Spanish utility Iberdrola is planning more than €100 billion ($117 billion) of investments through 2031 as it intensifies its shift towards the more regulated business of power grids in countries such as Britain and the United States.
Europe's largest utility presented on Wednesday its strategic update through 2028 and an outlook of what to expect until 2031: a big increase in power network investments and a more selective approach to renewable energy generation projects.
The plan is in line with its previous pledge to increase annual investments to around €15 billion from around €12 billion and builds on a strategic shift launched in 2022.
Iberdrola will invest €58 billion through 2028 - two thirds of which in power networks mainly in Britain and the US - and expects additional investments of around €45 billion between 2029 and 2031.
On renewables, the largest share of investments will fund offshore and onshore wind projects, mostly already under construction.
"This plan aims to transform Iberdrola's profile into a more regulated company, with networks as a vector for growth," Executive Chairman Ignacio Sanchez Galan said.
Iberdrola is targeting an adjusted net profit of €7.6 billion per year by 2028, about €2 billion more than in 2024.
Financial goals include €52 billion in cash flow generated during the period and €13 billion in asset sales and partnerships, three quarters of which have been completed. It will hire 15,000 people.
Shareholders will see rewards grow in line with returns, with some €20 billion in dividends between 2025 and 2028, equivalent to between 65 per cent and 75 per cent of earnings and with a floor of €0.64 per share.
As a result of the investments, the value of Iberdrola's grid assets, whose returns are regulated and guaranteed, is expected to reach €70 billion in 2028 and top €90 billion by 2031.
In its 2031 outlook, the firm sees earnings growth of at least a mid-to-high single-digit percentage.
(Reporting by Pietro Lombardi. Editing by Inti Landauro and Mark Potter)