State gives Irish Water €270m to make up for scrapping of charges

The Government has written a cheque for €270 million for Irish Water, which is largely reliant on the State for funding since water charges were suspended last year.

Company documents filed this week for the utility show it received the cash in return for issuing a raft of new shares, which were then allocated evenly between the departments of finance and housing.

Irish Water confirmed it received the payment, which it said was part of "routine Government funding" that was budgeted for when the political decision was taken to suspend water charges.

“It is not for a specific purpose or project, [but] rather for the continued work to transform Ireland’s water services in line with the Irish Water business plan,” said Irish Water.

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The Department of Finance said on Thursday that it would be unable to comment on the payment until Friday.

The capital injection is the first time Irish Water has issued new shares in exchange for money from the State since September 2015, when the Government handed over about €54 million.

Irish Water has said it will spend more than €2.1 billion on Ireland’s water infrastructure over the next four years, with the bulk of that investment earmarked for Dublin and Cork.

New model

Investment is scheduled to be €522 million this year, rising to more than €800 million by 2021. Funding is only in place until the end of 2018, and a new long-term financial model for water infrastructure in Ireland has yet to be agreed.

It will also cost the State about €178 million to refund the charges that were paid to Irish Water by residential users prior to their suspension in 2016. The Government has indicated that the cash for the repayments will come from underspending in various departments.