By Isla Binnie, Nina Chestney and Susanna Twidale
MADRID/LONDON (Reuters) – EDP-Energias de Portugal is preparing to sell up to three portfolios of renewable energy assets in Europe this year, potentially worth a combined 1.5 billion euros ($1.79 billion), to help fund its clean energy ambitions, its chief executive said.
In line with a global effort to cut planet-warming carbon emissions, Portugal’s largest utility said earlier this year it wanted to abandon coal-fired power generation by 2025 and produce energy only from renewable sources by the end of the decade.
Renewable and low-carbon energy businesses are attracting high valuations on public and private markets from cash-rich investors who expect steady growth in the market as policymakers seek alternatives to fossil fuels.
As part of a plan to sell around one third of the new wind farms and solar parks it builds, EDP will announce two portfolio sales in Europe in the short term, EDP’s chief executive Miguel Stilwell de Andrade told Reuters in an interview.
“There is a third one we are potentially looking at, and we have also started work on asset rotation deals for 2022,” he added.
EDP would aim to close the deals before the end of the year and invest capital back into the business towards its aim of adding 50 gigawatts of clean energy capacity by 2030.
“We can do more than we can finance purely on our balance sheet,” Stilwell de Andrade said.
The portfolios are in Europe and will be big enough to produce around 200 megawatts (MW) of power, he said, adding that they could be valued at between 300 million and 500 million euros each.
One source familiar with the matter told Reuters EDP was looking to sell wind farms located in Cadiz, southern Spain and Tarragona in the northeast with combined capacity of 180 MW.
Stilwell de Andrade declined to comment on specific details, but said he hoped to give more information to the market before August.
As well as renewable generation plants, EDP is also looking into potentially selling power transmission assets in Brazil, which would allow it to pour more capital into new greenfield projects, a company spokesperson said.
Stock markets currently value shares in EDP’s subsidiary EDP Renewables (EDPR) at around 15 times their core earnings, compared to around 10 times for EDP itself.
Last month, the International Energy Agency said investors should not fund new oil, gas and coal supply projects if the world wants to reach net zero emissions by mid-century, and 90% of electricity generation should come from renewables by 2050.
Stilwell de Anrade also said EDPR and its French partner Engie will bid for leases to build offshore wind projects off the coast of Scotland, in ScotWind, the next round of leasing for offshore wind development there.
That is likely to involve floating turbine technology.
Last month Macquarie’s Green Investment Group (GIG) and Scottish offshore wind developer Renewable Infrastructure Development Group said they have also partnered to compete in the ScotWind tender, which will close to bidders on July 16.
($1 = 0.8375 euros)
(Reporting by Isla Binnie in Madrid, Nina Chestney and Susanna Twidale in London and Sergio Goncalves in Lisbon; Editing by Veronica Brown and Jan Harvey)
