Abu Dhabi-based clean energy-focused developer Masdar announced an agreement with Italy-based European utility giant Enel to partner on 2.5 GW of renewable energy in Spain, including the acquisition of a 49.99% stake in EGPE Solar, encompassing Enel’s Spanish subsidiary Endesa’s portfolio of operational solar plants for €817 million (USD$887 million).
The deal aims to support Masdar’s ambitious clean energy growth plans, and Enel’s efforts to position its balance sheet for further grid and renewables-focused investments.
Endesa’s solar portfolio includes 48 operational solar plants, and the company’s aim to add 0.5 GW of battery energy storage system (BESS) to the projects. The agreement also foresees a 15-year power purchase agreement (PPA) under which Endesa is expected to acquire 100% of the energy generated by the PV plants. Additionally, the company’s announced an MOU aimed at jointly developing renewable energy projects in Spain.
The transaction forms part of Masdar’s growth plans in Europe, and follows the company’s recent agreements to acquire a 67% stake in Greek renewables company Terna Energy, and a 49% stake in Iberdrola’s Baltic Eagle offshore wind farm in Germany. Masdar has set goals to scale its global renewable energy capacity to 100 GW, and its production of green hydrogen to 1 million tonnes by 2030.
Masdar CEO Mohamed Jameel Al Ramahi said:
“By forging a strategic partnership in Spain with Endesa for 2.5GW of solar and battery storage assets, we are taking a significant step forward in our ambitious growth plans in one of Europe’s largest renewables markets. This deal with Endesa will play a significant role in supporting Spain and the wider EU in meeting their net-zero ambitions.”
According to Enel, the deal aligns with its “Partnership” business model, unveiled in November 2023 as part of the company’s 2024-2026 strategy, with proceeds from the transaction used to reduce debt. While including plans to invests over €30 billion in grid and renewables capex between 2024 and 2026, the strategy also targeted a reduction in leverage in an environment of higher interest rates, with Net Financial Debt/EBITDA expected to drop to around 2.3x in 2026 from 3.1x in 2022. The transaction follows a recent deal by Enel with clean energy-focused infrastructure asset manager Sosteneo for a €1.1 billion minority stake in its Italian battery storage developer Enel Libra Flexsys.
On a conference call with analysts discussing the company’s quarterly results, following the announcement with Masdar, Enel Group CEO Flavio Cattaneo said:
“In the first six months of the year, we have already completed two deals worth around €2 billion out of six to be cashed in by 2026. In particular, following the successful completion of the partnership with Sosteneo in Italy, today we announced a partnership with Masdar our solar assets in Spain. This is a clear example of how we can enhance the value associated with our project.
“In the partnership business model, investments are shared with the third parties to foster capacity growth and to accelerate paybacks and return, and more will come.”