British renewable power generator and network operator SSE has agreed to buy a portfolio of onshore wind development projects from Siemens Gamesa, the company said on Tuesday confirming a Reuters report.
SSE Plc will pay 580 million euros ($626 million) for the wind farm projects, which have the capacity to generate 3.9 gigawatts (GW) of electricity in France, Greece, Italy and Spain. A team of up to 40 staff would be integrated into SSE as part of the agreement.
The transaction includes an agreement for Siemens Gamesa Renewable Energy SA to provide turbines for the sites and long-term maintenance services, Siemens Gamesa said in a separate statement.
It is the latest acquisition of low-carbon generation by a large power producer as companies and countries try to phase out planet-warming fossil fuels.
The quest has become more urgent in Europe since major energy supplier Russia invaded its neighbour Ukraine on Feb. 24.
Bank of America advised Siemens Gamesa in the process.
SSE sold its household supply and services arm two years ago, and has pledged to invest 12.5 billion pounds ($16.25 billion) in clean energy projects to 2026.
The acquisition, which includes scope for 1GW of additional co-located solar development opportunities, marks the entry by SSE Renewables, a unit of SSE, into Southern Europe, the company said.
In March, it raised cash by selling its 33.3% stake in gas distribution operator Scotia Gas Networks Ltd (SGN) for nearly 1.29 billion pounds.
SSE has fended off calls from activist investor Elliott Management Corp to spin off its renewable business. It has raised its earnings forecasts twice this year, giving most of the credit for this to strong performance at its thermal and hydro businesses.
Siemens Gamesa, formed by the 2017 merger of Spain’s Gamesa with the wind division of Germany’s Siemens AG, is looking to raise cash and protect its core turbine manufacturing business from the margin-eroding effects of soaring materials and logistics costs.
In a separate statement on Tuesday, Siemens Gamesa announced it had put its 2022 guidance under review, saying it would work to achieve the low end of previously announced guidance. Its main shareholder Siemens energy announced its own guidance review as a result.
One gigawatt of power is equivalent roughly to the average production of a nuclear power plant.
