CELTIC INTERCONNECTOR

Promoter – Financial Intermediary

EIRGRID PLC

Location

• Ireland

Description

The project concerns the implementation of a High-Voltage Direct Current (HVDC) link interconnecting France and Ireland across the Celtic Sea. The project will have a rated capacity of 700 MW, DC voltage of 320 kV and a total route length of 575 km, of which 500 km offshore. The offshore route of the project will cross French, British and Irish waters.

Additionality and Impact

The Project is fundamental in the path to decarbonisation of the Island of Ireland. It addresses significant market failures (in particular incomplete markets/imperfect competition, i.e. no direct physical link to mainland Europe) and leads to excellent economic and social benefits. The quality of the Project is also reflected in its robust governance. The Project has a strong policy contribution in that it represents the first interconnector between Ireland and another EU Member State after Brexit. This assists progression towards national and EU climate and energy targets. The sponsors have requested for the Bank to be a cornerstone lender in order to contribute to the long-term financing required by this type of asset, while also mitigating the financial burden on electricity consumers. The EIB contribution also translates into support in raising complementary funds by reassuring other stakeholders that the project is of high quality and its structure appropriate.

Objectives

The project will establish the first direct electricity interconnection between the island of Ireland and continental Europe. Ireland is currently interconnected to continental Europe only via Great Britain. The project will thus enable the direct integration of the Irish electricity market into EU's market and improve the operation of the power system under growing shares of renewable power generation. It will help ease generation constraints and allow the evacuation of surplus renewable generation in both directions, thereby helping reduce greenhouse gas (GHG) emissions.

Sector(s)

• Energy - Electricity, gas, steam and air conditioning supply

Proposed EIB finance (Approximate amount)

EUR 300 million

Total cost (Approximate amount)

EUR 1623 million

Environmental aspects

The route of the project is entirely subsea/underground, thus the project does not fall under either Annex I or Annex II of the EIA Directive. The project is subject to various consenting regimes in Ireland, UK and France. According to national legislation, the project was screened in for an environmental impact assessment (EIA) in Ireland and France, while an EIA is not required to support the permitting of the works in UK waters. While the required applications have been filed, the permits have not been granted yet. The actual impacts, including potential negative impacts on sites of conservation importance, and the planned mitigating and/or compensating measures will be reviewed during appraisal.

Procurement

The Bank will require the Promoter to ensure that contracts for the implementation of the project have been tendered in accordance with the relevant applicable EU procurement legislation, (i.e. Directive 2014/25/EU) as interpreted by the Court of Justice of the EU, with publication of tender notices in the Official Journal of the EU, as and where required.

Status

Signed - 15/11/2022