Irish Water has signed a €100 million loan facility with Ulster Bank, the first in a series of loan agreements expected to be agreed with other domestic and international banks in the coming weeks.

The company said its long term funding plan was progressing well and would underpin the company’s ability to finance the significant investment in the water network that is required.

Irish Water has agreed with Ulster Bank is a committed unsecured facility that is available for up to two years. The company said it plans to refinance the loan into a longer term revolving credit facility before the end of the year, together with other bilateral agreements, which are expected to be confirmed shortly.

In November, Irish Water agreed a €50 million uncommitted overdraft facility with Bank of Ireland, which like the recently agreed Ulster Bank facility is not covered by a government guarantee.

“The ability to access private sector financing in order to invest in improving Ireland’s water infrastructure was a key reason for the establishment of Irish Water. The funds we are borrowing will be used to address decades of underinvestment. The signing of this facility demonstrates confidence in the Irish Water strategy and its ability to borrow competitively from commercial banks. Lenders understand the long-term and sustainable utility model that we have adopted,” said Michael O’Sullivan, group finance director of Ervia, Irish Water’s parent company.

Irish Water is expected to invest €550 million per annum or more, to start addressing the historical under-investment which means that some 40 per cent of water leaks away.