Italy’s Enel seeks to add 6.7 GW of renewables in 3 years

Italian utility Enel SpA (BIT:ENEL) has set a target of adding 6.7 GW of renewable energy capacity as part of its updated 2017-2019 strategic plan that was presented on Tuesday.

The figure includes both managed and consolidated assets, Enel noted.

The company said it is adding to its current operations a less capital intensive build, sell and operate (BSO) business model that will allow it to capitalise on its renewables pipeline more quickly, reduce the overall risk profile and crystallise value creation earlier.

Under its active portfolio management programme, Enel plans to dispose of around EUR 3 billion worth of assets, including but not limited to renewable energy plants through the BSO strategy. Up to EUR 4.5 billion will be reinvested.

Enel sees its total capex for the three-year period at EUR 20.9 billion, which is a reduction from EUR 21.2 billion under the previous plan from November 2015. It said that nearly 95% of growth capex will be spent on non-merchant risk businesses, including networks, renewables and thermal generation covered by power purchase agreements (PPAs).

The table below gives more details about the company’s financial targets for the period.

All figures are higher than in the previous plan for the period. Last November, the company projected recurring earnings before interest tax, depreciation and amortisation (EBITDA) of EUR 14.7 billion for 2016 and EUR 15.5 billion for 2017. Net ordinary income for the two years was expected at EUR 3.1 billion and EUR 3.4 billion.

"In today's update to the strategy, we are adding digitisation and customer focus as levers to drive further value creation across our strategic pillars. This will support enhanced earnings and cash generation, as a result of which we are increasing our dividend and introducing the possibility of a share buyback programme while maintaining our strong growth trajectory," said CEO Francesco Starace.

Enel also plans to streamline the group's structure in all countries and especially across Latin America and in the renewables segment.

(EUR 1.0 = USD 1.056)

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