Spain

Spain

Two independents pool resources

Eolia Renovables, an independent Spanish wind plant developer and owner, has added 474 MW to its wind holdings and more than doubled its activities in the sector outside Spain by acquiring Swiss company Renergys. Eolia now lays claim to an 1855 MW portfolio, of projects in Germany, France, Poland and Portugal as well as Spain. Of the 474 MW acquired through Renergys, 77 MW is in operation, 117 MW is building and 280 MW is in early stage development. Eolia's Miguel Salís says the deal "gives us a strong European footprint in a region with enormous growth." Neither company disclosed the price of the transaction.

Through the merger, Eolia Renovables also gains a new group of owners. German investors GermanCapital, Ramius Capital and Vintage Fund, together with Morgan Stanley, acquired a majority stake in Renergys in September 2006. In a shares swap, the consortium now becomes the second largest shareholder in Eolia after N+1 Eolia, which manages some 170 small wind developers. Other main shareholders in Eolia Renovables are Spanish bank BBK Banco de Sabadell and institutional investors Kutxa and Fonditel. Earlier plans to grow the company through a public flotation were foiled by uncertainties over Spain's market structure last year and this year's turmoil on the stock markets.

The deal illustrates that independent wind power producers (IWPPs) still play an important role "despite the global credit crunch -- or rather because of it," says Eduard Sala de Vedruna from the Spanish office of US advisory firm Emerging Energy Research. Scarcity of credit is forcing companies to optimise value chains by consolidating their core business, he says, attributing the exit of petrol giants Shell and BP from a range of wind projects in Europe to such pressure. Even for Babcock & Brown, one of the largest owners of wind plant, the sale of its Spanish and Portuguese wind farms in troubled times (story this page) is evidence that "core business for B&B is not wind but financing," says Vedruna.

That wind is the mainstay of "real IWPPs" like Eolia and Renergys makes the companies a suitable match, says Vedruna, calling the value of such a merger "greater than the sum of its parts." The deal will give the combined entity more clout in negotiating finance and contracts with turbine manufacturers and other suppliers, as well as diversify geographical development risk. Eolia also gains the experienced Renergys team.

The marriage will help Eolia and Renergys build a short but sturdy value chain focused on wind development, generation, operation and maintenance, Vedruna says.

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