THE GOVERNMENT is set to halt State company Bord Gáis Éireann's (BGÉ) €2 billion bid for the generating plants owned by independent power company Viridian in the Republic.
BGÉ is one of a number of bidders believed to be circling Viridian's two power plants at Huntstown in Dublin and a number of wind farms, which have a total price tag in the region of €2 billion. However, any such deal will require the approval of the Government via Minister for Communications, Energy and Natural Resources Eamon Ryan.
The Irish Times learned last night that the Government is not going to give its approval for a bid or purchase of these assets.
The company would also have required the Government to increase its borrowing limits above the current level of €1.7 billion.
Neither the department nor the company would comment, but the Government is likely to make an announcement shortly.
Up to last month, British-based International Power was a partner in the State company's Viridian bid, but International Power pulled out of the process three weeks ago. At the time, it was believed that BGÉ intended to continue with its bid.
Blocking the move will be a blow to BGÉ's expansion plans in the Republic. The company is moving from being a supplier of natural gas to homes and businesses to being a "dual-fuel" provider of gas and electricity.
It is building a gas-fired electricity plant at Whitegate in Cork harbour and is planning to compete with the ESB to supply electricity to the Republic's 1.7 million householders.
While there is competition to supply electricity to commercial and industrial users, the new arrivals in the Irish power market have up to this point stayed away from the domestic market, as putting the necessary infrastructure in place is expensive relative to the likely returns.
However, BGÉ already has a considerable domestic customer infrastructure and can make the move from supplying gas into electricity relatively easily.
Airtricity's owner, Scottish Southern Energy, also plans to expand into the domestic market.
Viridian's owner, Bahrain-based merchant bank and venture capitalist Arcapita, bought the then quoted company in 2006 for £1.62 billion (€2 billion).
Other bidders for Viridian include German giant RWE and a financial institution. Spanish utility Endesa was also named as a bidder but is reported to have dropped out of the process.
