Enel reorganises renewables operations in Spain and portugal

On 15 and 17 March 2010 respectively, the Boards of Directors of Endesa SA (Endesa) and Enel SpA approved an operation that foresees the integration of the renewable energy operations of Endesa and Enel Green Power SpA (EGP) in Spain and Portugal.

Currently, Endesa pursues its renewables operations in Spain and Portugal through Endesa Cogeneración y Renovables S.L. (ECYR), a wholly-owned subsidiary of Endesa Generación S.A, which is in turn 100% owned by Endesa SA.

EGP is active in the Spanish and Portuguese renewable energy sectors through its stake in Enel Unión Fenosa Renovables SA (EUFER), an equal share joint venture with Gas Natural/Unión Fenosa, held indirectly through its Dutch subsidiary EGP International BV (EGPI BV), which is wholly-owned by EGP.

The aim of the operation is to ensure, within EGP, the unified management of development on the Iberian peninsula of all of the activities of EGP and Endesa in the renewable energy. This objective will be pursued through ECYR, whose share capital will be held by EGP (60%) and Endesa (40%).

The integration will be implemented through the following steps, to be completed by 31 march 2010:

1. EGPI BV to acquire 30% of ECYR for about 326 million euros;

2. capital increase for ECYR reserved for EGPI BV, which will subscribe the offering with the transfer of its holding in EUFER and a cash payment of about 534 million euros. This will give EGPI BV a post-increase stake of 60% of the new share capital of ECYR.

The acquisition of the holding and the subsequent capital increase of ECYR will be made on the basis of market values, as appraised by a number of independent investment banks, which have issued a fairness opinion for the transaction.

The resulting company that, controlled by EGP, will maintain and have an operational capacity of about 1.4 GW once fully operational, with a generation mix diversified as follows: 88% wind power, 4% mini-hydro, 1% photovoltaic and 7% co-generation and biomass.

Endesa will remain directly involved and will play a key role in the operational management of the plants, the electricity generated and relations with central and local authorities.

On 9 November 2009, Enel Green Power (EGP), acting through its subsidiary Enel Latin America, reached an agreement with Energías Renovables, Térmica and Hidráulica de México, S.A. (Enerthi) aimed at developing wind farm projects in Mexico for a total capacity of up to 1,000 MW. Under the agreement, EGP will have exclusive access to wind energy projects being developed by Enerthi, as well as the right to acquire these projects once they are fully authorized. Thanks to this agreement, EGP will strengthen its presence in the promising Mexican renewable energy market, which has a wind power potential of more than 10,000 MW.

On 26 November 2009, Enel Green Power, acting through its subsidiary Enel North America, reached an agreement with Geronimo Wind Energy to acquire both a minority stake in the US company as well as cooperating for the joint development of Geronimo Wind Energy’s wind power pipeline, which includes projects with a total capacity of up to 4,000 MW. Under the agreement, EGP will have a priority right to acquire and operate the wind projects developed.

On 21 January 2010, Enel North America (a subsidiary of Enel Green Power) and NRG Energy reached an agreement enabling Enel North America to purchase from NRG Energy, Padoma Wind Power, a wind development company. Padoma is developing about 4,000 MW of potential projects in California which, once built, will help the State meet its Renewable Portfolio Standard target of 33% of retail sales from renewable energy resources by 2020. The two parties also reached an agreement giving NRG the right of first offer should Enel North America seek an equity partner in Padoma project pipeline.