ANALYSIS:STATE-OWNED power company, the ESB, could raise up to €1.5 billion within the next 18 months to fund its ongoing investment plans.

The group announced yesterday that proposals to modernise its networks, and expand into areas such as renewable electricity generation and rebuild its headquarters could create up 3,700 new jobs over the next four years.

The plans are part of an overall €22 billion investment programme that the company has already announced. It intends raising some of the cash needed from global markets in the form of bonds and other borrowings.

Its finance director Bernard Byrne said yesterday that the company intends raising between €1 billion and €1.5 billion from the capital markets within a year and a half, depending on market conditions and other factors.

The company is likely raise the money in the US and UK bond markets, where it has borrowed cash in the past. In 2005 it put in place a €1.2 billion facility, and it has drawn down around half of this.

Mr Byrne said the ESB will only borrow money to fund “solid capital spending projects” and not for its day-to-day needs.

The ESB is currently finalising its 2008 accounts, which it will publish later this year. The figures will show that it had profits of €270 million last year, compared with €430 million in 2007.

Mr Byrne told a press conference yesterday that the €160 million fall in its surplus can be largely attributed to the €300 million that it returned to consumers in 2008.

That cash was used to offset the increased cost of generating power last year, when oil prices reached a record €148 a barrel.

The cost of generating electricity is tied to oil prices, which in turn set the benchmark for the cost of natural gas, the fuel mainly used to generate electricity.

The ESB has also established a fund, Novus Modus, which will invest €200 million over five years in businesses developing technology focused on clean energy and energy efficiency.

It recently invested €2.5 million in a Cork company, Nualight, which specialises in producing energy-efficient lighting for supermarkets.

The company is creating 60 news jobs, is a market leader in Ireland and Britain, and is planning to target the US.

The Novus fund will create 350 of the 3,700 jobs which the ESB estimates will result from its investment activities.

Smart meters and networks, which will allow customers to use electricity more cost-effectively and suppliers to deliver power more efficiently, will create 1,500 jobs, and require an investment of €2 billion.

Rolling out networks to supply power to electric vehicles will result in 600 new jobs, and wind energy projects in which the ESB invests will be responsible for a further 300.

The company says that the redevelopment of its headquarters on Lower Fitzwilliam Street in Dublin will create 550 jobs.

The remaining 400 jobs will be in home insulation and other areas.

The ESB also intends recruiting 400 apprentices, around half of whom it expects to progress through training to reach third-level and qualify as engineers.

It has taken on 400 apprentices who were serving their time in the private sector but lost these positions as the economy turned down.