SEVILLE, Spain, June 2, 2011 /PRNewswire/ — Abengoa, the international company that develops innovative solutions for sustainable development in the energy and environment sectors, has reached an agreement with Compania Energetica de Minas Gerais (CEMIG), one of Brazil‘s largest electricity companies, through the entity Transmissora Alianca de Energia Eletrica S.A. (TAESA), to create a joint venture that will combine four transmission concessions currently owned by Abengoa: STE, ATE, ATE II and ATE III, in which CEMIG will now take a 50% stake. The new company will become a strategic growth vehicle for Abengoa in the electricity transmission business in Brazil. Abengoa will also sell 100% of the concession company NTE to CEMIG.

The deal will strengthen Abengoa’s balance sheet, generating euro 485 million (depending on the foreign exchange rate used) in cash, reducing its consolidated net debt position by approximately euro 656 million, and the estimated net gain from the sale will be in the range of 27 to 30 M euro, and may vary depending on the date and final costs of the transaction and foreign exchange impact, among other variables.

The assets in the transaction cover 2,518 kilometres and have been in operation for an average of five years. Of this total, Abengoa will continue to participate in the management of 2,138 kilometres, through the creation of the joint venture with CEMIG, which will enable it to continue growing through this activity in Brazil and other Latin American countries. The concession for these assets was granted to Abengoa by ANEEL (the national electricity agency in Brazil), and they came into operation between 2004 and 2008.

Manuel Sanchez Ortega, CEO of Abengoa, explained, “This transaction represents a very important milestone for the company: it strengthens our commitment to the Brazilian transmission market and our commitment to the country, introducing a key partner such as CEMIG into our growth strategy.”

“Furthermore, financially, this transaction strengthens our balance sheet thanks to the significant reduction in net debt, which will enable us to continue developing our business model with a more solid capital structure. This is consistent with our selective asset rotation strategy that we have explained to the markets in recent months,” continued Sanchez Ortega.

Abengoa has had a permanent presence in Brazil for more than 30 years and, following this transaction, the company will still hold an asset portfolio of more than 6,600 kilometres, including the 2,138 kilometres of the new joint venture created by this transaction. The company has three bioethanol production plants and has developed a large number of projects for its Brazilian clients, demonstrating Abengoa’s commitment to Brazil, which currently accounts for 18% of its sales.

The deal is subject to the approval of the financial lenders, as well as ANEEL.

Conference call details

Abengoa’s CEO, Manuel Sanchez Ortega, and Chief Reporting Officer and Head of Investor Relations, Barbara Zubiria Furest, will hold a conference call to explain the details of the transaction, which will be simultaneously broadcast via the internet, on Friday, June 3, 2011 at 11:00am (Madrid time).

To access the conference call, please dial +34 91 788 93 03. The conference call can be followed live via Abengoa’s website, www.abengoa.com. We recommend accessing the website at least 15 minutes prior to the start of the conference call to be able to register and download the audio software required to be able to listen.

A recording of the conference call will be available on Abengoa investors’ webpage approximately two hours after the conference has finished.

About Abengoa

Abengoa (MCE: ABG) is an international company that applies innovative technology solutions for sustainable development in the energy and environment sectors, generating electricity from the sun, producing biofuels, desalinating sea water and recycling industrial waste. (www.abengoa.com).

About CEMIG

CEMIG is one of the leading electricity companies in Brazil. It has more than 9,700 employees and is present in 19 states in Brazil and Chile. Its principal activities are electricity transmission and distribution. It also works in the natural gas, telecommunications and energy efficiency services sectors. It has 7,506 kilometres of transmission lines and a distribution network of 450,316 kilometres. (www.cemig.com.br).

For more information please contact:

Communications Department
Patricia Malo de Molina Melendez
Loreto Gonzalez Goizueta
Tel. +34 954 93 71 11
E-mail: comunicacion@abengoa.com

Investor Relations Department
Barbara Zubiria Furest
Tel. +34 954 937 111
E-mail: ir@abengoa.com

SOURCE Abengoa