IRISH COMPANY GT Energy will raise up to €15.5 million in the coming months to kickstart the development of five heating plants in Britain for multinational utility Eon.

The business, which designs and builds systems for exploiting naturally occurring underground sources of heat to produce energy, is also likely to float on London’s Alternative Investment Market (AIM) over the medium term, according to its managing director, Padraig Hanly.

GT Energy said yesterday it had agreed to build five geothermal energy plants in Britain for electricity and gas supplier Eon UK, which will use them to provide heat to domestic and business customers.

Mr Hanly said the plants would require a total investment of €125 million. As a result of the deal, GT Energy intends to step up its fundraising activities over the next few months.

The company is planning to raise an initial €3 million from private investors, and will follow that with a £10 million (€12.5 million) fundraising round that could be completed early next year. “We have spoken to a number of corporate finance houses and it looks like there is a good appetite for this sort of investment,” Mr Hanly said.

The five plants will cost £20 million each to build – a total of £100 million. Between them, they will deliver the equivalent of 500 megawatts, a similar amount of energy to an average-sized power plant.

Eon wants the Irish company to build heat plants rather than facilities that use underground heat to generate electricity.

Mr Hanly said the £10 million fundraising it was planning would be used to begin work on the first plant, for which the company is eyeing a number of sites in northwest England. It intends to start building the plant at the end of next year.

GT Energy expects to begin raising the £10 million late this year and to have completed the round in early 2013.

Mr Hanly said the company was pondering a flotation on the AIM in 12 to 18 months’ time.

GT Energy has planning permission for a number of geothermal heat-powered electricity generators in Ireland but has put them on hold as legislation that would have led to the creation of incentives to support such developments has been delayed. It has switched its focus away from the Republic to Britain and Northern Ireland, which have incentives for geothermal heat exploitation.