€6.4bn Irish reserve fund assets to target energy efficiency, wind in domestic infra push

New details published by government on remaining asset pool

The Irish government has published details on how it will use the remaining €6.4bn in discretionary assets run by the country’s National Pensions Reserve Fund (NPRF) – a signatory to the Principles for Responsible Investment – to finance domestic investments with a notable slant towards green assets such as energy efficiency and wind power.

In an update on the National Treasury Management Agency (NTMA) (the operation that runs the NPRF) Amendment Bill 2013 published yesterday (June 13), the government formally established the Ireland Strategic Investment Fund (ISIF), which will run an investment programme to identify commercial investments that support growth and employment in Ireland. The fund is currently developing its business plan and exploring areas where its capital can best be invested.

A separate body titled NewERA, also run by the NTMA, which is effectively the shareholder executive of a number of semi-state companies has also started work with the relevant Irish government departments in areas including the financing of Irish Water, the establishment of a National Energy Efficiency Fund and a financial evaluation of the potential for exporting wind power.Outlining the way ISIF would work the government suggested it would operate like a direct infrastructure/private equity fund and seek to recycle its capital investments over time to then make further investments in line with its mandate to invest in areas of strategic importance to Ireland for economic growth and job creation.

RI understands that ISIF will maintain similar ESG commitments of the NPRF, albeit with different priorities to the previous listed markets strategy of the pension fund.

The previously €25bn NPRF saw €20.7bn of its assets commandeered by the Irish government as a result of the financial crisis to support the Irish banking system.

Ireland has been boosting its support of green investment in the country including the creation of a Green International Financial Services Centre (Green IFSC) to promote Dublin as a hub for environmental finance.