Pictured in March 2009 at the cheerful announcement of EirGrid’s contract award to Swedish engineering group ABB for construction of the East West Interconnector from Ireland to Wales are back row from left to right: Trevor Gregory, Country Manager ABB UK and Ireland, Lars Weimers, Chief Engineer, Marketing HVDC System, ABB AB, John Fitzgerald, Project Director EirGrid, Michael G. Tutty, Chairman of the Commission for Energy Regulation (CER), Front Row: Peter Leupp, Head of Power Systems division ABB, and Dermot Byrne, Chief Executive EirGrid.

The European Investment Bank announced today a loan of up to €300 million for the EirGrid Ireland-Wales electricity link and €200 million is being made available to the ESB  to help Ireland secure and green its electricity supplies.

Ireland currently meets 95 percent of its energy needs through imported fossil fuels. The Government has an ambitious strategy to meet 40 percent of electricity consumption from renewable sources by 2020. EIB staff will attend the Irish Wind Energy Association’s autumn conference on Thursday to learn more about future wind power projects in the country.

The European Investment Bank is the bank of the European Union. It was set up under the 1957 Treaty of Rome with a mandate to support EU policies. It has six priority areas for its lending: poorer regions, the environment, transport and energy networks, small and medium-sized enterprises (SMEs), innovation and research, and secure and sustainable energy supplies.

Today's loan contract was signed today in Dublin Castle this morning by EIB Vice President Plutarchos Sakellaris and the Chief Executive of EirGrid, Dermot Byrne in the presence of the Minister for Energy, Communications and Natural Resources, Eamon Ryan, T.D.

The EIB raises substantial funds on the capital markets which it lends on favourable terms to projects furthering EU policy objectives. Electricity Interconnection between member states in part of the European Energy policy and the planned East West Interconnector between Ireland and Wales is of strategic importance to Europe in helping to create a single European electricity market.

EirGrid Chief Executive, Dermot Byrne said: “Today is a major milestone for Ireland’s electricity infrastructure and for our power market, with the signing of this very important tranche of funding for the East West Interconnector Project. When completed, the interconnector will help ensure secure electricity supplies for consumers, it will promote competition and will enable power to be efficiently transferred between Ireland and Britain, providing Irish wind producers with access to export markets.”

Byrne said:“We have concluded a number of key phases of this project, with the granting of planning permissions in Ireland and Wales, the completion of sea surveys, and the appointment of contractors to build the interconnector. And now this large scale funding from the EIB, at the most favourable borrowing terms available in the market, is another major ingredient to delivering this crucial infrastructure on target for 2012.”

The East West Interconnector project consists of a high voltage direct current (HVDC) cable link between Ireland and Great Britain. The Interconnector, which will be approximately 260 km long, can carry 500 megawatts of electricity - - the equivalent of supplying power to approximately 300,000 homes. This capacity approximates to 10 per cent of peak daily electricity demand in winter in Ireland.

The balance of the EirGrid East West Interconnector will be funded by a combination of further capital investment from commercial banks, EirGrid equity and a €110 million grant from the EU Commission for interconnection.

The East West Interconnector will represent an investment of €600 million. ABB, the Swedish engineering firm was awarded the contract to design, manufacture and install the interconnector. It is expected that this project will result in approximately 100 jobs in Ireland and 100 jobs in Wales during the construction phase. The project is due for completion in 2012.

It will possibly provide nuclear power generated electricity while Ireland can claim to be a nuclear-free zone.

In the National Development Plan 2007 – 2013, the Irish Government has identified the need for a strategic energy link, in the form of an electrical High Voltage Direct Current (HVDC) interconnector, to be developed between Ireland and the UK.

The interconnector is being developed by EirGrid, working closely with the Commission for Energy Regulation, and will be owned by EirGrid following its completion.

The Irish business group IBEC's  Senior Policy Executive Erik O’Donovan said: “Interconnection with the UK electricity market will help consumers by improving the security of our energy supply and increasing competition in the energy market. The development also opens up the opportunity for us to export renewable energy to our neighbours and bolsters our growing renewable energy sector.

"Improved energy infrastructure is critical for business, which accounts for 62.5% of the total energy consumption in the electricity retail market. In difficult economic times it is vital that this infrastructure is delivered quickly and cost effectively. The better our power system, the better our chances of attracting in quality jobs to our country.

"The EIB lends money on favourable terms to projects that further EU policy objectives. Today’s EIB announcement, coupled with a €110 million grant from the EU Commission for the Interconnector, underscores the strategic importance of this project in terms of developing a single European electricity market for consumers.”