PORTUGUESE POWER giant EDP (Energias de Portugal) has gained control of regional gas distributor, Portgás. This means that the national electricity generator and supplier is continuing its expansion plans in the Iberian energy market, despite the fact that Brussels threw out its bid to increase its presence on the Iberian Peninsular and restructure the energy sector.
In a press statement sent to the Lisbon-based Property & Values Market Commission (CMVM), EDP states that it has exercised an option to buy a 46 per cent share in Portgás for 86.4 million euros.
EDP has bought the total capital of NQF – Projectos de Telecomunicações e Energia from state-owned bank, Caixa Geral de Depósitos.NQF held a 12.9 per cent stake in Portgás. EDP also bought 10 per cent of another regional gas distributor, Setgás. These purchases mean that EDP can, in part, get around the restrictions placed upon it by the European Commission, which does not want to see Portugal’s main gas business transferred to EDP’s control.
Spanish utility company, Endesa, and French utility company, Gaz de France (GDF), are the other major shareholders in Portgás. Now, the three companies control gas distribution in the north of Portugal.
Brussels is concerned that an energy monopoly could be created, keeping prices uncompetitively high to the detriment of the energy consumer. The EU’s competition commissioner, Neelie Kroes, turned down EDP’s bid in December to carve up Portugal’s largest gas groups, Gás de Portugal (GDP), and Italian energy giant, Eni. EDP countered that the strict conditions imposed on it by Brussels, such as the sale of a major gas plant, would wreck the company’s value and restrict its operations.
EDP has already extended its tentacles into the Spanish market, with the equity purchase of Spain’s fourth largest power utility, Hidrocantabrico, for 1.2 billion euros. It now controls 95 per cent of that company.
EDP began a long process of privatisation from the Portuguese state in 1997, although the government still holds a 20 per cent stake in the company, while state-owned bank, Caixa Geral de Depósitos, has a 10 per cent stake and Spain’s Iberdrola a five per cent stake.
EDPserves 5.7 million customers in Portugal and generates and distributes power in Portugal, Spain and Brazil. Its main competitors are Electrabel, Endesa and Iberdola.