TotalEnergies and EPH have established a joint venture to operate and develop flexible power generation assets in Italy, the Netherlands, the UK, Ireland and (after employee consultation) possibly France.
Under the agreement, EPH will contribute a 50% stake in the newly created JV to TotalEnergies. In exchange, EPH will receive a 4.1% equity stake in TotalEnergies SE, implying a JV enterprise value (EV) of €10.6 billion. Following completion, EPH said it intends to remain a long-term strategic anchor shareholder of TotalEnergies.
EPH will contribute to the future JV its existing flexible power generation assets as well as development projects (excluding coal fired assets). In the UK and Ireland, that comprises six gas-fired power plant sites (totalling 4.6 GW), all supported by the capacity market, a 400MW biomass plant backed by a Contract for Difference and a 350 MW battery storage project currently under construction.
Other EPH assets (approximately 18% on a fully consolidated and 24% on a proportionate basis of EP Group’s energy segment), including its trading house EP Commodities, are unaffected.
The JV will focus on developing and operating flexible energy assets in these markets. It will also be “a platform to identify and develop further investment opportunities in those core countries and activities”.
“We are very enthusiastic to continue expanding our flexible power generation fleet in Western and Southern Europe together with TotalEnergies. A shared strategy, combined know-how, and strong financial capacity create an incredibly robust platform for future growth,” said Jan Špringl, CEO of EPH.
“This acquisition marks another major milestone in TotalEnergies’ strategy to build an integrated electricity player in Europe,” said Patrick Pouyanné, Chairman and CEO of TotalEnergies. He added, “Given our position as the number one gas supplier in Europe, this transaction enables us to fully capitalize on gas-to-power integration and create added value for our LNG chain, independently of oil cycles.”.
The JV totals 11 GW in operation and 3GW under construction. The JV team “have already identified 5GW of development projects that will help to meet increasing demand for flexible power generation capacities in Europe,” the partners said.