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Plan for sale of Bord Gáis Energy published by Government

It’s expected around a billion euro will be raised by the sale, with around half of the funds raised going to pay down bailout debt.
Jul 29th 2013, 4:38 PM 6,680 74

Updated 4.36pm

THE COALITION’S PLAN to sell off the energy business of Bord Gáis Energy has been published this afternoon. The sell-off is part of the Government’s agreement with the EU/IMF troika to raise some €3 billion from the privatisation of State-owned companies.

It’s hoped around a billion euro will be raised by the move. The full plan is outlined in the Gas Regulation Bill 2013, which Energy Minister Pat Rabbitte says he hopes to introduce to the Oireachtas in the autumn.

The Bill also provides for the restructuring of Bord Gáis Eireann, which will include the establishment of a gas networks subsidiary which will remain in state ownership.

According to the Department of Energy, the Government is “committed to retaining the BGÉ gas networks along with the two gas interconnectors” in State ownership as “national strategic infrastructure, critical for the delivery of secure, sustainable and competitive energy supplies”.

The sale process was formally launched in May, and it’s expected the deal will be concluded by the end of this year. Parties interested in bidding for the company – which has around 775,00 customers  – have been invited to contact its financial advisor RBC Capital Markets.

British energy firm Centrica, France’s GDF Suez and German energy company E-on are amongst those who have been mentioned as possible bidders.

Half of the proceeds will go towards job creation measures, with the other half to be used to repay the Troika bailout – although the Department’s statement announcing the sale adds the following proviso:

…while destined eventually to pay-down debt, (the money) will, in the first instance, be constituted as a fund to underpin additional lending into Ireland, for example by the EIB, in support of further investment in job-creating initiatives.

In addition to Bord Gáis Energy, parts of ESB (Electric Ireland) could also be sold-off as part of the Government’s plan to raise the €3 billion.

Last month, Agriculture Minister Simon Coveney announced that plans to sell the rights for the harvesting of trees in public forests had been formally abandoned.

“Disappointing”

Deputy Michael Colreavy, Sinn Féin spokesperson for communications, energy and natural resources, has condemned the government’s plan, describing it as a “very disappointing move”.

It is worrying to see the privatisation of a state energy company at a time when Ireland is attempting to become more self-sufficient in energy production, especially in the area of renewable energy. The entire gas network could be at risk if the current trend of privatisation continues. This would be sure to hamper growth.

He said that Ireland “requires investment in the energy market, rather than the government offloading it to the private sector”. Colreavy encouraged Minister Rabbitte to “listen to the voice of his own party members and stop the sell-off of Bord Gáis Energy”.

- Additional reporting Aoife Barry

First published 3.50pm

Read: Cabinet abandons plans to sell off felling rights for forests >

Read: For sale: State asset sell-off begins as Bord Gáis Energy invites bids

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