The ESB's international division wants to invest more than €1 billion (£787 million) in Spain and Poland.
If successful, the State-owned company will build a gas-fired electricity generating plant in Spain's Basque region and acquire eight power distribution companies in Poland. The Spanish plant would be almost as large as the company's biggest power station at Moneypoint, Co Clare. The Polish business it wants to acquire has more customers than its existing operation in the Republic.
Such initiatives, ESB International's largest to date, are being taken at a time when the firm faces competition in the domestic market for the first time. It also wants to cut its workforce by a quarter, to 6,000 from 8,000.
The ESB's managing director, Mr Ken O'Hara, has said it aims to retain 60 per cent of the power market when it is fully liberalised after 2005.
Significant sums would be invested in the projects, although both are subject to regulatory decisions locally. The Spanish plant would cost €450 million to build and the company is also believed to be planning to spend up to €600 million initially to enter the Polish market.
The ESB wants to build an 800 megawatt (MW) power station near the town of Amorbeita, 15km from Bilboa.
The plan was first suggested in 1997. An environmental impact study is complete and administrative authorisation has been sought from Spain's energy ministry. Senior ESB figures believe this could be secured before the end of the year, it is understood.
It is thought the funding - 85 per cent debt and 15 per cent equity - could be in place by next autumn and construction would take 27 months to complete.
Crucially, the ESB anticipates selling a minority stake to a joint venture or strategic partner once the plant goes live in early 2004. The most likely potential partners are oil or gas firms. The company is already linked to Statoil, with which it is building a similar plant at Ringsend, central Dublin, which has capacity to produce 400 MW. The Spanish plant would be twice the size of this operation. Moneypoint can produce 900 MW.
The ESB's wholly-owned Spanish subsidiary, Biskaia Energia, is also said to be interested in acquiring stakes in two quoted electricity companies in Spain which must sell part of their businesses to reduce their market dominance.
Endesa and Iberdrola control about 80 per cent and are required to reduce this to 50 per cent. How much the ESB is willing to spend to acquire stakes in either or both these businesses is unclear, although a senior figure said these would be significant.
In Poland, the government is selling off the domestic power distribution business. The Swedish state-owned firm Vattenfald has acquired businesses supplying 1.5 million customers after a competition.
In the next phase of the process, the government is seeking offers for a cluster of eight companies, known as G8, in the industrial city of Gdansk and further south.
These have two million customers and a turnover of €1 billion. The ESB has about 1.5 million customers in the Republic. It is likely to face competition from major international power companies such as Electricite de France (EDF) and Finland's Fortrum.
