Italian government may hasten Genco sale

31 Jan 2002 – A report in the Italian energy newsletter Staffetta Quotidiana Wednesday says that the sale of Enel’s two remaining generating companies is to be brought forward with a new deadline of October – three months earlier than planned.

The newsletter quotes an unnamed source as saying that the government also plans to scrap reimbursements connected to “stranded costs”, relating to investments made prior to the privatization process, which cannot be recovered in the open market. This would however, be offset by the elimination of charges made on Enel for hydroelectric production which amount to an estimated €1bn.

Enel believes it was likely to recover €350m from stranded costs for the years 2000 and 2001.

The new sell-off timetable is expected to be announced by the government following a meeting of the cabinet Friday, which is also likely to want new power plant construction brought forward in an effort to promote competition.

Enel has already disposed of one of its generating companies when Elettrogen was sold to Spain’s Endesa for €2.6bn last July. Elettrogen accounted for 5400 MW out of a total of 15 000 MW controlled by Enel.

The second generating company to be auctioned is the 7009 MW Eurogen and this process in underway. It will be followed by the sale of Interpower.

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