23 July 2002 – Spanish utility Iberdrola has sold its high-voltage electricity transmission assets to international private equity company CVC capital in a deal worth €577m.

The sale of the grid will provide cash to fund Iberdrola’s power generation expansion plans, aimed at taking advantage of Spain’s increasing demand for power. The company plans to build about 4,000MW of new gas-fired generation capacity by 2006.

Iberdrola will retain ownership of the fibre optic network alongside the power lines. As part of the transaction, CVC Capital has contracted with Iberdrola for the Spanish company to operate and maintain the 4,700km of 400kV and 220kV power lines for 35 years.

An Iberdrola official said that the group’s ambitions to expand overseas had been shelved for the moment after losing bids for assets sold by Enel, the Italian state-controlled electricity group.

“We will only expand abroad if there are good opportunities, and there do not appear to be any at the moment,” the official said.

CVC Capital is Europe’s largest private equity company with €9.3bn of investments under management. It owns companies in Spain with a combined annual revenue of €1.5bn and 13 000 employees.

The deal follows the sale of 75 per cent of Iberdrola’s Spanish water assets to RWE of Germany on Friday for €94.5m. Altogether, the group has disposed of €1.7bn of assets in the last nine months.