A consortium involving Bord na Mona, Finnish company IVO Energy, and French gas company Elf Aquitaine will make an application to Kildare County Council for the construction of a £190 million (€241 million) 400 megawatt gas-fired power station.

The group announced the project yesterday but declined to name the location, saying it preferred to hold public consultations in the coming weeks with residents living in the area, before making an Environmental Impact Statement and the planning application.

"We believe it would be the most appropriate time to bring it into the public domain," Mr Sean Grogan, of Bord na Mona Energy, said yesterday.

Industry sources believe the site is most likely to lie south of Newbridge, Co Kildare, close to Dunstown, where there is a 400 kilo volt switching station. This would enable the generated electricity to be tapped into a main transmission line and sold on to major customers in the new, deregulated electricity market.

Newbridge is also the headquarters of Bord na Mona and the semi-State agency could provide an appropriate site in the area.

"I believe myself when it is all planned out or mapped out, it will be a model in terms of environmental considerations," Mr Grogan said.

The plant will directly employ 40 people when it is constructed within three years but it would also provide considerable indirect employment. It is the agency's first major venture into a power station which does not involve peat. It is currently involved, along with IVO Energy, in the construction of a 120 MW peat-fired station in Edenderry, Co Offaly, which is due to be completed within a year but whose output is contracted to the ESB. It also has an 85 per cent interest in a Co Mayo-based wind farm.

Bord na Mona is a minority partner, along with Elf Aquitaine, in the new project and is likely, along with Elf, to take a 22.5 per cent stake in the venture, involving a capital expenditure outlay of £42.75 million.

Mr Grogan said it had not been decided whether funding would come from project finance or from the balance sheet.

The controlling 55 per cent stake is being held by the Fortum group, of which IVO Energy forms a part.

"We believe it is timely to do it now. We will soon approach all those customers who are eligible," said Mr Herbert Jost of IVO Energy, who is the project manager.

Mr Jost added that gas to power the station would either be piped from Britain, via the Bord Gais interconnector or the proposed new interconnector, or it would come from the new Corrib gas field off the west coast.

But issues such as gas allocation and the imposition of a gas transportation tariff need to resolved.

"At the moment it is totally open. Both Elf and Fortum have the ability to procure gas from the UK," he said.

IVO has previously claimed it expects the process of deregulation to lead to a 20 per cent cut in electricity prices.