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State-owned energy company, ESB, has borrowed just over €300
million through the sale of sterling bonds.
The company intends raising €3 billion in debt from financial
institutions over the next few years to help fund €22 billion
investments that will see it expand into green energy and
new technology.
ESB confirmed that it had raised £275 million (€307m) through
a bond issue to a number of European financial institutions.
The issue was the first tranche of the €3 billion total.
Finance director Bernard Byrne said the bonds would mature
in 10 years and carry interest of 6.5 per cent a year, which
is in line with what the company expected to pay. The money
will be used to fund the ESB’s expansion plan up to 2020 -
which, it said last year, would result in the creation of
more than 6,000 new jobs in that period.
The plan is focused on developing areas such as renewable
power generation, clean electricity and energy efficiency.
It is also investing in new technology, such as electric cars.
Along with this, it will continue to invest in its networks
and in developing it business outside Ireland. Recently, together
with Scottish Southern Energy - with which it competes in
the Irish market - it opened
a new power plant in Southampton in the south of England.
It also has a number of projects in Spain.
Mr Byrne said the ESB’s offer was oversubscribed. It originally
sought to raise £250 million, but was offered £450 million.
“We decided to increase it a little and leave the rest on
the table.”
The fund-raising will also result in the State company getting
a rating from international agencies such as Moody’s or Standard
Poors for the first time. This means these agencies will publish
independent assessments of the company’s ability to pay its
debts.
Source - The Irish Times
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