Cork rail, peatlands and retrofitting funded in €1bn EU plan

Funding is Ireland’s slice of €750bn scheme designed to counteract damage of pandemic

Carrowbehy bog in Co Roscommon is one of Ireland’s wettest and most important raised bogs. Photograph courtesy Ronan Casey/The Living Bog

Carrowbehy bog in Co Roscommon is one of Ireland’s wettest and most important raised bogs. Photograph courtesy Ronan Casey/The Living Bog

 

The upgrade of Cork commuter rail, restoration of Bord na Móna peatlands and retrofitting of buildings are among the projects to be funded in a €1 billion package of European Union Covid-19 stimulus funds announced on Friday.

The funding is Ireland’s slice of a massive €750 billion scheme funded by joint borrowing by the 27 EU member states designed to counteract the economic damage of the pandemic and overhaul economies to make them greener and more digital for the future.

In all, 42 per cent of the money is to be used for projects that help reach the Republic’s climate objectives, with €108 million set aside for the rehabilitation of 33,000 hectares of peatlands degraded by Bord na Móna harvesting to restore them as carbon sinks.

The electrification and upgrade of Cork commuter rail will receive €164 million, while €100 million is to be set aside for the retrofitting of public and residential buildings.

 

A further €105 million is allocated for the digitalisation of public administration and services, which will include the establishment of an online response option for the census.

There will be €85 million spent on the digital transformation of Irish enterprises, and €64 million in funding is set aside for connectivity and ICT services for schools.

This will bring high-speed broadband to more than 1,000 primary schools, in a bid to increase digital literacy skills.

A shared government data centre is set to receive funding of €39 million.

A total of €114 million is allocated for reskilling and upskilling workers, including the retraining of people who left the labour market due to the Covid-19 pandemic. This will involve a “green skills action programme”, providing training in zero-energy building and retrofitting, as well as digital skills with the aim of boosting innovation in small and medium businesses in the climate sector.

Work placements

A work placement programme will receive €27 million, while support for higher education in technological universities will receive €40 million.

European Commission chief Ursula von der Leyen is to visit tech projects at Technical University Dublin that are set to receive funding under the plan, as well as meeting Taoiseach Micheál Martin to hand over the formal approval of the plan.

Under the programme, 10 waste-water treatment plants will be upgraded under a river basin management plan.

In all Ireland is set to receive an estimated €989 million in grants, which do not need to be directly repaid: €914 in initial payments for 2021-2022, with a further estimated €75 million to come in 2023.

The second tranche is calculated based on the severity of the impact of the pandemic, so may change depending on the economic data.

Along with the investments, the Irish Government committed to undertake a number of reforms, including to increase the availability of social and affordable housing through the Land Development Agency.

It “should make available affordable housing on a number of state sites”, an EU official said.

The Government must also introduce reforms to address “aggressive tax planning”, and has committed to furthering the digitalisation of health and the Sláintecare reforms.

Environmental protection

Under the rules of the plan a minimum of 37 per cent had to be allocated for climate projects and 20 per cent for digitalisation, while overall investments and reforms had to do no harm to environmental goals. Ireland also had to commit to its existing recommendations from the European Commission, including action on aggressive tax planning, healthcare reform and the provision of affordable housing.

A final sign-off on the plan is expected by the end of the summer, and the payments will be issued annually as Ireland demonstrates it has reached milestones in the projects.

 

Ireland is to receive one of the smallest allocations in the EU under the stimulus plan, which will ultimately be paid back by all member states, and potentially through new environmental or digital levies by the European Commission.

The funding was calculated based on underlying economic performance before the pandemic, and by how hard each country’s economy was hit by the crisis. As the only member state to grow during the Covid-19 pandemic, supported by multinational exports, Ireland’s allocation is comparatively smaller.

Countries with underlying structural economic difficulties and large tourism industries are set for particularly large allocations. Italy is set to receive €68.9 billion in grants, Spain €69.5 billion, Greece €17.8 billion and Portugal €13.9 billion, with funds due to start flowing within two months.

While ultimately Ireland expects to be a net payer to the initiative, the Government has said the national economy could not thrive without growth in the single market overall and that it was vital to support struggling member states and the overall modernisation of economies in the EU to ensure recovery and future growth.