ESB to build plant in Spain

THE ESB, prevented by the Government from making a major incursion into the Polish energy market, yesterday signed a €690 million deal to build and operate the first foreign-owned power plant in Spain.

ESB has lined up a formidable array of international bankers to finance the construction of its largest international investment project to date a 755MW combined cycle gas-fired power plant outside of Amorebieta near Bilbao in the Basque region of northern Spain.

The Royal Bank of Scotland was lead arranger of the financial facilities having won the contract from the ESB though a tendering process. Nine international banks are underwriting non-recourse facilities totalling 690m, including the long-term project facility of 440m. These include: Royal Bank of Scotland, Allied Irish Bank, Bank of Ireland, BBVA, Banesto, Bayerische Landesbank, KBC, Fortis and Halifax Bank of Scotland.

The Government, as the ESB's major shareholder, has, according to the ESB, been kept appraised of all developments in the long gestation of the deal. ESB subsidiary, ESB International I, will act as the operations and maintenance manager to the project for a 20-year period.

Minister for Communications, Marine and Natural Resources Dermot Ahern said: "Great credit is due to ESB in securing this contract in a tough and competitive market. I have been supportive of this project and I was pleased to offer my backing based on the strong business case presented to me. I wish the company well in expanding and developing its international investment portfolio." The plant will be constructed by a consortium comprised principally of GE and ACS with commercial operations date expected at November 12, 2005.