ACEK, which also owns a 70% stake in car parts maker Gestamp, is working with investment bank Lazard to explore a sale, hoping to attract the interest of utilities and infrastructure funds looking to bulk up in the space, three sources said.
Companies, spanning oil majors, IT giants and traditional electricity firms have raced to secure renewable energy to manage costs and reduce their carbon emissions, while boosting their credentials with customers.
Pension and infrastructure funds have also been investing more in renewable energy, to capitalise on the steady returns assets generate.
ACEK has asked potential bidders to submit first-round bids for Elawan this quarter, the sources said, adding that it is expected to target European utilities and investment funds including Enel, via its Iberian unit Endesa, asset manager Macquarie and pension fund CDPQ, among others.
Elawan declined to comment and Lazard had no immediate comment.
Spain's renewables market is also drawing considerable attention from investors after Madrid outlined ambitious plans to source 70% of its electricity from renewables by 2030 and become carbon neutral by 2050.
Canadian asset manager Brookfield agreed to buy a 50% stake in solar group X-Elio from U.S. infrastructure fund KKR and Spain's Ribera family for $500 million in December.
The two main shareholders of Spanish electricity provider Viesgo, Macquarie Infrastructure and Wren House Infrastructure, the infrastructure arm of the Kuwait Investment Authority, are also evaluating a sale, a separate source said.
According to Spanish newspaper El Confidencial, the funds have hired investment bank JP Morgan to run the sale of the company active in wind farms and grids.
Macquarie and JP Morgan declined to comment.
Elewan is the wind power division of Spain's ACEK, a company established in 1958, and develops and operates wind farms throughout in Europe, South Africa and the Americas.
(Reporting by Arno Schuetze and Clara Denina; additional reporting by Isla Binnie and Jesus Aguado in Madrid; Editing by Hugh Lawson)