Euro500m fund to secure Irish electricity supply
28 Sep 2009
London - The European Investment Bank is to lend up to Euro500 mlllion to help Ireland secure its electricity supplies following its agreement of loan contracts with EirGrid Plc and electricity company Electricity Supply Board (ESB).
The Bank will lend a state-owned commercial energy business EirGrid up to Euro300m towards the construction of a 256km cable between Ireland and Wales. The East-West Interconnector (EWIC) will underpin the development of renewable energy by enabling the import and export of excess wind power. It is also expected to improve security of supply and facilitate competition through connecting the Irish electricity market with the rest of Europe.
State-owned ESB will receive up to Euro200m in loans to develop its renewable energy business by installing 248MW of wind power capacity by 2012 in various locations. The total cost of the investment programme is estimated at EUR 475m.
“Ireland is very dependent on imported fossil fuels but has huge potential for wind power. Both these projects help Ireland in its ambition to go green and secure future energy supplies, helping Europe as a whole meet its climate change goals,” said EIB vice president Plutarchos Sakellaris.
“The EIB is particularly happy to be able to support EirGrid and the interconnector, which was identified as key project in the European Economic Recovery Plan endorsed by EU leaders last year. The ESB loan is also our first to the renewables sector in Ireland, where we hope there will be many more opportunities for cooperation in the future,” he added.
ESB chief executive officer Padraig McManus said: “ESB is engaged in major investment in renewable energy to realise its ambition of becoming carbon-neutral by 2035. We are expanding our wind portfolio to 600 MW by 2012. By 2020, one-third of ESB’s generation will be wind-based. Today’s announcement is part of that strategy.”
The European Economic Recovery Plan, approved by the European Parliament and EU ministers in July, proposes spending Euro4 billion in 2009 and 2010 on key energy projects to help counter the effects of the financial crisis on the real economy. It allocates Euro110 million for the Ireland-UK interconnector.
The total cost of EirGrid’s project is estimated at Euro601million. Engineering group ABB has been awarded the contract to design, manufacture and install the interconnector. EirGrid expects the project will result in approximately 100 jobs in Ireland and 100 jobs in Wales during the construction phase. The project is due for completion in 2012.
Ireland currently meets 95% of its energy needs through imported fossil fuels. The Irish government's strategy is to meet 40% of electricity consumption from renewable sources by 2020.
