Italgas IG.MI plans to invest 7.8 billion euros ($8 billion) by 2029 to modernise its domestic network, strengthen its Greek unit and expand its water and energy efficiency businesses.

Italy’s biggest gas distributor’s projected capital expenditures are almost unchanged compared with the 7.9 billion euro investments it announced last year for 2022-2028 net of the money it spent to acquire Greece’s DEPA Infrastructure and capital gains from disposals.

In its new industrial plan to 2029 on Thursday, Italgas also extended its dividend policy to 2026, saying it would offer a payout ratio of 65% and guarantee a minimum annual growth of its dividend per share of 4%.

Compared with last year, energy markets have recorded a significant fall in natural gas prices and Europe has increased efforts to reduce the use of fossil fuels.

In this scenario, Italgas will spend 4.6 billion euros for its domestic network but will also push to diversify its activities devoting 0.9 billion euros to Greece and 0.8 billion euros to water and energy efficiencies activities.
“With 800 million euros, we aim to become a benchmark player in [water distribution and energy efficiency], leveraging the technologies developed for gas,” Italgas CEO Paolo Gallo said in a statement.

The group recently acquired several small water companies in Italy from Veolia VIE.PA.

Gallo is due to present the updated business plan in London later on Thursday.

The group said it expected core earnings to rise to 1.18 billion euros this year and exceed 1.8 billion euros in 2029 with an annual average growth of around 8% over the plan period.

Net debt is projected to grow to 6.4 billion euros at the end of this year, from 6 billion euros in 2022.
Source: Reuters (Reporting by Francesca Landini, editing by Alvise Armellini and Alexander Smith)