AIB commits €300m to new fund to lend to nursing home sector
AIB is committing €300m to a new fund to lend to the healthcare sector, saying an ageing population will fuel demand for care homes.
Tanaiste Joan Burton launched the fund and a special sector report on the healthcare industry at an event last night.
The €300m Healthcare Fund was earmarked for the sector on the back of a 200pc increase in demand for loans, according to AIB's head of business banking Ken Burke.
Loans from the fund will range from less than €100,000 for projects such as energy efficiency or other improvements to more than €10m for major expansion and greenfield developments, he said.
Operators looking to refinance away from other lenders - including banks exiting the Irish market - will also be able to access the fund.
If demand over the next two years exceeds the €300m now in the fund it can be increased, Mr Burke said.
The research commissioned by AIB suggests the care sector, especially residential care homes, could support an additional 10,000 jobs.
Occupancy rates at existing nursing homes are already close to capacity at 95pc, and an ageing population is creating a need for an additional 8,000 beds over the coming seven years.
Demand is greatest in urban centres, especially in Dublin.
In recent years just 350 additional beds per year have been added to the system.
The head of AIB's new healthcare-focused unit, Anne Bannon, said financing is also available through the fund for primary health centres and related facilities.
Private sector and voluntary sector operators now account for around 75pc of all residential care facilities, despite the sector historically being dominated by the public sector.
However, as much as 90pc of the income of most operators is from the State, through the fair deal scheme.
Funding was not cut during the downturn and the evidence is that the State will continue to finance the sector into the future, according to Mr Burke.
The number of people over 65 is set to increase by around 200,000 over the next seven years, bringing the total to around 732,000.
The greatest increase in demand for residential care is for those over 85 years of age, and for people suffering from dementia. The lack of dedicated dementia facilities was highlighted by the new research.
"Looking after our ageing population is a key priority for the Government and I welcome the fact that AIB is willing to lend to operators,'' Tanaiste Joan Burton said last night.