Since the LuxLeaks revelations late last year it has seemed as if all roads, suddenly, lead not to Rome but to Luxembourg.
So there was something almost inevitable about the disclosure that funding for the controversial waste to energy incinerator being built in Poolbeg, Dublin, is coming from the tiny European Union member state.
Given that the rate being tagged to the loans coming from Luxembourg is an impressive 13.5 per cent, it is understandable that people might worry that what we are looking at is another variant of the type of multinational tax planning that has the G20, European Commission, OECD, a lot of NGOs, and parts of the general population, in such a huff over recent times.
The fact that the incinerator has been so strongly opposed by environmentalists and local communities adds to the controversy but the biggest contributor undoubtedly is the fact that the project is a public- private partnership involving the four Dublin local authorities. So on one side of the pitch you have tax-raising bodies and, on the other, financial structures aimed at avoiding tax. You could understand how a ratepayer might feel that something, somewhere, is a bit off.
A spokesman for Covanta, the US firm contracted to build the plant, said in a short statement the group formed with the councils, the Dublin Waste to Energy Group, has no interest in the Luxembourg funding company, Dublin First WTE, which is a wholly-owned subsidiary of one of the funders of the project.
In fact, all the companies in the group are Irish-domiciled. However, the Irish company set up by Covanta for its involvement in the Poolbeg project, Covanta Energy (Ireland) Ltd, is itself owned by a Luxembourg subsidiary, Covanta Energy Holdings Sarl, with that company in turn ultimately owned by Covanta in the US.
The 2013 accounts for the Irish company show that it received $2 million and $2.7 million in two contributions during the year, from the immediate Luxembourg parent.
Whether all of this has anything to do with the type of structures being targeted by the OECD’s Beps project, and some initiatives within the EU, sparked by the LuxLeaks controversy, is not clear. The accounts being filed in Luxembourg and Dublin, over the coming years, may yet throw some light on the question.
They may also serve to lend more heat to the Poolbeg waste to energy project.
