UPDATE 1-PGE and Energa to buy Iberdrola's Polish unit

Tue Feb 26, 2013 4:34am EST

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WARSAW/MADRID Feb 26 (Reuters) - Polish state-owned utilities PGE and Energa agreed to buy Iberdrola's 75 percent stake in Renewables Polska for 840 million zlotys ($268 million), PGE said on Tuesday.

Poland's No.1 utility added that the two companies want to buy the remaining 25 percent of the windfarm unit from the European Bank for Reconstruction and Development (EBRD) .

Under the deal PGE would add 70.5 megawatts (MW) of installed capacity and a development portfolio of 36 MW, with Energa adding 114 MW and a portfolio of 1,146 MW.

Spain's Iberdrola has now sold 1.1 billion euros ($1.45 billion) of a 2-billion-euro target for asset sales and said it expects to continue with disposals to reduce debt and improve finances in the next few months.

Its shares were down 3.5 percent at 3.64 euros in early trading versus a 3-percent decline on Madrid's blue chip index . PGE fell 1.2 percent.

The deal confirms a Reuters report and comes a week after PGE and Energa said they would buy wind farms from Denmark's Dong Energy Wind Power A/S for about 1 billion zlotys.

Uncertainty over a planned new renewable energy law has prompted some companies to review their investments in Poland. Last year sources told Reuters that Iberdrola wanted to sell its wind power businesses in Poland.

The new law, which has been postponed several times, may cut support for large biomass co-firing and onshore wind in favour of micro-generation, solar power and offshore. The acquisitions by PGE and Energa will mean they are subject to the new law.

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.

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