British Gas owner Centrica is in line to take over the energy supply arm of Ireland’s state-owned Bord Gais as part of a £1billion deal.
The group would pick up a business with more than 700,000 households and business customers in the sale, as well as a gas-fired power station in Cork. British Gas already supplies 12million homes in Britain.
Centrica is part of a consortium of companies named as preferred buyers in a sale of Bord Gais assets, in a deal struck as Ireland prepares to end its international bail-out.
The announcement came hours after Centrica said it was quitting its planned £2billion Race Bank windfarm scheme off the Norfolk coast, selling the project to Denmark’s Dong Energy for £50million.
The Irish deal saw the Dublin government pushing for a £1.2billion sale price but eventually accepting the lower bid.
Ministers said the international investment was a strong vote of confidence in the market and the Irish economy and would provide additional funding for investment in infrastructure and jobs.
As part of the deal, North American firm Brookfield Renewable Power is understood to be in line to pick up existing onshore windfarms and others being developed, while iCON Infrastructure will take on a gas pipeline network in Northern Ireland.
The sum being paid by each member of the consortium has not been disclosed.
Talks will now begin on finalising the sale, which is expected to complete early next year.
Bord Gais’s assets were offered to international investors as part of the disposal of state assets under Ireland’s EU-IMF bailout programme, which it is expected to exit within days. Centrica sees the Irish deal as a growth opportunity in an adjacent market to the one currently served by British Gas.
Its exit from Race Bank, announced yesterday, was part of a broader strategy shift which includes focusing more on gas investments.
Another key factor was last month’s decision by the Government not to select the project as one of those qualifying for an early wave of subsidy contracts.