Funding for the 2013-2015 Investment Programme, submitted this spring with a reservation on the availability of funding, has now been secured.
The Minister of Finance and Economic Affairs and the deputy leaders of the coalition parties recently presented a slate of projects totalling some ISK 6 billion, which will receive additional budget allocations to create jobs and stimulate investment in expanding industrial sectors.
These new projects are in addition to funding for improvements to transport infrastructure, innovation and research funds, and regional development initiatives in the Investment Programme already included in the budget currently before parliament and financed with revenues from fishing fees. A total of over ISK 10 billion, therefore, will be devoted to investment projects in 2013 as laid out in the government's Investment Programme for Iceland.
The objective is to boost investment and job creation, which in turn will positively impact growth and the Treasury's revenue base.
Funding for the Investment Programme will come from two sources. Firstly, there is funding for transport infrastructure projects and R&D generated by fishing fees, which was added to the existing transport programme approved last June. Funds for research were increased in the budget presented this autumn. Secondly, projects involving support for growth sectors and building construction will be funded with dividends and sale of assets.
Two main deviations have been made to the programme since it was presented last spring. In the first place, no conclusion has yet been reached on acceleration of maintenance work directed by State Real Estate (Icel. Fasteignir ríkisins). Secondly, funding by the Housing Financing Fund (HFF) for rental housing is not expected by itself to require an equity contribution at this stage. HFF's situation and need for more equity is the object of a special examination and will be considered in the context of expanding the supply of rental housing.
Contributions to projects included in the 2013 Investment Programme (mISK)
|Projects funded by fishing fees and rental income as provided for in the 2013 budget||4,200|
|Transportation infrastructure, increase||2,500|
|Research and Technology Development Fund, increase||1,300|
|*Regional Development Initiatives||400|
|New projects financed with dividends as of the 2nd budget reading||6,130|
|Icelandic studies building||800|
|Natural history museum/exhibition||500|
|Knowledge centre at Kirkjubæjarklaustur||290|
|Protected buildings and structures||200|
|The green economy||1,030|
|Green Investment Fund, new||500|
|Green economy and greening of business, new||280|
|Green steps and ecofriendly purchasing, new||150|
|Green investments, new||50|
|Energy conversion of vessels, new||50|
|Icelandic Film Fund, increase||470|
|Project fund for creative endeavour, new||250|
|Internetland Iceland, increase||200|
|Development of tourist destinations, increase||500|
|Infrastructure of protected areas, new||250|
* The Investment Programme anticipated that contributions to Regional Development Initiatives would be funded by rental income from harvest rights through the quota market (Icel. Kvótaþing), however the Bill amending the fisheries management system has not been adopted by the Althing. Nonetheless, one of the government's emphases in the budget is ISK 0.4 billion to be devoted to Regional Development Initiatives.
An account has already been provided of that part of the Investment Programme which is funded by fishing fees.
According to the Budget Bill, ISK 4.2 billion of these fees will be used for transport infrastructure, research and innovation and Regional Development Initiatives.
The 2013-2015 Investment Programme is part of a new advance, following the economic collapse, which is aimed at reinforcing the economic recovery and growth. The Programme is based upon the assumption that, given the current economic situation, it is advisable to devote a considerable portion of the funding which has been tied up in banks, together with part of the resource fees, towards organised and focused investment in infrastructure to the public benefit. This will strengthen the foundation for growth and expand the Treasury's revenue base in the long term.
Preparation of the Investment Programme and the prioritisation of projects it reflects was grounded on the government's previous strategic planning for Treasury finances and economic affairs and Ísland 2020.
3-year Investment Programme
|Funded by dividends and sale of assets||18,850||6,130||6,710||6,010|
|Total support for growth sectors||8,540||2,700||3,120||2,720|
|Development of tourist destinations||1,500||500||500||500|
|Infrastructure of protected areas||750||250||250||250|
|Icelandic Film Fund||1,410||470||470||470|
|Project fund for creative endeavour||750||250||250||250|
|The green economy||3,530||1,030||1,450||1,050|
|Green investment fund||1,000||500||500|
|Greening of business||1,280||280||500||500|
|Green steps and ecofriendly purchasing||600||150||200||250|
|Energy conversion of vessels||500||50||200||250|
|School of Education building||1,300||1,300|
|Icelandic studies building||2,400||800||800||800|
|Natural history museum||500||500||0||0|
|Protected buildings and structures||600||200||200||200|
|Knowledge centre at Kirkjubæjarklaustur||870||290||290||290|
3-year Investment Programme funded by fishing fees
3-year Investment Programme funded by fishing fees
|Research and innovation||5,300||1,300||2,000||2,000|
|Regional Development Initiatives||2,800||400||1,200||1,200|