UPDATE 1-Iberdrola, DONG to sell Polish renewables units-sources

Tue Sep 25, 2012 7:41am EDT

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WARSAW, Sept 25 (Reuters) - Spain's Iberdrola and Denmark's DONG Energy want to sell their wind power businesses in Poland, two sources told Reuters on Tuesday, with the largest utilities and private equity funds among those likely to show interest.

The plans to withdraw from one of Europe's most promising renewables markets come at a time when Poland is overhauling its system of support for green energy, moves that will effectively cut funding for onshore wind power.

"The sale of DONG's assets will start soon, while Iberdrola will come a bit later," one source said.

"They will be interesting for the largest utilities and for private equity funds," a second source said.

Poland's top utility PGE, rival Tauron, No.3 ranked Enea as well as an investment vehicle controlled by one of Poland's richest men Jan Kulczyk, all have plans to expand their green energy portfolios.

Polenergia, an energy group controlled by Kulczyk Investments, is currently offering 703 million zlotys ($219 million) for a wind farm developer Polish Energy Partners .

DONG Energy declined to comment. Iberdrola's local office did not have an immediate comment.

Iberdrola has five wind farms in Poland with a total capacity of 184.5 megawatts (MW), while DONG operates three wind farms with a capacity of 111.5 megawatts.

Poland increased its wind power capacity to 1.6 gigawatt (GW) at the end of 2011 from 1.2 GW at the end of the previous year as the government has encouraged investment in green energy to meet the European Union's renewable targets.

Central and Eastern Europe's largest economy generates around 90 percent of its electricity from coal. To meet EU regulations on carbon emissions, it must increase the share of renewable energy to at least 15 percent by 2020.

A draft bill on renewables released by Poland's economy ministry in July has drawn criticism from wind energy producers. ($1 = 3.2107 Polish zlotys)

(Reporting by Maciej Onoszko and Adrian Krajewski; editing by Jason Neely)

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