EDPR to raise equity from GIC to partly fund 17-GW renewables plan

Portuguese renewables company EDP Renovaveis SA (ELI:EDPR) said on Thursday that it will hold a capital increase to raise around EUR 1 billion (USD 1.06bn) in equity to partially finance its revised business plan, which is to see it invest EUR 20 billion in renewables expansion in 2023-2026.

The group said its board had approved the capital hike via an accelerated bookbuild starting immediately and without pre-emption rights.

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EDPR entered into an investment agreement with Lisson Grove Investment Pte Ltd, a wholly-owned subsidiary of Singapore’s sovereign wealth fund GIC Pte Ltd. GIC committed to subscribe to new shares offered in the capital hike at a price of EUR 19.62 apiece.

EDPR said that, under the agreement, it has the option to reallocate up to EUR 0.15 billion which it may offer to a selected number of institutional investors at the same price.

The company plans to use the proceeds to support its investments in 17 GW of new renewables, planning installations at rate of over 4 GW per year between 2023 and 2026. Its onshore wind and utility-scale solar segments will each receive 40% of the planned EUR-20-billion investment, with the rest going towards technologies such as solar distributed generation, energy storage and hydrogen. EDPR’s joint venture with France’s Engie SA (EPA:ENGI), Ocean Wind, will continue to support their offshore wind plans.

EDPR said that it will focus on core low-risk markets in North America, planning 7.4 GW of capacity additions there, Europe - 5.6 GW of additions, South America - 2.2 GW, Asia Pacific - 1.2 GW. Another 0.7 GW of net additions are planned for the offshore wind segment.

The company expects that the plan to lead to EBITDA of EUR 3.0 billion by 2026, rising by the compound annual growth rate of 9% in 2022-2026, and recurring net income of EUR 0.9 billion by the end of the planning period.

EDPR’s power generation mix in 2026 is expected to be 29% solar, 8% distributed solar, 59% onshore wind, 2% offshore wind with the remainder divided between storage and hydrogen.

(EUR 1.0 = USD 1.061)