Leo Varadkar (Dublin West, Fine Gael)
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Question 12: To ask the Minister for Communications; Energy and Natural Resources the reason he approved the purchase of Northern Ireland Electricity by the ESB and if he is satisfied with the price paid in view of the large debts of NIE; and if he will make a statement on the matter. [45064/10]

Eamon Ryan (Dublin South, Green Party)
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With the agreement of the Government, ESB received my consent, and the consent of the Minister for Finance, to the acquisition of Northern Ireland Electricity, NIE, in July last. These consents were given after consideration by my Department and the Department of Finance of detailed legal and financial advice in relation to the proposal and its implications for the ESB Group, including financial gearings, borrowing levels and investment programmes.

Under the terms of the transaction, ESB will pay £1,034 million, or €1,248 million, for the NIE Group, subject to certain adjustments when the transaction is complete. NIE is a regulated utility and its revenue is derived principally through charges for transmission and for use of its distribution system. NIE's regulated asset base at 31 March 2010 was £1,007 million, or €1,215 million. ESB will also assume obligations of NIE, including those under a £175 million Eurobond, which is the only debt to be taken on by ESB in this transaction. NIE made a profit after tax of some £60.6 million in its last financial year.

Together with the Minister for Finance and my Government colleagues, I am confident that this transaction, when complete, will be an investment that will be to the benefit of both economies in terms of potential synergies and will critically underpin the delivery of the ambitious renewable energy targets set by both administrations North and South. It will allow for greater co-ordination and network planning in relation to the integration of high levels of wind onto the systems.

Security of energy supply is critical for business and domestic consumers and continued cost efficient development of the networks North and South will ensure that the island of Ireland has secure, environmentally sustainable, energy supply for the long-term. This is crucially important for business confidence and competitiveness in both our economies.

In light of the detailed analysis of ESB's own due diligence and all the metrics of this transaction provided to my Department and to our legal and financial advisers, I am satisfied that ESB will pay a fair price for the NIE assets. The acquisition will increase the regulated earnings of ESB and contribute to the value, profitability and growth of the group.

Leo Varadkar (Dublin West, Fine Gael)
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This decision may turn out to be the biggest made by the Minister during his time in office. I hope he has made the right decision. I am concerned that adequate scrutiny has not been given to this acquisition.

Does the Minister agree that the €1 billion being spent by the ESB would have been better invested in the Republic of Ireland rather than on purchasing an asset in Northern Ireland? At a time when we need investment in our economy, would it not have been better to spend that money here? Can the Minister confirm - this is important - that the only obligations the ESB is taking on from its purchase of NIE is the €175 million Eurobond? According to NIE's accounts, it is carrying a debt of almost €1 billion, a debt almost equal to its value making its real value approximately €100 million, yet ESB is paying €1 billion for it? Perhaps the Minister will confirm - this is important for the future - that the only debt the ESB is taking on is the €175 million Eurobond?

Eamon Ryan (Dublin South, Green Party)
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The position is as stated in my reply. This acquisition has been thoroughly examined by financial advisers for my Department, the Department of Finance and the company.

Leo Varadkar (Dublin West, Fine Gael)
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Which ones?

Eamon Ryan (Dublin South, Green Party)
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It makes sense because this is a regulated asset which provides a steady regular return. There is very low risk attached to it. It broadens the regulated asset base which provides the company with stability and does not push up gearings to the high levels, in regard to which the Deputy expressed concern. This makes business economic sense. The acquisition has been examined at length because it is a large deal.

On the Deputy's strategic point that we should not be investing in Northern Ireland, I disagree with that. We have during the pass three years moved to a single electricity market which is to the benefit of people North and South. This deal will further develop that. There will be economies of scale from this and developments on the network in the North will benefit from ESB's involvement. Through this single integrated distribution network we can gain efficiencies across the Border regions and on our whole network. We have huge advantages on this island in one of the fastest growing areas of the e-economy, namely, smart grid, because we have a single distribution network. That is advanced by this deal, which makes strategic and economic sense. I do not understand Deputy Varadkar's figures.

Leo Varadkar (Dublin West, Fine Gael)
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The country is in crisis. There are 450,000 people unemployed and the Minister thinks it appropriate to spend €1 billion on power lines and €500 million on roads in Northern Ireland. The sooner this Government is out of office the better if that is its approach.

I wish to raise with the Minister the recent statement by the Green Party that it had been misled and betrayed. Yesterday, on "The Week in Politics" the Minister for Community, Equality and Gaeltacht Affairs, Deputy Carey, said he felt betrayed by the Green Party. The Minister for Tourism, Culture and Sport, Deputy Hanafin, said the same.

Brendan Howlin (Wexford, Labour)
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Deputy Varadkar must remain relevant to the question.

Leo Varadkar (Dublin West, Fine Gael)
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The Green Party in its statement said it had been misled and betrayed. Who misled and betrayed the Green Party?

Eamon Ryan (Dublin South, Green Party)
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The Minister for the Environment, Heritage and Local Government, Deputy Gormley, said the people felt that. I want to return to the key issue which relates to presenting economic growth for our country.

Brendan Howlin (Wexford, Labour)
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I ask Members to remain within the confines of the question.

Eamon Ryan (Dublin South, Green Party)
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Fine Gael is saying we must show where the growth is and where the new jobs are.

Leo Varadkar (Dublin West, Fine Gael)
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In Northern Ireland, apparently.

Eamon Ryan (Dublin South, Green Party)
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One area from which growth and new jobs will come is the green e-economy through the development of new electric vehicles, smart metering and renewable generation, which will bring with it a whole range of different services. There are huge economic opportunities for Ireland in this area. We are getting good at it. This investment fits in within that context. Fine Gael cannot on the one hand state in its NewEra document that it will do this, that and the other and on the other hand seek to stop any element of this happening, suggest we break up companies so they cannot invest and stop investments which make strategic sense. Fine Gael cannot on the one hand talk up growing the country and on the other come in here and when provided with specific policy details on how to do so state its opposition to everything. That makes no economic sense.

Leo Varadkar (Dublin West, Fine Gael)
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It is in Northern Ireland.

Eamon Ryan (Dublin South, Green Party)
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The Deputy is talking nonsense.

Leo Varadkar (Dublin West, Fine Gael)
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We do not want to grow the economy in Northern Ireland.

Eamon Ryan (Dublin South, Green Party)
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We do not know how the energy area can and will grow.

Leo Varadkar (Dublin West, Fine Gael)
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The Minister is more interested in Berlin and Belfast than he is in Ireland.