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British utility Centrica wins bidding for Ireland's Bord Gais Energy

Dec. 16, 2013 at 12:01 AM   |   Comments

DUBLIN, Ireland, Dec. 16 (UPI) -- A $1.54 billion offer from British utility Centrica is the winner in bidding for the energy business of Ireland's Bord Gais, the Dublin government announced.

Irish Minister for Communications, Energy and Natural Resources Pat Rabbitte said Friday a bid submitted by Centrica -- part of a consortium along with Brookfield Renewable Power Inc. and iCON Infrastructure -- had been chosen to take the state-owned Bord Gais Energy private.

Bord Gais Energy is the trading, assets and retail division of Bord Gais Eireann, whose distribution and transmission systems will remain in public hands as a way to protect Ireland's energy supply security.

The breakup of Bord Gais is in keeping with Dublin's agreement with the European Union-International Monetary Fund-European Central Bank "troika" managing the $90 billion emergency bailout of country's economy to sell off state-owned assets.

Also to be privatized over the next two years are "non-strategic" power generation capacity held by the state-owned ESB electric utility and the government's remaining 25 percent interest in Aer Lingus, but only if its share price rises.

The sale agreement is expected to be formally completed in the first half of next year once regulatory and merger approvals are received.

Also included in the sale are a power station and several wind farms.

"We are pleased with this development, which has led to materially improved value being offered and the selection of a preferred bidder," Rabbitte said in a statement issued along with with Minister for Public Expenditure and Reform Brendan Howlin.

"Each consortium member brings with it deep industry experience and significant financial strength to support the continued investment in the business. The entry into the all-island energy market of international strategic investors is a strong vote of confidence in the market, the Irish economy and in the Bord Gais Energy business and its employees."

"The sale process has now reached an important milestone with the appointment of a preferred bidder," added Rose Hynes, chairwoman of Bord Gais Eireann. "The company will continue to work with staff, unions and relevant government departments to complete the process by early 2014."

Opposition party critics, however, assailed the moves as a "fire sale" of precious public property meant to benefit the political standing of the ruling Fine Gael-Labor Party coalition government.

They suggested the timing of the announcement as Ireland was celebrating its emergence from the bailout package after three years of deep austerity measures was meant to maximize political benefits.

"The Labor Party is clearly hoping that with the upcoming weekend of self praise marking the scheduled end of the program of assistance, this U-turn and betrayal of key Labor Party election promises will escape proper scrutiny, " Fianna Fail party spokesman Michael Moynihan said in a statement.

Sinn Fein energy spokesperson Michael Colreavy said the inclusion of wind power assets in the sale was "shortsighted" given the potential demand for clean energy.

"Bord Gais Energy is already a significant stakeholder in wind energy and is poised to further expand its interests," he said. "That will be worth far more than the sale price agreed as the proportion of electricity generated by wind increases."

Topics: Sinn Fein
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