France’s Engie sells 13GW of US, Asian assets

The disposals account for one-third of the developer’s three-year €15 billion asset rotation programme.

French energy developer Engie has divested 13GW of power generation assets located across the US, India and Indonesia in a bid to reduce its net debt by up to €5.5 billion, it said in a statement. 

In the US, Engie has sold a portfolio of 8.7GW thermal assets, comprising 8GW of gas-fired generation and 700MW of coal-fired generation, to a joint venture formed by Houston-based Dynegy and North America-focused Energy Capital Partners for $3.3 billion. 

It has also divested 1.4GW of hydro assets in Massachusetts and Connecticut, to Canada’s Public Sector Pension Investment Board (PSP Investments) for $1.2 billion.  

The two deals will help the company reduce €4.1 billion of consolidated net debt. 

In North America, the company will retain activities related to power generation, energy efficiency services, retail electricity and small-scale gas infrastructure. 

In Indonesia, Engie’s 40.5 percent stake in the 2GW Paiton coal-fired power plant will be sold to Qatar’s Nebras Power and a combination of some of the existing Paiton shareholders. The developer is also selling its 89 percent equity stake in India’s Meenakshi 1GW coal-fired power plant to local utility India Power Corporation (formerly known as DPSC Limited). 

Financial details for the transaction were not disclosed but these latter sales will result in a reduction of €1.4 billion of the consolidated net debt of Engie, according to the statement. It will also lead to a 16 percent reduction in the company’s installed coal-fired generation capacity. 

The Paiton deal is expected to close in the second half of 2016, while the Meenakshi transaction will be closed in the first half of the year. 

India Power Corporation said that the acquisition will be funded from the company’s own internal accruals as well as external debt in case it is required, according to a local press report. 

It has also acquired OpTerra Energy Services, a California-headquartered energy management service provider. The acquisition is expected to enhance Engie’s energy performance in schools, colleges, universities, commercial and industrial firms, health care, information technology and municipal markets. 

“Through the acquisition of OpTerra, ENGIE becomes the third US leader in energy services. With the disposals in the US, India and Indonesia, we already realise over one third of our three-year €15 billion portfolio rotation programme, while reducing by 20 percent our coal-fired generation installed capacity,” said Gérard Mestrallet, chairman and chief executive officer (CEO) of Engie, and Isabelle Kocher, deputy CEO and chief operating officer, in the statement.