Copel pays BRL 1.8 billion for 2 EDP Wind Complexes
Copel has purchased two renewable wind farms from EDP in a transaction that adds 260 megawatts to its generation capacity and creates operating synergies with the company’s portfolio.
Al Masiran, located in Rio Grande do Norte, is valued at $1.8 billion in enterprise value – RM965 million with the remainder in long-term debt with low-cost BNB (IPCA +2% on average) .
The two parks are Santa Rosa and Mondo Novo (155 MW in five parks) and Adventure (105 MW in four parks).
The company is less than 30 kilometers from another wind complex in Copel (Jandaíra), which should generate related synergies, CEO Daniel Slaviero said in a call with analysts earlier today. “It’s a very big operating synergy and a differentiator when you look at the asset,” he said.
Copel estimates fixed cost reductions at $3 million per year and O&M (operations and maintenance) benefits at $6.3 million per year.
The acquisition is part of CoPel’s strategy to expand into wind and solar, diversifying its sources outside of hydro generation. Today, non-hydro renewable energy already accounts for 17% of the company’s capacity, and the goal is to reach 25% within about three years.
It has a total capacity of 6.4 GW, of which 1.1 GW is of wind origin (taking into account the assets acquired today). The CEO said the acquisition was completed at a “double-digit” real internal rate and would generate “a lot of value” for the company.
Given the takeover and no tax credit, BTG calculated an IRR of 10.3% – “in line with COPEL guidelines and well above the 9.2% IRR that the company is trading on the stock exchange today. However, this TIR is expected to be larger – the company said it intends to leverage the holding company to pay the equity share.
According to the CEO, the structure will vary depending on the company’s cash position at the time of closing, but the debt portion should be between 50% and 100%. In a call with Asolits, the CEO of CoPel said he was in negotiations for the next generation of M&S and was also considering participation in the upcoming transmission line auction.
For the renewable energy EDP, the sale is part of the capital rotation strategy. Last year, the Portuguese company announced its intention to sell 8 billion euros and use these resources to finance the construction of other assets.
XP was Copel’s financial advisor.
