Italian energy firm to accelerate wind investment

www.businessspectator.com.au
15 Oct 2013

Italian energy group ERG plans to invest in wind power in Brazil and Europe, accelerating its expansion in the sector after its recent decision to exit the refining sector.

ERG, over 60% controlled by Italy's Garrone family, completed the acquisition of wind power assets from France's GDF Suez this year to become Italy's largest wind power player and one of the top ten in Europe.

Presenting the group's strategy in Vienna on Saturday, ERG chief executive Luca Bettone said ERG planned to invest in countries and areas which had strong wind conditions and were less dependent on government subsidies, such as South America.

"This company must look to growth and, since we are now the biggest wind player in Italy, must try to move outside our national borders", Bettone said in comments that were embargoed until Monday. "There are opportunities in this country (Brazil) and we think we'll enter the market with acquisitions".

ERG has transformed itself in recent years into a renewable energy company in order to counter declining profits at its refinery business. Last week it struck a deal to sell its remaining stake in the ISAB oil refinery in Sicily to Russia's Lukoil for around 400 million euros-a sale Bettone said would yield no special dividend from the proceeds.

ERG, which is now targeting a 20% rise in core earnings next year to around 600 million euros ($813.75 million), intends to invest some 500 million euros to 2015 to focus on renewable energy.

In Europe, Bettone said, the company aimed to enter the Spanish market while strengthening its position in Bulgaria and Romania where it has wind power assets. He also confirmed that TotalErg-the joint venture between ERG and France's Total-was interested in the Italian petrol distribution network that Shell is selling. TotalErg has a market share in Italy of 12% which would rise to 18% with the Shell network.