EDP has agreed to buy back 49 percent of a 970 MW wind portfolio in Portugal, Poland and Italy from funds sponsored by China Three Gorges. It sold those same stakes between 2016 and 2017. The price works out at six times the portfolio's expected 2024 EBITDA, lower than any other operational European wind deal with a disclosed earnings multiple that Enerdatics records in 2023 and 2024. The explanation sits in the calendar, not in the turbines.
Key takeaways
- EDP announced on 29 December 2023 that it agreed to buy back a 49 percent stake in a 970 MW operating wind portfolio in Portugal, Poland and Italy from China Three Gorges for an enterprise value of $635.53 million; the deal completed on 9 October 2024.
- EDP's $635.53 million for 49 percent implies an enterprise value of $1.29 billion for 100 percent of the portfolio as of June 2023, about $1.34 million per MW.
- The EDP buyback is priced at 6x EV/EBITDA and 10x price to earnings on 2024 estimates, from which Enerdatics estimates the portfolio's 2024 EBITDA at about $215 million.
- The 970 MW portfolio comprises 422 MW in Portugal, 418 MW in Poland and 130 MW in Italy, with an average asset age of 11 years and a weighted average remaining contracted period of six years.
- EDP is acquiring the stakes through its 71.27 percent owned subsidiary EDP Renewables from ACE Investment Fund I LP and ACE Investment Fund II LP, which bought them from EDPR between 2016 and 2017.
Why would EDP sell stakes and then buy them back?
Because the sale and the buyback serve the same strategy at different points. EDPR, EDP's renewables subsidiary, sells stakes in operating assets and recycles the capital, as its other deals below show. The 2016 and 2017 sales of 49 percent stakes to the ACE funds kept EDPR as majority owner while releasing cash.
Six to seven years later the assets are a different proposition. Their remaining subsidy and contract periods are short, and the questions about them have shifted from steady cash flow to what happens next. EDP says full ownership gives it immediate cash flow, earnings growth and more flexibility in how it manages the energy the farms produce. It also cites potential opportunities for hybridisation and repowering.
Repowering means replacing older turbines with newer, larger ones on the same site, which can raise output without new land or a new grid connection. Hybridisation means adding solar or storage to an existing wind site, sharing its grid connection. Both are decisions an owner can only take cleanly with 100 percent control. Under shared ownership, major new capital spending would typically need a minority partner's agreement.
Why is the multiple so low?
Because the contracted income is close to its end. EV/EBITDA, enterprise value divided by earnings before interest, tax, depreciation and amortisation, measures how many years of current operating earnings a buyer is paying for. A low multiple usually means the market expects those earnings to fall.
Here the reason is visible in the support schemes. The Portuguese assets have a feed-in tariff until 2030. The Polish assets sell power under the green certificates scheme until 2027. The Italian assets have a feed-in premium or contract for difference until 2033. Weighted across the portfolio, that leaves six years of contracted revenue. After that, the farms sell at market prices or under new contracts, and their earnings depend on what those prices are.
For a financial owner, six years of contracted income from turbines with an average age of 11 years supports only a modest multiple. For EDP, which can repower and hybridise, the same assets carry options the multiple does not price. That gap between what the assets are worth to a passive holder and to an operator is the logic of the deal.
The headline capacity also needs reading carefully. The portfolio's 970 MW is gross capacity; its net operating capacity is 475 MW. The 10x price to earnings ratio on 2024 estimates, alongside the 6x EV/EBITDA, describes a buyer paying for a short, well understood earnings stream rather than for growth.
Enerdatics' data shows 130 M&A transactions for operational wind assets in Europe announced in 2023 and 2024, of which 56 carry a usable price per MW, with a median of $1.96 million per MW. Only eight disclose an EV/EBITDA multiple. Their median is 7.6x, and the lowest is the EDP buyback at 6.0x. In Portugal itself, Enerdatics records 15 wind deals from 2021 to 2025 and only three with a usable price: $2.85 million per MW for a 221 MW deal in 2021, EDP's $1.34 million per MW, and $1.07 million per MW for a 605 MW portfolio in 2025.
What does the deal signal for European wind?
It signals that ageing contracted portfolios are moving back to operators. Minority investors bought into these farms for long-dated, predictable cash flow. As support schemes run down, the asset changes character. It becomes a site with a grid connection and a repowering option, and the natural owner is the company that can build on it.
EDPR's other asset rotation deals show the opposite trade working at the same time. In July 2023 it sold nine operating Spanish wind farms to Verbund at about $1.91 million per MW, covered in Enerdatics' analysis of the Verbund sale. More recently it agreed to sell a contracted Greek wind portfolio to Faria Renewables, as set out in Enerdatics' analysis of the Faria deal. EDP sells where contracts are long and buyers pay for them, and buys back where contracts are short and the value sits in what it can rebuild.
For sellers of similar portfolios, the price is a caution. A portfolio with six years of contracts left trades well below the regional median per MW. The discount is not a judgement on the turbines. It is a judgement on the revenue after the contracts end.
Frequently asked questions
How much did EDP pay China Three Gorges?EDP agreed an enterprise value of $635.53 million for the 49 percent stake, implying $1.29 billion for 100 percent of the 970 MW portfolio, or about $1.34 million per MW.
Where are the wind farms?The portfolio has 422 MW in Portugal, 418 MW in Poland and 130 MW in Italy. Named assets include the 100 MW Margonin 2 and 79.5 MW Pawlowo-Golancz farms in Poland and the Pietragalla and San Giovanni farms in Italy, each 20 MW.
When did the deal complete?The transaction was announced on 29 December 2023 and completed on 9 October 2024, after regulatory and other customary conditions were met.
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