Romania’s OMV Petrom reportedly in exclusive negotiations on sale of wind park to China-CEE Fund

Romania’s OMV Petrom reportedly in exclusive negotiations on sale of wind park to China-CEE Fund
By bne IntelliNews March 24, 2016

Romanian oil and gas company OMV Petrom is holding exclusive negotiations with private equity company CEE Equity Partners on the sale of its 45MW wind farm in the country, local media reported on March 23.

CEE Equity Partners is the investment advisor for the $435mn China-CEE Fund. It was established by China Exim Bank in partnership with other institutional investors from the CEE region. CEE Equity Partners is reportedly planning to invest between €20mn and €60mn in Romanian projects in the next two to three years.

The negotiations started last year, after Petrom decided to sell the wind farm as part of its strategy to give up operations which are not connected to its core business, gas and petrol. The decision might have been triggered by the decrease in incentives given to investors by Romania, which has already met its green energy objectives.

The country initially enacted, in 2008 and then in 2010, one of the most generous subsidy programmes for wind and solar energy investors. However, since 2013 it has cut back the subsidies, due to significant negative effects on residential and industrial end-users.

The Dorobantu wind park, in which Petrom invested €90mn, started operations in 2011. It generated a net electrical output of 0.08TWh in 2015, stable versus 2014, receiving around 130,000 green certificates, half of them eligible for sale after January 1, 2018. The wind park is operated by OMV Petrom Wind Power, in which OMV Petrom holds a 99.99% stake.

According to mirsanu.ro, Petrom’s wind farm might be an interesting target for CEE Equity Partners which is planning to direct make an initial investment of between €20mn and €50mn in the energy market. Considering the current situation on the wind power market, the Romanian company, part of Austrian group OMV, could agree to sell the wind park at a much lower price than its original investment.

OMV Petrom reported RON676mn (€152mn) losses last year, after the company constantly reported considerable profits every year since it was privatised in 2005. The company’s financials suddenly deteriorated in the fourth quarter, amid low crude oil prices. 

Another developer, CEZ, announced in 2014 that it was considering the option of selling its two Romanian wind farms, which with 600MW installed capacity are the largest wind-based production capacity in Europe. CEZ's wind farms were developed under a €1.1bn project.

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