Enel Signs Agreements to Sell Peru Power Generation Assets

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Written by Amir Richani for Industrial Info Resources (Sugar Land, Texas)--Enel SpA (Rome, Italy) decided to sell its electricity generation branch in Peru to Niagara Energy (Peru) a year after selling its distribution units to a Chinese company.

Enel Peru has signed an agreement to sell its stakes to Niagara Energy at Enel Generacion Peru and Compañia Energetica Veracruz in a deal equivalent to US$1.3 billion. The deal was first announced in November last year and is now moving forward following the fulfillment of the conditions presented in that agreement, including the clearance from the antitrust authority in Peru.

Through this transaction, Niagara Energy, which is controlled by global fund Actis, will receive 86.95% of the shares at Enel Generación Peru and 100% of the stakes at Compañia Energetica Veracruz.

Enel Generacion Peru has an electricity generation capacity of 1,677.7 megawatts (MW), with 47% of the power generated through hydroelectric plants and 53% coming from thermoelectric assets.

Most of the company's assets are located near Lima, such as the Ventanilla and Santarosa thermoelectric plants with a capacity of 485 MW and 103 MW, respectively, and the Callahuanca, Huampani, or Moyopampa hydroelectric plants that together hold a capacity of about 183.8 MW. Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Plant Database can click here to view Enel's plants in Peru.

In April last year, Enel Peru also agreed to sell its stakes in Enel Distribucion Peru and Enel X Peru to the Chinese company China Southern Power Grid International (Guangzhou, China) in a transaction totaling around US$2.9 billion. The deal included 83.15% of the stakes at Enel Distribucion Peru and 100% in Enel X Peru.

Yet the sale of Enel Distribution Peru has raised criticism in the South American country due to the monopoly that such a transaction creates in Lima. The National Society of Industries issued a statement in February raising concerns about this acquisition, which would put 100% of Lima's electricity distribution in the hands of Chinese state companies, according to a statement from the society.

However, these divestment efforts are part of Enel's group strategic plan, which seeks to divest assets and raise funds.

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