Irish energy group Airtricity is poised to invest €700 million in a wind farm off the Netherlands coast.

The company announced yesterday that the Dutch government has given it permission to develop the farm at West Rijn, 40km out in the North Sea. Airtricity believes that the area has the capacity to deliver 284 megawatts (mw), which is enough electricity to power 150,000-200,000 homes a year.

The company expects to begin work on the project in 2010. Sources yesterday said it was planning to invest €700 million in the development over the "next few years". Airtricity did not say how it intended funding this.

However, media reports last week stated that it intended raising new money from the capital markets. Yesterday, Airtricity's head of offshore, Torben Andersen , said the Netherlands move was the first step in the Irish company's plan to create a wind power "supergrid" in the North Sea capable of supplying the main markets in the region, including Holland, Denmark and the UK.

The Dutch government has set itself the target of generating 6,000mw of electricity from North Sea wind power by 2020. The country's gas reserves are depleting quickly.

"It's very feasible, the technology is already there," Mr Andersen said. "And we would see it eventually supplying Ireland as well, via the proposed interconnector from Wales."

He added that Airtricity hopes to press ahead with the supergrid between 2010 and 2015. "This is the first building step," he said.

Airtricity's chief executive, Eddie O'Connor, recently said that permission for the Netherlands project was "imminent".

In a statement yesterday, he said the company saw the country as an important market.

Airtricity operates wind farms off the Sligo coast, and in Donegal, Sligo, Cavan, Cork and Fermanagh.