Preparing for listing in Lisbon -- EDP starts its road show

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Following in Iberdrola's footsteps, Energias de Portugal (EDP) is the next European utility preparing an Initial Public Offering (IPO) of its renewable energy business, planned for May on the Lisbon Euronext exchange. In an exercise aimed at raising investor awareness, EDP has released a series of headline figures highlighting the growth of EDP Renováveis, its renewables holding that owns NEO Energia in Europe and Horizon Wind Energy in the United States.

EDP says its 3.6 GW of operating wind power plant at the end of last year puts it in fourth position in the world rankings behind Iberdrola, Acciona and American FPL. Of the total portfolio, 1490 MW is in the US, 1639 MW in Spain, 424 MW in Portugal and the remainder in France and Belgium.

Last year was its busiest yet, with around 800 MW added in the US and nearly 600 MW in Europe. The intention now is to more than double capacity to 2010, putting online 1200 MW each year from 2011 to 2013. "Wind and hydro will be the key value drivers for EDP over the next five years," says the company. It is earmarking 70% of its capital expenditure for hydro and wind, with 31% going to wind development in America and 27% to wind in Europe.

EDP has contracted 90% of its turbine needs for 2009 and 45% for 2010. Up to 2010, 91% of EDP's wind capacity will have been supplied by five companies: Vestas, Gamesa, GE, Suzlon and Ecotecnia. It intends to concentrate its purchases on regional suppliers and cites Enercon in Portugal, Gamesa in Spain, and Vestas in the United States.

Moving outside its limited sphere of activity geographically, EDP says that in Europe it will prospect markets in Italy, the UK, and Ireland as well as in eastern Europe. It also has an eye to the European offshore market, France in particular. In North America, EDP Renováveis is eyeing Mexico and Canada and in Latin America it will leverage the local presence of Energias do Brasil while awaiting regulatory developments.

The aim of the IPO is to increase the share capital of EDP Renováveis by 20-25% to finance further company growth. The holding has been valued by analysts at Deutsche Bank at EUR 10 billion.

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