Italy's ERG flicks switch on hydro, gas plant sale

MILAN: Italian renewable energy company ERG has kicked off the sale of hydroelectric and gas-fired power plant assets worth more than 1 billion euros ($1.2 billion), attracting interest from funds and utilities, three sources told Reuters.

ERG is looking to sell the assets in order to reinvest in its solar and wind business abroad, while maintaining credit stability, one source said, adding a decision had not yet been taken on whether to sell them separately or as a package.

The Italian company is more than 60% owned by Italy's Garrone-Mondini family and is one of Europe's leading wind power players with almost 2 gigawatts of installed capacity.

ERG also operates 527 megawatts of hydro-electric plants in Italy that generate core earnings of 87 million euros and has 480 MW of gas-fired (CCGT) capacity.

Mediobanca and Rothschild are working on the sale and have begun sending out information packs, two of the sources said.

"Non-binding bids are due by end April," one added.

ERG, Mediobanca and Rothschild declined to comment.

Engie, Enel, A2A and Dolomiti Energie are among the utilities interested while infrastructure funds like Ardian could also have a look, the first source said.

The hydro assets are attractive and could raise around one billion euros, one of the sources said, although questions remained over concession duration and the fact that the plants are concentrated in central Italy.

The gas-fired plant, located in a refinery in Sicily, could fetch between 200 million euros and 300 million euros, the source said.