Bank of Ireland Global Markets to provide emissions trading service to Edenderry Power Limited

Bank of Ireland Global Markets today (Monday 31 October 2005) announced the completion of an innovative emissions transaction under the EU Emissions Trading Scheme (EUETS). This scheme has arisen from the Kyoto Protocol, which has the aim of reducing the amount of carbon dioxide that companies emit. The deal will result in Bank of Ireland Global Markets Energy & Emissions Desk entering an agreement with Edenderry Power Limited, the Offaly-based power station, to supply emission allowances at a monthly average rate. The rate is derived from the ECX futures price, a standard industry benchmark.

Under the EUETS the majority of Irish companies received emission allowances close to their requirements - based on both historical and projected figures. However, the power sector received only around 70% of allowances required. Given that the price of purchasing additional allowances has risen from €6.65/tCO2 to around €23/tCO2, the management of any shortfall has become critically important.

Edenderry Power, in common with other power generators, did not receive sufficient allowances to cover its projected emissions. The station, which burns peat to produce around 3% of Ireland's electricity, needed to put in place a strategy to ensure that their shortfall would be met by the April 2006 deadline.

Under this arrangement Bank of Ireland Global Markets has contracted to deliver Edenderry Power with emission allowances equivalent to its shortfall through a transparent and prudent agreement. The cost of these allowances will be determined by the monthly average of the price of allowances on the European Climate Exchange. By linking the purchases to a recognized industry benchmark, Bank of Ireland Global Markets has embedded transparency into the procurement process. Additionally, by transacting at an average price, Edenderry Power ensures that costs are contained as the effective price for the entire shortfall will be close to the average for the period covered.

The arrangement allows Edenderry Power to vary the number of allowances purchased in any one month. This flexibility is crucial for the company particularly in the winter months where greater demand for electricity could see Edenderry Power's emissions rise, necessitating a greater requirement for allowances.

Commenting on the transaction, Paul Harris, Senior Sales Manager on the Energy & Emissions Desk said "The launch of the European Emissions Trading Scheme (EUETS) in January of this year has prompted affected Irish companies to develop new strategies to ensure compliance with these regulations which are governed by the 'polluter pays' principle. Bank of Ireland Global Markets recognised that the new EUETS would present fresh challenges to corporate Ireland and is the sole domestic banking institution to trade in the emissions market. We are delighted to have the expertise and capabilities to assist Edenderry Power Limited meet its obligations under the EUETS."

Bank of Ireland Global Markets anticipates rapid growth in the emissions markets, particularly with areas such as the transport and the chemical industries tipped to be included in the second phase of the EUETS which will commence in 2008.

For reference:

Damien Daly
Head of Marketing
Bank of Ireland Global Markets
Tel:01 609 3303 / 086 8179415

Anne Mathews
Media Relations Manager
Corporate Communications
Tel:01 604 3836 / 087 246 0358

Profile of Bank of Ireland Global Markets

Bank of Ireland Global Markets' is the number one treasury services provider in Ireland. Global Markets' key offering is a comprehensive range of treasury and international banking services to Irish and international companies from its global headquarters in Dublin. Customers are provided with a single point of contact to handle all their treasury management needs from currency, interest rate and international trade risk management to treasury investment solutions and global payments. It has built up considerable expertise in risk management and has a reputation for innovation and price competitiveness in the marketplace. Bank of Ireland Global Markets' No. 1 position is recognised through award winning, including the iMoneyNet Offshore Money Fund Report (OMFR) Award for its US Dollar liquidity fund, the Irish Association of Corporate Treasurers (IACT), Euromoney and The Banker publications.