LISBON, Nov 16 (Reuters) - A group of investors led by Iberia's leading private equity firm has bought Portugal's largest wind power business, Enersis, from Australian investment company Babcock & Brown Ltd BNB.AX for 1.2 billion euros.

Magnum Capital will take over a portfolio of wind farms with installed capacity of 515 megawatts and 156 megawatts under construction.

The private equity firm said in a statement on Sunday that it was the largest deal in the European wind energy sector ever done by a private equity firm. It showed confidence remains in the alternative energy sector in spite of the financial crisis sharply reducing investment in it in recent months.

“This transaction was concluded during the biggest global financial crisis and highlights the consortium’s investment capacity at a particularly complex moment,” the statement said.

Still, electricity produced by wind power is guaranteed in a fixed-tariff regime for 15 years in Portugal, ensuring “that the income is not affected by the current economic crisis.”

Magnum provided 65 percent of the financing for the purchase itself and raised the rest through local institutional investors such as Espirito Santo Capital, a part of Banco Espirito Santo BES.LS bank, and a Nordic clean energy private equity fund known as Fjord Capital.

Portugal and Spain have seen strong growth of wind power in recent years and have two of the largest listed wind energy companies, Iberdrola Renovables IBE.MC and EDP Renewables EDPR.LS. Spain's Gamesa GAM.MC is a leading producer of wind power turbines.

Investment in alternative energy has suffered during the global financial crisis and there have been concerns in the sector that enthusiasm could wane, especially now that oil prices are considerably off their record highs.

Enersis accounts for 25 percent of installed wind power capacity in Portugal. The business is forecast to post sales of 120 million euros in 2008 and earnings before interest, tax, depreciation and amortisation of 100 million euros. (Reporting by Axel Bugge; Editing by Tim Dobbyn)