MINISTER FOR Energy Eamon Ryan is seeking to boost State company Bord Gáis Éireann's (BGÉ) borrowing limit to €3 billion to fund its expansion plans.
But the increase will not mean that it can go ahead with a proposed €2 billion bid for electricity plants owned by independent power player Viridian. BGÉ had been hoping to buy these until the Government halted it last month.
The Minister published a Bill yesterday that will amend existing legislation to increase BGÉ's statutory borrowing limit to €3 billion from €1.7 billion.
The natural gas distributor and supplier is expected to reach its current borrowing limit early next year, and needs further cash to fund a five-year capital spending programme that will ultimately run to €2 billion, according to its own estimates.
BGÉ is building a €400 million power plant in Cork, and intends expanding its business to become a dual electricity and gas supplier to both consumers and businesses.
It also intends investing heavily in renewable energy projects. These developments will see it competing with other players, such as the ESB and Scottish Southern, which recently announced its own plans to enter both the domestic and dual fuel markets.
Mr Ryan pointed out that BGÉ's strategy is in line with the three pillars of Government energy policy, security of supply, competitiveness and environmental sustainability.
"The energy policy framework also commits to ensuring a sustainable future for the semi-State energy enterprises," he said.
Mr Ryan and Minister for Finance Brian Lenihan will have to approve all capital spending and borrowing proposed by BGÉ's board.
This is the practice with all State-owned companies.
The new Bill runs to two sections, and as BGÉ will reach its borrowing limit next year, the Minister is hoping that the legislation can make it through all stages in the Oireachtas before the current session ends on December 18th.
BGÉ was a front-runner to buy Viridian's electricity generating businesses in the Republic, which include two power plants in north Co Dublin and a number of wind farms, valued at around €2 billion.
However, it is understood that Mr Ryan has not approved this deal and is not likely to.
BGÉ's partner in the bid, International Power, pulled out of the process a number of weeks ago.
Bord Gáis itself has never commented on the bid process or International Power's role in it.
Viridian's owner, Bahrain-based venture capital fund, Arcapita, paid €2 billion for it in 2006 and is said to be looking for at least a similar price from any potential buyer.
BGÉ's borrowing limit was increased in 2002 to €1.7 billion. Since then it has built a second gas pipeline to Britain, extended its network to Galway, Limerick and the west of Ireland and completed a link to Bellenaboy, Co Mayo, which will ultimately feed gas from the Corrib field into the Irish network.
Last year it paid the State a dividend of €8.36 million.
