trending Market Intelligence /marketintelligence/en/news-insights/trending/WOsjSbhbVSPYn5Aks1Dpog2 content
Log in to other products

Login to Market Intelligence Platform

 /


Looking for more?

Contact Us

Request a Demo

You're one step closer to unlocking our suite of comprehensive and robust tools.

Fill out the form so we can connect you to the right person.

If your company has a current subscription with S&P Global Market Intelligence, you can register as a new user for access to the platform(s) covered by your license at Market Intelligence platform or S&P Capital IQ.

  • First Name*
  • Last Name*
  • Business Email *
  • Phone *
  • Company Name *
  • City *
  • We generated a verification code for you

  • Enter verification Code here*

* Required

Thank you for your interest in S&P Global Market Intelligence! We noticed you've identified yourself as a student. Through existing partnerships with academic institutions around the globe, it's likely you already have access to our resources. Please contact your professors, library, or administrative staff to receive your student login.

At this time we are unable to offer free trials or product demonstrations directly to students. If you discover that our solutions are not available to you, we encourage you to advocate at your university for a best-in-class learning experience that will help you long after you've completed your degree. We apologize for any inconvenience this may cause.

In This List

EDP to sell €2.21B hydro portfolio in Portugal, writes down Iberian coal fleet

As COVID-19 Wears On, Regulators Examine Moratorium Extensions, Cost Recovery

Essential Energy Insights - June 11, 2020

Webinar Replay

Deep Dive on Oil & Gas for Financial Institutions

Essential Energy Insights - May 28, 2020


EDP to sell €2.21B hydro portfolio in Portugal, writes down Iberian coal fleet

EDP - Energias de Portugal SA is reshaping its electric generation portfolio on the Iberian Peninsula, reaching a deal to sell a 1,689-MW portfolio of hydroelectric power plants in Portugal and writing down 2,400 MW of coal-fired power plants to reflect what an executive described as a "significant deterioration" in the economics of coal.

A consortium of French investors led by Engie SA and including Crédit Agricole Assurances SA and Mirova won a bid to buy the hydro portfolio for €2.21 billion, according to a Dec. 19 deal announcement. The assets have attracted wide interest from both strategic and financial investors during the course of an eight-month competitive sale process.

The portfolio includes three recently repowered run-of-river plants that date back as far as the 1950s and three newer pumped storage plants built since 2015. Together, they generated EBITDA of €154 million in 2018.

"We believe that there was a fundamental lack of appreciation for the value of the [assets]. And I think that this transaction really highlights the value of that," EDP CFO Miguel Stilwell de Andrade said on a Dec. 19 call with analysts about the deal.

Engie will take a 40% stake in the portfolio, Crédit Agricole Assurances will take 35% and Mirova will take 25%. The transaction is expected to close during the second half of 2020.

J.P. Morgan is financial adviser to Engie, with Bredin Prat and Cuatrecasas serving as the company's legal advisers. BNP Paribas is financial adviser to Crédit Agricole Assurances, while BDGS and CLP-Cliperton are legal counsel to Crédit Agricole Assurances and Mirova, respectively.

Coal write-down

EDP's hydro disposal forms part of a wider €6 billion asset rotation program and helps reshape its Iberian generation portfolio in a strategy that now also includes writing down about 2,400 MW of coal-fired power plants on the peninsula, the utility said Dec. 19.

"There's been a significant deterioration of the outlook for coal power plants in Iberia," the CFO said. "This is obviously driven very much by the increase in the CO2 prices but also by lower gas prices ... We've all seen the inversion in the merit order."

EDP operates two coal facilities in Spain and one in Portugal, which contributed just 2% of the company's EBITDA in the first nine months of the year. This figure is expected to reduce to zero in the "short- to medium-term," de Andrade said. The utility expects to have to pay about €300 million in one-off costs relating to the assets in 2019.

"So clearly, we are writing down a substantial, very substantial, amount of the value of these assets," the CFO added. "We are not closing them down; we're simply saying that we are writing them down and we will keep them as long as they're profitable."

If the plants stop being profitable, "we'll obviously take the necessary actions," de Andrade said, adding that EDP is exploring ways to reuse the sites, including converting them to burn gas or installing renewables.

EDP's move to write down its coal assets follows in the footsteps of Spanish utility Endesa SA, which announced in November a €1.4 billion impairment against its own fleet in Iberia.