12 Oct 2015 – EDF [EPA:EDF], the listed French electricity group, is finalizing the sale of its wind farm assets in Portugal, several sources said.
Up for sale is the 50% stake that EDF has in several wind farms in Portugal, said two sources close to the situation, while the remainder is in the hands of local investors. SocGen is advising on the deal, which, according to one of the sources, is in the final stages.
EDF declined to comment on this process, although it said that in Portugal it has 507 MW of wind farm operations.
An EDF source in Portugal also declined to comment on the sale, but explained that the 507 MW is under EDF’s renewable energy subsidiary EDF Energies Nouvelles Portugal, which is 100% owned by EDF.
Some of the wind farms in this subsidiary are 100% owned by EDF, while others are shared with local partners, said the source. As an example, the source said EDF has a 50% stake in Empreendimentos Eólicos do Vale do Minho, which has close to 300 MW in operation, one of which is the 240 MW Parque Eólico do Alto Minho I, which at the time it was inaugurated was considered the largest wind farm in Europe.
Bidders said to be involved in the process include Talanx [TLX GR] of Germany and Enbridge [TXS:EN; NYSE:ENB] of Canada, a third source close to the process said. An industry source said that a UK-based pension fund that has been analyzing deals in Spain and Portugal is also a candidate. Enbridge did not respond to requests for comment.
Talanx declined to comment on the process, although a company spokesperson said it is interested in investing in the wind sector in both segments of onshore and offshore. Equity investments as well as debt financing are part Talanx’s strategy to grow the wind portfolio, she said.
In the past Talanx’s geographical focus for investment in wind were Germany and France but now the company is looking at all the EU countries, she said. To date Talanx has no investments in the wind sector in Portugal, she added. In Portugal the company invested in water supply company Indaqua.
She noted that Talanx’s first investment in offshore wind was the financing of German farm Gode Wind I in September 2015. This project, which is expected to have a total capacity of 330 MW, requires investment above EUR 1bn, according to a company’s presentation. Talanx Asset Management structured the bond and as anchor investor the company subscribed up to EUR 320m, according to a company’s presentation. Talanx has a total of 220m MW in wind, both operational and in development.
In terms of a potential deal value for EDF’s assets in Portugal, the industry source said recent deals in Portugal will serve as a precedent. A second industry source said the market value for operational wind parks in Portugal is around EUR 1.66m per MW.
Recent deals in Portugal include one announced two weeks ago where Magnum Capital Industrial Partners sold Iberwind to Cheung Kong Infrastructure (CKI). The deal valued Iberwind, with 31 wind farms in Portugal with a total of around 685 MW, at around EUR 1bn.
In the same week, Enel Green Power announced it sold its Portuguese company Finerge Gestão de Projectos Energéticos to First State Wind Energy Investments. The total amount of the sale is approximately EUR 900m and includes the repayment of loans granted by the partner Finerge. With the planned segregation of assets that Finerge is involved in in Portugal, it will own wind farms with a total installed capacity of 863 MW, equivalent to a net capacity 642 MW, as reported.