Iberdrola SA, Spain’s largest utility, will shift investment toward Britain, Latin America and the U.S. as growth at home is stymied by a stagnant economy and rising renewable-power levies.
“We’ll invest in countries that have a stable regulatory framework like in the U.K. and in the U.S., where they need investments, and in Mexico where there are good opportunities,” Chief Financial Officer Jose Sainz said in a phone interview.
The Madrid-based company, presenting its strategy to investors today, plans to invest 9.6 billion euros ($13 billion) from now until 2016, 41 percent of which is destined for the U.K., followed by Latin America and the U.S. Spending in Spain, which is being cut to 15 percent of the total from 17 percent, will mainly be for maintenance, Sainz said.
A sluggish economy in Spain, which last year exited its second recession since 2008, has eroded power demand. Iberdrola, whose revenue outlook at home is uncertain as the government reorganizes how it calculates consumer prices, is investing in regulated businesses including distribution networks, which will account for 57 percent of spending through 2016, and renewables.
Proposed projects include a 2.6 billion-pound ($4.4 billion) subsea power cable linking England and Scotland, and an upgrade of distribution networks in the U.K. costing more than 5 billion pounds. It also plans a high-voltage line in Maine and power plants in Mexico, according to a company presentation.
The shares rose 1.6 percent in Madrid trading, the biggest gain since October, to close at 4.683 euros, valuing the company at 29.8 billion euros.
Earlier today Iberdrola reported a 33 percent slump in fourth-quarter net income to 297 million euros after Spanish levies to fund renewable-energy investments doubled.