Enel's lucrative green power IPO

Enel IPO

Italian energy firm Enel SpA are on the look out for banks to help them with the lucrative initial public offering (IPO) of its renewable energy arm. The deal is likely to become the largest IPO in Europe since the 4.5 billion euro sale of Iberdrola Renovables SA in 2007.

Fulvio Conti, Enel's CEO, said that in the next few weeks the company would be holding a "beauty parade" to choose advisers, and planned to issue a prospectus in April, in order to complete the sale by the end of the year. The company is likely to be dual listed in both Italy and Spain.

Europe's economic recovery has been slow in comparison to that of Asia and North America, meaning IPOs have also failed to return to growth quickly which means European investment banks have been without one of the most profitable businesses.

However it's unsurprising that the strongest IPO growth has come from the renewable energy industry, which has remained a bright spot on Europe's financial horizon.

A slower recovery in comparison

Enel Green Power is selling assets to reduce debt to 45 billion euros from 51 billion euros. The utility manages activities in wind, solar, geothermal, biomass and hydroelectric energy across 17 countries in Europe and the Americas.

The total power production of Green Power currently stands at 5.7GW but this should climb to 9.4GW over the next four years if all ongoing and planned projects are complete on time and the required cash is generated.

Europe's slower recovery in comparison to those of Asia and North America could be attributed to the fact that the economic stimulus funds of EU member states tended to favour the more traditional like car makers, power utilities and perhaps foremost banks.

Renewables industry looks promising

In Asia and the America's, new sectors in the renewables industry received far more attention. As Olivier Drücke of European Solar Thermal Industry Federation points out, Germany is a good example of this trend. Despite its miraculously progressive development of the renewable energy sector since 1999, Germany has opted to "counter the crisis by supporting classical industries," says Drücke.

Parallel to this, lobbyists for conservative energy industries are seeking to take the lead again, pushing for the next generation of coal and nuclear base-load power plants. This is in sharp contrast to the first boom of the renewable sector in the country.

Europe's renewables industry looks promising even with less government attention than it currently warrants, and even though the EU remain on target to meet the goal of 20 percent of energy generated from renewable sources by 2020, imagine where we could be with full state backing.

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Daniel Jones

Daniel is a Politics and Philosophy graduate from Cardiff University where he also worked as a section editor on the award winning student newspaper. After university he joined an IT support company where he was a B2B online writer. He loves anything to do with sport and joined GDS in July 2009.

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