Enel 10-Year Plan Includes €70B Investments in Renewables, Big Increases in Sustainable Finance
Energy provider Enel unveiled today its 2030 Vision and 2021-2023 Strategic Plan, including significant increases in renewable energy investments and the use of sustainable finance tools.
Over the next ten years, Enel anticipates mobilizing investments of €190 billion, aimed at boosting decarbonization, electrification of consumption and platforms, and creating sustainable shared value for all stakeholders and profitability over the medium and long term. The company’s strategy will be carried out through dual business models: Ownership, where digital platforms are a business enhancer supporting investment profitability, and; Stewardship, which catalyzes third-party investments in partnership with Enel or where platforms are a business generator.
Under the Ownership model, the company anticipates directly investing 150 billion euros, with nearly half devoted to Renewables. Enel expects installed renewable energy capacity to reach approximately 120 GW, compared to 45 GW currently. Additional customer-focused investments will be made to enable electrification, accelerating customers’ path to sustainability and energy efficiency.
Under Stewardship, Enel will invest approximately €10 billion, while catalyzing around 30 billion euros from third parties, mainly related to Renewables, alongside Fiber, e-transport and flexibility.
Overall, the company expects to achieve an 80% reduction in direct CO2 emissions versus 2017 levels.
The company’s 2021-2023 strategic plan will see Enel directly investing around 40 billion euros while further catalyzing 8 billion euros from third parties. According to the company, more than 90% of consolidated investments will be in line with the UN Sustainable Development Goals (SDGs), and between 80% and 90% of the Group’s consolidated capex will be aligned to EU Taxonomy criteria for its substantial contribution to climate change mitigation.
On the sustainable finance front, the company stated that instruments including Sustainability linked bonds, green bonds and sustainable loans currently account for around one third of the Group’s total gross debt. Enel expects the share of these sources to increase to around 50% in 2023 and more than 70% in 2030, as the Group aims to progressively refinance upcoming maturities and raise new funding through these sustainable instruments. Enel noted that the cost of debt of Group Sustainability linked bonds is on average around 15-20 bps lower compared to a conventional bond, a level that is expected to drive the reduction of Enel’s cost of debt.
Francesco Starace, CEO and General Manager of Enel said:
“With this new Strategic Plan we are setting a direction for the next 10 years, mobilizing 190 billion euros in investments to pursue our goals in a decade full of opportunities. To realize this vision, we can leverage on our clear leadership in the utility sphere across three main elements, all driven by an innovative platform-based model. First, as a ‘Super Major’ in the renewable sector, we operate the world’s largest private generation fleet. Furthermore, we have an unparalleled global network system, where the platform-operating model drives improvements in quality, resiliency, efficiency and flexibility. Last but not least, we count on the largest customer base worldwide to which, through our business platforms, we provide innovative services and integrated offerings. Throughout the decade, we will strengthen the creation of sustainable shared value for all stakeholders, which is also embedded in an attractive remuneration for our shareholders.”