Monday, 5 April 2010

City Council seeks to issue bond to fund social housing

DUBLIN City Council is attempting to issue a bond on the international markets in an attempt to fund several municipal projects around the capital.

It would be the first time such a move has been made by an Irish local authority although several success stories of bond-funded development in other countries have been cited by its supporters.

Council officials are now drawing up a wish list of social projects they would like to see funded, specifically looking towards the rejuvenation of social housing.

Should the council receive the green light to issue such a bond, investors would essentially fund the various projects in return for interest repayments and an eventual return of their entire capital investment.

It is understood that debts incurred through the bond would be met by the rent and sale of local authority properties.

However, the project has already run into difficulties.

Although initially told it had the authority to proceed, the council discovered that due to a recent amendment in the Local Government Act, any state agency wishing to issue a bond must now seek the permission of the Minister for Finance.

"The bond would then be part of the national debt so I doubt they will allow us to do that," said Labour Cllr Killian Forde, who masterminded the move.

"Each local authority had the ability to raise a bond and we are working off the assumption that we could still do that.

"But we still want to do this."

Sunday Tribune

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