ESB's international arm and one of the UK's largest utilities, Scottish and Southern, have signed a €563 million deal to develop a new 840 megawatt power plant near Southampton, England.
Funding for the deal between ESB International (ESBI) and Scottish and Southern has been provided by five international banks, including AIB.
Overseas expansion is a core strategy of ESB chief executive Padraig McManus. The company meanwhile has said its market share in Ireland is set to decline.
A financing agreement between the two companies was signed yesterday. The capital cost of the project will be funded on the basis of 80 per cent debt and 20 per cent equity. The equity - totalling just over € 112 million - will be provided in equal part by ESBI and Scottish & Southern.
The five banks providing the debt finance are: AIB, Barclays Bank, Bank of Tokyo, Fortis Bank and West LB. ESBI executive director Michael McNicholas said the decision of the banks to invest showed ESB's standing as a major company.
He added: "We are very pleased to be partnering with Scottish and Southern Energy on this significant energy development."
Scottish and Southern will supply gas to fuel the plant and will buy its electricity for 15 years. There is an option to extend this contract for a further five years.
The plant, known as Marchwood, already has planning permission. It is being built on the site of a former power station in the Marchwood Industrial Park and has access to the existing on-site electricity infrastructure.
Construction of the combined cycle gas turbine plant will start in January and should be completed within 30 months. Commercial operation of the facility is scheduled for summer 2009. A long-term agreement for the plant's maintenance has been concluded with Siemens.
ESB Networks has completed more than 100,000 new electricity connections for 2006, the first time in the company's history new connections have topped the 100,000 mark, a statement said yesterday.
Over the past five years, ESB has connected more than 350,000 new premises. This reflects an overall increase in demand of about three times the EU average.
