Enel & Sosteneo to Develop Battery and Open-Cycle Plant

Source: www.gulfoilandgas.com 3/1/2024, Location: Europe

- The agreement provides for the entry of Sosteneo, which will acquire 49% of the share capital, in Enel Libra Flexsys, a company fully-owned by Enel Italia, for a consideration of approx. 1.1 billion euros upon closing. Enel Libra Flexsys is established with the aim to develop and operate a portfolio of projects mainly composed of Battery Energy Storage Systems (BESS). The enterprise value on a 100% basis of Enel Libra Flexsys recognized in the agreement is equal to around 2.5 billion euros
- Enel will retain control of Enel Libra Flexsys and manage the project portfolio in line with the “Partnership” business model outlined in the 2024-2026 Strategic Plan

Enel S.p.A. (“Enel”), acting through its subsidiary Enel Italia S.p.A. (“Enel Italia”), has signed an agreement with Sosteneo Fund 1 HoldCo S.à.r.l. (“Sosteneo HoldCo”)[1], for the acquisition by the latter of 49% of the share capital of Enel Libra Flexsys S.r.l. (“Enel Libra Flexsys”), a company fully-owned by Enel Italia and established for the implementation and operation of a portfolio of:

- 23 Battery Energy Storage Systems (BESS) with a total capacity of 1.7 GW;
- 3 renovation projects for Open Cycle Gas Turbine (OCGT) plants with a total capacity of 0.9 GW.

The agreement foresees the recognition of a consideration by Sosteneo HoldCo of approximately 1.1 billion euros for the acquisition of 49% of the share capital of Enel Libra Flexsys. Furthermore, the consideration is subject to an adjustment mechanism customary for these kinds of transactions. The enterprise value on a 100% basis of Enel Libra Flexsys recognized in the agreement is equal to around 2.5 billion euros once the investment cycle foreseen by the project will be completed.

“Energy storage systems are a key asset in the energy transition, to which Enel is strongly committed: this is why they hold such an important position in our 2024-2026 Strategic Plan,” said Stefano De Angelis, CFO of the Enel Group. “This partnership with a leading player such as Sosteneo enables us to further accelerate the development of storage solutions supporting Italy’s energy system, optimizing capital allocation with the aim to create value for all stakeholders.”

The transaction is in line with the “Partnership” business model outlined in the Enel Group’s 2024-2026 Strategic Plan, with the aim to retain control of strategic assets while maximizing productivity and returns on invested capital.

The closing of the sale, which is expected to occur by the first half of 2024, is subject to a number of conditions precedent customary for these kinds of transactions, including the clearance from the competent antitrust authorities and the successful completion of the golden power procedure with the Presidency of Italy’s Council of Ministers.

The transaction is expected to generate upon closing a positive impact of about 1.1 billion euros on the Enel Group’s consolidated net debt, while it is set to bear no impact on the Group’s economic results, as Enel will continue to maintain control and fully consolidate Enel Libra Flexsys upon the closing of the transaction.

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