Italian energy group ERG has agreed to buy German utility E.ON’s hydroelectric power plants Italy for $1bn to boost its renewable portfolio.
E.ON owns Terni Hydroelectric Complex which is capable of producing 527MW of power and generates about 1.4 terawatt-hours of power per year.
The projects are spread across the regions of Umbria, Lazio and Marche.
Terni Hydroelectric Complex includes 16 hydro power plants, one pumping station, seven large dams and three reservoirs which includes Salto, Turano and Corbara, along with 22 weirs and 155 km of channels and tunnels.
Terni Hydroelectric project generates power from the river Nera, Velino and Tiber, as well as their tributaries.
The deal is expected to close by the end of this year, subject to approval from Italian Antitrust Authority and completion of consultation with trade unions.
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By GlobalDataReuters cited ERG CEO Luca Bettonte as saying: "The acquisition will enable a significant improvement in our economic results and cash generation in the medium term."
The company previously sold its coal, gas and solar generation businesses in Italy.
After completing a strategic review of its Italian power and gas sales business, it decided to spin off its power plants into a separate unit, which already provides power and gas to around 700000 customers.
E.ON said that its Connecting Energies has built up a good market position in distributed energy, and company wants to strengthen the business.
