Italian Enel plans to sell a part of its renewables portfolio in Greece, or the entire business, with offers expected later this month.
The Italian group has decided to divest from a number of countries, such as Romania and Greece, to raise cash and support other activities.
The company has been active in the Greek market since 2008 using the so-called creating shared value (CSV) model. Enel Green Power (EGP) has 60 different projects with 551 MW of total installed capacity. Specifically, wind farms constitute 368 MW, photovoltaics are at 163 MW and small hydropower plants have 19.3 MW in total. According to Hellenic Wind Energy Association, Enel Green Power is currently the fourth largest investor in Greek wind farms in terms of installed capacity.
Based on reports in the Italian press, large international investors are interested in acquiring EGP’s Greek portfolio, among them Macquarie, which has already bought 49% of the national distribution operator (HEDNO), KKR, State Grid Corp. of China, which holds 24% of the Independent Transmission Operator (IPTO), Ardian from France and equity fund Antin Infrastructure Partners. Macquarie is already active in Greece in the sector through its subsidiary CERO Generation.
Sale of Enel Romania under negotiation with PPC
Enel is also interested in selling its Romanian subsidiary, with Greek Public Power Corp. (PPC) being the primary candidate under an exclusivity agreement. The two sides have been in negotiations for months and a deal is expected soon.
It should be noted that Enel is one of the main power suppliers in Romania, covering the area of Bucharest and two other highly populated zones with a total of three million consumers, while also operating the local grid. Additionally, it has 534 MW of renewable energy capacity.
Stassis: PPC is exploring investment opportunities in the Balkans
Enel’s local subsidiary has faced reduced profit margins in Romania lately and this means that the sale may occur at a lower price than otherwise for PPC. The Greek group plans to expand its presence in the Balkans as part of a growth strategy that will offset its smaller share in the Greek power market.
It remains to be seen whether PPC can profit from Enel’s Romanian portfolio. Its underperformance can be attributed to special circumstances caused by the energy crisis over the last couple of years. The Greek group hopes for long-term profitability after the stabilization of the market.
PPC CEO George Stassis, who was formerly chairman and CEO of Enel Romania, said recently that the group continues to explore investment opportunities in the Balkans in accordance with its strategic plan.