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EIB Announces $727.5 Million in Loans to the Irish Electricity Sector

The European Investment Bank, the lending arm of the European Union, is to lend up to 500 million euros ($727.5 million) to help Ireland secure and green its electricity supplies and support Europe's economic recovery. Two loan contracts to that effect were signed recently by EIB Vice President Plutarchos Sakellaris and the chief executives of EirGrid Plc and Electricity Supply Board (ESB).

EIB reports that it will lend EirGrid up to 300 million euros towards construction of a 256 km cable between Ireland and Wales. The East- West Interconnector (EWIC) will reportedly underpin the development of renewable energy by enabling the import and export of excess wind power and hopes are that it will improve security of supply and facilitate competition through connecting the Irish electricity market with the rest of Europe.

ESB will receive up to 200 million euros in loans to develop its renewable energy business by installing 248 MW of wind power capacity by 2012 in various locations. The total cost of the investment programme is estimated at 475 million euros.

The loans bring total EIB support for Ireland in 2009 to 760 million euros, almost double 2008's total of 450 million euros.

The European Economic Recovery Plan, approved by the European Parliament and EU ministers in July, proposes spending 4 billion euros in 2009 and 2010 on key energy projects to help counter the effects of the financial crisis on the real economy. It allocates 110 million euros for the Ireland-UK interconnector.

The total cost of EirGrid's project is estimated at 601 million euros. Engineering group ABB has been awarded the contract to design, manufacture and install the interconnector. EirGrid expects the project will result in approximately 100 jobs in Ireland and 100 jobs in Wales during the construction phase. The project is due for completion in 2012.

Ireland currently meets 95 percent of its energy needs through imported fossil fuels. The Government has an ambitious strategy to meet 40 percent of electricity consumption from renewable sources by 2020.