State energy group the ESB is borrowing €500 million from European finance institutions to fund further investment and refinance existing debt.

The company said yesterday it had successfully sold €500 million of seven-year bonds with an interest rate of 4.375 per cent to capital markets. The money was raised mainly from European financial institutions.

The group’s statement said its offer was several times oversubscribed as it had received orders for €6 billion worth of the bonds.

The ESB said afterwards that the seven-year term and interest rate reflected improving international sentiment towards Irish bonds

In September the State-owned group borrowed €600 million, but over five years at 6.25 per cent.

The ESB intends using the cash raised through yesterday’s bond issue to fund investment in its electricity distribution networks and in renewable generation projects.

“The proceeds from the bond issue will also be used to refinance some of ESB’s existing debt,” the group’s statement said.