By Francesca Landini
Madrid — Spanish power utility Endesa is set to increase investments in Spanish power grids as part of Italian parent company Enel’s €53bn investment plan in 2026-28.
The increase would come at a sensitive time. A massive blackout that hit Spain and Portugal in April last year reignited the debate about investment needs in Spain’s power networks and the return on such investments.
Enel said on Monday it plans to invest €26bn in power grids until 2028. Of this, roughly 21% is earmarked for Spain, where it operates through Endesa, according to a presentation of the plan.
This would be a significant increase on the roughly €4bn Endesa previously allocated to invest in this business under a plan that it will update on Tuesday.
Under its previous three-year strategy, Enel had planned capex of €43bn, of which 60% was dedicated to the regulated business of grids and 28% to green energy projects. Now roughly 38% has been allocated to renewables.
Spain’s competition watchdog recently set the financial return for power grid activities at 6.58% for the coming years, saying it seeks to balance network investment needs with consumer protection. This is well below the more than 7% Spanish power utilities, including Endesa, have called for.
Enel pledged on Monday to increase its dividend per share by 6% a year on average through 2028 from 49 euro cents in 2025, sending its shares up 6% by late morning in Italy.
Cutting costs
The stock took a hit last week after the Italian government approved a decree containing measures aimed at cutting energy costs for companies and households.
That includes the reimbursement of carbon dioxide costs to gas-fired power plants, a measure that is expected to cut wholesale power prices and weigh on Enel’s results if cleared by the European Commission.
The negative impact on the group’s net income is estimated at between €300m and €400m a year on average in the 2026-28 period, according to the utility.
Enel said the push on investment and investor rewards will increase net financial debt to about three times core earnings, from a debt-to-earnings multiple of 2.5 at the end of last year.
JPMorgan said it does not believe the market will penalise Enel for higher leverage, “as the market is more focused on growth than on balance sheets, and Enel starts from an under-leveraged position”.
Enel faces regulatory risks in Brazil, where its power contract for the Sao Paulo area is at risk after a cyclone in December last year disrupted electricity services.
CEO Flavio Cattaneo, who is expected to be appointed to a second three-year term in May, said Enel is having good discussions with Brazilian authorities over the issue.
Enel also said it forecast EPS would grow to between 80c and 82c in 2028 from 69c expected for 2025.
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