Iberdrola signs €6.3B turbine deal

Spain's electrical giant, Iberdrola Renewables said it signed a €6.3 billion supply contract for wind turbines from Madrid's Gamesa, a wind turbine manufacturer.

Touting it as the "sector's largest ever transaction," Iberdrola, also Madrid-based, said it is acquiring turbines with a total capacity of 4,500 megawatts for wind projects in Europe, the U.S. and Mexico.

According to Iberdola, the €6.3 billion figure is to encompass overall costs associated with installing the turbines, including the cost of the turbines, cost of transport, and moneys associated with civil works and interconnections, both at the wind farms and to the grid.

In addition to installation, Iberdrola said the contract covers turbine startup, operational services and maintenance during the life of the guarantee.

Iberdrola said the deal would help the company meet more than 70 percent of its requirements up to 2012. The company said its current turbine supply stands at 42,280 MW.

The company asserts the deal would help to "avoid one of the major uncertainties in the business by assuring the installation of a significant portion of its projects for the medium term."

The Spanish electric company's last turbine contract with Gamesa was in 2006 and was for a reported 2,700 MW of power.

Iberdrola's most recent turbine contracts include General Electric for 300 MW, Mitsubishi for 300 MW, Suzlon Wind Energy for 700 MW, and Ecotencia for 310 MW.

In addition to the supply contract, the Iberdrola and Gamesa announced a partnership to combine efforts to promote, develop and exploit wind farms in Spain and continental Europe.

Under the partnership, two joint companies are to be formed, one in Spain and the other abroad.

Iberdrola is to hold 77 percent of the new Spanish venture and Gamesa is to hold 23 percent, while Iderbola said its shareholdings in the international venture would be 76 percent, with Gamesa holding 24 percent.

Once the partnership is approved by antitrust authorities, Gamesa said it can increase its shareholding in the jointly owned Spanish company up to 32 percent, relative to the number of additional megawatts that correspond to new wind farms.

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