As part of the IMF / EU bailout agreement – Ireland has agreed to sell off some of the state owned assets to raise funds.
Four assets are being considered :
a) Bord Gáis Energy – which supplies natural gas and electricity . (NOT Bord Gáis networks – which provides the pipelines .)
b) Some ESB power plants
c) Coillte’s forests (not the land)
d) The 25 per cent share of Aer Lingus. (This was worth €127 million based on share prices earlier this week .)
Bord Gáis Energy is the most valuable of these assets – with a gas-fired 450 mega watt power plant, wind farms with the capacity to generate 235 MW of electricity, and 900,000 or so gas and electricity customers. Borg Gais Energy is currently valued at about €1.25 billion.
The selected ESB power plants could be sold to a single buyer – along with with the Bord Gáis business to create a new, private energy company.
Centrica which owns British Gas , has already been mentioned as a possible buyer for Bord Gáis Energy.
€2 billion from the sale of assets will have to be allocated to pay off debts – the remainder (hopefully about €1 billion) can be invested in job creation.
The Government has agreed with the IMF/ EU to provide a report on what proceeds, if any, there are from the sale of State assets by June 2013. The short timescale may result in lower prices being obtained.
A Review Group on State Assets and Liabilities was set up in July 2010 by the Fianna Fail government to “consider the potential for asset disposals in the public sector, including in view of the indebtedness of the state”. They pr0duced a report in April 2011
The original IMF / EU Memorandum of Understanding in Nov 2010 mentioned this Review Group of State Assets and Liabilities – and said “an assessment will be made of the scope for increased efficiency of state-owned assets based on the report. Following that assessment, the possibilities of asset privatization will be explored, especially in the electricity and gas sectors. “