Acceleration of investments in renewables and infrastructure assets.
ENGIE intends to implement a new capital allocation strategy, focusing on two growth areas servicing the energy transition.
ENGIE plans to accelerate its development in renewables, by increasing the target for renewables capacity commissioned 3 GW p.a. currently to 4 GW p.a. on average over the medium-term, while increasing the number of renewables projects retained on its balance sheet. The Group will also capture opportunities resulting from recovery plans announced in Europe, notably related to the development of green gases (biogas and hydrogen). This strategic move will strengthen the Group’s position as a key player in low-carbon energy and in the decarbonisation of energy systems.
Leveraging on its longstanding expertise, ENGIE will further accelerate its growth in decentralised infrastructure assets such as urban district heating and cooling networks and on-site power generation. The Group will also seek to rebalance its exposure to French and international gas and electricity networks.
Strategic review of part of the Client Solutions business
Offering innovative low-carbon solutions to its clients, ENGIE has successfully built a solid leadership position and developed a very wide and diversified portfolio of activities.
Decentralised infrastructure assets (e.g. district heating and cooling networks, on-site low carbon power generation) and related services, mostly benefit from long-term contracts and help clients achieve their energy transition targets.
The Board decided to conduct a strategic review of the other activities representing approximately 2/3 of Client Solutions revenues. These activities will be assessed in light of their coherence with the strategic priorities of the Group. All options will be considered with a view to maximizing their value and reinforcing their leadership position, and to seize future growth opportunities through a coherent perimeter and adapted organisation.
Significant enhancement of the divestment programme to fund future growth in renewables and infrastructure assets
The Group will consider opportunities to divest non-core businesses and minority stakes in order to increase financial flexibility to fund investments in renewables and infrastructure assets.
Overall this could lead ENGIE to potentially more than double its previously communicated asset divestment programme of around EUR 4 billion over the medium-term. The implementation of these strategic orientations will be presented in the first half of 2021.
Jean-Pierre Clamadieu, Chairman of ENGIE said that “ The Board intends to strengthen ENGIE’s capacity to play a key role in the energy transition. To this end, it is fundamental to clarify the Group’s organisation and strategic priorities, including from a geographical standpoint. This is the essence of the direction that we are presenting today and that will constitute the roadmap for the new CEO, to be announced soon. The appointed employee representatives will be regularly informed and consulted on projects that may result from the strategic review of Client Solutions’ activities and on potential divestment projects before any decision is made. ”