Italian energy group Enel SpA (BIT:ENEL) has struck a USD-1.35-billion (EUR 1.15bn) deal to sell a majority stake in a portfolio of renewable energy assets in Mexico totalling 1,700 MW, it announced today.
Enel Green Power SpA (EGP) will sell an 80% stake in a newly-formed Mexican holding company, owner of eight special purpose vehicles (SPVs), to Canadian institutional investor Caisse de depot et placement du Quebec (CDPQ) and CKD Infraestructura Mexico SA de CV (CKD IM), the investment vehicle of local pension funds.
The particular SPVs own three plants in operation with a combined capacity of 429 MW, and five under construction totalling 1,283 MW. More specifically, these are the solar plants Villanueva I (427 MW), Villanueva III (327 MW) and Don Jose (238 MW), along with the wind farms of Amistad (198 MW), Dominica (200 MW), Palo Alto (129 MW), Salitrillos (93 MW) and Vientos del Altiplano (100 MW). The assets will be developed, built and operated by EGP. They hold long-term power purchase agreements (PPAs).
EGP will receive USD 340 million for the 80% stake in the new Holdco. At USD 1.01 billion, the remaining portion of the deal value represents financing granted to the SPVs by the buyers. Enel noted that the Holdco’s enterprise value is estimated at USD 2.6 billion, with the equity value amounting to roughly USD 400 million.
The transaction is pending clearance from the local antitrust authorities and is scheduled for completion by the end of the year. It is expected to reduce Enel Group’s consolidated net debt by about USD 1.9 billion.
“We are enthusiastic about the opportunities offered by the Mexican renewables market and it is our intention to continue to invest in the country where EGP will play an active role by managing operating assets and developing new initiatives,” said Antonio Cammisecra, head of Enel Green Power.
Enel noted that its EGP subsidiary may transfer additional projects to the Holdco as from January 1, 2020, thus increasing its interest in the entity.
The Italian group will retain direct control of about 300 MW of capacity already installed in Mexico, including the 74-MW Stipa Nayaa, 70-MW Zopiloapan and 102-MW Sureste wind farms, as well as the 30-MW El Gallo, 12-MW Chilatan and 8-MW Trojes hydropower plants. In addition, it will keep the 134-kW COP 16 solar array.
(USD 1.0 = EUR 0.852)
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