EGP to invest €6.1bn by 2018
Italian renewables giant Enel Green Power plans to spend €6.1bn ($8.4bn) by 2018, adding generation capacity of 4.6GW. This will bring its total capacity to 13.4GW.
EGP says its 2014-2018 business plan is based on geographical and technological diversification, with the company planning to invest across renewable power sources – hydropower, wind, solar, geothermal and biomass – in a number of new countries.
It currently operates in 16 countries, and has already announced that it is entering Colombia, Peru, Turkey, South Africa and Morocco.
EGP says that of its capital expenditure earmarked for growth, 73% is concentrated in emerging markets, which will account for 2.9GW of total additional capacity. North America accounts for 10% of growth capex, while Europe accounts for 17%.
EGP says its expects EBITDA of €1.9bn in 2014, which will grow to €2.3bn in 2016 and €2.6bn in 2018.
EGP says that geographical diversification and its technology mix "enabled the company to generate sufficient cash flow to finance investments in the period from 2010 to 2013, while at the same time mitigating the effects of the adverse economic and financial conditions in the markets where the company operates."
The group's CEO Francesco Starace said: “The outlook for renewables remains very strong, and renewables will outpace all other power sources in meeting world power demand in the coming period, underpinned by a growing competitiveness versus fossil fuel generation.”
EGP expects world electricity demand to grow by 60% by 2030, requiring an 80% increase in generation capacity. The company expects renewables to account for 70% total new power generation up to 2030.
Starace says that EGP “has the most diverse renewables pipeline in the world”' and notes that over 50% of his company’s development portfolio is now in emerging markets. "This diversity has mitigated our risks and will continue to add value in the future,” says Starace.
Starace also notes that EGP is funding its capital expenditure from its cash flow,“without reliance on asset rotation, as some of our colleagues are doing.”
Note: Update adds Starace comments