Energias de Portugal (EDP) has agreed to sell a portfolio of six hydro plants in Portugal to a consortium of investors formed by ENGIE (40% of equity stake), Crédit Agricole Assurances (35%) and Mirova — Natixis Group (25%), in a transaction valued at €2.2 billion.
The disposed hydro portfolio comprises 1,689 MW of installed capacity in the Douro river basin, namely three run-of-river plants (Miranda, Picote and Bemposta) with 1.2 GW of installed capacity and three pumped storage power plants (Foz Tua, Baixo Sabor and Feiticeiro) with 500 MW of installed capacity.
According to a press release, the agreed transaction value represents an enterprise value of €2,210 million (with equity value subject to adjustments until the conclusion of the transaction). In 2018, in which hydro production index in Portugal was 1.05x, EBITDA contribution from this portfolio amounted to €154 million.
The transaction is expected to be completed by the second half of 2020, following the fulfillment of the applicable corporate and regulatory conditions.
Over the past 12 years, EDP executed a plan for the construction and repowering of hydroelectric power plants in Portugal, increasing its installed capacity in the country by 2.6 GW. After this transaction, EDP will have hydro generation capacity in Portugal of 5.1 GW, making it the second largest hydro operator in Iberia.
The company says this transaction aims at optimizing its portfolio, decreasing its exposure to concentrated hydro volatility and merchant prices, reinforcing the low business risk profile and improving financial leverage.
In 2018, EDP sold a portfolio of 21 small hydropower plants to Aquila Capital.