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28/07/2014
ESB No Longer Selling Power Stations
The Electricity Supply Board (ESB) has said it is no longer selling two peat-fired power stations in the midlands.
In October 2012, the Irish Government requested ESB develop plans for the sale of some non-strategic generation capacity, with the objective of delivering special dividends to the Government of €400m by the end of 2014.
The process commenced in February 2013, with ESB confirming it was to sell its 50% shareholdings in two international tolling plants, Marchwood Power Limited (UK) and Bizkaia Energia SL (Spain). The sales of these assets have since been completed, with special dividends totalling €197m from the proceeds paid to the Government earlier this year.
A further two plants, West Offaly Power in Shannonbridge, Co Offaly, and Lough Ree Power in Lanesboro, Co Longford, were to be sold off to make up the remainder of the €400m, but ESH has said that following "detailed analysis" these sales will no longer go ahead.
The remaining funds will now be made up by borrowing, it is understood.
In a statement, the firm said: "It will be financially more beneficial to both ESB and the Government for ESB to retain ownership of the peat plants and fund the payment of the remaining amount of the special dividend target by drawing down additional debt from ESB's bank facilities.
"It is now ESB's intention that the peat plants and their associated cashflows will be retained, and will be available to the company to support the additional funding requirements arising from payment of the special dividend.
"This course of action means that rather than selling the physical assets and getting upfront proceeds to enable payment of the special dividend, the cashflows from the assets will be utilised in a different manner to yield an overall better financial result, but with the substance of the approach being the same as if the assets had been sold."
The decision not to sell the plants was formally approved at an ESB board meeting on Monday (28 July).
(JP/CD)
In October 2012, the Irish Government requested ESB develop plans for the sale of some non-strategic generation capacity, with the objective of delivering special dividends to the Government of €400m by the end of 2014.
The process commenced in February 2013, with ESB confirming it was to sell its 50% shareholdings in two international tolling plants, Marchwood Power Limited (UK) and Bizkaia Energia SL (Spain). The sales of these assets have since been completed, with special dividends totalling €197m from the proceeds paid to the Government earlier this year.
A further two plants, West Offaly Power in Shannonbridge, Co Offaly, and Lough Ree Power in Lanesboro, Co Longford, were to be sold off to make up the remainder of the €400m, but ESH has said that following "detailed analysis" these sales will no longer go ahead.
The remaining funds will now be made up by borrowing, it is understood.
In a statement, the firm said: "It will be financially more beneficial to both ESB and the Government for ESB to retain ownership of the peat plants and fund the payment of the remaining amount of the special dividend target by drawing down additional debt from ESB's bank facilities.
"It is now ESB's intention that the peat plants and their associated cashflows will be retained, and will be available to the company to support the additional funding requirements arising from payment of the special dividend.
"This course of action means that rather than selling the physical assets and getting upfront proceeds to enable payment of the special dividend, the cashflows from the assets will be utilised in a different manner to yield an overall better financial result, but with the substance of the approach being the same as if the assets had been sold."
The decision not to sell the plants was formally approved at an ESB board meeting on Monday (28 July).
(JP/CD)
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