In May 1995, the Government approved in principle the injection of equity in three tranches into Bord na Móna and a corresponding reduction of an average £6 per tonne in 1993 prices in the price of milled peat sold to the ESB. These measures were designed to deal with Bord na Mona's unsustainable debt problem in an open and transparent manner, and to enhance the economics of electricity generated from peat.
The first tranche of equity, £49 million, was injected into Bord na Móna in December 1996 upon receipt of the decision from the EU Commission which found that the proposed equity injection did not constitute State aid within the meaning of the provisions of the EU Treaty. I intend, with the concurrence of my colleague the Minister for Finance, to inject the remaining two tranches of equity into the company over the next two to three years.
Bord na Móna have been instructed to make the necessary arrangements, in consultation with the ESB, to implement the first phase of the reduction in the price of milled peat. Further phased reductions in the price of milled peat sold to the ESB will be made in line with further injections of equity.