In what has been a low interest rate environment supported by the ECB’s quantitative easing programme, the NTMA has lengthened the maturity of Ireland’s debt and locked in lower borrowing costs. During 2016, we issued €8.25bn of benchmark bonds at a weighted average yield of 0.82% and a weighted average maturity of 10 years. One particularly noteworthy transaction was our first ever issue of a 100-year note, which saw us borrow €100m at a yield of 2.35%. It is a sign of how far Ireland has travelled that we went from a position of being unable to access the international capital markets at all in 2011 to one in 2016 where we could borrow for 100 years.

Notwithstanding the progress that has been made over the past number of years in putting the public finances on a sustainable footing, Ireland’s debt burden, at €200bn, remains high. While our debt as a percentage of GDP has fallen sharply from 120% at peak to 75% at end-2016, it is important to remember that the absolute debt, in monetary terms, has barely moved and is over four times higher than it was in 2007.

2016 saw the ISIF commit over €500m to strategic investments across Ireland. The key economic impact principle covering the ISIF’s investments is “additionality” – the ISIF is seeking to invest, in conjunction with private sector partners, where its capital can make a difference and help to generate economic activity that would not otherwise occur. The ISIF’s key differentiating features of flexibility across the capital structure and its long-term investment horizon means that it can fill investment gaps and respond to strategic imperatives in a way that other market participants cannot. Its ability to attract private sector capital has meant that co-investment has increased the total committed to Ireland arising from ISIF activity to end-2016 from €2.6bn to €7.5bn – a multiple of 2.8 times the ISIF commitment. This is a higher multiple than we had originally envisaged.

At a time when governments across Europe are constrained by budgetary rules in the amount they can do to support their economies and to address strategic and infrastructural issues, the ISIF, with its unique double bottom line mandate of “commercial return” and “economic impact” represent an innovative approach. Unlike conventional capital spending, as an investment fund, the ISIF’s resources are recycled rather than depleted and become available to the State again as investments are realised.

The NDFA met a number of significant milestones in the financing and construction of PPPs during 2016. The Primary Care Centres PPP, Ireland’s first healthcare PPP, involving the development of 14 new primary care centres across the country reached financial close and construction is underway at all locations. Schools PPP Bundle 4 providing 2,950 student places was completed as scheduled, with all schools now fully operational, while Schools PPP Bundle 5 providing 4,870 student places also reached financial close and construction is underway.

I referred to the low interest rate environment in my comments on funding and debt management above and this factor has also enabled the funding of PPPs at very attractive rates. There has been a substantial improvement in the funding costs available to Irish PPP projects with all-in senior debt rates falling from 6.5% in early 2014 to just over 2% in 2016. While each case must be rigorously evaluated on its own merits, in an environment where budgetary restrictions exist and interest rates are at historically low levels, PPPs offer an alternative means of financing some of our significant infrastructural requirements.

During 2016, NewERA built on work previously carried out on setting appropriate financial targets for commercial State bodies within its remit including capital structure, profitability and dividend targets. With invested capital of €15.5bn and over 12,000 employees these companies play a very significant role in the economy. A key focus for NewERA has been advising on appropriate dividend targets for commercial State bodies such that there is an appropriate balance between the payment of dividends and re-investment in the business. NewERA’s annual review of the commercial State bodies within its core remit, setting out the common key strategic themes or challenges from a shareholder perspective, was published for the first time in December 2016.

The risk exposure to the State from the costs of claims can be under-appreciated. At end-2016 the State Claims Agency was managing almost 9,000 active claims with an estimated outstanding liability of €2.2bn. This figure represents a €400m increase on the previous year principally due to a reduction in the real rate of return used by the courts in calculating damages and pecuniary losses.

As well as its work on claims management, risk management and analysis to identify the causes and reduce the incidence of claims is a priority for the SCA. With regard to clinical claims its efforts are focused particularly on maternity services which constitute 65% of the total estimated outstanding clinical claims liability. For example, during 2016 it performed an analysis of closed cerebral palsy claims. The results of this analysis will be made available, on a “lessons learnt” basis, to maternity hospitals and units to seek to prevent a recurrence of similar events.

The success or otherwise of the NTMA in achieving its objectives is wholly dependent on the quality and dedication of our people. It is my aim, and that of the Board, to ensure that the NTMA is recognised as an organisation that can attract, develop and retain talent and expertise of the highest calibre. To this end, we have worked hard in 2016 on the embedding of our corporate culture of self-leadership, collaboration and learning. I would like to thank all our people for the contribution they have made towards the attainment of our goals over the past year. Finally, I would also like to thank the Chairperson and the Board for the support and guidance they have provided to us over what has been a very productive 12 months for the NTMA.