The ESB is planning to raise money by issuing an Islamic bond, known as sukuk, in what will be a first for an Irish company.
The ESB is understood to have hired specialist financial firm Amanie Advisors to advise on how best to access the market for Islamic bonds in Malaysia.
Islamic finance, which complies with rules set down in the Sharia body of religious laws, has become an increasingly popular source of financing in recent years as borrowers struggled to raise funds in the traditional money markets.
Malaysia is the world leader in the sukuk market thanks to a big pool of pensions and savings from its mainly Muslim population.
Investing in infrastructure, like the ESB’s network, is popular with Malaysian sukuk investors because they need to invest in companies underpinned by strong assets.
For the ESB, access to the Sharia compliant market would allow the state-owned electricity company to tap into the vast wealth of investors in the Far East and Middle East, many of whom will not invest in conventional debt for religious reasons.
It’s a growing €1.2 trillion a year market for companies seeking alternatives to bank and bond markets.
It’s understood that the ESB has sought to register as an issuer with Malaysia’s central bank and securities commission in order to be allowed to raise money there.
If it does, the agency will become the first Irish borrower to tap the Islamic finance market, which forbids charging or paying interest but not profit sharing.
However, Ireland already has important infrastructure in place to make it easier to access the market, including equal tax treatment for Islamic-finance products compared to conventional debt.
The Irish Stock Exchange listed its first sukuk in 2005. Last year Goldman Sachs Group was cleared to list its $2bn (€1.55bn) sukuk programme in Ireland.