Business Farming

Friday 30 September 2016

Coillte land 'can meet half of new energy needs'

Published 27/05/2016 | 02:30

Coillte announces appointment of Fergal Leamy as new Chief Executive
Coillte announces appointment of Fergal Leamy as new Chief Executive

The state's forestry agency says it has half of all the land needed to hit Ireland's renewable energy targets by 2020.

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Coillte has mapped its entire 445,000 hectares of land, which is spread across the country, and marked it according to its potential use, including suitability for not only forestry but wind and solar generation, chief executive Fergal Leamy told the Irish Independent.

The vast majority of the portfolio is earmarked for forestry, but as much as 20,000 hectares is regarded as suitable for non-core projects, that can range from tourism to power generation, he said.

The semi-State company said it can develop wind and solar power projects itself but is also open partnering with private operators.

"We won't try to do everything ourselves, if people want to come in and use the land we can have a conversation," he said.

Even if Coillte develops wind and solar farms, it does not see itself as a long-term operator.

With approximately 6pc of the entire country on its books, Coillte is responsible for managing trails and tracks used by the public, historic properties including Avondale, Co Wicklow, and amenity sites like Lough Key forest, as well as commercial forestry.

The company generated profits last year of €47.6m, two-thirds more than the previous year. The company paid a €5m dividend to the State.

Coillte said earnings before interest, taxes, depreciation and amortization (EBITDA) stood at €89.6m at the end of last year, 12pc.

During the year the board and management concluded a new, five-year growth strategy for the business which will see Coillte becoming the leading forestry and land solutions company in Europe, the company said. Fergal Leamy said demand for forestry products will double in the next ten years, and that the business is capable of throwing off €50m to €60m a year in free cash flow as it develops.

That's enough to support a regular dividend to taxpayers and ongoing investment, he said.

However, he cautioned that a British vote to exit from the European Union next month could have a significant impact on the business.

The UK is Coillte's biggest market - accounting for 80pc of its €300m of annual sales, he said.

In the short term the company has hedged against a potentially sharp decline in the value of sterling, he said. But in the longer term trade restrictions would hurt Irish exports, he said.

Coillte had branched into telecoms in the past.

Last year, it sold its network of 298 telecoms masts to French investment fund, Infravia Capital Partners, for about €70m last August.

The company is now looking at tapping into the planned roll out of the National Broadband Plan, by providing land to companies for telecoms infrastructure.

Irish Independent

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