ESB and Coillte joint energy venture to seek investors

Futurenergy, a €1 billion green electricity venture launched jointly by Coillte and ESB, will seek investors interested in backing the business early next year.

The company aims to build between 15-20 wind farms around the Republic providing enough electricity to power 500,000 homes.

Chief executive Peter Lynch confirmed on Tuesday that Futurenergy will begin seeking bids from banks or other investors interested in funding the venture early next year.

He explained that Futurenergy will cover the cost of getting each project to the point where construction can begin, using cash invested by its two shareholders. From that point on, it will use money raised from the capital markets. Mr Lynch said this would most likely be a loan provided by a syndicate or group of banks.

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He added that Futurenergy would begin tendering next year to establish the most appropriate method of raising money and to find out what sort of appetite investors have for backing renewable energy projects.

“It will probably take six to 12 months. We will start the process in the first part of next year,” he said. Mr Lynch added that any money raised would be subject to shareholder approval and other conditions.

The joint venture already has a number of projects awaiting planners’ approval and it is preparing several more to apply for planning permission.

Its chief executive said it would build 15-20 wind farms, each with the capacity to generate 50-100 megawatts of electricity.

Coillte’s land

Ultimately Futurenergy intends to develop wind farms on Coillte’s land with a capacity to generate 1,000 megawatts (1 gigawatt) of power, enough electricity to supply some 500,000 homes. The total investment required is likely to be about €1 billion.

Government plans to combat climate change envisage new onshore wind farms with the total capacity to generate about 4,000-5,000 megawatts of electricity operating in the Republic by 2030.

Those plans aim to have 80 per cent of electricity used in the State generated from renewable sources by the end of the decade.

Futurenergy will seek backing under the State's Renewable Energy Support Scheme, which will guarantee prices to green electricity producers. The company also hopes to do direct power purchase deals with individual companies to take the electricity generated by some of its wind farms.

State forestry company Coillte and energy group ESB have been planning the project since early 2019.

Significant milestone

Coillte chief executive Imelda Hurley described the news as a significant milestone for the company.

“It sees our entire renewable energy business transfer into the new joint venture company, which aims to deliver 1 gigawatt of renewable energy projects by 2030,” she said.

ESB chief executive Paddy Hayes added that Futurenergy built on a history of successful partnerships with Coillte. In a statement, Mr Lynch, predicted that the new company would become a industry leader.

Coillte and ESB will each hold a 50 per cent share in the new business, which will be a separate company from its shareholders.

Earlier this year, mergers watchdog, the Competition and Consumer Protection Commission allowed the deal on condition that the two sides put measures in place to prevent themselves sharing commercially sensitive information with each other.