Spotlight: Enel sharpening focus on LatAm investments

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Thursday, November 9, 2017

A new business model for renewable projects in Mexico and a Latin America-wide corporate overhaul will help drive the fourth quarter investment program of Italian energy group Enel, CEO Francesco Starace said on Thursday.

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In a quarterly earnings call, Starace said the company invested 5.55bn euros (US$6.46bn) in the first nine months of 2017, of which 3.57bn euros were pumped into projects in the Americas.

A key plank in the capital program has been a build, sell and operate (BSO) strategy, which delivered the company US$1.35bn from transactions involving eight renewable projects in Mexico last month.

"Our growth in renewables will be boosted even further with the intensification of our BSO strategy, which has now been expanded to new countries like Mexico," Starace said.

He added that Enel expected additional progress in the second phase of a corporate simplification plan, "especially in Latin America, where the restructuring in Chile is currently under way."

SEE Enel's top LatAm projects here

The Rome-based firm reported year-to-date net income of 2.62bn euros, down from 2.76bn euros a year earlier.

It said the result reflected adjustments to the estimated value of assets under development in upstream gas and subsidiary Marcinelle Energie.

CAPACITY, PIPELINE

Enel said it had 19.985GW of installed capacity in South America at the end of September, just under a quarter of its global total.

The figure comprised 9.60GW of hydropower, 4.24GW of combined cycle, 2.69GW of oil and gas, 1.30GW of wind, 835MW of coal, 41MW of geothermal and 1.20GW of solar and other.

Chile has the largest share with 7.48GW, followed by Argentina (4.42GW), Colombia (3.47GW), Brazil (2.60GW) and Peru (1.98GW).

The company has a further 757MW under construction in the region, including 304MW from wind, 283MW from solar and 170MW from hydro.

South America makes up 36% of Enel's 20.6GW project pipeline.