€92m lifeline for North's AES plant

FRENCH BANK BNP Paribas is raising a €92.3 million loan for multinational AES's power plant in Co Antrim, to pay for technology that will help prolong the facility's life.

US-based utility AES owns and operates a 540 megawatt coal- and oil-fired electricity generating plant at Kilroot, close to Carrickfergus on Belfast Lough.

It recently hired the French bank to raise a syndicated loan of $130 million (€92.3 million) to pay for the installation of new technology that will cut emissions such as sulphur from the plant.

The technology will help prolong the plant's operating lifespan and cut any potential bills for pollution. The facility has been running since the early 1980s.

The loan will mature in 2011 and will pay a margin of 2 per cent over the wholesale interbank libor rate, which is generous by industry standards.

According to energy industry news service, Sparkspread, BNP Paribas saw off competitors such as Crédit Agricole's investment banking arm, Calyon and ABN Amro to win the financing mandate.

The service adds that it is seeking two other partners to join it in the deal. The bank is putting up about one-third of the financing and hopes to recruit its partners and complete the round towards the end of next month.

AES Kilroot has a 12-year deal with local supplier Northern Ireland Electricity, a regulated utility owned by Viridian, which has two power plants in Dublin. However, it has the option of terminating this contract at the end of 2010. This means it would sell its power on the all-Ireland market.

The generating plant supplies about one-third of all electricity used in Northern Ireland. It has been planning to fit the new technology for some time.

Some of the cash raised will be used to refinance money already spent on the project by shareholders.

The local branch of environmental group Friends of the Earth recently called for the plant to be closed and replaced with "cleaner, more efficient" technology.

AES is a global company with energy and power operations on four continents. Last year, it had sales of $13.6 billion and profits before tax and contributions from minority interests of $1.6 billion.