March 10, 2020 / 2:05 PM / 23 days ago

Terna pledges record-high spending to upgrade Italian grid

MILAN, March 10 (Reuters) - Italy’s Terna will spend a record 7.3 billion euros ($8.3 billion) on its power grid over the next five years to beef up connections and deal with the growing shift toward green energy and decarbonisation.

In its 2020-2024 plan, the state-controlled company also promised shareholders fatter returns, pledging an 8% yearly growth in dividends to 2022.

“Our financial commitment of 7.3 billion euros is a new investments record in line with the Green New Deal and the Italian decarbonisation strategy,” Chief Executive Luigi Ferraris said.

Terna, one of the world’s biggest power grid players, said it would be spending 4 billion euros to streamline its domestic network and strengthen cross-border connections with a view to making Italy an energy hub for the Mediterranean.

It said revenues would grow 5% annually over the period to reach 2.94 billion euros, from 2.29 billion euros last year, while core earnings would grow more than 4% a year to touch 2.17 billion euros in 2024, from 1.74 billion euros last year.

Terna, which expects its regulated asset base to grow 5% a year to 19.7 billion euros, makes most of its money from returns set by the regulator to help it improve its high-voltage transmission grid.

It said the main focus in the plan would remain the domestic grid but said it would continue operating power assets in Brazil, Uruguay and Peru while also looking for selected growth opportunities elsewhere.

State Grid Corporation of China is Terna’s second-biggest shareholder, after Italian state lender Cassa Depositi e Prestiti. ($1 = 0.8790 euros) (Reporting by Stephen Jewkes; editing by Valentina Za)

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