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EDPR scales up global ambition with growth plan of more than 4GW/year

Friday 03, March 2023
6 min reading time
Renewable Energy

EDPR will invest 20 billion euros until 2026 to boost renewable additions, forecasting to add more than 4GW per year in capacity during this period and doubling installed capacity in Solar Utility Scale and Wind. Growth is partially funded by a 1bn capital increase.

  • Renewables deployment to increase to more than 4 GW per year, totalling 17 GW gross additions until 2026;
  • Double Wind and Solar installed capacity by 2026;
  • €20 Bn gross investment in renewables between 2023-2026, of which 40% on Wind Onshore and 40% on Solar Utility Scale;
  • Focus on core low-risk markets in North America (7.4 GW additions), Europe (5.6 GW additions), South America (2.2 GW additions), APAC (1.2 GW additions) and Offshore (0.7 GW net additions);
  • Reach an EBITDA of €3.0 billion by 2026, with 9% CAGR in 2022-26 and a recurring net profit of €0.9bn by 2026;
  • Partially fund the Company growth through a €1 billion capital increase;
  • New dividend policy, with scrip dividend proposal for Shareholders' approval, setting target payout ratio between 30-50%;
  • Future-proof organization creating 1500 new hires by 2026;
  • EDP Group reiterates its commitment to be coal-free by 2025, all green by 2030 and Net Zero by 2040, approved by SBTi.
3 March 2023

EDPR today presented its revised Business Plan 23-26 in London, forecasting a global gross investment of 20 billion euros and a yearly deployment of more than 4GW in renewables.

This ambition is aligned with the overall 23-26 plan presented by EDP Group and its net zero commitment. The Group aims to allocate 85% of the total investment to renewables, clients and energy management and 15% to electricity networks across fast-growing and low-risk markets in 4 regional hubs: Europe (40% of the investment plan), North America (40%), South America (15%) and Asia-Pacific (5%).

“Today we ramp up our ambition to lead the energy transition supported by a competitive and resilient portfolio, strong financials, an empowered team and the will to contribute to a climate-positive world for the coming generations. This Business Plan reinforces our growth ambition while pushing even further our commitment to the planet and creating superior value for all”, says Miguel Stilwell d’Andrade, EDP and EDPR CEO.

The investment plan combines conventional and emerging technologies

Onshore wind and solar utility scale will account each for 40% of the 20 billion investment plan in renewables, complemented by emerging technologies such as solar distributed generation, storage and hydrogen. Offshore wind capacity will scale up through the joint venture Ocean Winds and provide significant visibility on growth over the next 10-15 years. With the recent acquisition of Kronos and the company’s activity across the globe, EDPR is set to continue to capture growth in Solar. The technology mix by 2026 will have a share of 29% Solar and 8% Solar Distributed, while wind will represent 59%, wind offshore 2% and the remaining mix diversified through H2 and Storage. EDPR aims to continue to deliver strong earnings growth, targeting an EBITDA of 3.0bn euros in 2026 and a recurring net income of 0.9 bn euros in 2026.

In order to partially finance its updated investment plan, EDP Renewables intends to raise equity and entered into an investment agreement with Lisson Grove Investment Pte Ltd, an affiliate of GIC Pte Ltd., Singapore’s sovereign wealth fund and a leading global long-term investor, in which the latter committed to subscribe c.€1.0 billion worth of new shares in a capital increase. The commitment by GIC to subscribe shares in EDPR shall be subject to the decision of EDPR to launch the transaction at an appropriate time vis-à-vis market conditions.

1500 new hires until 2026 and a clear commitment to communities

The updated Business Plan for EDPR foresees 1500 new hires by 2026 basing the talent strategy on attraction, experience and development and renewing its recognition as a top employer across the regional hubs.

EDP as a group will continue laying the path for a better tomorrow through its target to become net zero by 2040 across all scopes and evolving the entire value chain, from clients to partners. This commitment has recently been validated by the Science Based Target Initiative (SBTi), which recognized EDP’s best practices in climate action in total alignment with the science based 1.5ºC temperature mitigation target.

Innovation and digitalization will remain at the core of EDP Group’s strategy, driving change and promoting efficiency with a reinforced investment of 3 billion euros in these two areas by 2026.

Strong financials and an attractive dividend policy

EDPR will leverage its distinctive asset rotation model to further empower growth, targeting 7 billion in proceeds until 2026. The company will continue to present a sound balance sheet, with a Net Debt/EBITDA target of 3.2X in 2026.

EDPR has also announced a proposal, subject to approval at the Shareholders Meeting, to update dividend policy and improved the pay-out ratio to 30-50%, providing a flexible and competitive remuneration to its shareholders, aligned with the market.