The Minister for Communications, Mr Ahern, has demanded a detailed report on an unprecedented $1 billion (€850 million) loan being raised by the ESB in New York.
The deal is believed to be the second largest fund-raising undertaken to date in the New York private placement market where companies raise money by selling their bonds directly to investors. Bonds issued through private placements are not subject to the same level of regulation as traded investments such as stocks and shares.
Mr Ahern was reported in Sunday newspapers to be "furious" about not being informed about the advanced nature of the fund-raising activity. This was after The Irish Times revealed last Friday the ESB had already managed to raise $300 million.
Mr Ahern's spokesman said he was now being kept informed of developments and was seeking a report from his officials. The Minister was reported to be unhappy about the ESB going on a "solo run" on such a large deal.
Final approval for the fund-raising will have to come from the Government which is the controlling shareholder of the ESB.
The ESB declined to comment last night. The board is engaged in the largest infrastructure investment programme by any company in the history of the State. It intends to spend €3.5 billion over the next five years.
The funds raised in the US are likely to be used by the ESB to renew the electricity network and to upgrade some of its older stations. The ESB has been looking at a number of options for future funding over the past year.
US reports indicated yesterday the ESB has managed to raise $1 billion in a deal arranged by two leading banks, ABN Amro and Barclays Capital.
The ESB has declined to comment on these reports emanating from US sources.
A target of $300 million was set for the fund-raising originally, but according to US sources, a "frenzy" of interest among investors prompted the banks involved to arrange another $700 million. About 27 investors are believed to have participated in the deal, some from the US and others from Britain.
A Government-backed western European electricity company is regarded as a highly attractive investment vehicle to investors in the US.
The level of debt at the ESB has been growing in recent years. The company had debts of € 632 million in 2001, but this rose to €902 million last year - a 43 per cent increase.
According to the company's annual report: "The group has developed strong banking relationships, which will be of benefit to the ongoing financing of the business."
The relationship between the Government and the ESB has altered in recent years. Following instructions from the Department of Finance, the company last year paid a €40 million dividend to the Department of Finance, the first payment in recent times. This was taken from its strong pre-tax profits for 2002 of €196 million.
The company's results for 2003 are expected to be equally strong.