RWE AG to sell heat business of Dutch unit Essent to PGGM and Dalkia

RWE AG, Germany's largest power producer, yesterday said it has agreed to sell the heat business of Dutch unit Essent to Dutch pension fund service provider PGGM and Dalkia, a subsidiary of Veolia Environnement and Electricité de France.

RWE did not disclose the financial terms of the deal.

PGGM and Dalkia will also acquire from RWE Generation NL three combined heating and power stations in Helmond, Eindhoven and Enschede that are connected to the heat grids.

Essent Local Energy Solutions owns 64 heating networks in the Netherlands, spanning 1,950kms and several of RWE Generation's medium-size units and services.

The networks serve more than 62,800 households and 1,240 business customers.

''In a radically changing energy market, Essent no longer considers its heating activities to be one of the company's core activities,'' RWE said in a statement.

Essent is the largest producer of renewable energy in The Netherlands and delivers electricity, gas and energy services to consumers and businesses.

The company regards the Netherlands and Belgium as its home market. It employs 3,600 people and has an annual turnover of €5.9 billion.

In March Essen-based RWE, which has owned Essent since 2009, announced that it would sell non-core units in order to strengthen its bottom line and ease pressure on future capital expenditure.

In May, RWE appointed ABN Amro to identify prospective buyers for Essent Local Energy Solutions.

The German utility agreed in August to sell its 50-per cent stake in US liquefied natural gas (LNG) company Excelerate Energy to its co-owner, George B Kaiser, for an undisclosed sum, and has put its oil and gas unit RWE DEA AG on the block.

The sale of RWE DEA could fetch the company around €7 billion, according to analysts.