US CONGLOMERATE GE has agreed terms to take a majority interest in the Tynagh Energy power station in east Galway by acquiring half of the 40 per cent stake held by Turkish construction firm Gama, writes Arthur Beesley, Senior Business Correspondent.
GE held 40 per cent of the 400 megawatt plant prior to the transaction. The power station, formerly part of Tynagh mines, opened in 2006 and was designed to meet about 10 per cent of Irish energy market demand.
GE's stake will rise to 60 per cent on foot of the deal, which was notified to the Competition Authority in recent days.
The 20 per cent stake held by Naas-based consultant Bran Keogh through his company Mountside Properties will not change after the transaction.
The financial terms of the deal were not disclosed. The plant, which cost some €300 million to build, has the potential to produce some €150 million of electricity per annum.
The transaction was agreed in light of GE's entry into a new joint venture with Gama to exploit opportunities in the energy and water sectors in Turkey and the surrounding region.
In that deal last December, GE Energy Financial Services acquired 50 per cent of the equity in a company called Gama Enerji. Stamford-based GE spokesman Ken Koprowski said yesterday that the Tynagh deal was part of that transaction.
"This particular notice [ to the Competition Authority] reflects the contemplated acquisition of half of Gama's interest in Tynagh. That would give us 60 per cent economic interest," he said.
"We didn't announce the size of the investment and we won't be announcing any additional financial details."
Gama originally held a 40 per cent interest in the Tynagh project, alongside 40 per cent shareholder Investec Bank and Mountside.
Gama increased its stake to 80 per cent at the financial close of a competition run by the Commission for Energy Regulation but sold down 40 per cent to GE in 2006.
While the latest deal gives GE a majority economic interest in Tynagh, it is understood that the conglomerate does not have majority of voting rights among the company's shareholders.
The new joint venture between the two group is currently developing 855 megawatts of renewable power generation capacity and 1,000 megawatts of thermal generation in Turkey. It is also developing a water conveyance project in Jordan.
