E.ON, a major investor-owned power and gas company and Enbridge Inc., a North American leader in energy delivery, today announced a deal whereby E.ON has agreed to sell an 80 percent interest in a portfolio of two wind farms in the US to Enbridge. The agreed enterprise value for the portfolio is around $650 million.
The 203 megawatt (MW) Magic Valley 1 wind farm located near Harligen, Texas and the 202 MW Wildcat 1 wind farm near Elwood, Indiana are operational and came into service in 2012. The two wind farms are located in areas with favorable wind regimes and combined, provide enough clean power for more than 120,000 households.
The deal is consistent with E.ON’s ‘build and sell’ strategic approach. The proposed transaction partly monetizes capital expenditure spent and the value created during development and construction while maintaining a minority equity position. E.ON will retain a 20 percent interest and remain the operator of the wind farms, demonstrating its ongoing commitment to the projects and the North American market. E.ON currently operates over 2,700 MW of renewable capacity in the US and is a leader in the American wind industry.
Commenting on the deal, Eckhard Rummler, CEO of E.ON Climate & Renewables, said: “Thanks to our excellent project portfolio and our capabilities there is a vital demand in the market for assets built and operated by E.ON. We are happy to have found a reliable partner in Enbridge, who shares our approach of combining high class assets and safe operations.”
“This strategic investment provides a significant contribution to our growth targets in power generation,” said Vern Yu, Senior Vice-President of Corporate Development for Enbridge. “The transaction extends our renewable platform in the U.S., complementing our existing wind farm presence in Texas and establishing Enbridge in the Indiana renewable market. E.ON is a global leader in renewables and we welcome the partnership with a company that is a safe, reliable and proven asset operator.”
Enbridge has invested approximately $3 billion in renewable energy assets over the past five years. The acquisition of these two wind farms brings the total generating capacity of the green power projects in which Enbridge has interests to more than 2,200 MW and helps position the Company to double its previous capacity of 1,800 MW by 2017. The projects also further help Enbridge meet its Neutral Footprint commitment to generating a kilowatt hour of renewable energy for every additional kilowatt of energy consumed by its Liquids Pipelines business, a goal the Company is on track to meet by 2015.
Completion of the transaction is subject to regulatory approvals.
E.ON is one of the world’s largest investor-owned power and gas companies, with annual sales of €122 billion and more than 62,000 employees. E.ON, headquartered in Dusseldorf, Germany, plays a leading role in the development of the renewable industry worldwide and is already active in onshore and offshore wind, photovoltaic, and concentrating solar power (CSP). E.ON currently operates over 10 gigawatt of renewable capacity including large hydro. Since 2007, E.ON has already invested more than €9.5 billion and will continue to expand the share of renewable energy in E.ON’s power generation portfolio. It is E.ON’s ambition to further industrialize the sector and professionalize its operations, in order to reduce the cost of renewable generation and make it ever more competitive. To this end, E.ON works with a wide range of partners and is always open to discuss potential co-operation with committed technical experts and financial investors alike.
Enbridge Inc., a Canadian Company, is a North American leader in delivering energy and has been included on the Global 100 Most Sustainable Corporations in the World ranking for the past six years. As a transporter of energy, Enbridge operates, in Canada and the U.S., the world's longest crude oil and liquids transportation system. The Company also has a significant and growing involvement in natural gas gathering, transmission and midstream businesses, and an increasing involvement in power transmission. As a distributor of energy, Enbridge owns and operates Canada's largest natural gas distribution company, and provides distribution services in Ontario, Quebec, New Brunswick and New York State. As a generator of energy, Enbridge has interests in more than 1,800 megawatts of renewable and alternative energy generating capacity and is expanding its interests in wind and solar energy and geothermal. Enbridge employs more than 10,000 people, primarily in Canada and the U.S. and is ranked as one of Canada's Top 100 Employers for 2014. Enbridge's common shares trade on the Toronto and New York stock exchanges under the symbol ENB. For more information, visit www.enbridge.com.This press release may contain forward-looking statements based on current assumptions and forecasts made by E.ON Group management and other information currently available to E.ON. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. E.ON SE does not intend, and does not assume any liability whatsoever, to update these forward-looking statements or to conform them to future events or developments.