THE planned leasing of part of the ESB's generating station at Moneypoint, on the Shannon estuary, to a consortium of US banks, would not involve the sale of any assets, a spokesman for the ESB has said.
"There is no question of the ESB selling any part" of the group, he said.
Under the proposals, which have to be sanctioned by cabinet the ESB would receive a lump sum of $400 million (£250 million) from the consortium and in return, the ESB would pay an annual sum to the banks for 20 years.
The spokesman would not disclose the size of the annual payment but conceded that there would be a net benefit to the ESB of around £1 million per annum, putting the total net present value of the deal at £20 million.
Negotiations have been taking place for about a year and, under the arrangements, the company would first lease the assets and the consortium would then lease those same assets back to the ESB. In this ownership would continue in the hands of the ESB.
This procedure also would allow the consortium headed by First Union National Bank, to benefit under the US tax legislation, and this would allow the banks to cut a better deal with the ESB.
The spokesman stressed the deal "complies fully with tax legislation in Ireland and the US". He also noted that such deals were common in the US, particularly with public utility companies.
Moneypoint was completed 10 years ago at a cost of £700 million. It is now "worth £850 million", the spokesman said. The ESB has very heavy capital requirements, he added, and the deal would reduce its borrowing requirements.
As part of its on going preparations for competition in 1999, the ESB is negotiating with the Department of Energy on the introduction of a special levy on all electricity users after 1999.
