7.9 billion euro investments to extend the network, complete the digital transformation and drive the energy transition, boosting the development of renewable gases and energy efficiency
Rome, June 15th, 2021 – Italgas Chief Executive Officer, Paolo Gallo, is today presenting to analysts and investors the Group’s Strategic Plan for the 2021-2027 period, which was approved yesterday by the Company’s Board of Directors chaired by Alberto Dell’Acqua.
The new Plan envisages an investment program of 7.9 billion euros, with an increase of 0.4 billion euros compared to the previous Plan presented in October 2020. The increase in investments is driven by digitization, with the aim of completing the digital transformation of assets in 2022 and making Italgas a leading player in the energy transition for all intents and purposes; a Plan in line with European decarbonization targets and the development of renewable gases such as biomethane, synthetic gas and green hydrogen.
The new 2021-2027 Plan is structured along five main pillars: (i) digital transformation and technological innovation that will enable Italgas to play a key role in the energy transition; (ii) repurposing and upgrade of the infrastructure to accommodate and distribute renewable gases, and network extension also through M&A and gas tenders; (iii) new growth opportunities by enhancing the Group’s expertise in the energy efficiency, water and IT services sectors; (iv) insourcing of core skills, further boost to people reskilling and upskilling (v) a solid and efficient financial structure to support growth opportunities and continue to ensure an appropriate return for shareholders.
The Plan integrates ESG factors and meets the challenges of sustainability by setting new targets for the Company in terms of emissions reduction, energy efficiency, competences and people development to make the change effective.
- Total investment Plan of 7.9 billion euros, of which 2 billion euros dedicated to gas tenders;
- More than 1.4 billion euros for network digitization (+32% compared to previous Plan);
- 30% reduction in greenhouse gas emissions and 25% reduction in energy consumption;
- First step in growth strategy in the energy efficiency sector with the acquisition of the ESCo Ceresa SpA;
- Consolidation of the Group’s Information Technology activities into a new corporate vehicle;
- Strong attention to Gender Equality and focus on training (600,000 hours);
- Optimization of the financial structure and use of financial instruments characterized by sustainability profiles;
- Dividend policy confirmed until 2023.
Paolo Gallo, CEO of Italgas, commented:
“Digital transformation remains the main enabler of our growth with the aim of completing network digitization by 2022 and drawing the roadmap that will confirm the strategic role of gas networks as a key driver of the energy transition to achieve EU net carbon zero targets.
With 7.9 billion euros investments, an increase compared to the previous Plan presented last October, Italgas confirms its position as one of Italy’s leading industrial groups in terms of planning, execution and value generation for the communities it serves, able to give a strong boost to the recovery of our Country.
The largest amount of investments is allocated for the repurposing of the 73,000 km network and its further extension to unreached territories, also to support the development of biomethane, expected this decade, and other renewable gases such as green hydrogen, to be accommodated and distributed through our network.
This capability for innovation is reflected in the technology applied to the networks we are building in Sardinia, which are already the most advanced in the country. On the island, we have met the challenge of starting to distribute methane in just over two years, and we are close to completing the construction of 1,100 kilometers of digital native grids which will be suitable for receiving green hydrogen blending, produced by our Power to Gas plant in the province of Cagliari.
The unlocking of gas tenders, for which we have allocated 2 billion euros, would activate important investments and also would enable the digital transformation of networks which are not involved in this kind of actions due to the current impasse.
In line with the EU Commission’s recommendations to DSOs, we are strengthening our commitment in the energy efficiency sector, working on the acquisition of new competences, also through M&A transactions.
We will support the implementation of this Plan, and therefore the growth of our Group, through our people and our financial resources. For the former, important training and recruitment initiatives are planned in order to acquire additional digital skills, functional to the energy transition, always focusing on Diversity & Inclusion. Through traditional and sustainable finance, the Company will continue to raise the necessary resources on the market, being able to count on a profitability and a solid cash generation ability, firmly supported by the great attention to operational efficiency”.