Cheap European loans to fund half of Luas link-up costs
HALF the cost of extending the Luas light-rail system in Dublin will be met by way of cheap loans from the European Investment Bank (EIB).
It has approved loans for three projects in the past week totalling €373m, including Luas, the redevelopment of the Grangegorman campus and a lending package for renewable energy projects to be administered by AIB.
The money will be made available at cheaper interest rates than currently available, saving millions of euro over the lifetime of the loans.
Funding has been made available for other projects at 2.3pc. This compares with about 3.5pc if the money was sourced on the international bond markets by the Government.
The move comes following a visit to Ireland by EIB president Werner Hoyer last April, when he said that a range of capital projects would be considered for investment.
He said that the bank wanted to be "part of the success story" and was also considering funding a number of transport projects including roads and the expansion of the Port of Cork.
Details of the loan approvals were posted on the EIB website, just as the State prepares to exit from the bailout in December, and as the Government considers whether it will avail of a €10bn overdraft from the troika to cover spending in the event of an unforeseen crisis.
The three projects approved by the EIB include the 5.6km Luas cross-city extension, which will mean 13 additional stations and which will allow the existing Red and Green lines to be connected and extended to Broombridge near Cabra.
The project is expected to cost €326m, and €163m has been made available in financing. The loan was approved last Friday.