Belfast Telegraph

Buying Viridian would make Republic top player in Northern Ireland energy

By John Mulligan and Donal O'Donovan

The Irish State could become the biggest player in Northern Ireland's energy market through a takeover of Power NI parent company Viridian, it can be revealed.

A joint venture between the State-controlled Ireland Strategic Investment Fund (ISIF) and funds controlled by Goldman Sachs is understood to have submitted a final round bid to buy power firm Viridian, which owns Energia in the Republic as well as Power NI, for up to €1bn.

If the joint venture is successful, it will cement the Irish State's effective control of the bulk of Ireland's power generation and supply, as well as electricity and gas distribution.

Final binding bids in the Viridian sales process were due yesterday. It is believed the joint venture between ISIF and Goldman Sachs is among the final offers submitted. Viridian, led by Ian Thom is being sold by Arcapita, the Bahrain private equity fund. It put the power firm up for sale last year.

In February, UK utility giant Centrica, which owns Bord Gais Energy, failed to make it to the second round of bidding.

State-owned ESB, which is already the biggest energy business on the island of Ireland, did not bid for Viridian.

It is believed that just a handful of bidders now remain in the final round of contenders to buy Viridian, but it is unclear when a decision on the winning bid will be made. While there have been expectations that Viridian could sell for about €1bn, it has been speculated that the final selling price could come in below that.

Power NI supplies electricity to about 610,000 homes and businesses in Northern Ireland.

In the Republic, Viridian owns Energia, which supplies electricity to the domestic and commercial market.

A sale would include two power stations in Dublin and an extensive windfarm portfolio.

Power NI's former sister company, Northern Ireland Electricity Networks Limited, which owns the electricity transmission infrastructure network, is owned by the ESB.

Viridian's power generation and power supply businesses could be broken up after a sale, especially if the business is bought by a consortium.

Viridian's group pro-forma earnings before interest, tax, depreciation and amortisation were £97.5m in its last financial year, which was down from £99m a year earlier.

Its assets include the 747-megawatt Huntstown power plants in Dublin, as well as 300 megawatts of windfarms that are already operational or being developed.

The National Treasury Management Agency (NTMA) controls and manages the ISIF, which was established in 2014 with a statutory mandate to invest on a commercial basis in a manner designed to support economic activity and employment in the State.

The NTMA points out that assets are managed at arms length, and co-investment is a key element of ISIF's strategy.

Belfast Telegraph