Enel sells 49% of Italian storage business to Sostoneo

Enel Italia has sold a minority stake (49%) in Enel Libra Flexsys, a company overseeing a 1.7 GW battery energy storage product portfolio, to Sostoneo, an investment manager specialising in greenfield infrastructure projects.

The transaction, valuing €1.1 billion ($1.2 billion), is in line with Enel’s “Partnership” business model outlined in the group’s 2024-2026 Strategic Plan. It is part of the company’s efforts to reduce net debt while retaining control of strategic assets.

Enel Italia will retain control over the company, whose enterprise value is around €2.5 billion ($2.7 billion).

Enel Libra Flexsys was established to develop and manage a major portfolio of energy transition infrastructure in Italy, composed of 23 BESS as well as three open-cycle gas turbine (OCGT) projects with a total capacity of 0.9GW.

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Sosteneo forms part of the Generali Investments ecosystem. Generali, based in Italy, is one of the largest global insurance and asset management providers.

To support their acquisition, approximately €200 million ($214 million) in mezzanine financing is being provided by CPP Investments through CPPIB Credit Investments Inc. In addition, approximately €900 million ($964 million) in senior financing is being provided by a consortium of banks including BayernLB, BBVA, BNP Paribas, Bank of China, Crédit Agricole CIB, Caixa Bank, Cassa Depositi e Prestiti (CDP), ING, Societe Generale CIB, and SMBC Bank.

The transaction was initially signed and announced in March 2024, with this latest announcement marking closure. Revenues are fully contracted for 15 years through capacity agreements with Enel as well as capacity payments from Enel that are backed by Terna, Italy’s transmission system operator.

Commenting in a release was Umberto Tamburrino, managing partner, CEO and CIO Europe at Sosteneo: “The financial closing of Enel Libra Flexsys is a major milestone, and we are pleased to be delivering investments of this calibre for the benefit of our clients.

“Adding flexibility and strength to Italy’s grid is vital for the integration of more renewable generation. We are delighted to have partnered with Enel, CPP Investments, and other financing institutions on this transaction and look forward to strengthening these partnerships and exploring further opportunities for collaboration.”

Added Geoffrey Souter, managing director and head of real assets credit at CPP Investments: “Battery energy storage systems and open-cycle gas turbines are two flexible and reliable solutions to support Italy’s energy transition efforts.

“We are pleased to be partnering with Sosteneo on these projects by providing long-term and flexible capital, which we believe will provide a promising source of risk-adjusted returns for the CPP Fund.”

According to Sostoneo in a release, Enel Libra Flexsys is representative of their strategy of investing in new infrastructure that makes an active contribution to the transition to clean energy, while providing the potential for attractive commercial returns supported by stable cash flows.

The transaction adds to Sosteneo’s growing portfolio of energy transition infrastructure projects spanning Italy, the UK, and Australia.