Italian energy company Enel has agreed to sell its equity stakes in Enel Distribución Perú and Enel X Perú to China Southern Power Grid (CGSI) in a deal worth about $2.9bn.

The agreement has been signed by Enel Perú, a subsidiary of Enel, which is controlled through Chilean-listed company Enel Américas.

Enel Distribución Perú is a power distribution and supply company while Enel X Perú provides advanced energy services.

Through the transaction, CSGI will acquire Enel Perú’s 83.15% stake in Enel Distribución Perú and a 100% stake in Enel X Perú.

The deal represents an enterprise value of approximately $4bn.

According to Enel, the divestiture is anticipated to result in a decrease of the company’s consolidated net debt of nearly €3.1bn in 2023.

Besides, the Italian utility expects the deal to make a positive impact on the company’s net income for 2023, which comes to about €500m.

Enel stated that the sale of its Peruvian assets aligns with the company’s strategic plan to refocus on countries like the US, Brazil, Italy, Spain, Chile, and Colombia.

Enel Group CEO and general manager Francesco Starace said: “With this transaction, we are able to maximise the value of the investments carried out so far in grid digitalisation and advanced energy services in Peru as we continue to implement the asset disposal plan announced to the markets during the presentation of Enel’s Strategic Plan last November and aimed at finalising the Group’s streamlining process that has always been a cornerstone of our Strategy.”

The closing of the deal is subject to clearance from antitrust authorities in Peru, certain customary conditions, and approvals of competent Chinese authorities for outbound direct investments (ODI).

Last month, the Italian utility company agreed to sell its equity stake in its Romanian operations to Greek electric power company Public Power Corporation (PPC) in a deal worth €1.3bn.