The ESB is set to borrow € 1 billion via the bond market. The money will be used in an attempt to double the company's profits ahead of possible privatisation.

.ESB chief executive Mr Padraig McManus said this year the company would attempt to get a credit rating before raising the funds on the bond market.

He said 1 billion would be needed, possibly in two tranches as the company's debt will need to rise to € 3 billion to fund a network renewal programme, upgrading of power stations and continuing overseas expansion.

The company is likely to seek a credit rating from the three main agencies, S&P, Moody's and Fitch and Co.

Mr McManus has told The Irish Times that privatisation of the company is "inevitable", although it needs to become "fit and lean" before that could be considered.

He was speaking as the company announced its results for 2002 with pre-tax profits rising from € 160 million to € 196 million. Turnover was up to €2.2 billion from €2.1 billion in 2001.

The company's after-tax profits fell by €5 million to €159.5 million. This was because in 2001 the company received a €45 million tax rebate after the Revenue Commissioners changed its accounting rules. Finance director Mr Tony Donnelly explained that such a rebate was a once-off and the company's after-tax figure fell as a result.

For the first time in its history the company has paid a €40 million dividend to its shareholder, the Department of Finance. This represents 25 per cent of after-tax profits, although this is set to rise to 33 per cent in future years.

As the Irish electricity market opens up further, ESB will control only 60 per cent of it and consequently the company is increasingly devoting resources to its overseas operations run by ESB International.

The results break down where the company's turnover comes from geographically: Ireland contributed over €2 billion; Europe and the UK chipped in €164 million, while other territories produced turnover of €41.7 million.

Mr McManus, speaking to The Irish Times, gave a strong indication that privatisation of the company was looking increasingly likely.

Asked in an interview whether he personally favoured privatisation, he said: "I think its inevitable. So in that sense it's not a question of whether I support it or don't support it.

"I think it's inevitable there will be an ownership change at some time, the question is getting the timing right. What I am really pushing at now is to try and get the company in the condition we would like to have it in. I think that certainly after one year we have done a lot to try and do that."

Speaking to reporters after presenting yesterday's results, Mr McManus said people in the markets were looking for "steady performers" and utilities fell into that category.

If the company is privatised, it is possible the ESB distribution network - as distinct from the national grid operated by Eirgrid - would be withheld from any sale as many regard it as a national asset. Various valuations have been put on the company over the years, but most put the price tag at about 4 billion, although this figure includes the network.

The company's staff now own 5 per cent of ESB and in 2002 the company allocated 5 per cent of its profits to facilitate this. Mr McManus said this process was now concluded, although he acknowledged that in a privatisation scenario there might be "a different agenda".

Mr McManus said the company had to face an extensive closure programme over the next few years and €319 million has been provided for this.