Half of €368m Luas line to be funded by cheap Euro loans
UP to half the cost of the new Luas line in Dublin is expected to be funded using cheap loans from the European Investment Bank (EIB).
And other projects including road developments, schools and port expansions are being considered for funding, EIB president Werner Hoyer said.
His comments came after the bank announced yesterday that it would provide €200m in lending for small and medium-sized businesses, and that investment in a range of capital projects would also be considered.
The move would have a huge impact on the cost of delivering big infrastructure projects planned over the coming years.
The EIB borrows up to €80m a year at cheaper rates than most member states. A decision by the bank to invest can lead to a 1pc to 2pc interest rate reduction, saving millions of euro over the lifetime of the loan.
The Luas is expected to cost €368m, and up to half the cost could be funded by the EIB, Transport Minister Leo Varadkar said. "The key thing to note is the Government is very keen to build some roads and rail again," he said.
"We're conscious the EIB is not an aid agency but a bank, and it will examine Luas. We have the money in the capital envelope and works begin within weeks."
Linking the Red and Green Luas lines will add an extra 10 million passengers a year. Up to 800 construction jobs will be created, with works beginning in the coming weeks, and the project is expected to be completed in 2017.
A public private partnership (PPP) deal to build the N11 – which includes a dual carriageway from Arklow to Rathnew in Wicklow and an upgrade of the Newlands Cross junction – is expected to be signed in the coming days.
Expected to cost €282m, half of the loan will be funded by the EIB. The deal will be the first PPP signed since 2007.
"EIB wants to be part of a success story," Mr Hoyer said. "We are broadening our activities and transport is of the highest importance. We're very open to the examination of the connection of the two Luas lines, and expect to progress rapidly.
"Beyond that, the financial close of the N11 project would be good in substance, because the road is needed, but also good in symbolism because it shows that Ireland is back on track."
The EIB is also considering funding the N17 Gort to Tuam road; N25 New Ross bypass; M11 Gorey-Enniscorthy road; and Port of Cork expansion.