Dáil Éireann Debate, Thursday - 4 July 2024
84. Deputy Darren O'Rourke asked the Minister for Finance the impact the infrastructure, climate and nature fund will have on the general Government debt; if expenditure out of the climate and nature from 2026 onward will impact on the general Government balance; and if he will make a statement on the matter. [28631/24]
View answer202. Deputy Rose Conway-Walsh asked the Minister for Finance if the FIF/ICNF shows up in the GGD; and if he will make a statement on the matter. [28725/24]
View answerI propose to take Questions Nos. 84 and 202 together.
The purpose of the Infrastructure, Climate and Nature Fund (ICNF) is to, first, provide a fiscal buffer to support State expenditure during a period of significant deterioration in the economic or fiscal position of the State, and second, to provide support to projects that directly or indirectly contribute to climate change, nature, water quality and biodiversity objectives. Under the legislation, an initial €2 billion will be transferred to the Fund from the dissolved National Reserve Fund in 2024, and €2 billion will be transferred from the Exchequer to the Fund each year from 2025 to 2030, resulting in an overall contribution of €14 billion.
This fund constitutes an accumulation of financial assets for the State. The investment strategy of the Fund will be determined by the National Treasury Management Agency (NTMA).
The General Government Debt is a gross measure of consolidated government liabilities. The General Government Debt measures the gross level of borrowings for the general government sector. A transfer into the ICNF is simply counted as a transaction of a financial asset within General Government. When compiling the General Government Debt, transfers of financial assets within Government is not included in the calculation of the General Government Debt.
Transfers into the fund have no impact on the General Government Balance. However, if there is a drawdown from the ICNF for expenditure, this would be included in General Government expenditure and would have a negative impact on the General Government Balance.
