EU bank deal to pump €200m into new homes
The EU's investment bank is close to agreeing a €200m loan aimed at alleviating Ireland's acute housing crisis with construction on the 1,400-plus homes expected to start next year.
The funds from the Luxembourg-based European Investment Bank will draw in support from other private investors, while the State's Housing Finance Agency will match the EIB's commitment with an injection of €205m.
Negotiations on the public-private partnership deal have been under way for years.
Andrew McDowell, vice-president of the EIB, told the Finance and Public Expenditure Committee that a final agreement was close. The deal, likely to be signed off by the end of 2017 at the latest, would mark the first time a social housing development has been constructed with funds from a PPP.
As tensions over the Brexit negotiations threaten to intensify, Mr McDowell also urged Ireland to take advantage of the UK's departure and increase its requests for EIB funding.
He pointed out there is no "upper limit" to the amount of money the bank can offer and added the EIB teams working in the UK were now keen to switch focus to its smaller neighbour given the economic and legal similarities between the two countries.
His comments came as it emerged the Government is weighing fresh EIB-backed alternatives to tackle the housing shortage.
Housing Minister Simon Coveney is considering a proposal from a trade union alliance to create an ESB-styled agency to act as a powerful Municipal Housing Authority (MHA) in Ireland.
The proposal would allow Irish councils to kick-start a major public home construction campaign thanks to European Investment Bank funding at record low interest rates.
Ireland currently requires 20,000 new housing units each year. Central to the proposal is the fact the new super-housing body would then allow such loans to be kept off State books for economic purposes.
By offering affordable rather than simply social housing, the MHA would cater for families currently earning up to €54,000 a year but who simply cannot afford mortgages for the private sector. The costed model for the MHA and its operations has been submitted to Mr Coveney.