Ence Plans 546 Million Euros of Wood-Power Plants in Canaries

Ence Energia & Celulosa SA (ENC), a Spanish clean energy generator, plans to build three biomass facilities in the Canary Islands for 546 million euros ($731 million).

The facilities, which will use wood imported from West Africa to generate electricity, will have a capacity of about 70 megawatts each, Ignacio Colmenares, Ence’s chief executive officer, said in a telephone interview. Ence is currently waiting for final approvals and it expects to start building the facilities next year for them to begin working in 2016.

“The Canary Islands, like other island communities, get a lot of their energy from diesel and heavy fuel and that’s expensive and polluting,” Colmenares said. “The market price of energy is on average 200 euros a megawatt-hour, but 30 percent at more than 300 euros a megawatt-hour, and we can sell energy at 170 euros a megawatt-hour.”

The projects will cost about 182 million euros each. They be funded using about 30 percent equity and the remainder debt. Ence already is talking to potential banks, the CEO said. It expects to raise the money in the next 12 to 14 months.

Ence’s Canary Island power plants are acting as a shop-window for future facilities, said Colmenares. “We’re talking to mining companies in Africa and Latin America to install biomass plants on-site where they could as much as half their energy costs,” he said. “We hope to announce a deal before year-end.”

To contact the reporter on this story: Louise Downing in London at ldowning4@bloomberg.net

To contact the editors responsible for this story: Reed Landberg at landberg@bloomberg.net Ana Monteiro

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.