RWE’s newly-named renewables and power distribution subsidiary Innogy is ready to make heavy investments in its power grids, according to Chief Executive Peter Terium.
Terium told shareholders the news as the company’s management prepares to list shares in the unit by the end of the year.
The German utility separated its renewable power generation, distribution and retail businesses from its troubled thermal and nuclear power generation operations last year.
The exact size of the Innogy listing will depend on market conditions but could exceed a minimum of 10 per cent that RWE has defined, Terium said.
According to Reuters Innogy has plans to invest up to $7bn (EUR7bn) between 2016 and 2018, mainly in its grids, as old equipment needs to be made fit for the digitalised nature of energy generation and usage of the future.
“The key to succeed in this environment is flexibility and speed to adapt,” Terium said, citing partnerships with international energy service companies.
Analysts expect the sale of 10 per cent of Innogy to bring in about EUR2bn, which would give the entity a market value of EUR20bn, nearly three times that of RWE now.
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