in the EU’s push to connect Europe and generate growth was described by Labour MEP Proinsias De Rossa as, “a vote of confidence in Ireland’s future”.

The money will be provided through a mechanism called project bonds, which will be tested on a number of pilot projects next year and should be ready to go into operation by 2014.

This kind of funding is specifically targeted at projects that would have a revenue stream to pay back investors, who would be given senior bondholder status and so be assured of recouping their money.

Any loss would be taken by the European Commission and the European Investment Bank would be a junior bondholder. Its funding would act as a guarantee for private sector investors.

Launching the initiative, European Commission President José Manuel Barroso said they had chosen projects where additional EU investment could have maximum impact.

About €31.7bn has been earmarked to upgrade Europe’s transport infrastructure, build missing links and remove bottlenecks.