On Monday, February 8, the Irish Strategic Investment Fund (ISIF) released details of its commercial investments in COVID-19 pandemic-hit businesses, which includes a three-year, €150 million loan to IAG’s Irish airline, Aer Lingus, and a €40 million loan to the Dublin Airport Authority.
The ISIF was launched in 2014 to invest in supporting economic activity and employment in Ireland. Last May it was mandated to directly invest up to €2 billion in pandemic-hit larger firms through debt, equity and hybrid instruments. In relation to the loan extended to Aer Lingus Conor O’Kelly, the chief executive of the National Treasury Management Agency, which oversees ISIF, told a news conference that: “It is a commercial investment, it’s not state aid,” adding: “Probably the reason that Aer Lingus would want liquidity from us is it’s possible that the banking system is going to find itself already over-exposed to the sector.”
Aer Lingus made it clear in a statement that the debt facility represented an important contribution to its future funding requirements while it is forced to navigate through the unprecedented crisis. Ireland’s Finance Minister, Paschal Donohoe, felt confident the state would get its money back from the investments. “We want to get back out of these investments ultimately in two or three years’ time. This is a temporary phenomenon. We’re backing great companies who were great companies before the pandemic, they just help to get through,” O’Kelly said. (€1.00 = US$1.21 at time of publication.)
