North power plant bought for £99m

US POWER group AES has agreed to buy Ballylumford power station in Co Antrim for £99 million (€120 million).

The deal will make the Virginia-based company the North’s largest power producer, and will give it a 15 per cent share of Ireland’s electricity market. AES already owns the Kilroot power plant near Carrickfergus, also in Co Antrim.

The price is at the lower end of expectations, with the vendor, BG Group, at one point expected to receive as much as £300 million.

BG confirmed the deal in a short statement, saying the transaction was subject to regulatory approval. When it goes through the sale will mark BG’s exit from the North. The company, originally a subsidiary of British Gas, entered the market post-privatisation in 1992.

Ballylumford employs 172 staff and is the largest site for electricity generation in Ireland, through BG’s subsidiary Premier Power. It includes three gas-power stations providing a combined capacity of 1,316 megawatt (MW), with most of its output contracted to Northern Ireland Electricity.

The plant is possibly best-known for effectively bringing the North to a standstill in 1974 when its staff ceased work as part of the Ulster Workers’ Council strike.

Kilroot, which uses oil and coal, employs 140 staff and has an operational capacity of 622MW.

A spokeswoman for AES was unable to comment on the future for jobs at the combined operation but she pointed out that Ballylumford was being purchased as a going concern.

AES chief executive Paul Hanrahan said the company’s strong financial position and its “familiarity” with the North had allowed it to move quickly on the deal.

“The Ballylumford acquisition will contribute accretive near-term earnings, creating value for our shareholders,” he said.

AES operates generation and distribution businesses in more than 30 countries.

Last year it posted revenues of $14.7 billion and profits of more than $658 million. The group was not always so buoyant, having lost almost £2 billion on a single investment – the acquisition of Britain’s Drax – just seven years ago.

The Ballylumford deal is expected to close in the second half of this year, subject to the approval of the Northern Ireland Authority for Utility Regulation and the Northern Ireland Department of Enterprise, Trade and Industry.