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August 4 (Renewables Now) - Enel SpA (BIT:ENEL) has agreed to acquire the entire share capital of ERG Hydro Srl together with its 527-MW hydropower portfolio from Italian energy group ERG SpA (BIT:ERG).
The Italian utility major said that it has agreed on a consideration of EUR 1.039 billion (USD 1.23bn), giving the business an enterprise value of EUR 1 billion, and will pay for the acquisition using cash flows from current operations and existing debt capacity.
ERG Hydro, which ERG controls via a wholly-owned subsidiary, holds a portfolio of 19 hydropower plants, seven micro-hydro plants, of which four are projects in development, seven large dams and four reservoirs located in Umbria, Lazio and Marche.
Combined, the plants generate around 1.5 TWh on average per year. Some 35% to 40% of the annual production is subsidised until 2025, ERG said separately.
The transaction will include Enel taking in 114 workers, which currently operate the plants.
ERG Hydro’s plants will help the Enel group reach some 13 GW of installed hydroelectric capacity in Italy. With geothermal, wind and solar PV, the group’s total clean energy capacity would stand at around 14.5 GW, Enel said.
For ERG, the latest move will get it closer to the goal of becoming a pure-play wind and solar business. The energy company expects to finalise the sale of its thermoelectric assets in the coming months, ERG CEO Paolo Merli said in a statement.
“Asset rotation, one of the pillars of our 2021-2025 strategic plan, will allow us to accelerate the process of growth and geographical diversification with a better balance of our businesses between Italy and abroad,” said Merli.
The transaction is subject to several levels of regulatory approval and could close in early 2022.
(EUR 1.0 = USD 1.186)