Iberdrola will invest 47 billion between 2023 and 2025 to drive the energy transition, employment and net zero emissions

Iberdrola avanza en su crecimiento global con inversiones de 47.000 millones de euros en el periodo 2023-2025 para impulsar la transición energética, el empleo y las emisiones netas cero. Así lo ha anunciado la compañía en la presentación de su Capital Markets Day, celebrada en Londres. 

Según ha explicado el presidente ejecutivo del grupo, Ignacio Galán, el crecimiento de este plan estratégico se basa en inversiones orgánicas en todos los mercados y en la operación PNM Resources, a la que destinará 11.000 millones de euros.

“La situación actual del sector es una oportunidad para que Iberdrola siga contribuyendo al autoabastecimiento y la descarbonización de los países en los que estamos presentes y por eso vamos a invertir la cifra récord de 47.000 millones de euros en tres años”, dijo el ejecutivo de Iberdrola presidente, Ignacio Galán. 

Specifically, of the 47 billion euros of investment, 80% will go to countries with an A rating, with stable regulatory frameworks and ambitious electrification targets. By country, the group will allocate 47% of its investments to the United States - including organic investments and the integration of PNM Resources - which is the main market for expansion over the next three years. In second place is the United Kingdom, with 16%. Iberdrola is also promoting geographical diversification through an additional focus on countries such as Germany, France and Australia, to which it will allocate 13% of total investment.

In Spain, investments will exceed 6,000 million euros over three years, 13% of the total, in line with the average of recent years. With this investment approach, the company will contribute to the employment of 85,000 people in Spain by 2025.

Analysing the main investments by business area, Iberdrola will allocate 27 billion euros to networks and 17 billion euros to renewables. "Over more than two decades, we have built a strong track record of performance and our plans ensure that Iberdrola will continue to be at the heart of delivering the smart grid and renewable energy improvements that the energy transition needs around the world," said the chairman.

For the company, grids are the backbone of the integration of new renewables capacity and will enable the implementation of new distributed solutions and services. By investing in this area, the company is ensuring predictable frameworks and protection against macroeconomic uncertainty. This commitment will enable it to reach a regulated asset base of 56 billion euros in 2025, which represents a 44% growth compared to the 39 billion euros estimated for this year.

85% of organic investments in this area are practically assured, as they are made in projects with tariffs already closed or with advanced negotiations and known conditions. Around 20% of investments in transmission will go to the United Kingdom, the United States and Brazil.

The company intends to allocate around 17,000 million euros to the renewables business, focusing growth on secured, high quality projects with the best risk/return ratio. Of this amount, 46% will be focused on offshore wind in France, Germany, the United Kingdom and the United States. In the remaining technologies, onshore wind will account for 25% of the investment, photovoltaic for 24%, hydroelectric for 2% and batteries for 3%.

As a result of these investments, the company will increase its installed renewable capacity by 12,100 MW to 52,000 MW in 2025 - 3,100 MW onshore wind, 6,300 MW photovoltaic, 1,800 MW offshore, 700 MW of batteries and 200 MW of hydro, compared to the 40,000 MW planned for this year. The group has already secured 50% of the new capacity and around 95% of production will be contracted by 2025.

This entire strategic plan is orchestrated within the framework of careful financial soundness, which allows the company to preserve its credit rating levels. This is thanks to Iberdrola's highly diversified sources of financing and business - 70% of EBITDA will come from the international area -, a solid financial structure - 75% of debt is fixed-rate and long-term -, active liquidity management and optimisation of green financing, with no capital increases planned and with the support of asset rotation. As a result, the company will maintain its financial strength: the net debt/EBITDA ratio will stand at 3.4x at the end of the period. 

"Our long-term strategy is proving more appropriate than ever in the current scenario. Following our sustainable growth model, we are improving our financial strength and increasing our EBITDA and net profit outlook to 2025, as well as maintaining our long-term outlook to 2030. This strategy will enable us to deliver more value to our shareholders and the communities we serve," commented the chairman. 

The new investments planned for the period 2023-2025 allow Iberdrola to forecast gross operating profit (EBITDA) of between 16,500-17,000 million euros by 2025, representing average annual growth of between 8 and 9%. Spain will account for 31% of EBITDA. In addition, the company estimates that net profit will increase to between 5.2 and 5.4 billion euros by 2025, which represents an average annual growth of between 8 and 10%. 

These results will enable the company to meet its commitment to increase shareholder remuneration in line with the evolution of results and to allocate between 65% and 75% of profits to dividends, which will enable it to achieve a dividend of between 0.55 and 0.58 euros per share in 2025. Iberdrola sets a dividend floor of 0.46 euros between 2023 and 2024 and 0.50 euros for 2025, within the Iberdrola Flexible Remuneration programme, which includes the repurchase of shares.

The chairman also reaffirmed the outlook for 2030, driven by growth in all markets and the acceleration of electrification: investments of EUR 65-75 billion in 2026-30 to exceed 100 GW of installed capacity and EUR 65 billion in network assets.

Environmental and social factors are fully integrated in the Strategic Plan presented. "In difficult economic times, our plan will also be a catalyst for job creation. We will hire around 12,000 people over the next three years, and by 2030 we anticipate that our activities will support more than 500,000 jobs globally across our supply chain," stressed the chairman. Of this figure, more than 85,000 jobs will be in Spain.

Iberdrola sigue avanzando en su apuesta por el autoabastecimiento energético y en su papel proactivo como agente activo en la lucha contra el cambio climático. De hecho, dentro de su plan estratégico, la compañía pretende compatibilizar su crecimiento en renovables y redes con el objetivo de ser neutra en carbono en 2030 en sus plantas de generación y consumo propio y en todas sus actividades en 2040. Iberdrola también tener un impacto neto positivo en la biodiversidad al 2030. Para lograrlo, la compañía promoverá la plantación de 20 millones de árboles al 2030.