IDA gives Intel €30m to offset energy price spike

IDA Ireland gave Intel €30 million last year as part of an aid package for companies whose energy bills spiked after Russia’s invasion of Ukraine, new data shows.

The money was provided to Intel in order to remedy “significant economic uncertainties, disrupted trade flows and supply chains and led to exceptionally large and unexpected price increases, especially in natural gas and electricity” caused by the invasion, according to a European Commission decision published at the time.

The funding was provided as part of a €100 million scheme introduced by the Irish Government last year and cleared by the European Commission in March 2023 to support companies involved in the manufacturing of microelectronics.

As part of the scheme funds could be applied for by companies from Enterprise Ireland, Údarás na Gaeltachta, the Local Enterprise Offices and IDA Ireland.

Individual recipients of support were limited to a maximum total of €50 million, according to the details of the scheme, which ended in December 2023.

As part of its examination of state aid measures the European Commission concluded that the grant was “necessary, appropriate and proportionate to remedy a serious disturbance in the economy”.

According to the Irish Government’s own submissions on the scheme, “companies involved in wafer-manufacturing account for €8.7 billion in exports from Ireland annually and employ over 7,000 people, with an actual impact greater than those figures since the value chain spans 130 companies and includes multinational companies and SMEs”.

It is not clear what other companies, if any, benefitted from the scheme. When contacted a spokesperson for the IDA said that the agency “does not comment on individual client companies”.

A spokesperson for Intel Ireland said: “As a major manufacturer that has invested and operated in Ireland for almost 35 years we have just completed construction of our newest facility Fab 34, at a cost of €17 billion.”

She added, “We welcomed the opportunity to apply for the Microelectronics Manufacturers Ukraine Enterprise Crisis Scheme.”

Intel was also granted hundreds of millions of euro worth of refundable tax credits by the Irish Government last year as part of its expansion of its enormous manufacturing facility in Leixlip.

According to the company’s most recent annual report, it noted that it had recognised a total of $645 million (€601m) worth of grants and refundable tax credits from countries outside the US in 2023, up from $373 million the year before.

The annual report does not break out precisely how much of that came from the Irish taxpayer, but noted that “a majority of [this figure] related to the expansion of silicon wafer manufacturing facilities in Ireland”.

Meanwhile, the company is looking to raise around $2 billion to help it with the construction on the Irish facility, according to reports by Bloomberg, which stated that Apollo Global Management, KKR, and Stonepeak had been approached in relation to a joint venture investment in the project.

It is not clear how the investment would be structured, and none of the parties commented. Intel has previously used private equity to fund the construction of a plant using an investment from Brookfield Infrastructure Partners, which invested $15 billion in a plant in Arizona, getting a 49 per cent stake in the plant in return.

The investment is part of an enormous global investment Intel is making in its manufacturing facilities worldwide as part of a major effort to turn around its fortunes after a period of struggling revenues. The company’s share price has fallen significantly in the last two years, from a high of just over $68 at the end of November 2021 to its current price of just around $30.

Intel’s chief executive Pat Gelsinger, has insisted that the investment will result in “one of the greatest turnaround stories in business history and technology industry history – the rebuilding of the iconic Intel”.