One third of a potential €3bn sell-off of State assets will be used for job creation and economic stimulus.
Brendan Howlin, Minister for Public Expenditure and Reform, said the windfall deal had been struck in negotiations with the bailout chiefs before the Government agreed to privatise parts of energy suppliers ESB and Bord Gáis.
Huge swathes of forestry planted by Coillte and the remaining 25% of Aer Lingus is also being lined up for a future sale.
“When we came into Government, the position was that no money from the disposal of assets could be spent on anything except reducing our debts,” Mr Howlin said.
“This is a substantial change to the Troika’s previous position and will help promote recovery in the economy.”
The Government will retain its minority stake in ESB, despite original speculation it would be among the most lucrative assets sold off.
But some of the energy giant’s five hydro and seven thermal power stations - due to be detailed in a sales report next month – will be sold.
ESB is in talks with the Government to define which stations are strategic, with Poolbeg in Dublin, Moneypoint, Co Clare and Aghada, Co Cork the biggest electricity generators.
Bord Gáis Energy, the trading, assets and retail division of Bord Gáis – valued from €1bn to €1.4bn - will be sold off but the company’s gas distribution and transmission will remain in state ownership to protect security of supply.
Mr Howlin said the Bord Gáis break-up was designed to increase competition in the energy market and bring down prices for consumers.
“And nothing will be sold unless it presents good value, fair value for the taxpayer,” the minister added.
Taoiseach Enda Kenny said first steps in sales are likely to begin by the end of March, when the Minister for Communications, Energy and Natural Resources will make specific recommendations. They are not likely to be complete until next year.
“The objective and the target of the Government is to have a limit here of reaching €3bn of disposal of State assets at the appropriate time, at the best opportune price,” said Mr Kenny.
The vast majority of the money raised will pay off debts with the Troika of European Commission, European Central Bank and International Monetary Fund.
Meanwhile, the remaining 25% stake in Aer Lingus will only be sold when conditions are favourable and the share price is acceptable. It opened this morning at 94 cent compared to €2.20 when initially floated in 2006.
A number of suitors and investors have been touted for the airline, including Abu Dhabi-based Etihad and Qatar Airways.
Transport Minister Leo Varadkar insisted there is no longer any strategic value for the State to hold a stake in Aer Lingus but ruled out a Ryanair buy-out under European competition rules.
Considerations are also being made for the sale of Coillte’s forestry – but not the land on which it is planted. Some 445,000 hectares of trees covers about 7% of Ireland.
The sell-off plan – under the terms of the €85bn EC/ECB/IMF bailout – has been met with fierce opposition from Sinn Féin, which described it as short-termism.
Deputy leader Mary Lou McDonald rejected claims that job creation will be boosted and warned money could be found elsewhere rather than selling semi-state cash cows.
“The idea of selling off profitable, self-financing semi-state companies makes absolutely no sense at all,” said Ms McDonald.
“Anyone with an ounce of cop-on, common sense or eye to the future would know that you hold on to viable, profitable commercial entities that not only return a dividend to the state, but are strategic.”
The Troika originally ruled out investing proceeds of sales of State assets but Mr Howlin said consistent negotiations encouraged the bailout chiefs to change their mind.
“We were determined to have a growth and jobs strategy from the very beginning of the negotiations,” he said.
“My department has been looking at other sources of capital to invest in jobs. We will not only get money from the sale of State assets but other sources to leverage the capital, such as the Strategic Investment Fund.
“When we sell the first billion of the State assets, one-third of that total will be to fund job creation.”