Endesa has put forward 110 projects eligible for the EU recovery fund, according to ElEconomista.es. The whole of these projects would mean a total investment of 19 billion euros (53% of its Enterprise Value and 75% of its capitalization). So the company is requesting 16 billion euros (85% of implicit leverage) from the EU recovery funds. Member countries can submit proposals from today until April 30th, 2021.
The main items included in Endesa’s proposal would be: (i) 32% energy transition; (ii) 25% efficiency and rehabilitation of buildings, (iii) 18% intelligent networks; (iv) 13% sustainable transport and (v) 4% hydrogen.
Predicting now how much the company will get and under what conditions (soft financing, non-repayable fund …) is complex. Banco Sabadell’s analysts understand that both Endesa and the rest of its sector will propose projects, as will other industries.
“We therefore expect a lot of competition. But we recognise that, in accordance with previous statements from the government, energy transition projects would have a certain preference.”
While waiting for details, Sabadell’s experts estimate that investments of 1 billion euros would have a positive impact on valuation of 0.5-1%. So in the extraordinary case of the 19 billion euros investment mentioned -unlikely- the impact on valuation would be between +7.5% and+19%.
