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Parts of Bord Gais and ESB to be sold off to raise €3bn

The government is considering selling parts of Coillte and Aer Lingus when conditions improve – and has insisted that there will not be a fire sale.
Feb 22nd 2012, 11:02 AM 3,561 49

PARTS OF BORD Gais and the ESB are to be sold off by the government, Minister for Public Expenditure Brendan Howlin has announced.

The government will also considering selling off some assets of Coillte and the state’s 25 per cent shareholding in Aer Lingus when market conditions improve.

However the government has decided not to proceed with the  sale of a minority stake in ESB.

The sale of up to €3 billion worth of state assets is required under the terms of the bailout deal struck with the troika.  However in a significant change to the EU/IMF deal, one third of the money raised from the sale of the state assets can be reinvested in the Irish economy and will not have to go towards reducing Ireland’s debt.

“When we came into government, the position was that no money from the disposal of assets could be spent on anything except reducing our debts,” said Minister Brendan Howlin.

“I am pleased that following intense engagement the troika has agreed that one third of the proceeds can be used for reinvestment in to our economy. This is a substantial change to the Troika’s previous position and will help promote recovery in the economy”.

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Today’s decision will see Bord Gais’s energy business sold off, but not the company’s gas transmission or distribution systems or the two gas interconnectors. Some of ESB’s non-strategic power generation capacity will also be sold off.

Former Minister for Finance Brian Lenihan created a review group in July 2010 led by UCD economist Colm McCarthy to advise on the future of commercial semi-states. The report by the group recommended the part-privatisation of ESB and CIE and the full privatisation of Dublin Bus, and suggested the State could make €5 billion in selling off assets.

Explainer: Which State assets are being considered for sale? >

Previously: Rabbitte, McGrath in war of words over state assets >

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