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Poolbeg hitch as investors shun Ireland

THE Poolbeg incinerator project has been delayed by the reluctance of banks to invest in Ireland, Dublin City Council has revealed.

The future of the waste-to-energy proposals have been in doubt for several months, even though the scheme has full planning permission and a licence to operate.

Now, the council says the view abroad of Ireland as a risky place to invest has made it difficult to secure funding for the €350m plant.

Officials at the local authority have told councillors that Covanta -- the US company contracted to build and operate the facility -- will only proceed if part financing can be sourced through international lenders.



Twist

The energy firm does not want to use all of its own cash reserves, the council said.

However, banks are less likely to invest in projects in Ireland now than they were a number of years ago, officials added.

In another twist, former Environment Minister John Gormley's trenchant opposition to the facility has actually strengthened Covanta's hand, it has emerged.

The company initially agreed to use its own money to fund the project. However, as Mr Gormley had not issued a foreshore licence by September 4 last year, the energy firm was able to escape from this obligation.

All of the conditions to build the plant had to have been fulfilled by that date -- the longstop deadline -- for the council to be in a position to instruct the company to proceed.

The foreshore licence was the only outstanding issue.

"Covanta are in a stronger position post-September 4 than they were before," assistant city manager Seamus Lyons told councillors.

The company revealed its change of tack last October, saying it would not finance the 600,000-tonne incinerator from its own cash reserves. However, the city council remains confident the plant will be built.

"Both parties are still very much of a mind that there's a need for this facility," Mr Lyons said.



Supported

He added that their opinion is supported by its own waste data and figures from the Environmental Protection Agency (EPA).

Mr Lyons admitted the "situation in relation to Ireland Inc" is having an effect on the project as "banks are less likely to lend at the moment than they were five or 10 years ago".

comurphy@herald.ie


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