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Ireland reveals €22bn low-carbon ‘investor roadmap’

A vast public-private decarbonisation funding programme worth up to €21.8 billion ($26.9 billion) has been billed a “clear roadmap” for investors to fund Ireland’s global green finance leadership ambitions.

The Irish Government has proposed that an initial €7.6 billion of public funds be invested in low-carbon projects between 2018 and 2027. It forecast that this will, in turn, unlock an additional €14.2 billion of private financing from ‘commercial semi-state bodies’.

Investment priorities include upgrading 45,000 homes per annum from 2021, providing up to 4.5GW of additional renewable energy and transitioning to low-emission public transport. The Government also recommends that all new vehicles should be zero emissions beyond 2030.

An additional €8.5 billion will be invested by Irish Water between 2018 and 2027 to develop Ireland’s water infrastructure.

The funding proposal was announced in the Government’s Project Ireland 2040 National Planning Framework, which was published alongside a ten-year National Development Plan that will see total public capital investment in infrastructure projects of about €116 billion.

The framework notes the National Policy Position on Climate Action and Low-Carbon Development, which said the pathway for transitioning to a low-carbon society to 2050 requires an 80% to 95% reduction in CO2 emissions.

Dublin-based non-profit Sustainable Nation Ireland called the funds “an important first step in financing Ireland’s national transition” to a low-carbon economy.

Sustainable Nation Ireland, whose programmes are partly financed by the Irish government and the EU’s Climate-KIC climate innovation initiative, has a mandate to stimulate investment and promote Ireland as a hub for sustainable investments, as part of the country’s International Financial Services (IFS) 2020 programme.

All its green finance activities will be overseen by a public-private committee chaired by Pat Cox, former President of the European Parliament.

Stephen Nolan, the organisation’s chief executive, told Environmental Finance: “From our perspective, the outlining of how much is required to 2027, how much government is willing to commit and a recognition of the importance of private sector capital in realising this ambition, is to be welcomed, and establishes a clear roadmap for investors, both domestic and international, to react to.”

He added that the Irish public sector acting as “an enabler and anchor for private sector capital is a model that has already worked for government”, noting that, since 2014, the Ireland Strategic Investment Fund (ISIF) has committed €3.4 billion of financing to both green and non-green projects, which unlocked a further €5.7 billion in capital.

Management of the sovereign wealth fund, which has total assets of €19.7 billion, is divided between the National Treasury Management Agency (NTMA, which manages €8.5 billion of the assets), the agency that manages the assets and liabilities of the Government of Ireland, and the Minister for Finance (€11.2 billion).

Last month, it committed to integrating Environmental, Social and Governance (ESG) factors across all the NTMA’s Irish investments, which currently stand at €3.4 billion, and said it would develop a bespoke ESG framework in collaboration with specialist consulting firm Environmental Resources Management.

Michael D’Arcy, Irish Minister for financial services and insurance at the Department of Finance, said: “Ireland was amongst the first countries to make attracting green finance a strategic priority, with Government and policy backing since 2012. Today, we have €28 billion of green finance activity already in Ireland and a thriving cluster of activity covering asset management, domiciling and the listing of green bonds.”

Meanwhile, the Irish Government has also published its IFS Action Plan for 2018, which lists green and sustainable finance second in its list of priorities.

To promote Ireland as a leading location for green finance-based activities between 2018 and 2020, Sustainable Nation Ireland has allocated a budget of about €1.5 million per annum to achieve this aim. It will also co-host Climate-KIC’s annual European Climate Innovation Summit in Dublin in November.

Nolan said that the importance placed by Government on sustainability in this year’s Action Plan is particularly timely given the recent publication of the EU Commission’s High Level Expert Group Report on Sustainable Finance, “which will drive the European policy roadmap in this area, bringing sustainable finance even further into the mainstream”.

By Michael Hurley, Environmental Finance 21 February 2018


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