It has been confirmed that South African bank Investec has been bought out of the Tynagh Energy power station project by Turkish firm Gama Construction.

Mr Brian Keogh, a director of the Tynagh project, said Gama had agreed to acquire Investec's 40 per cent interest for an undisclosed sum. He said it was always recognised that Investec were not long term equity investors, although they remain lenders to the project.

The Commission for Energy Regulation (CER) has approved the changes in shareholding. Gama now have 80 per cent of the equity, with Mountside Properties, a company associated with former beef processor Mr Martin Blake, with 20 per cent.

A few months ago some businessmen approached Mountside about selling its interest in the project, but these talks came to nothing.

The Tynagh Energy consortium are planning a 400 megawatt gas-fired power station on the old Tynagh mine in Co Galway.

Galway County Council has given planning permission for the project.

There was huge surprise in the industry when the Tynagh consortium won the contract from the CER following a competitive tender.

The losers in the competition were Bord Gaís Éireann/Scottish and Southern Energy, US utility AES Electric, Ireland Power Energy, and Viridian Power.

While Investec and Gamma have been involved in energy projects before, Mountside has never operated a major electricity project in the State. Under the contract agreed with the CER, the ESB has guaranteed to buy Tynagh's output for up to 10 years.

The 400 megawatt Galway power station is badly needed to boost the Republic's supply of energy.