November 24, 2020 Read More →

Enel to invest $190 billion on green energy, electrification in coming 10 years

Bloomberg:

Enel SpA, Europe’s biggest utility, is set to invest 160 billion euros ($190 billion) over the next 10 years on a bet that demand for green energy and electrification will surge globally.

Under Chief Executive Officer Francesco Starace, Enel has sought to ride the accelerating shift to a low-carbon world, committing vast sums of money to expanding its renewable power, networks and energy-efficiency divisions. Its bold investment plan comes as competition for new projects intensifies, with utilities now vying with oil majors pushing more aggressively into the sector.

Enel plans to invest about 40 billion euros over the next three years, driving annual profit gains of as much as 10% over the period, the Rome-based company said Tuesday. Almost half of that spending will be channeled to renewable energies.

It’s a “monster investment” program and is above expectations, Roberto Letizia, an analyst at Equita SIM SpA, said in a note.

The utility will offer shareholders a guaranteed fixed dividend with a target of 43 euro cents a share in 2023, the strategic plan shows. An increase in the use of so-called sustainable finance — which will account for about half of total gross debt in 2023 — will allow Enel to lower its cost of borrowing.

Enel said almost half of its investments will be directed to developing infrastructure and networks, while the rest will be allocated to power generation. The company expects to have about 120 gigawatts of installed capacity by 2030, almost three times more than the current level.

[Alberto Brambilla and Chiara Albanese]

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