EIB to invest €500m in Irish electricity

A €500 million investment package in the Irish electricity sector was announced by the European Investment Bank (EIB) and Minister for Energy Eamon Ryan, in Dublin this morning.

The investment covers €300 million in ‘soft’ loans for the Ireland - Wales electricity interconnector and €200 million in loans to encourage the development of wind farms here.

This is the first time a loan sanctioned under the EU’s economic recovery plan has been used for an energy project, and the first EIB loan for renewable energy in Ireland

Speaking at the announcement of the funding in Dublin Castle, EIB Vice-President Plutarchos Sakellaris said the timing of the Lisbon referendum had nothing to do with the scheme, which he said the EIB had been working on since early 2008.

Mr Sakellaris said the European Investment Bank was also prepared to invest in Dublin Airport, and such loans were an investment in Ireland generally, by the other 26 EU member states. There was, he said, no need “to be suspicious of the loans”.

Up to €300m will go towards the construction of a 256 km cable between Ireland and Wales. The East-West Interconnector is required to underpin the development of renewable energy, enabling the import and export of excess wind power.

Mr Ryan said it would improve security of supply and facilitate competition through connecting the Irish electricity market with the rest of Europe.

The loan of up to €200 million to the ESB is to be used to develop its renewable energy business by installing 248MW of wind power capacity by 2012 in various locations. The total cost of the investment programme is estimated at €475 million.

The loans bring total EIB support for Ireland in 2009 to €850 million, almost double the 2008 total of €450 million.

Dermot Byrne chief executive of Eirgrid said the State was on target to achieve 15 per cent of its electricity from renewable resources by next year. The EIB money would assist in achieving increasing that to 40 per cent by 2020.

Minister Ryan said it would be easy to get caught up in figures and targets. He said the point of the exercise was to offer offices and homes clean, cheap electricity in order to sustain employment.

Secondly it would allow us to develop our wind energy sector, selling excess power through the interconnector; and thirdly it would assist in reducing carbon emissions and help move to clean power.