EWE takes next step towards forging German renewables champion (updated)

Energiekontor AG

07/01/2021 12:04

* JV with AWS could also do solar projects - EWE CEO
    * JV profits will mostly go into expansion - EWE CEO
    * No plans for IPO of joint venture - EWE CEO

 (Adds CEO comments, details on joint venture)
    By Christoph Steitz, Tom Käckenhoff and Vera Eckert
    FRANKFURT/DUESSELDORF, Jan 7 (Reuters) - German utility EWE
 LANDWE.UL  will favour expansion over payouts in its planned
renewable power joint venture with the owners of wind turbine
maker Enercon, its chief executive said.
    The companies signed a deal just before Christmas to form
Germany's largest onshore wind park operator, a direct
challenger to larger utilities RWE  RWEG.DE  and EnBW  EBKG.DE ,
as well as to renewable firms wpd and Energiekontor  EKTG.DE .
    The joint venture, which is expected to get antitrust
approval in the next two to three months, plans to invest about
4 billion euros ($4.9 billion) by 2030 to more than double
onshore wind power capacity to as much as 5 gigawatts (GW).
    "Most of the planned investments will be funded through cash
flow," Stefan Dohler told Reuters. "Most of the profits will
likely be spent on expansion, so payouts will be kept moderate."
    The joint venture between EWE and the Aloys Wobben
foundation has a wind project pipeline of more than 9.4 GW.
Dohler said the company was not restricted to wind technology
and could also choose to pursue large-scale solar power parks.
    Based on current industry multiples, the entity's enterprise
value could be around 4.5 billion euros, boosted by a major rise
in renewable assets over the past 12 months.
    "With regard to balance sheet, this is a substantial growth
case due to the large portfolio. You could call it a
transformational shift," Dohler said.
    Amassing renewable capacity has been high on the agenda of
large corporations, including oil majors that have been
desperate for new revenue streams as their old business model
comes under pressure from a global move away from fossil fuels.
    Despite the steep valuations, Dohler said that an initial
public offering was not on the agenda for the joint venture.
    "We ourselves want to realise the potential."
    ($1 = 0.8150 euros)

 (Editing by Thomas Seythal and Jan Harvey)
 ((christoph.steitz@thomsonreuters.com; +49 30 220 133 647))