Italgas, an Italian company specialized in gas distribution, has presented the new business plan 2023-2029 which provides investments totals equal to 7,8 billion euro.
The plan, illustrated by the Chief Executive Officer, Paolo Gallo, was approved today by the Board of Directors chaired by the president Blessed Navarre.
Italgas 2022-2029 strategic plan: the key points
- investments they will focus on several key sectors: 4,6 billion euros will be allocated to the development, digitization and adaptation of the gas distribution network in Italy, in order to support the transition towards greater sustainability; 900 million they will be invested in the development of the gas distribution network in Greece, contributing to the country's decarbonisation objectives; 800 million instead, they are dedicated to accelerating growth in the water and energy efficiency sectors. Also, they are expected 1,5 billion euros to participate in Atem tenders.
The consolidated RAB (Regulatory Asset Base) of gas distribution in Italy and Greece is expected to grow at an average annual rate of approximately 3,1%, reaching 11,1 billion euros by 2029. Also considering the contribution of tenders, the consolidated RAB is estimated to reach approximately €12,4 billion by 2029, with a compound annual growth rate of 4,8%.
Promote the ecological transition
The goal of the plan is to facilitate the ecological transition while guaranteeing energy security and the competitiveness of energy costs, to the benefit of businesses and households. Despite a more unstable economic context, the Group has a solid and efficient financial structure. About the dividend, the dividend policy has been extended through 2026, with a payout of 65% and a minimum increase of 4% of the dividend per share, based on 2022 results.
The Plan is based on ESG principles (Environmental, Social, and Governance) and faces the challenges of sustainability by confirming the objectives of reducing Scope 1 and 2 greenhouse gas emissions by 34% by 2028 and by 42% by 2030, Scope 3 (supply chain) by 30 % of consumption by 2028 and 33% by 2030
energy by 27% by 2028 and by 33% by 2030 (baseline 2020). The ultimate goal is to achieve the climate neutrality by 2050.
To promote more changes, introduce new ones goals related to gender pay equity and the development of skills and the value of resources.
Italgas plan: 4,6 billion for the development of the gas network in Italy
The Plan provides for a investment of 4,6 billion euros for the development and upgrading of the gas distribution network in Italy. Of these, 1,6 billion euros are earmarked for digital transformation of the network, in order to have a completely digitized network by 2024. In addition, around 400 biomethane plants will be connected to the Italian and Greek network and the reverse flow technology will be developed for the unlimited reception of quantities not consumed locally.
In addition, investments of 2,9 billion euros are planned for the improvement of existing infrastructure, including repurposing and development projects. About 170 million euros are dedicated to the completion of the methanisation of Sardinia, which will include conversion of networks currently powered by propane and LPG air. 100 million euros will be earmarked for growth through acquisitions in the sector of gas, following the approach adopted in the past.
For the strengthening in Greece 900 million
Italgas will invest almost one billion euros in the development of the gas distribution network in Greece, using the experience acquired in the methanisation of Sardinia. These investments will make it possible to extend the Greek network from 7.491 kilometers in 2022 to approximately 11.000 kilometers by 2029, favoring the diffusion of natural gas into new areas and enabling the distribution of renewable gases. Part of the resources will be dedicated to the integration of Depa Infrastructure with Italgas, including IT systems and sustainability, and to the merger of the operating companies, obtaining significant benefits in terms of efficiency and knowledge sharing. All while favoring the decarbonisation objectives of the Greek country.
800 million for business diversification
The investment of 800 million euros is intended for business diversification and mainly intended for growth in the sectors water and energy efficiency. In the water sector, more than 400 million euros are planned for selected mergers and acquisitions, applying the best practices and technologies developed in the field of gas distribution to the managed and acquired water networks. Around 115 million euros will be earmarked foracquisition of shares in companies active in Lazio, Campania and Sicily, allowing the Group to directly and indirectly serve around 10% of the Italian population.
The investment in the sector is confirmedenergy efficiency, which represents an important lever for achieving the objectives indicated by the REPowerEU and which is increasingly central to Italgas' development strategies. More than 300 million euros will be allocated to the ESCo development (Energy Service Company) of the Group, both for targeted mergers and acquisitions, and to strengthen the areas of activity and the customer portfolio in the construction, public sector, industrial and tertiary sectors.
Atem tenders: 1,5 billion for the development of concessions
Finally, 1,5 billion euros will be earmarked for the participation in Atem tenders and the development of the acquired concessions. This amount is in line with the scheduled race schedule. The company's ultimate goal is to achieve a 45% market share at the end of the Atem assignment process, compared to 34% today.
Gallo, At Italgas: "We aim to become a reference player"
“Since the outbreak of the war in Ukraine, the EU has been grappling with the solution of a difficult equation which sees the ecological transition as an always fundamental goal but no longer to be achieved at any cost; in fact, it is necessary to guarantee at the same time energy security and an adequate level of energy costs for households and businesses. The vision and strategic choices made in recent years place Italgas in a position to contribute significantly to its solution thanks to digitalised, flexible and intelligent networks capable of receiving renewable gases that enable diversification of sources, decarbonisation of consumption and greater efficiency and cost-effectiveness. With 7,8 billion euro, the Group is confirmed as one of the leading industrial companies able to put their own design skills, of ininvestment and value creation at the service of the sustainable development goals of the countries in which it operates. The largest share of investments is once again destined for development, digital transformation and repurposing of the gas distribution network. A network that today, after twenty years, also extends to Greece where the application of Italgas technologies, the most advanced in the sector, will improve the efficiency and quality of the gas distribution service and the work of the Group's people Depa Infrastructure. Water distribution and energy efficiency they represent two important sectors of diversification and development of the Group. With 800 million euros we aim to become a reference player in the two sectors borrowing from them the technologies developed for gas. The digital transformation of water networks and energy efficiency are drivers capable of guaranteeing more efficient services, reducing losses and restoring wealth to communities and territories. Digitalisation, decarbonisation, circular economy, training, diversity and inclusion are confirmed as strategic factors for achieving our growth objectives. Results that will depend on our ability to continue to bet on innovation to put it to value through our people” were the words of the Italgas CEO, Paolo Gallo.
Sales prevail on the Stock Exchange, headline in red on Piazza Affari
However, the new industrial plan does not seem to have been well accepted by the shareholders. The Italgas title travel red in Piazza Affari, losing up to 3%. At midday, the loss stood at -2,68%.
