independent

Thursday 17 April 2014

Centrica set to take over Irish gas

Centrica is part of a consortium of companies named as preferred buyers in a sale of Bord Gais assets

British Gas owner Centrica is in line to take over the energy supply arm of Ireland's state-owned Bord Gais as part of a 1.12 billion euro deal.

The group would pick up a business with more than 700,000 household and business customers in the sale, as well as a gas-fired power station in Cork. British Gas already supplies 12 million homes in Britain.

Centrica is part of a consortium of companies named as preferred buyers in a sale of Bord Gais assets, in a deal struck as Ireland prepares to end its international bail-out.

The announcement came hours after Centrica said it was quitting its planned 2.3 billion euro Race Bank wind farm scheme off the Norfolk coast, selling the project to Denmark's DONG Energy for 59 million euro.

The Irish deal saw the Dublin government pushing for a 1.4 billion euro sale but eventually accepting the lower price.

Ministers said the international investment was a strong vote of confidence in the market and the Irish economy and would provide additional funding for investment in infrastructure and jobs.

As part of the deal, Brookfield Renewable Power is understood to be in line to pick up existing onshore wind farms and others being developed, while iCON Infrastructure will take on a gas pipeline network in Northern Ireland.

The sum being paid by each member of the consortium has not been disclosed. Talks will now begin on finalising the sale, which is expected to complete early next year.

Bord Gais's assets were offered to international investors as part of the disposal of state assets under Ireland's EU-IMF bail-out programme, which it is expected to exit within days.

Centrica sees the Irish deal as a growth opportunity in an adjacent market to the one currently served by British Gas.

Its exit from Race Bank, announced on Thursday, was part of a broader strategy shift which includes focusing more on gas investments.

Another key factor was last month's decision by the Government not to select the project as one of those qualifying for an early wave of subsidy contracts.

Press Association

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