Enel to sell power network interests

16 July 2003 – Italy’s dominant power producer, Enel, is planning to launch an IPO for its high voltage transmission network next year, according to a report in the Financial Times.

The assets of Terna, the transmission network, may be worth up to €4.5bn ($5.1bn), according to the report and Enel is likely to sell between 30-40 per cent of the company. The sale is part of the ongoing liberalization of energy markets and follows the sale by Enel of the national gas pipeline network by oil company Eni two years ago.

The Italian government still owns 68 per cent of Enel but plans to sell the second tranche of shares when market conditions are favourable.

The potential sale received a boost last week when Italy’s energy regulator approved tariff proposals for 2004-2007 that would allow the network to increase revenues significantly.

Around 95 per cent of high voltage transmission flows through Terna’s grid and it also accounts for around 82 per cent of power distribution with most of the rest going through low voltage municipally owned lines.

Enel is likely to make a bid to acquire the grid operator GRTN, in order to bundle the assets together for sale.