Neoenergia Sells Baixo Iguaçu Hydroelectric Plant to EDF and STOA
Neoenergia, a subsidiary of Iberdrola in Brazil, has completed the sale of its majority stake in the Baixo Iguaçu Hydroelectric Power Plant to the French electricity company EDF and the French investment fund STOA. This transaction aligns with Iberdrola’s ongoing strategy of asset rotation, aimed at optimizing its portfolio, maintaining financial discipline, and streamlining its corporate structure.
A Strategic Move for Iberdrola
The Baixo Iguaçu Hydroelectric Power Plant, located in the state of Paraná, is a significant renewable energy asset in Brazil, boasting an installed capacity of 350 megawatts (MW) and 172 MWm of assured energy. Before the sale, Neoenergia held a controlling 70% stake in the facility, reflecting its commitment to hydroelectric power development in Latin America. However, in line with its broader corporate strategy, Iberdrola decided to divest from this asset, securing a transaction valued at approximately 1.43 billion Brazilian reals (about 240 million euros). The final sale price remains subject to customary adjustments typical in such transactions.
This decision is part of Iberdrola’s ongoing effort to optimize its asset portfolio, focusing on high-value investments that align with its long-term goals of enhancing financial strength, expanding renewable energy capabilities, and simplifying its business structure.
Asset Rotation and Portfolio Optimization
Iberdrola’s asset rotation strategy is a core component of its broader financial and operational plan. By selectively divesting certain assets while investing in strategic growth areas, the company aims to increase efficiency, boost profitability, and ensure long-term value creation. This approach is particularly important in the rapidly evolving global energy sector, where companies must continually adapt to new market conditions, regulatory environments, and technological advancements.
By selling its stake in Baixo Iguaçu, Iberdrola reinforces its focus on offshore wind, green hydrogen, and electricity transmission networks. The company has been pursuing strategic partnerships and acquisitions that align with these priorities, ensuring that its investment portfolio remains resilient and future-proof.
Strategic Partnerships for Growth and Sustainability
Iberdrola has been actively engaged in forging long-term alliances to accelerate growth, support the global energy transition, and maintain a strong financial position. These partnerships highlight the company’s commitment to decarbonization, sustainability, and innovation in the energy sector. Below are some of the most notable strategic moves undertaken by Iberdrola in recent years:
1. Offshore Wind Expansion in Germany
- Iberdrola sold a stake in the Windanker offshore wind project in Germany to Kansai Electric Power for a total valuation of 1.28 billion euros. This transaction enabled the company to optimize its offshore wind investments while securing capital for further expansion.
2. Strengthening UK Market Position
- In October 2023, Iberdrola acquired the British electricity distribution company Electricity North West (ENW). This acquisition strengthens Iberdrola’s presence in the UK’s energy distribution sector and aligns with its goal of expanding regulated network businesses. Kansai Electric Power participated in this investment as a strategic partner.
3. Renewables Investment with Norges Bank
- In January 2023, Iberdrola signed a landmark agreement with Norges Bank to co-invest in renewable energy projects. Initially focused on 1,265 MW of assets, the collaboration has since been expanded to reach 2,500 MW, reinforcing Iberdrola’s leadership in the clean energy space.
4. Offshore Wind and Green Hydrogen Collaboration with Masdar
- In December 2023, Iberdrola announced a major agreement with Masdar to co-invest up to $15 billion in offshore wind and green hydrogen projects across Germany, the UK, and the US. The first milestone of this partnership was the agreement reached in July 2023 for the Baltic Eagle offshore wind farm in Germany.
5. Transmission Network Expansion in Brazil
- In September 2023, Iberdrola finalized an agreement with Singapore’s sovereign wealth fund GIC to expand electricity transmission networks in Brazil. The deal was valued at approximately 430 million euros, further solidifying Iberdrola’s presence in the South American energy market.
6. Divestment of Mexican Gas-Fired Power Plants
- In February 2023, Iberdrola sold more than 8,400 MW of combined-cycle gas plants in Mexico for 6.2 billion dollars. This transaction aligns with its strategy of reducing exposure to fossil fuels and increasing investment in renewable energy sources.
7. Electric Vehicle Charging and Green Hydrogen in Iberia
- In March 2023, Iberdrola and BP launched a joint venture to deploy 11,700 fast-charging electric vehicle stations across Spain and Portugal. Additionally, the two companies established a 50/50 partnership to develop a 25 MW green hydrogen project, set to become the largest plant of its kind in Spain.
8. Renewable Energy Expansion with MAPFRE
- Iberdrola and the Spanish insurance company MAPFRE have continued strengthening their strategic alliance by incorporating an additional 150 MW of renewable energy projects. Their joint venture now boasts a total capacity of 450 MW.
9. Offshore Wind Investment with Energy Infrastructure Partners
- Iberdrola has partnered with Energy Infrastructure Partners to co-invest in the Wikinger offshore wind farm. This alliance supports Iberdrola’s broader offshore wind strategy and enhances its renewable energy portfolio.
EDF and STOA: New Owners of Baixo Iguaçu Hydroelectric Plant
With this acquisition, EDF and STOA further consolidate their positions in Brazil’s renewable energy market. EDF, one of Europe’s largest electricity companies, has been expanding its global renewable energy investments, focusing on hydropower, wind, and solar assets. Meanwhile, STOA, a French investment fund specializing in infrastructure and energy projects, brings additional financial backing and expertise to the operation of the Baixo Iguaçu plant.
EDF’s entry into the Baixo Iguaçu project aligns with its goal of strengthening its presence in Latin America, where it has been involved in numerous renewable energy initiatives. Hydropower remains a key component of EDF’s strategy, as it provides stable and reliable electricity generation, complementing the company’s growing portfolio of wind and solar assets.
The Future of Hydropower in Brazil
Brazil’s energy sector continues to undergo significant transformation, with a strong emphasis on expanding renewable energy capacity. Hydropower remains the dominant source of electricity in the country, accounting for more than 60% of total generation. However, as climate change affects water availability, diversification into wind, solar, and green hydrogen has become a priority for energy companies operating in Brazil.
With the transfer of Baixo Iguaçu to EDF and STOA, the new owners are expected to enhance the plant’s operational efficiency and integrate it into their broader renewable energy strategies. This move aligns with Brazil’s long-term energy plans, which emphasize sustainability, reliability, and investment in clean technologies.
