To ask the Minister for the Economy to detail the rationale and background for Invest NI Expected Credit Loss January 2021 monitoring bid of £12.7 million.

The bid of £12.7m ECL includes £10m relating to one large project funded under the Sustainable Utilisation of Poultry Litter (SUPL) Scheme. The balance of £2.7m relates to several adjustments made in relation to a number of smaller projects. Expected Credit Loss (ECL) is an accounting adjustment required under International Financial Reporting Standard (IFRS) 9 where organisations must make provision for “Expected Credit Losses” based on estimated risk factors. Some of these ECLs therefore may not materialise.

The details of the large SUPL project for which £10m has been bid, are as follows. Invest NI, alongside a private investor, provided funding towards the build and operation of an Anaerobic Digestion (AD) plant.

The aim of the project was to help resolve a significant local environmental and economic issue, and to help Northern Ireland comply with EU nitrates targets to positively impact the poultry sector and the wider Northern Ireland economy. Invest NI’s support was by way of a £9.3m commercial loan.

Initial indications show that the project might not reach an outcome that fully covers the investment in the project. Therefore, Invest NI has included a provision in their accounts to cover the capital and interest accrued, should they not be able to achieve a return on the investment. This provision is in line with current accounting standards.