E.ON, HSH Nordbank Exit Sahara Green Power Project

By Markus Klausen and Matthias Goldschmidt

Germany's E.ON SE (EOAN.XE) and HSH Nordbank AG are pulling out of a large-scale project aimed at generating renewable energy in North Africa, the companies said Friday.

Utility E.ON won't extend its contract with the Dii GmbH consortium when it expires this year, and will instead focus on its own projects, a spokesman said. HSH also confirmed it is exiting Dii, also known as Desertec Industrial Initiative.

The departures are the latest setback for the initiative planning multi-billion euro investments in solar and wind power generation in the desert. Dii was founded in 2009 as an industrial consortium to help implement a plan to export solar power from Africa to Europe. Dii backed away from the goal of meeting a fifth of Europe's electricity demand by 2050 last year.

Two of the most important co-founders of Dii, Siemens AG and automotive supplier Robert Bosch GmbH, left the project in 2012.

Other important Dii members, however, said Friday they are still on board. "We remain with Dii," said a spokesman for RWE AG, Germany's second-largest utility. Spokespeople for Munich Re, Deutsche Bank AG and Schott AG also confirmed they are sticking with the project.

--Friedrich Geiger contributed to this article

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