Wednesday 7 December 2016

EIB funding in the pipeline to improve Irish supply network

Sarah Collins in Brussels

Published 01/12/2016 | 02:30

The EIB says it is ready to fund water upgrades in Ireland – once the Government decides what to do about charges. Stock Image
The EIB says it is ready to fund water upgrades in Ireland – once the Government decides what to do about charges. Stock Image

The European Investment Bank says it is ready to fund water upgrades in Ireland - once the Government decides what to do about charges.

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EIB vice-president Andrew McDowell said that "assuming Ireland comes to a consensus on the best way to fund water infrastructure, if that involves looking for EIB financing to help address the infrastructure deficit through Irish Water, we're certainly happy to work with the Irish authorities".

Mr McDowell, a former economic adviser to Taoiseach Enda Kenny, was speaking to the Irish Independent after the water commission advised that households should pay only for "wasteful usage" and not regular water consumption.

But it remains to be seen whether the system the Government chooses will comply with EU rules.

A spokesman for environment commissioner Karmenu Vella said the European Commission "has made its position clear" in its official submission to the report - which said that "disapplying" water charges would breach the EU's water framework directive.

"We will now have to evaluate the report, in light of the recommendations of the Expert Commission," the spokesman said.

He said he "notes the Irish Parliamentary Committee established to examine the report will now start its work with a view to concluding by March of 2017".

Meanwhile Mr McDowell, who took up his role with the bank in September, didn't express an opinion on water charges, but said it was "an awful lot easier" to deal with Irish Water than the previous decentralised set-up.

"Previously, trying to discuss water investment with 34 different local authorities was just not feasible," he said.

"Now we have a single national utility that we can talk with, and discuss their overall investment programme, and what role we can play in financing that."

The EIB, the EU's long-term lender, has approved €200m in loans to Irish Water since 2012, half of which was never drawn down, given the controversy over water charges.

The bank has also announced a bid to step up lending in Ireland post-Brexit.

"We are looking to develop a new, stronger institutional relationship between the EIB and the Irish authorities," said Mr McDowell.

"The best thing the EIB can do to support Ireland and to help protect its economic recovery against the uncertainty that's been generated by the UK referendum outcome is to increase our levels of lending into Ireland."

He said the bank wanted to help Ireland address "infrastructure deficits" and improve financing conditions for companies impacted by the drop in the value of the pound.

"There's a whole range of mitigants that I'm sure the Irish authorities will be looking for from Europe, in the context of the Brexit negotiations, and obviously the EIB has a role in that," added Mr McDowell.

He made the comments as diplomats were meeting with the European Commission's lead Brexit negotiator, Michel Barnier, to discuss "the issues at stake" in future divorce proceedings with the UK.

A Commission spokesman said this would "contribute to building a common understanding of the process to come".

Irish Independent

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