ROME, Italy, Nov. 14, 2000ENEL SpA, of Rome, Italy, said November 1 that its wholly-owned subsidiary Erga SpA had agreed to acquire CHI Energy, Inc. (CHI), of Stamford, Conn., a leading owner, operator and developer of renewable power projects in North America, for $170 million in cash.
The acquisition, ENEL’s first in the United States, “complements the company’s strategy for worldwide growth in its core electric business and creates additional expansion opportunities throughout North America and Latin America,” the company said.
ENEL is the world’s largest publicly listed electric utility with 29 million customers and a current generating capacity of 56,000 MW. In 1999, ENEL established Erga as a wholly-owned subsidiary “to grow its existing set of competencies and assets in the renewable energy segment of its business,” the company said. With the acquisition, Erga becomes the world’s largest company dedicated exclusively to renewable energy.
Erga already owns 30 geothermal plants, 273 hydroelectric plants, four wind farms and three photovoltaic plants and a generating capacity of about 1,700 MW. Erga has also committed $800 million to expand its capacity in Italy. With this acquisition, Erga will have 389 power plants and a combined generating capacity of approximately 2,000 MW.
Chicco Testa, chairman of Enel, said, “Enel’s acquisition of CHI is a significant achievement for our company. As a global multi-service provider, it is critical that we expand our geographic footprint in renewable energy and broaden our assets and skills mix. This transaction leverages Enel’s strong core capabilities in plant operation and maintenance and will provide a platform to capture the robust growth opportunities that exist in the North American and Latin American markets. Working together with CHI, and building on their established relationships with suppliers, customers and communities, we will set new standards for renewable energy.”
Paolo Pietrogrande, chief executive officer of Erga, said, “This acquisition will enable Enel to establish a beachhead for future growth in renewable energy markets throughout the United States, Canada and Latin America. Deregulation, environmental awareness and volatile oil prices are all contributing to the accelerating interest in renewable energy sources. In the United States alone, we have seen a dramatic increase in green power over the past few years.
“Twenty-two states now offer their customers the opportunity to purchase energy from renewable sources, and twelve states have set specific standards regarding the quantity of power sales that must come from renewables. In Canada, the government has been particularly outspoken in its support of clean energy.”
CHI owns and manages a portfolio of renewable energy projects across the United States and Canada with a total generating capacity of 254 MW, plus 53 MW under construction and other projects under development. CHI’s projects are located in 15 U.S. states and two Canadian provinces, with concentrations in the northeastern, southeastern and western United States and eastern Canada.
CHI’s diversified portfolio of renewable energy projects includes hydropower, biomass, landfill gas, wind and other clean energy generation technologies. Pending its acquisition by Erga, CHI’s major shareholders include Morgan Stanley & Co., Inc. and UBS AG, London Branch, which hold approximately 39.7 percent and 34.5 percent, respectively, of CHI’s common equity.