Enel looks to distribution, renewables for Latin American growth
By Rosalba O'Brien and Antonio De la Jara
SANTIAGO (Reuters) - Italian utility Enel SpA (ENEI.MI: Quote) wants to simplify its Latin American operations and focus on electricity distribution and renewable energy as it increases investment in the region's growing markets, its chief executive said on Thursday.
The group, Europe's most indebted utility, gradually has been shifting attention away from Italy and Spain to emerging markets with abundant resources and good growth prospects.
Over the next five years, it will spend around 7 billion euros ($8.7 billion) on its local assets, which are held by Santiago-listed Enersis SA ENE.SN. Another 2 billion will go to Enel Green Power SpA EGPW.MI, which has solar, geothermal, biomass, hydroelectric and wind operations.
The spending will likely increase in March and the focus will be on building distribution networks and on renewable energy projects, Enel Chief Executive Officer Francesco Starace told journalists in Santiago.
"I think at the end we are going to have more networks, investment in connection and distribution infrastructure, quite a lot more renewables, and generation. But networks and renewables more than generation."
In September, Enel agreed to buy the controlling stake in Enersis held by its Endesa SA (ELE.MC: Quote) subsidiary, and has appointed local executives to exert more direct control over its Latin American assets.
The first priority will be streamlining operations in the region over the next year, simplifying a structure that now includes some 80 separate businesses. That could save between 10 and 20 percent on Enersis' capital expenditure, Starace said.
"This structure over the last 15 years served to put us at a distance, to keep Latin America far away," he said. "What we want to do now is get close to Latin America, and we're going to do it beginning with Chile, Brazil second, (then) Colombia, Peru and I think Argentina will be fifth or will wait." Continued...