Northern Ireland news

Investment fund for north will not receive direct support from European Investment Bank

The European Investment Bank has said it will not be directly involved in the creation of the proposed Northern Ireland Investment Fund
John Monaghan

THE European Investment Bank (EIB) has said it will not be playing a direct role in the creation of any future Northern Ireland Investment Fund.

Finance minister Máirtín Ó Muilleoir has confirmed he received a letter from the EIB following the Brexit vote indicating it would not be directly involved in delivery of the fund.

It comes as another blow amidst uncertainty over European funding for projects in the wake of the EU referendum result.

The bank, which represents the interests of European Union member states, said its decision not to offer direct support was due to the "non-EU origin" of the funding.

Discussions surrounding the creation of an investment fund have been ongoing since it was first announced in a draft Executive budget for 2015-16, aimed at providing finance to private sector infrastructure projects.

In February 2015, then finance minister Simon Hamilton told the Assembly that it was hoped that the EIB would provide financial support.

He said: "We hope that (£40 million executive funding) will leverage in additional finance from, first and foremost, the EIB, which we have been working with incredibly closely on this project from roughly this time last year.

"I pay tribute to the EIB for its engagement and work in the genesis of the fund and throughout the last year."

In a feasibility study into the fund commissioned by the Department of Finance later in 2015, the EIB was also described as a "potential matched funder".

However, the bank has now offered only "advisory support" to the Executive in getting the fund off the ground.

Mr Ó Muilleoir confirmed the letter in a response to a written assembly question from Alliance East Belfast MLA Chris Lyttle.

He said: "The EIB has indicated that direct delivery and management of the investment fund is outside of usual EIB 'core' business.

"Following the result of the EU referendum, the EIB president, Dr Werner Hoyer, wrote to me confirming that: 'The non-EU origin of the NIIF’s funding means that we are unfortunately not in a position to commit to act as Fund of Fund manager for the NIIF.'

"However, President Hoyer also confirmed that '...we very much wish to continue to provide the executive with advisory support in relation to the development of its own investment fund'.

"Work is therefore continuing, with EIB advisory support, to deliver the fund."

Mr Lyttle said he had noted "with concern" previous statements from the EIB regarding the fund.

He said: "Further to his answer, I will be asking the minister what are the implications for the fund and hope he provides clarity in due course."

In May 2015, current First Minister Arlene Foster, in her role as then finance minister, met European Commission vice-president Jyrki Katainen to discuss the creation of the investment fund.

Following the meeting, Mrs Foster said: "I welcome this opportunity to discuss the NI Investment Fund... I will be doing what I can to ensure that Northern Ireland makes the most of opportunities presented by the Investment Plan for Europe."

The departmental feasibility study, released in June 2015, stated that funding would come through the Treasury in London but cited the EIB's potential involvement as a "matched funder".

The report concluded that there was a "strategic case" and an "addressable market" for the proposed investment fund.

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