ESB raises €300m through bond issue

STATE-OWNED energy company the ESB has borrowed just over €300 million through the sale of sterling bonds.

The company intends raising €3 billion in debt from financial institutions over the next few years to help fund €22 billion investments that will see it expand into green energy and new technology.

Yesterday it confirmed that it had raised £275 million (€307 million) through a bond issue to a number of European financial institutions. The issue was the first tranche of the €3 billion total.

Finance director Bernard Byrne said yesterday the bonds would mature in 10 years, and carry interest of 6.5 per cent a year, which is in line with what the company expected to pay. The money will be used to fund the ESB’s expansion plan up to 2020, which it said last year would result in the creation of more than 6,000 new jobs in that period.

The plan is focused on developing areas such as renewable power generation, clean electricity and energy efficiency. It is also investing in new technology, such as electric cars.

Along with this, it will continue to invest in its networks and in developing it business outside Ireland. Recently, together with Scottish Southern Energy, with which it competes in the Irish market, it opened a new power plant in Southampton in the south of England. It also has a number of projects in Spain.

Mr Byrne said the ESB’s offer was oversubscribed. It originally sought to raise £250 million, but was offered £450 million. “We decided to increase it a little and leave the rest on the table.”

The fund-raising will also result in the State company getting a rating from international agencies such as Moody’s or Standard Poors for the first time. This means these agencies will publish independent assessments of the company’s ability to pay its debts.