Enel, through its subsidiary Enel Produzione, has agreed to acquire ERG Hydro, which owns a portfolio of 527MW of hydro plants in Italy, for an enterprise value of €1.03bn.
ERG Hydro is the hydroelectricity business of ERG Power Generation, which is a fully owned subsidiary of Italian renewable energy group ERG.
The acquisition includes 19 hydro plants, seven micro hydro plants, seven large dams and four reservoirs located in Umbria, Lazio and Marche, with an average annual production of about 1.5TWh.
The transaction is expected to close early in 2022, subject to fulfilment of certain conditions, according to normal market practice for the current transaction type.
Enel intends to finance the acquisition consideration using cash flows from its current operations and existing debt capacity.
On closing of the transaction, the company’s installed hydro capacity is expected to reach around 13GW in Italy.
Enel said that the transaction is in line with its current strategic plan, and is expected to contribute to increasing installed renewable capacity in Italy.