European Investment Bank to fund Irish social housing

The Government is in talks with the European Investment Bank (EIB) about a €300 million plan to build 2,400 social housing units and upgrade local authority homes.

The Luxembourg-based bank agreed to lend €150 million to the scheme if the Government came up with equal funding. The homes would be built over the next three years.

Preparations for the scheme, which may be unveiled in the budget next week, come amid mounting pressure on the Government to tackle an acute housing shortage in Dublin and a growing waiting list for local authority homes.

Brian Hayes, Fine Gael MEP for Dublin, said the EIB has told him that most of the new homes would be built in the capital.

Improving supply

“This programme will hugely benefit Dublin by providing a much-needed boost towards improving the supply of adequate and affordable housing,” he said. “We need to use resources from the EIB in the best way possible to deliver long-term housing to those who need it most.”

The EIB is an EU institution specialising in long-term lending for big public projects. The bank has a top credit rating so it can raise money cheaply on international markets and lend to governments at lower interest rates than commercial banks.

Its board is to make a final decision on the plan by the end of this month, it is understood.

The bank’s main contact is the Housing Finance Agency, a State-owned firm that lends to local authorities and voluntary bodies for housing.

‘Advanced discussions’

An EIB spokesman said: “We are considering providing €150 million to support an investment in the rental social housing sector in the coming years. This would cover both retrofitting and rehabilitation of existing social housing stock as well as the construction of new additional units.

“I can confirm that advanced discussions have taken place with the Housing Finance Agency.

“Certainly the housing sector is one that we are keen to explore in Ireland. We are keen to explore potential ways in which the EIB would support investment in the sector to upgrade housing and support new construction.”

This would be the first such programme in Ireland. There are precedents elsewhere, however. The bank has supported a British housing finance corporation for many years.