Ervia to pay €100m dividend to exchequer

Payment from Irish Water’s holding company follows sale of Bord Gáis Energy

Ervia is the holding company for Gas Networks Ireland and Irish Water.

Ervia is the holding company for Gas Networks Ireland and Irish Water.

 

State-owned utility company Ervia is set to pay a special dividend of €100 million to the Government this year, as the latest instalment in the disbursement of proceeds from the sale of Bord Gáis Energy in 2014.

In a statement to The Irish Times, Ervia said: “The timing of the payment of the dividend and the amounts payable are at the discretion of the shareholder. It is expected that €100 million will be paid later this year as confirmed by the minister [for public expenditure and reform Pascal Donohoe].”

In a recent written answer to a parliamentary question from Fianna Fáil TD Dara Calleary, Mr Donohoe said that some €350 million had been received to date from Ervia from the sale of Bord Gáis Energy.

Eurostat rules mean that the proceeds from any asset disposal that could improve the general government balance is limited. So to take “maximum advantage” of the Bord Gáis Energy sale proceeds, it was decided that Ervia would remit the money over time to the exchequer via special dividends.

Sale proceeds

Mr Donohoe indicated that another €600 million is due from Ervia. In the meantime, the utility company has used the sale proceeds, on a temporary basis, to reduce it debts.

Ervia is the holding company for Gas Networks Ireland and Irish Water, and it provides services to about 1.7 million customers across the country.

Separately, the minister told Mr Calleary that the €400 million from the Bord Gáis Energy sale proceeds that had originally been earmarked to build social housing would now have to be used for other purposes.

He said the Government wasn’t able to come up with a suitable off-balance sheet model that would have complied with Eurostat rules on our national debt.

“In response to this outcome, it was decided to commit €10 million per annum from the Bord Gáis Energy proceeds, over a longer 20-year period, which could be used to secure the development of a pilot affordable rental scheme as envisaged in Rebuilding Ireland,” the minister said.

Mr Donohoe said a decision on how to spend the other €200 million of the proceeds originally set aside for social housing was “under consideration”.

Approved housing bodies

The €400 million for social housing was originally announced in Budge 2015, with the then minister for public expenditure and reform, Brendan Howlin of Labour, announcing that it would be made available from 2015 onwards to approved housing bodies.

In his reply to Mr Calleary, Mr Donohoe said €1.5 billion in cash had been paid to the State from the sale of various assets. This included the sale of the National Lottery licence, and €335 million from off-loading of our stake in Aer Lingus to IAG.

The sum will rise to €2.1 billion by the time Ervia has finished its phased dividend payments to the Government.

Bord Gáis Energy was sold by the State in 2014 for €1.1 billion to a consortium comprising Centrica, the owner of British Gas, and two private equity groups.