Yes, it's there; but made up by Paddy Graber, I strongly suspect, to fill a gap in a song he probably learned from a record, turning it into an "Irish version" by adding "Donegal" wherever it would fit. The language of that verse isn't really consonant with the rest.

This is too rare a song to have turned up unremarked in Donegal (there's no evidence that it's ever been found in tradition outside Orkney and Shetland); and I'm afraid Paddy has on other occasions made claims for some of his material which are are very unlikely to be true. Treat with extreme caution in the absence of supporting evidence.