Why private investment is critical to Ireland’s infrastructure strategy

Private capital and alternative delivery models are no longer optional add‑ons to Ireland’s infrastructure strategy, writes Luke Hardcastle

The National Development Plan (NDP) sets out €275 billion of public capital investment by 2035. This is in addition to the substantial planned investment by the State’s commercial semi‑state utilities, representing the largest capital programme in the State’s history.

Even at this scale, the requirement is growing: housing demand; the energy transition; climate adaptation; digital and water infrastructure; and a more uncertain geopolitical and trade environment are each pushing investment needs higher.

This investment is underpinned by reforms to strengthen capital spending through the economic cycle. The Infrastructure, Climate and Nature Fund will be capitalised with €2 billion per year to support capital expenditure during downturns.

Alongside this funding commitment, the Government has set out a system‑wide programme of delivery reform through the Accelerating Infrastructure Report and Action Plan, aimed at removing legal, regulatory and coordination barriers that have historically slowed infrastructure delivery.

While the public funding commitment is welcome, it comes with constraints and risks. In this context, we must not rest on our laurels and continue to ask ourselves: how can we do more?

Part of the answer is to enhance investment levels by leveraging private capital. Private capital should not be viewed as a substitute for public investment. it should be understood as a complementary source of funding to help Ireland deliver more infrastructure, faster and more efficiently.

The role of private capital at the core of delivery

Early and informed decisions on the funding approach for infrastructure programmes have a material influence on how assets are delivered. When well-structured, these decisions can unlock benefits that extend far beyond access to additional capital, supporting stronger delivery outcomes and long‑term value for money for the State:

• Expertise and innovation
  Private investors and operators bring delivery experience from comparable projects internationally, supporting better design and lifecycle asset management.
• Performance outcomes
  Long‑term contractual obligations sharpen focus on availability, quality and whole‑life outcomes.
• Risk allocation
  Construction, cost and performance risks can be transferred to parties best placed to manage them, improving certainty for the State.
• Market development
  A credible long‑term pipeline encourages investment in skills, supply chains and productivity across the construction and infrastructure ecosystem.

Mechanisms to harness private capital

The choice of delivery model should be driven by asset characteristics, risk profile and policy objectives, rather than institutional precedent. In practice, a small number of tested mechanisms recur internationally and can be utilised further in Ireland.

1. Deploying private capital mechanisms
   There are a number of good examples where these mechanisms can be deployed to mobilise private investment and maximise the impact of infrastructure programmes, both within Ireland and internationally
2. Commercial stimulus
   Ireland already uses targeted public funding mechanisms, including the Climate Action Fund, Urban Regeneration and Development Fund, to support infrastructure and climate goals. Expanding this approach through an Irish version of the EU’s Connecting Europe Facility could help unlock private capital and accelerate delivery of strategically important infrastructure.
3. Market revenue supports
   Ireland has successfully used market-based revenue supports, particularly through the Renewable Electricity Support Scheme (RESS), to attract private investment into renewable energy projects. Similar risk-sharing models could now be extended into other infrastructure areas, including offshore wind and energy storage.
4. Regulated models
   Regulated revenue models already support investment across Ireland’s electricity, gas and water networks. However, these models have largely relied on State balance sheets rather than attracting private capital, creating an opportunity to apply international-style regulated asset base models to strategic energy and grid infrastructure.
5. Guarantees and credit-enhancement models
   Guarantee and credit-enhancement mechanisms can help reduce financing risk, unlock debt funding and attract private investment into infrastructure projects. Used selectively, they could support strategic infrastructure such as Port Offshore Renewable Energy terminals.
6. Asset recycling
   The expiry of a number of first-generation public-private partnerships (PPP) and concession contracts creates an opportunity for Ireland to recycle capital from mature infrastructure assets. Applied selectively, this approach could free up funding for new infrastructure investment while maintaining public oversight.
7. Public-private partnership and concession models
   Public-private partnership (PPPs) and concession models have delivered strong outcomes across a range of Irish infrastructure projects, including roads, schools and public buildings. However, their use has been inconsistent, highlighting the need for a more structured and investable long-term project pipeline.

Designing for private capital from the outset

The financing mechanisms set out here show that private capital and alternative delivery models are no longer optional add‑ons to Ireland’s infrastructure strategy. Ultimately, the objective is not to privatise infrastructure delivery, but to achieve better outcomes.

Pragmatic collaboration between public and private actors, aligned around clear objectives, strong governance and transparent risk allocation, offers a credible route to mobilising additional funding capacity and accelerating delivery while protecting the public interest.

Luke Hardcastle is a Partner in EY Ireland’s Government and Infrastructure Advisory Team