Ervia gas arm taps the EIB for €200m
State-owned Gas Networks Ireland is tapping the European Investment Bank for a €200m loan to help bankroll a €454m upgrade of its network and IT systems.
The company, part of Ervia, has just applied for the loan and it's currently being appraised by the bank. It's likely to take a number of weeks before a decision is made.
"The project is part of the promoter's investment plan in gas transmission and distribution networks," the European Investment Bank (EIB) has noted. "It consists of expansion, reinforcement, refurbishment and replacement works, new service connections, installation of new IT systems and acquisition of equipment."
The EIB said that the project would help to improve the security, safety and reliability of the country's gas supply.
It said that the various components of the planned upgrade by Gas Networks Ireland will be further investigated during appraisal to ensure compliance with the bank's environmental and social standards.
The government sold Bord Gáis Energy to UK's Centrica in 2014 for €1.1bn, but retained control of Ireland's natural gas network. Gas Networks Ireland operates under the umbrella of Ervia, which also controls Irish Water. Last week, Ervia named Bord na Mona managing director Mike Quinn as its new chief executive, succeeding Michael McNicholas who stepped down in May.
Last November, Gas Networks Ireland sold €625m of bonds in advance of a debt repayment that was due in April this year. They were the first bonds sold by the company since the Bord Gáis Energy sale.
Gas Networks Ireland sold €500m of 10-year bonds with a 1.4pc interest rate, and €125m of 20-year bonds that carry a 2.3pc rate.
The company has been extending natural gas delivery infrastructure around the country. It will begin laying a new gas feeder main in north Kerry in August, which will serve residential and commercial customers. The infrastructure had been lobbied for by Kerry Group, which will use gas at its operations in Listowel.
A new gas distribution network is also being constructed for Wexford town. That involves the replacement of about 10km of gas mains. A second phase of the project set to start next year will see an additional 11km of gas mains laid.
The European Investment Bank has also been recently approached for funding by ferry group Irish Continental. It's seeking a €75m loan to cover about half the cost of a new ship for its fleet that's being built in Germany.
That loan application is also currently under appraisal by the EIB. The EIB opened a permanent office in Dublin last year.