Minister for Finance Michael McGrath has confirmed the first details of the new Infrastructure, Climate and Nature Fund, which was announced in Budget 2024.
However, the details confirmed today relate primarily to how the fund will be financed and the procedures for allocating money to it and from it. Details on what specific businesses can benefit from the fund have not been confirmed.
Minister McGrath said while delivering the budget on Tuesday (October 10) that “€14 billion will be put aside in the Infrastructure, Climate and Nature Fund by 2030 to allow for sustained levels of investment in infrastructure in the event of economic downturns and to support climate and nature related projects”.
In response to this, the Irish Farmers’ Association (IFA) expressed concern over how the fund would benefit the farming community, and what conditions would be attached to any funding coming from it.
“Farmers will be concerned about what will be required of them to access any of this fund. Ultimately, farmers want to farm and have a viable enterprise that they can pass onto the next generation,” IFA president Tim Cullinan said on Tuesday.
Announcing further details of the fund today, Minister McGrath said that it will be used to provide for “pro-cyclicality” in capital spending.
Infrastructure, Climate and Nature Fund
The funding reserve would be funded over time to provide for resources in capital spending in the event of a future economic downturn in order to support capital expenditure through the business cycle, thereby preventing “stop-start” public capital investment.
According to the Department of Finance, the fund would avoid backlogs on capital projects if public spending dries up in an economic downturn.
It is intended that €2 billion will be put into the fund each year for the seven years 2024 to 2030 inclusive, building up a total fund of €14 billion.
The Department of Finance said that the fund will, among other uses, help to support climate-related initiatives over the medium and long term.
However, the department also said that an access route to the fund specifically related to climate change will be developed in order to channel investment towards climate neutrality.
However, the Infrastructure, Climate and Nature Fund will remain a single overall fund.
Commenting on the fund, Minister McGrath said: “The Infrastructure Climate and Nature Fund will help smooth the investment cycle and avoid a ‘stop-start’ approach and help provide support for the economy in times of exceptional need and capital spending in periods of economic dislocation.”
Separately, Minister McGrath has also announced the funding details for another new pot of money, the Future Ireland Fund.
This fund will also support government expenditure in climate-related investments, among several other areas.
Around €6 billion will be paid into this fund each year until 2035, for a total of roughly €70 billion.
Minister McGrath said: “The Future Ireland Fund will provide multi-generational benefits and deliver the widest benefits to the public. It will also prevent the reliance of current expenditure on temporary or “windfall” sources of income.”
The finance minister called on TDs to back both funds, saying: “I would again ask all colleagues across the [Dáil] to put aside political differences and support the passage of this legislation through the house.”