News

Enel encounters obstacles in selling stake in green energy unit

Alexander Richter 9 Dec 2008

Enel, the Italian utility giant, announced on December 1, 2008 that it founded Enel Green Power. The new entity incorporates all of Enel's activites in the wind, solar, geothermal, run-of-the river hydroelectric and biomass fields in Europe, North America and Central and South America.

Enel, the Italian utility giant, announced on December 1, 2008 that it founded Enel Green Power. The new entity incorporates all of Enel’s activites in the wind, solar, geothermal, run-of-the river hydroelectric and biomass fields in Europe, North America and Central and South America. The company has about 4,300 MW of installed capacity, of which 678 MW are geothermal capacity in Italy (671 MW) and North America (7 MW). See press release of Enel here.

Through the sale of a minority stake (about 20-30%) in the Enel Green Power, Enel is trying to raise about EUR 2.8bn (US$ 3.6bn) to essentially cut its debt position.

Now the Wall Street Journal talks about the difficulties the company faces in selling that stake. With the financial crisis and falling oil prices, the paper claims that the “wind is being taken out of renewable energy’s sails”. And indeed the current market environment should make this situation difficult. On the other hand, this is a good investment opportunity into green cash generating assets and a company with a strong project portfolio in many of the world’s most exciting regions for geothermal potential. Article can be found here.