Wednesday 13 December 2017

Bord na Móna to launch new €1.2bn investment plan

Investment: Bord na Móna chief executive Mike Quinn
Investment: Bord na Móna chief executive Mike Quinn
Gavin McLoughlin

Gavin McLoughlin

Commercial semi-state Bord na Móna will today unveil a €1.2bn investment programme with a major focus on renewable energy projects.

The company, which has been broadening its activity beyond its traditional role in peat, will diversify into the solar and biomass sectors.

Turnover dropped 6pc year-on-year to €406m and earnings before interest, taxation, depreciation and amortisation (EBITDA), excluding exceptional items, dropped 17.9pc to €82.1m.

Chief executive Mike Quinn said those figures were better than the company had expected, given that it was the first full year operating without a public subsidy the company had received for its role in peat electricity.

The investment programme is designed to continue the company's transformation and the money is due to be deployed between now and 2030. It will be funded by a €150m revolving credit facility (similar to a credit card in that the credit can be used repeatedly so long as repayments are made) that can be used as necessary.

"The development of new wind energy projects will continue on a strong expansionary track in the coming years," Mr Quinn said. The company has a pipeline of projects in Offaly, Longford and Mayo.

"Apart from wind energy we will also be investing to diversify into other sources of renewable energy including biomass and solar power...we will also be investing in the further development of the domestic and overseas biomass supply chain," Mr Quinn added.

Bord na Mona had previously announced it was collaborating with the ESB on a solar project at locations in Kildare, Offaly and Roscommon aiming to power the equivalent of 150,000 homes.

Mr Quinn said the investment programme will also be used to develop new sources of revenue for businesses like bin collection service AES. He said that business now contributes significantly to Bord na Móna's revenues.

The company also plans to invest in its fuels business. It has secured planning permission for a smokeless coal plant at Foynes, Co Limerick.

Mr Quinn said Bord na Móna had encountered difficulties with integrating a UK acquisition, White Moss Horticulture. It had bought the company to try to mitigate against the impact of Brexit on its horticulture business, which supplies growing products to gardeners. The strategic rationale was that the company would be able to manufacture in sterling for sale in sterling.

"Following the acquisition of White Moss, we discovered regulatory compliance issues at the company's Liverpool sites, which were not evident prior to completion of the transaction.

"This matter is subject to litigation with the former owners of the business. All new product is now fully compliant and we are in an agreed process with the Environment Authority to address historic non-compliances," Mr Quinn said in Bord na Móna's annual report, which is published today.

"The integration of this business has itself been challenging, which is reflected in the impairment and exceptional costs, amounting to €14m, in today's results...we, however, continue to focus on the implementation of the robust integration plan so we can secure the business and employment across Bord na Móna Horticulture in Ireland," he said.

The company has also been mulling an investment in a wood pellet manufacturing plant in Georgia in the United States.

"This last year has seen a lot of work by the biomass business around the potential investment ... unfortunately, there currently isn't sufficient biomass in Ireland to allow us to build a similar plant here, but I am looking forward to this changing over the next number of years," Mr Quinn said.

Irish Independent

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