The company has received non-binding offers for an 80% stake in its energy storage business from several potential buyers, including infrastructure funds. Enel intends to retain the remaining 20% of the unit. The battery storage division, established in 2015, currently has more than 2.7 GW under construction or in operation, primarily in Italy. The business also includes approximately 1.1 GW of contracted capacity awarded by Italian grid operator Terna at the capacity market auction in Feb’22.
The move aligns with Enel's strategy to streamline its operations and concentrate on its core business of generating and distributing electricity. The strategy is aimed at decreasing the group’s debt to ~$52bn by the end of 2023, and includes the sale of approximately ~$22bn of assets between 2023-25. The restructuring will help Enel focus on operations in its six core markets in Europe and the Americas. The capital raised from the potential deal will be deployed to fund a ~$38bn investment program for 2023-25 aimed at growing its renewable energy capacity to 75 GW by 2025.
Enel's recent strategy is consistent with that of several other major European utilities, including Iberdrola and EDF, which have also announced billion-dollar asset rotation programmes to fund their extensive investment plans. Iberdrola has disclosed plans to sell partial stakes in some of its assets and non-core operations across Europe and North America, raising funds to support its $47 billion capex program during 2023-2025. Similarly, EDF has also announced its intention to sell a stake in its Italian subsidiary Edison. Enerdatics understands that the sales will also help the companies to fund their investments without tapping the debt market, where the cost of capital has been rising due to interest rates hikes by the European Central Bank in an effort to curb inflation.
Over the short term, Enerdatics expects to see private equity (PE) investors and oil and gas (O&G) majors with the liquidity and development expertise to acquire the assets being sold by utilities, mirroring investments by Norges Bank and Energy Infrastructure Partners (EIP) in Iberdrola’s European assets.
The above analysis is proprietary to Enerdatics’ energy analytics team, based on the current understanding of the available data. The information is subject to change and should not be taken to constitute professional advice or a recommendation.
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