Business Irish

Tuesday 17 January 2017

The first of the State's proceeds from the Aer Lingus sale has been spent

Published 14/10/2016 | 02:30

State sold its stake in Aer Lingus, which was acquired by IAG
State sold its stake in Aer Lingus, which was acquired by IAG

The first two investments have been made from the State-backed €335m Connectivity Fund, which was set up to spend the proceeds from the country's shareholding in Aer Lingus.

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The first two investments have been made from the State-backed €335m Connectivity Fund, which was set up to spend the proceeds from the country's shareholding in Aer Lingus.

Dublin-based Aqua Comms DAC received the first investment of €25m (€22m).

The company is the operator of Ireland's first dedicated sub-sea fibre-optic network.

The network will be used by major multinational tech and telecom firms to provide fast and secure data connections between Ireland, the US and the UK.

The Ireland Strategic Investment Fund (ISIF), which operates the Connectivity Fund, said the investment should further the growth of Ireland's digital economy.

ISIF has also invested €35m into the Dublin Airport Authority (DAA), which operates Dublin and Cork airports.

The spend was in the form of a new 2028 public bond, rolling on from an existing National Pensions Reserve Fund commitment.

ISIF director Eugene O'Callaghan said there is an active pipeline for further investments.

"We are looking forward to seeing connectivity investments being completed by ISIF, over time, in a range of commercially viable projects with economic impact and competitiveness benefits for Ireland," Mr O'Callaghan said.

The strategic fund operates a double-line mandate, which looks to secure both commercial and economic returns from public money.

Future investments are being explored in the areas of energy, air, sea and more data connectivity projects to help build Ireland's international links.

The State received a €335m windfall from the sale of its stake in Aer Lingus in September of last year.

The Connectivity Fund had lay idle since the sale with ISIF spending the time identifying potential investments.

The Government received the proceeds after agreeing to sell its 21.5pc stake in the airline to British Airways owner IAG.

The then Transport Minister, Paschal Donohoe, unveiled the new fund last May, saying any expenditure by it would not be included in Government spending.

Mr Donohoe said the fund could be used for anything from developments in energy to improving the country's ports.

Fellow former Aer Lingus stakeholder Ryanair said it shared its proceeds from the €1.36bn sale among shareholders.

Irish Independent

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