Terna [TRN:IM], the Italian power grid company, unveiled a bold investment plan totaling EUR16.5bn over the next five years to foster the integration of renewable energy sources and enhance the digitalization and flexibility of the nation’s power network, as reported by Reuters on March 19. This marks a substantial 65% increase in capital expenditure compared to its prior strategy. Under the leadership of new Chief Executive Giuseppina Di Foggia, the company aims to leverage these investments to propel Italy towards its ambitious energy transition goals, including the phase-out of coal by 2028 and a significant reduction in gas-fired power stations. Notably, Terna is eyeing potential acquisitions of distribution assets, aligned with regulatory changes incentivizing asset sales, although specifics were not disclosed.

Terna’s industrial plan underscores its commitment to robust financial growth, with a targeted average annual increase of over 8% in adjusted core earnings until 2028. Earnings before interest, taxes, depreciation, and amortization (EBITDA) are projected to surge to EUR3.25bn by 2028, reflecting the company’s confidence in its ability to navigate the evolving energy landscape. Moreover, Terna’s initiatives align with the Italian government’s energy and climate objectives, including boosting renewable energy capacity and enhancing energy interconnections. The company’s new dividend policy ensures a minimum annual growth of 4% in dividend per share, with potential hybrid debt issuance to maintain its credit rating stability amidst ambitious investment plans.

Sources:

https://www.reuters.com/business/energy/italys-terna-invest-18-bln-power-grid-by-2028-2024-03-19/