Italian utility Enel, through its wholly owned subsidiary Erga, has announced a merger agreement to acquire CHI Energy of Connecticut in the US for US$170M. Under the terms of the agreement approximately US$142M in CHI debt will remain outstanding.

This acquisition, Enel’s first in the US, complements the company’s strategy for worldwide growth in its core electric business and creates additional expansion opportunities throughout North America and Latin America.

Enel is the world’s largest publicly listed electric utility with 29M customers and a current generating capacity of 56,000MW. In 1999, Enel established Erga as a wholly owned subsidiary and, with this acquisition, Erga becomes the world’s largest company dedicated exclusively to renewable energy. Erga already owns a generating capacity of about 1700MW, which includes 273 hydroelectric plants. The company will now have 389 power plants and a combined generating capacity of approximately 2000MW.

Chicco Testa, chairman of Enel, said: ‘Enel’s acquisition of CHI is a significant achievement for our company. As a global multi-service provider, it is critical that we expand our geographic footprint in renewable energy and broaden our assets and skills mix. This transaction leverages Enel’s strong core capabilities in plant operation and maintenance and will provide a platform to capture the robust growth opportunities that exist in the North American and Latin American markets.’ Edward M Stern, president and chief executive officer of CHI added: ‘We are delighted to become a part of the Enel family. This transaction brings together two leading organisations, with complementary strengths, in the growing renewable energy market. CHI has extensive transactional experience and knowledge of the North American renewables market, as well as the ability to act quickly on new project opportunities. Together, we will be able to offer broader capabilities to our existing customers and project partners and also offer increased opportunities to our employees.’ Stern will remain president and chief executive officer of CHI and Charles F Goff, Jr will remain as chairman of CHI’s board of directors. CHI’s senior management team will remain in their current positions. The company will maintain its name and headquarters in Stamford, Connecticut, and continue to manage its portfolio of renewable energy facilities in operation, under construction and in development.

CHI Energy owns and manages a portfolio of renewable energy projects across the US and Canada with a total generating capacity of 254MW, plus 53MW under construction and other projects under development.