Endesa is signaling a shift in its electrification roadmap for the economy, noting a drop in industrial demand amid high inflation and rising financing costs while renewable generation continues to expand. One day after its parent company unveiled the 2024-2026 strategy, Endesa confirmed an investment plan of 8.9 billion euros over the next three years.
In light of this context, the 2023-2025 plan reveals increased allocations to networks and the customer experience, alongside continued investment in traditional generation. Specifically, about 31% of the total will go to electrical networks, totaling close to 2.8 billion euros, roughly 200 million more than prior estimates due to new regulatory parameters. The plan continues to allocate about 48% to renewable energy, maintaining a cap of 4.3 billion euros; however, Endesa now seeks alliances with other partners to advance projects and maximize a favorable risk-return profile.
The company reiterates its green energy objective of 13.9 gigawatts, unchanged from the previous plan, with several flagship clean-energy projects positioned to move forward in 2026-2027. The Teruel-Andorra just-transition projects will receive 1,700 and 700 million euros respectively, and are targeted for operation in 2026-2027 and 2026. Galicia will add 800 megawatts of wind capacity, financed with around 1,000 million euros and set to begin operations in 2026. These projects illustrate Endesa’s pragmatic approach to expanding clean energy while aligning investment with regulatory timelines.
The plan marks a shift in how customers are served. Endesa intends to grow its free-market customer base, aiming to reach 7.5 million by the end of the period, up from 7.3 million targeted earlier and 7.1 million closed in 2023, with a clear emphasis on bundled services similar to telecommunications. Approximately 900 million euros will be directed to this area, a modest increase of 100 million euros versus the prior roadmap. A parallel emphasis on traditional generation remains intact, including gas-tired combined cycles, nuclear facilities that are gradually being retired, offshore holdings, and the corporate structure that supports these activities.
Jose Bogas, the chief executive, has laid out targets for 2026 that show stronger profitability. EBITDA is expected to land between 5.6 and 5.9 billion euros, up from the previous plan’s 5.2-5.5 billion range for 2025. Net ordinary profit is anticipated to fall between 2.2 and 2.3 billion euros in 2026, with 2.0-2.1 billion projected for 2025. The company reported an EBITDA of 5.327 billion euros and a net profit of 2.541 billion euros for 2022, illustrating a trajectory of steady improvement through the plan horizon.
Endesa also announced a dividend policy that includes an additional approximately 0.50 euros per share this year and a continuation of a 70% payout through 2026. The policy envisions a 1 euro per share minimum over a three-year span, with a projected payout rising to about 1.2 euros per 1 euro base in 2024 and staying near 1.5 euros in 2026. This stance follows a decision by the International Chamber of Commerce that required a payment of roughly 570 million euros in a dispute with QatarEnergy to renegotiate a long-term LNG supply contract. Such financial adjustments reflect the company’s broader strategy to balance shareholder returns with ongoing capital needs.
On the balance sheet, net debt is expected to rise in the near term, with liabilities projected to end 2023 around 10,000 to 11,000 million euros and a net investment of about 8 billion against a dividend of 4 billion. Cash flow around 11 billion and a 3 billion contribution from partners and asset rotations through the new cooperation model will help maintain liquidity. By 2026, net debt is anticipated to be in the 8,000-9,000 million euro range, signaling a 10-20% improvement versus the end of 2023 projections.
The workforce strategy mirrors the long-term efficiency push. A plan to reduce around 1,200 roles over four years was first proposed in 2020, and the target remains to reach a net total reduction, bringing the headcount closer to 9,000 employees by 2026. That implies about 100 fewer staff than the current level of around 9,100, a move aligned with the company’s push toward more automated and integrated operations while maintaining service quality and reliability.