EDP Renewables (EDPR) has agreed to sell its stake in European wind portfolio totaling 997MW for €800m to institutional investors advised by JP Morgan.
Image: EDPR has also signed a separate agreement with the buyers to provide operations and maintenance services for the wind farms. Photo: Courtesy of EDP Renováveis.
The portfolio that EDPR is selling includes 388MW of operational assets in France, 348MW in Spain, 191MW in Portugal (part of ex-ENEOP assets) and 71MW of operational assets in Belgium.
On an average, the total portfolio has been operating for 7 years now. The company previously sold minority stakes in these wind farms in 2013, 2014 and 2016. And, with the present agreement, EDPR is fully offloading its ownership in these projects.
EDPR has also signed a separate agreement with the buyers to provide operations and maintenance services for the portfolio being sold.
The company is also selling its outstanding shareholder loans in wind portfolio and including the net debt, the total enterprise value of the portfolio amounts to €1.6bn, which translates to €1.6m per MW.
The deal is subject to regulatory and other customary closing conditions, and is expected to be completed in the second quarter of this year.
As per the Spanish energy company, the deal is part of its asset rotation program for 2019-22 period mentioned in its Strategic update announced this March.
The sale of stake and continuation with the operation and maintenance services, allows the company to accelerate value creation and generate up-front profits, while recycling capital to reinvest in growth prospects.
Last month, the company secured contracts to build two wind farms in Colombia, including the Alpha (212 MW) and Beta (280 MW) onshore wind projects. These wind farms are expected to enter into commercial operation in 2022.
EDPR secured 20 year contracts in the auction organized by the Colombian Government. The company is now planning to secure long term power purchase agreements (PPAs) with third parties to sell the electricity generated from the two wind farms.
And, in the same month, EDPR signed two 15-year PPAs to sell 125MW of clean electricity from its Timber Road IV Wind Farm to Microsoft. The wind farm will be operational later this year and will generate enough energy to power 36,000 US homes annually.