Endesa boosts three-year spending to upgrade Spain’s power grids

By Pietro Lombardi

Endesa’s 2026–2028 Investment Priorities

MADRID, Feb 24 (Reuters) - Spanish utility Endesa said on Tuesday that it will invest 10.6 billion euros ($12.5 billion) in the next three years, more than half of which will be allocated to build and upgrade power networks.

As it invests more on power networks, it will reduce investments in renewables projects, Endesa said in a strategic update released a day after its parent Enel presented its own plan.

A massive blackout that hit Spain and Portugal on April 28 last year has highlighted a need for more investment in the country's power networks, but utilities have also called for higher guaranteed returns on such investments.

Endesa's new plan foresees a 10% increase in investments compared with its previous three-year strategy, under which the company had planned investments of 9.6 billion euros, with grids and renewables getting 42% and 39%, respectively, of the overall amount.

Power Grid Upgrades and Spending

Power grids will now account for 5.5 billion euros, a 40% increase.

Renewables Strategy and Storage

Endesa's planned renewables outlay will decline 20% to around 3 billion euros, with a more selective approach and a growing role for power storage and wind projects, it said.

EBITDA Targets for 2028

Financial Guidance and Outlook

The company targets earnings before interest, taxes, depreciation, and amortisation (EBITDA) of between 6.2 billion euros and 6.5 billion euros in 2028, up from 5.8 billion euros in 2025.

Adjusted Net Profit Outlook

Adjusted net profit is seen rising to a range of 2.5 billion euros to 2.6 billion euros from 2.3 billion euros last year.

Dividend Policy and Payout

Dividends will rise in line with profits, with a minimum payout of 70% of adjust profits.

Endesa said its adjusted net profit rose 18% to 2.35 billion euros last year, while EBITDA increased 9% to 5.76 billion euros. Both came in above the company's targets.

For this year it forecasts adjusted net profit of 2.3-2.4 billion euros and EBITDA of 5.8-6.1 billion euros.

Regulatory Context: CNMC Returns

Spain's competition watchdog recently set the guaranteed return on investments in power grids at 6.58% for the coming years, saying it sought to balance network investment needs with consumer protection.

This is well below the more than 7% Spanish power utilities - including Endesa - have called for.

Exchange Rate Note

($1 = 0.8490 euros)

(Reporting by Pietro Lombardi; Editing by David Latona and Susan Fenton)