During 2015 Ireland’s public debt dynamics continued to improve, reflecting a combination of strong economic growth and further improvements in the public finances. Ireland’s General Government Debt dropped to below 94% of GDP at end-2015 and is projected to fall to below 90% of GDP by end-2016. One of the themes of the year was a tightening in Ireland’s spreads to core European markets as Ireland’s recovery and robust growth were reflected in Irish bond prices.

Against this backdrop the NTMA took the opportunity to lock in lower interest rates and longer maturities, issuing €13bn of bonds at a weighted average yield of 1.51% and a weighted average maturity of just under 18 years. This compares with a weighted average yield of 2.84% and a weighted average maturity of just under 12 years on the €11.75bn 2014 bond issuance. In February 2015 a significant milestone was reached as strong investor demand enabled us to issue Ireland’s first ever 30 year benchmark bond in an amount of €4bn. In March we completed the early repayment of just over €18bn of Ireland’s IMF loan facility using cheaper market funding and generating interest savings of over €1.5bn over the original lifetime of the IMF loans.

These lower rates have had a positive impact on the debt service burden with the interest on the National Debt falling to just below €7bn in 2015, from almost €7.5bn the previous year.

While our debt dynamics are currently favourable, we do face challenges. The supportive environment provided by the ECB’s quantitative easing programme should not be underestimated. Our debt, at €201bn, remains very high in absolute terms. In addition, we have over €47bn of maturing debt to refinance in the markets between 2018 and 2020. For as long as our debt remains at elevated levels, we are extremely vulnerable to adverse economic developments whether domestically, at European level or globally.

The ISIF’s first full year of operations has been a productive one as it has made commitments of €759m to investment opportunities that meet its dual mandate of investing in Ireland on a commercial basis in a manner designed to support economic activity and employment. Including previous NPRF investments, the ISIF’s commitments in Ireland totalled €2.2bn at end-2015.

The major differentiators of the ISIF compared with other forms of available funding are its ability to provide long-term “patient capital” and being able to invest as required across the capital structure. It is also an attractive local partner for third-party investors. Indeed, the ISIF’s investment model of seeking co-investment from private sector capital has resulted in a total of €5.4bn being committed to Ireland at end-2015 – a multiple of 2.5 times the ISIF commitment.

The ISIF undertook an intensive market awareness and engagement programme in 2015 that has laid the necessary groundwork for an investment programme that will span several years. Arising from this it now has a strong and active pipeline of potential investments designed to deliver both a commercial return and economic impact.

The delivery of PPP projects, including those within the Infrastructure Stimulus Programme 2012, was the main focus of NDFA activity in 2015. The NDFA is responsible for delivering education, health, justice and housing PPP projects with an estimated total capital value of €1bn. Schools Bundle 4 providing 3,000 pupil places is close to completion while construction on the Courts PPP has commenced with all seven projects involved scheduled to be fully operational by December next year. The NDFA also continues to work closely with the EIB to maximise the availability of cost effective funding for Irish infrastructure – both through provision of funding and credit enhancement for PPPs and direct Exchequer loans, most recently through the provision of €200m for flood protection projects in December 2015.

NewERA continues to develop its capabilities as a dedicated centre of corporate finance expertise to Government and the range of issues referred to it, including in relation to bodies outside its core remit, continues to grow. During 2015 NewERA provided commercial and financial advice to Government across a broad range of sectors including energy, transport, biomass and telecommunications. These issues included the reorganisation of Ervia with the operational establishment of Gas Networks Ireland, the Bord na Móna and Coillte joint venture, the IAG offer for Aer Lingus and ownership and financing options for the National Broadband Plan.

NewERA also continues to work with the commercial State bodies within its remit on the enhancement of the Shareholder Expectations Framework setting out the Government’s strategic priorities, policy objectives, financial performance, and reporting requirements for each body. Work in 2015 has focused on the development of formal financial targets and dividend policies.

The work of the State Claims Agency continues to expand. From April 2014 to June 2015 the number of State authorities within its remit more than doubled from 56 to 129. The SCA was managing 8,275 active claims with an estimated outstanding liability of €1.79bn at end-2015. Maternity services comprised €0.9bn of this estimated liability and are a risk management priority. In 2015 the SCA published a five year review of clinical incidents and claims in maternity and gynaecology services and also carried out a series of detailed site visits in order to identify national and site specific risks.

In 2015 the SCA commenced the rollout of the National Incident Management System (NIMS) across the healthcare sector and larger State authorities. Ireland is the first country worldwide to have implemented a single ICT system to support the management of risk across its public service, including the healthcare sector. NIMS was selected by Marsh Clearsight, a US based global leader in risk management solutions, as the winner of its 2015 Excellence in Innovation award. NIMS will enable risk management and mitigation responses that will both ensure the safety of service users, patients and State employees and ultimately reduce the cost of claims against the State in the future.

In my comments in last year’s Annual Report I said the NTMA’s focus was switching from crisis management to economic growth and recovery. I believe we have made a very strong start in this regard and I look forward to continuing our progress through 2016. The Chairperson referred in his remarks to the work we have done in developing the NTMA corporate strategy. At the centre of this strategy is recognition of the critical importance of our people and the need to offer a working environment that allows NTMA employees to reach their full potential. As Chief Executive, I am committed to developing an open and transparent corporate culture based on self-leadership, collaboration and learning. I want to take this opportunity to thank my colleagues in the NTMA for the support they have offered me during what has been a very interesting first year as Chief Executive. On behalf of the employees of the NTMA, I would also like to thank the Chairperson and the Board for their support and commitment in helping us achieve our objectives.

Conor O'Kelly

Chief Executive