Lywydd, diolch yn fawr. Mae gan Lywodraeth Cymru brofiad helaeth o fuddsoddi mewn seilwaith yng Nghymru drwy ein cyllideb cyfalaf. Mae buddsoddi’n benodol mewn seilwaith yn un o’r pethau pwysicaf y gall Llywodraeth ei wneud i gefnogi twf cynaliadwy a chreu swyddi. Yn ogystal â gwella cynnyrch economaidd a hybu lefelau uwch o gyflogaeth, mae buddsoddi mewn seilwaith hefyd yn gwella effeithlonrwydd gwasanaethau cyhoeddus. Ers datganoli, rydym ni wedi buddsoddi mewn ysbytai, ysgolion, tai a seilwaith cyhoeddus newydd, a byddwn ni’n parhau i wneud hynny.

Ym mis Hydref, yn y gyllideb ddrafft, roeddwn i’n gallu cyflwyno cynlluniau gwariant cyfalaf am bedair blynedd. Mae gennym gynlluniau uchelgeisiol i adeiladu system metro ar gyfer y de, i greu 20,000 yn fwy o dai fforddiadwy, i uwchraddio ein rhwydwaith ffyrdd ac i gwblhau ein rhaglen i foderneiddio’r ystâd ysgolion. Byddwn ni'n gwneud hyn ar adeg pan fo ein cyllideb cyfalaf wedi cael ei thorri o ganlyniad i fesurau cyni parhaus Llywodraeth y Deyrnas Unedig. Erbyn diwedd y degawd hwn, bydd 21 y cant yn llai o gyllid ar gyfer seilwaith ar gael inni, mewn termau real, o gymharu â 2009. Mae hyn yn golygu bod angen cyllid o ffynonellau eraill arnom ni i gefnogi ein rhaglen gyfalaf.

It was in that context, Llywydd, that the previous Welsh Government set out its commitment to examine innovative ways of funding public infrastructure. Since then, innovative financial instruments have already been used to increase investment in transport, housing and education by £0.5 billion. One of the reasons we have been able to fund this additional investment is because Wales has not been exposed to large-scale PFI schemes. Our exposure to the cost of such schemes is less than 1 per cent of our revenue budget—a relatively small amount when compared with other parts of the United Kingdom.

Llywydd, before focusing on the mutual investment model, I want to put that model in the context of other innovative action, which will enable £1.5 billion-worth of additional investment to be made in the social and economic infrastructure of Wales over the course of the next six years. To begin with, the Government will make full use of our new capital borrowing powers. Originally set at £500 million under the Wales Act 2014, our ability to borrow will rise to £1 billion under the terms of the fiscal framework, which was agreed with the UK Government in December. We will also deliver further innovative finance schemes in partnership with other parts of the public sector in Wales. In the final budget, I was able to allocate £3.6 million-worth of revenue to extend the successful housing finance grant. This new, recurrent allocation will rise to £9 million in 2019, resulting in some £250 million-worth of additional investment in social and affordable housing, producing at least 1,500 homes towards this Government’s ambitious target of building 20,000 affordable homes over the course of this Assembly term. As well as providing revenue to support registered landlords in this way, we are also bringing them together to improve their borrowing power. I can confirm today that a loan application has been made on behalf of registered social landlords to the European Investment Bank. This follows meetings held with the vice-president of the bank, here in Cardiff in early February, to discuss this application. We expect a final decision from the bank in June of this year.

At the same time, we are also finalising arrangements for the coastal risk management programme. Recurrent revenue funding of more than £7 million a year will, by 2020, result in around £150 million-worth of additional investment in flood prevention, protecting Welsh businesses and homes. The new programme will complement the additional £33 million-worth of conventional capital allocated to flood defence activities in the final budget published in December.

Now, Llywydd, while all this effort is making a real difference in all parts of Wales, there remains a set of essential public purposes that need an additional response. Today’s statement therefore sets out how three major capital projects are to be delivered through a new form of public-private partnership, the mutual investment model, crafted here in Wales. Could I also acknowledge the opportunity to discuss these ideas in the finance liaison committee between the Government and Plaid Cymru, and to add to the pool of ideas available to us in Wales in that way?

The three schemes—the completion of the dualling of the A465 from Dowlais Top to Hirwaun, the new Velindre cancer centre, and providing a significant tranche of investment in the next phase of the twenty-first century schools programme—will, together, make up some £1 billion-worth of new investment. The mutual investment model has been carefully designed to promote the public interest and to protect the public pound. We have worked closely with statisticians at Eurostat and the Office for National Statistics, and with experts at the European Investment Bank, for more than a year to secure this model and to make sure that it delivers benefits for Wales. Under its terms, private sector partners will take on risks associated with building, financing and maintaining public infrastructure, but unlike historic PFI deals, our model allows the public sector to share in any profits, excludes the provision of services such as cleaning and catering from the contract, excludes low-level value maintenance work and ensures the transparency that we need about costs and performance.

The mutual investment model includes important obligatory long-term provisions to secure community benefits, to create apprenticeships and training places for Welsh workers and for sustainable development, in which the private sector partner supports delivery of the well-being of future generations Act. It incorporates our commitment to an ethical employment code and allows us to maximise the benefits of our sustainable procurement practices. The model also enables the government to exert influence over the chosen private partner to ensure that the public interest is protected. Where we invest in schemes, this influence will be exercised by a public interest director, and this is an important advance on what has been secured in other public-private partnership models in other parts of the United Kingdom. This ensures robust transparency in terms of access to board-level information, alongside a range of reserved matters to protect public funds and the public interest.

Next month, on 23 March, together with Cabinet colleagues, we will host an event to launch the mutual investment model to potential partners, the next important step forward in the development of this new and necessary programme of capital investment. Llywydd, the adoption of the mutual investment model and our other innovative financial instruments demonstrates how this government continues to act decisively and as a catalyst for change in challenging circumstances. These measures will see an additional investment in public infrastructure of some £1.5 billion, representing a proper balance between ambition and affordability that otherwise would simply not have been undertaken. I commend the model to the Assembly.