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Renewables 'evolution' at Enel will unfold over a decade, CEO says

Italy's Enel SpA could transform its worldwide power plant portfolio into one dominated by renewables within a decade, CEO Francesco Starace said March 21, highlighting the pace of the energy transition sweeping global markets.

With just over half of the electricity Enel produced in 2018 labeled "emission-free," the company is pushing to soon operate a "major renewable portfolio" sprinkled with a "minor" amount of thermal generation, Starace said on an earnings call.

"So you will see us going through this evolution in the next 10 years, shutting down progressively inefficient or not-so-competitive thermal generation and substituting that with renewable plants to serve the large base of customers" Enel has in markets such as Spain, Starace said.

Enel finished 2018 with 43,400 MW of renewables out of a total power portfolio of 89,800 MW, according to an investor presentation. It aims to fully decarbonize by 2050.

The company is also spending heavily to digitize the electric grid in areas where it operates. Of the €8.5 billion in capital expenditures Enel reported for 2018, 45% went to its networks business and 38% went to renewables.

In April, Enel subsidiary Enel Américas SA plans to ask shareholders to approve a capital raise of up to $3.5 billion through the issuance of new stock following its 2018 acquisition of Brazil's Eletropaulo Metropolitana Eletricidade de São Paulo SA The deal made Enel Américas Brazil's leading electric distribution company, an Enel executive said on the company's March 21 earnings call.

"Enel Américas has reached the limits of its ... capability to raise further debt, so I think the proposed transaction makes sense," Starace said.

"[We] have a clear indication that growth is … to be pursued in Latin America, and therefore Enel Américas needs to be able to face this opportunity flow with some adequate financing," he said.

Enel reported €16.2 billion in ordinary EBITDA for 2018, up from €15.6 billion a year earlier.