EDP Faces €335 Million Tax Bill Following Dam Sale
Lisbon, Portugal – November 6, 2025 – Energias de Portugal (EDP) has been ordered too pay €335 million in taxes related to the 2022 sale of its hydroelectric dams to the consortium formed by the sovereign wealth fund of Abu Dhabi and Engie, a French energy company.The ruling, delivered by Portuguese tax authorities, centers on the capital gains realized from the transaction.
The substantial tax assessment impacts EDP’s financial outlook and underscores the government’s scrutiny of major corporate transactions. The dispute revolves around the valuation of the assets sold and the applicable tax rate on the profits generated.this decision follows a prolonged examination into the €2.5 billion dam sale, which involved a complex financial structure. EDP maintains it fulfilled all tax obligations and is prepared to contest the ruling,possibly leading to a legal battle.
The sale, completed in December 2022, transferred control of EDP’s hydroelectric assets – including dams on the Douro, Tâmega, and Tejo rivers – to the new ownership.At the time, EDP stated the proceeds would be reinvested in renewable energy projects and debt reduction. The Portuguese government, however, initiated an audit shortly after the deal closed, questioning whether the appropriate taxes had been paid on the capital gains.
António Mexia, EDP’s CEO, has previously defended the transaction, asserting its strategic alignment with the company’s focus on green energy. The tax authority’s assessment alleges underreporting of taxable income derived from the dam sale. The outcome of any appeal could set a precedent for future large-scale asset disposals by Portuguese companies.