Spanish utility Endesa SA (BME:ELE) is set to embark on a significant EUR 4.3 billion (USD 4.69bn) investment in its renewables business in Spain and Portugal, as revealed in its comprehensive 2024-2026 spending plan announced on Thursday. The announcement reflects a strategic commitment to bolster its renewable energy portfolio, with a heightened focus on wind power, while retaining room for potential partnership deals.
Endesa's total investment for the specified period stands at EUR 8.9 billion, representing a slight increase from the initially allocated EUR 8.6 billion for the preceding 2023-2025 timeframe. The company underscores key principles in its strategy, emphasizing profitability, flexibility, resilience, and a “more selective investment strategy,” aligning closely with the overarching action plan of its parent group, Enel SpA (BIT:ENEL).
While the investment amount for renewables and conventional generation remains consistent, Endesa has elevated allocations to its electricity distribution business to EUR 2.8 billion, primarily directed towards distribution networks. An additional EUR 900 million is earmarked for the customers segment.
Within the renewables sector, Endesa aims to escalate its total installed capacity to 13.9 GW by the end of the planning period, a notable increase from the estimated 10 GW anticipated by the close of the current year. The outlined plan includes the construction of 1.6 GW of wind farms, 2 GW of solar farms, and 0.2 GW of battery energy storage systems. Notably, a larger financial commitment will be directed towards wind power, with a specific emphasis on wind and hydroelectric repowering initiatives.
Endesa identifies three projects as pivotal during the upcoming years: the energy transition projects Andorra in Spain, Pego in Portugal, and a substantial wind farm development in the Spanish region of Galicia.
In a bid to optimize its vertically integrated business model, Endesa's financial strategy for renewables involves selecting investments that offer a balanced risk-return profile and divesting stakes in projects to attract new partners. The company anticipates raising approximately EUR 3 billion from partners' contributions and asset rotation.
Endesa CEO Jose Bogas expressed confidence in the new, more selective investment strategy, emphasizing its alignment with the company's overarching goals while maintaining the flexibility to capitalize on future opportunities. Financially, Endesa targets a net financial debt to EBITDA ratio of 1.4 in 2026, marking a decrease from the estimated 2.3 in 2023, with sustainability criteria influencing over 80% of the debt.
