Centrica has eyes on Belgian expansion

Centrica, the owner of the British Gas brand, is in talks to expand its operations in Belgium through a joint venture with one of the country's smaller electricity suppliers.

Centrica, the owner of the British Gas brand, is in talks to expand its operations in Belgium through a joint venture with one of the country's smaller electricity suppliers.

Société Publique d'Electricité, (SPE) which has about 10 per cent of the Belgian market, said it was in preliminary discussions about selling a stake to a partnership between Centrica and Gaz de France.

They are understood to have made two proposals involving taking either a minority or majority stake in SPE. The business is 63 per cent owned by a collection of local municipal authorities. It is looking for a strong international partner to help it take on the might of the dominant player in Belgium, Electrabel, which owns the transmission network and supplies the bulk of the country's energy.

Centrica already has a joint venture in Belgium with a number of other local authorities called Luminus, which has about 600,000 gas and 200,000 electricity customers but has generally found expansion in mainland Europe difficult because of the limited market liberalisation.

The Centrica-Gaz de France partnership appears to have seen off two Dutch utilities, Essent and Nuon, which had also expressed an interest in partnering SPE. An SPE spokesman said it would decide by the end of this week whether to enter exclusive talks with Centrica and Gaz de France.