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Deal on Enel’s sale of Russian assets suspended indefinitely, newspaper reports

Italy’s Enel is involved in production of electrical and thermal power

MOSCOW, August 9. /TASS/. The deal on sale of 56.43% in Enel Russia to Lukoil and the Gazprombank-Frezia fund by the Italian generating company Enel has been suspended indefinitely, the Kommersant newspaper reported on Tuesday citing sources briefed on the matter. The transaction on sale of Fortum’s Russian assets has also been frozen, according to the publication.

The withdrawal of foreign shareholders from Russia’s power industry has been suspended in accordance with President’s decree that bans transactions on purchase and sale of shares in strategic companies, as well as those producing and supplying heat and electricity by December 31, 2022. That said, the decree allows closing such deals if a special permission of the president of the Russian Federation has been obtained, the paper writes.

The sale of Russian assets by the Finnish Fortum, the Fortum generating company (98.25%), was suspended by the authorities in July, according to the publication. By that time the company had finished accepting applications from such potential buyers as Gazprombank, Sistema, and Invest AG of Alexander Abramov and Alexander Frolov. Plenty of applications for purchase of assets were received despite the difficult financial state of Fortum, the source told Kommersant.

On June 15, Chief Executive Officer of Italy’s Enel Group Francesco Starace said at a Reuters conference Events Global Energy Transition 2022 in New York he expected the deal on sale of assets in Russia to be made, adding that the company was close to a final decision, with the transaction to be completed a couple of weeks later.

Italy’s Enel is involved in production of electrical and thermal power. Its production branches in Russia include three gas stations: Konakovskaya GRES, Nevinnomysskaya GRES, and Sredneuralskaya GRES. Moreover, the company commissioned the Azov wind farm (90 MW) in May 2021. It is also implementing the Kola wind farm (201 MW). The company also announced the project on construction of the Rodnikovskaya wind farm, though later it gave it up.