Frosty indications from partnership

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Negotiations for an international joint-venture wind company between Spain's dominant wind developing partnership, Energía Hidroeléctrica de Navarra (EHN) and giant utility Iberdrola, have come up against a brick wall. The breakdown throws cold water over earlier announced plans by the companies to jointly put up 5000 MW of wind power worldwide by 2005.

Relations also appear to be cooling in the companies' existing and prosperous partnership, which has seen the installation of 1000 MW of wind turbines in the regions of Navarra and Castile-La Mancha and another 400 MW building. The most notable indication of a cooling between the two came when EHN announced that its affiliate, Energías Eólicas Europeas (EEE), had won a business magazine prize for best project finance in Europe's electricity sector. What EHN omitted to say was that EEE is a 50/50 joint venture with Iberdrola.

Iberdrola followed the EHN announcement with its own version of the news, claiming a 68.5% stake in EEE via its 50% direct share and its 37% share in EHN.

Only three months ago the two had summoned the national press and Navarra dignitaries to witness the signing of an agreement to pool the renewables resources of the two companies to form one of the largest operators of wind plant in the world -- but at the last moment Iberdrola pulled out of the event, which was cancelled (Windpower Monthly, February 2002).

With Iberdrola determined to capitalise on EHN's successful wind ventures on the one hand, and EHN's institutional shareholders in Navarra showing equal determination to keep these successes associated with the region on the other hand, the stalemate still seems far from a solution. EHN's is owned 45% by regional government affiliates.

The business award from magazine Euromoney was for a record EUR 913 million credit to back 31 wind plant totalling 1173 MW in Castile-La Mancha. Sources close to Iberdrola point out that without the backing of a large utility, EEE would never have pulled the credit off.

EHN was also recently presented with an international Energy Globe 2002 prize by an Austrian energy saving association, which chose to honour the Spanish company for its work in renewables from among over 1300 candidates. Last year, EHN won the Financial Times' award for Best Renewables Company in the World 2000.

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