EDP plans to invest €25B by 2026, 85% of which in renewables
21 billion will be allocated to renewable energies and 4 billion to electricity grids, which represents an annual gross investment of around 6.2 billion, 30% more compared to the previous plan.
The EDP group plans to invest €25bn by 2026, according to the 2023-2026 strategic plan released on Thursday, of which €21bn in renewables (85%), with an annual gross investment of €6.2bn, 30% more than in the previous plan.
According to a statement released this morning, the EDP group, which is presenting its new strategic plan for the period between 2023 and 2026 in London today, is planning an “investment of €25bn by 2026 to boost renewables and support the group’s carbon neutrality commitments”.
Thus, €21 billion will be allocated to renewable energies and €4 billion to electricity grids, which represents an annual gross investment of around €6.2 billion, i.e. 30% more compared to the previous business plan.
In the previous strategic plan, presented in February 2021, for the three-year period 2021-2025, EDP planned to invest €24 billion in the energy transition, of which €19.2 billion (80%) in renewables.
In the new plan, the pace of adding new renewable capacity increases to 4.5 gigawatts (GW) per year, for a total of 18 GW by 2026, forecasting an installed capacity of renewables of 33 GW by the end of the plan and the ambition to reach more than 50 GW by 2030.
Thus, 40% of the investment will be in ‘onshore’ wind power, 40% in large-scale solar, 12% in distributed solar, 5% in offshore wind and 3% in storage and hydrogen.
With regard to networks, it is planned to expand distribution lines to 400,000 kilometres, nine million smart meters (500,000 more than in 2022) and 12 million access points (2.5 million more than in 2022).
As in the previous plan, 80% of the investment is in Europe and North America (40% each), 15% in South America and 5% in the Asia-Pacific region.
EDP aims to achieve a recurring profit of €1.4 to €1.5 billion in 2026, according to the new strategic plan 2023-2026 sent to CMVM today, corresponding to an average annual profit growth of 12% to 14%.
“With recurring net income forecast at around €1.4 to €1.5 billion by 2026, the minimum dividend per share threshold will gradually increase from €0.19 to €0.20, while the payout target is to be revised to 60-70%,” EDP communicated to the Portuguese Securities Market Commission (CMVM) this morning, hours before presenting the new strategic plan for 2023-2026 in London.
In the previous plan, presented in February 2021, for the years 2021-2025, EDP planned to reach €1bn in 2023, postponing the €1bn target by one year, and rising to €1.2bn in 2025.
The previous plan also provided for dividend payments of at least 19 cents per share until 2025.
At EDP Renováveis, the dividend policy has also been upgraded to a payout ratio of 30-50% “in order to provide flexible and competitive remuneration to its shareholders and in line with the market”, EDP indicated.
The new plan also envisages the group achieving a recurring EBITDA (earnings before interest, taxes, depreciation and amortisation) of €5.7bn in 2026, with annual investment growing by 6% between 2022 and 2026.
Additionally, “EDP will leverage its asset rotation model to further enhance its growth,” it said, highlighting the “€2bn in asset rotation over the last decade” and indicating that it “now expects to reach €8bn in revenue and capital gains by 2026”.
EDP communicated to the market on Wednesday a profit of €679 million in 2022, up 3% on the previous year.
EDP plans to hire 3,000 more workers by 2026, increasing the total to 14,000, according to the 2023-2026 strategic plan sent to the Securities and Exchange Commission (CMVM) today.
“The Strategic Plan now updated provides for 3,000 new hires by 2026 for a net total of 14,000 employees and the goal of having 31% women in leadership positions,” the group said this morning in a statement to the market, hours before presenting the plan in London.
According to the electric company, “EDP’s employees – over 13,000 people of 63 nationalities around the world – will continue to support the group’s ambitious objectives through their dynamism and diversity.
The updated strategic plan also maintains EDP’s commitment to be coal neutral by 2025, which implies closing thermoelectric power plants that use that fossil fuel, and to be 100% ‘green’ by 2030 and carbon neutral by 2040.
EDP announced the launch of a 100% takeover bid for EDP Brasil, funded by a capital increase of €1bn, of which €600m has already been secured by major shareholders.
In a statement sent to the Portuguese Securities Market Commission (CMVM) early this morning, EDP announced the launch of a 100% takeover bid for its listed subsidiary EDP Brasil, held at 56.05% (consolidated position of 57.55%), “aiming at its delisting in a transaction that generates value”.
“Focusing on renewable and electricity networks, this operation also aims to simplify the business organisation,” EDP explained.
The takeover bid will be financed by a capital increase of €1 billion, placed with institutional investors, and €600 million already has the investment commitment of major shareholders, including the China Tree Gorges group (CTG).
According to the market statement, the price offered to minority shareholders of EDP Brasil is 24 reais per share (about 4.4 euros), thus corresponding to a total potential investment of 5,770 million reais (about 1.04 billion euros).
The stock exchange withdrawal of EDP Brasil is expected to be completed in the second half of 2023.
EDP Renováveis Brasil was founded in 2009 and has 1.1 gigawatts (GW) of renewables in operation.
“This operation will strengthen the focus on the renewable energy and grid segments, while reducing exposure to hydro generation and providing for exit from thermoelectric generation,” EDP pointed out.