The Strategic Plan

In February 2010, Terna presented its Strategic Plan for 2010-2014, which had been approved by the Company’s Board of Directors.

Investment increased from €3.4 billion to €4.3 billion (+26%)

In the next five years Terna will invest €4.3 billion, mainly to develop the grid, an increase of 26%, amounting to €900 million, with respect to the figure stated in the preceding Plan (€3.4 billion). The total of €4.3 billion does not include SunTergrid’s investment of more than €300 million for the photovoltaic project.

The increase in investment is reflected in the Regulatory Asset Base (RAB), which will grow from €8.6 billion to €11.1 billion at the end of the Plan, with an average annual increase of more than 5%.

The investment provided for by the Plan on the regulated part amounts to an annual average of about €860 million. This is a big, but manageable challenge, as shown by the significant results achieved in the last two years.

As far as interconnections are concerned, the following are planned:

Investment diversification

Terna plans to invest more than €300 million in the photovoltaic project, with an EBITDA margin of more than 80% when it is operating regularly. The project aims to exploit some of the currently unused land adjacent to stations and provides for the construction of small-scale photovoltaic generating plants, with a target of 100 MW of power by the end of 2010.


Increased margins: from 74% to 77%

Increased revenue and cost containment will enable the Group to raise its profitability from the current 74% to 77% at the end of the period covered by the Plan. Thanks to the increased investment, from 2009 to 2014, the average annual increase of Group revenue will be about 6%. The increase in profitability also stems from the complete consolidation of TELAT, which was acquired on April 1, 2009, and the maximisation of incentives, which Terna foresees will lead to €90 million of additional revenue, concentrated in the three-year period 2010-2012.

Capital structure: net debt less than 60% of the Regulatory Asset Base

The cash absorption entailed by the investment plan and the dividend policy will lead to an increase in net debt of €3.1 billion by the end of the Plan.

The capital structure will remain sound during the period of the Plan. Terna is committed to maintaining the ratio between debt and the RAB below 60% at all times. Because of the Group’s excellent rating, among other things, the conditions of the debt remain very competitive.

Dividend policy: 4% annual increase, with 2008 as the base year

Terna has confirmed its dividend policy, which provides for a 4% annual increase, with 2008 as the base year and half-yearly coupons split into an interim dividend and the balance. Furthermore, part of the proceeds from the sale of Terna Participações – amounting to about €150 million – will be used until 2012 to supplement the aforesaid policy.

For further information

 

The Strategic Plan