EDP Sells Italian Solar Assets for €250 Million

• EDP Energias de Portugal SA sells its 207-MW solar portfolio in Italy to Encavis AG for over EUR 250 million, enhancing renewable energy growth in Europe.

EDP Energias de Portugal SA is divesting its entire stake in a 207-MWac/248-MWdc solar portfolio in Italy through its renewables arm, EDP Renovaveis SA. The portfolio, comprising five solar farms in central and southern Italy, is being sold to German operator Encavis AG for over EUR 250 million. Four of the farms have long-term PPAs, while one has a 20-year CfD.

The transaction, pending regulatory approval, is expected to close later this year. The enterprise value may be adjusted at closing, considering capacity extension possibilities and synergies from hybridisation. EDP holds a 71.3% stake in EDPR.

Why is EDP selling its 207-MWac solar portfolio in Italy to Encavis AG?

• Strategic Focus: EDP is focusing on reallocating resources to other strategic markets or projects that align more closely with its long-term goals.
• Capital Recycling: Selling the portfolio allows EDP to recycle capital, freeing up funds for investment in new projects or technologies.
• Market Conditions: The Italian solar market may have reached a maturity level where EDP sees more value in selling assets than in holding them.
• Financial Optimization: The sale could improve EDP's financial metrics, such as reducing debt or increasing liquidity.
• Partnership Opportunities: The transaction with Encavis AG could open doors for future collaborations or partnerships in other markets.
  
• Regulatory Environment: Changes or anticipated changes in the regulatory environment in Italy might have influenced the decision to sell.
  
• Portfolio Diversification: EDP may be looking to diversify its renewable energy portfolio by investing in different types of renewable energy or in different geographical regions.
• Risk Management: Selling the portfolio could be part of a risk management strategy to reduce exposure to specific market or operational risks in Italy.