ERG S.p.A. (ERG) Earnings Call Transcript & Summary

Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the ERG 2022 Results and Strategy Update Conference Call. [Operator Instructions] At this time, I would like to turn the conference over to Ms. Emanuela Delucchi, Chief ESG-IR and Communication of ERG. Please go ahead, madam.

Good morning, everybody, and welcome to ERG full year 2022 results and 2022 to 2026 business plan update presentation. Here with me, as usual, that are our CEO, Paolo Merli; and our CFO, Michele Pedemonte. Now let's see the agenda of today's meeting. Paolo will start with a brief introduction on the full year key figures and the important steps we did this year, continuing our successful journey in renewable growth and decarbonization. Afterwards, Michele will drive you through our full year and fourth quarter 2022 results. And then Paolo will show you our updated targets for the plan following the energy crisis, which took place in 2022, is acerbated by extreme volatility and regulatory uncertainties. Then Michele will focus on our capital structure and financial policy in the planned period. As usual, I will focus on the updated ESG strategy, which continues to be at the core of ERG, and I will show the main achievement in 2022. Paolo will then conclude with 2022, '23 guidance including [indiscernible] focusing on key pen of our business plan. As usual, there will be a Q&A session at the end of the event. So let's start and now over to Paolo.

Thank you, Emanuela, and welcome, everyone, to our Investor Day. Before we get started on the full year '22 results and the updated targets for the future, let's spend a moment to see what we have done so far over the last couple of years since when we first announced the strategy to focus on wind and solar, also through an asset rotation program to dispose hydro and thermal operations. Since then, we made significant investments, about EUR 1.6 billion, EUR 0.6 billion in '21 and almost EUR 1 billion in 2022, through which we added almost 1 gigawatts of new capacity. The one year presented in the chart, both wind and solar through higher M&A and organic, spread out in 7 different geographies. From another perspective, you can see it as the delivery of the full substitution of 1 gigawatt of conventional power, hydro and thermal in less than 2 years. I think a proof of our strong capability that was well beyond our initial expectations, to be honest. That's why we are all very proud of what we have been able to achieve. That's also the platform we want to keep growing from in the future. Now 2022 results. I'm on Page #6. Numbers here are based on continuing operations that's excluding hydro and CCGT from the scope, numbers are also presented here gross windfall taxes and clawback measures consistently with our accounting in the 9 months of the year and our last guidance. Those items are accounted as nonrecurring. In a nutshell, I would say, a solid set of results, mainly driven by larger -- the larger installed capacity. I comment here the full year, while Michele will walk you through the fourth quarter results in more detail. EBITDA, EUR 537 million, up 34% year-on-year. As I said, mainly boosted by the larger installed capacity. It's worth noting that during the year, we upgraded our EBITDA guidance 4x in a row, and this was mainly attributable to the larger-than-expected contribution from new assets, that all in all, brought in roughly EUR 120 million of fresh EBITDA that's basically explaining the entirety of the growth compared to 2021 results. Contribution from Italy, as you can see, was down mainly due to a negative price effect as the reduction in the value of incentives based on the math formula, you know, was only partly offset by higher merchant prices, limited by the hedging policies. On the other hand, EBITDA growth from international operations was very significant, more than doubled compared to 2021. About 50% of '22 EBITDA came from outside the board. Those numbers are not a coincidence. They are the consequence of the huge investments done, EUR 946 million in 2022, so a further acceleration compared to the already high level in '21. We continued to grow through a mix of organic and M&A, relying on the financial firepower of the group. Adjusted net profit was EUR 216 million, almost double year-on-year, reflecting the stronger operating results and lower financial charges. Let me repeat it, this number does not include impact of windfall taxes and clawback measures accounted as non recurring items being temporary measures for a total of EUR 83 million net of taxes, bottom line. Michele afterwards, will explain those items, providing all the needed details. Although it's not represented here, the CCGT generated an EBITDA of EUR 56 million in '22 compared to EUR 29 million in '21, partly thanks to its renewed eligibility for white certificates as of last year and despite a tough scenario, particularly over the fourth quarter. The net financial position at year-end was EUR 1.434 billion, down versus EUR 2.051 billion at 2021 year-end, mainly reflecting the cash in of the hydro disposal, strong cash flow generation registered by the company over the period partly absorbed by investments and dividends paid. Net financial position at year-end still includes roughly EUR 150 million related to the negative mark-to-market of derivatives. This item will reverse in 2023. We are increasing our proposed dividend from EUR 0.9 to EUR 1 per share, sustainable in the planned period. Let me now give you a very quick update on our main achievements of the year. I'm on Page #7. We are moving forward with the expansion of our RES portfolio in Europe, as far as organic growth, we brought in operation, 320 megawatts of wind in U.K., Poland, France, we entered in Sweden. In 2022, we continue to leverage on our solid track record in M&A. We added 323 megawatts, out of which 151 megawatts were solar PV in Spain and Italy, while 172 megawatts of wind in Italy. All in all, we've reached a very sizable portfolio with more than 3 gigawatts of installed capacity. We made steps forward also in securing our revenue through PPA and CfD from auctions, in line with our objectives to have 85%, 90% of revenues backed by stabilization mechanisms. We signed PPA with Engie in Scotland and with Luxottica recently in Italy, some repowering projects were awarded a CfD tariff. Finally, it's important to stress the solidity of our financial structure with an investment-grade rating, which remains a distinctive feature in the space of pure renewable players. In addition to that, in the fourth quarter of last year, we signed an ESG-linked revolving credit facility for EUR 600 million, which provides ERG with the right flexibility to manage a more volatile business environment and to keep looking for growth opportunities in a cost-efficient way. Move to Page #8. Very quick year, as I said, 2022 was another year of strong execution. I think these numbers are very self explained. In '22, we accelerated even further our energy transition deployment. We invested 6x more than in 2020 to boost, as shown before, our RES portfolio. We remain committed to dispose the thermal plant in 2023 to become a pure RES player with 100% of capital employed in renewables. Now to Michele for his review of our results.

Thanks, Paolo. And now let's have a look at our Q4 2022 results. Let's start with an overview of unitary revenue strength. In Q4, electricity prices have been substantially aligned to the previous year, so the all-in unit revenues are affected especially by the hedging, mainly in line with our [exploit] or by other revenues component. In wind Italy for example, unitary revenues are influenced by the value of the incentive, which declined from EUR 109 per megawatt hour to EUR 43 per megawatt hour, while on the market, we got the pricing line in the previous year. All in all, we have a decline in unit revenues from EUR 198 per megawatt hour to EUR 120 per megawatt hour. In France, the large majority of our assets operate under fixed scheme without exposure to market prices. The increase of unitary revenues refers to plans out of incentive. In Germany, the one-way tax structure, coupled with some short-term hedging allow us to capture part of the peak merchant prices. East Europe revenues decreased in Q4, mainly in Romania and Poland. Romanian government introduced the obligation for our plan to sell electricity through a PPA at the cap price, roughly EUR 90 per megawatt hour in order to reduce the impact of high energy prices in the country. As regard as the solar on unitary revenues, we see value increase in Italy, thanks to the new asset at merchant prices. It's been where our assets have a tariff mechanism that operated the floor to our revenues, the oiling price is aligned with the overall merchant prices. Finally, please note that consistently with previous quarterly results, our figures are presented gross of clawback measures, progressively implemented by various government during the year and accounted as nonrecurring items in 2022. And now a focus on production. As regard as the Q4, we have in Italy, 567 gigawatt hour, minus 13% year-on-year affected by the weaker average wind production, minus 30% compared to those extremely high recorded in Q4 '21, partly offset by the consolidation of new wind and solar assets. . In France, 343 gigawatt per hour was 17% year-on-year, thanks to better wind conditions in comparison to Q4 '21 and 17 gigawatt hour coming from the perimeter. Germany was 153 gigawatt hour plus 2%, thanks to slightly higher in volume. In Eastern Europe, wind volumes lower than Q4 '21 which affect towards new condition in Bulgaria and Romania. Poland recorded higher volumes than to the new capacity in operation. On top of that, we have the contribution to the portfolio of 239 gigawatt hour related to the assets built in Northern Ireland in 2021 or acquired in Spain in January 2022 in the first megawatt hour compliant business color. Wind production reached [5 terawatt-hours], mainly due to the new assets acquired or internal -- internally developed in Italy and abroad and the higher wind production in Eastern Europe and Germany. In the fourth quarter of the year, we had an overall EBITDA equal to EUR 126 million lower than Q4 '21 by EUR 19 million, despite EUR 28 million coming from perimeter effect, mainly due to negative price effect and lower volumes, especially in Italy and East Europe. Unitary EBITDA is EUR 55 million, minus 48%, mainly due to lower wind production in comparison to the extremely high volume record in Q4 '21 and lower value of incentive, partly offset by the 2022 acquisitions. In France, the EBITDA is EUR 26 million, benefiting from better wind conditions, higher prices for merchant assets and the consolidation of the assets and the [deuteration] end of 2021. In Germany, the EBITDA grew consistently in the quarter. Due to a better scenario, which accounted for EUR 14 million and higher in volumes to me. In Eastern Europe EBITDA is EUR 16 million lower than Q4 '21, mainly due to lower sales price and lower volumes at the offset by perimeter effect in Poland. It is worth mentioning that in Q4 2022, U.K. , Scotland [indiscernible] [commission] and Spain have contributed to our result for [indiscernible]. In full year result, adjusted EBITDA reached EUR 527 million, EUR 128 million higher than previous year, of which about EUR 118 million comes from perimeter effect in Italy and the group. Notwithstanding the last acquisition acquisition in Italy, the group EBITDA showed a significant increase in geographical diversification. In 2022, EBITDA from Italy is just 50%. Now a brief overview of investments in the period. For the full year, we invested EUR 946 million, an amount which is higher than the one invested in 2021, EUR 670 million. CapEx are composed as follows: about EUR 638 million of M&A related to wind and solar acquisition in Italy, of which 117 megawatt wind and 34 megawatts solar, with closing took place in Q3 2022 and solar acquisition in Spain, 92 megawatts acquired in January and acquisition in Q4 of the company, which hold permits to be the wind farm in Northern Ireland. About EUR 282 million related to organic CapEx in winds refer to construction [indiscernible] in the U.K.,northern parts and Sweden. It does include EUR 121 million of CapEx in Italy for powering projects and greenfield projects in city. It is worth mentioning that we made an important step forward in our construction world with the commissioning of further 36 megawatts of sending now in U.K. 92 megawatts of Creag Riabhach at the beginning of January 2023. About EUR 15 million are related to the rebranding of solar plants in Italy and EUR 11 million related to maintenance CapEx spread across all our countries. Let's move on to financials, commenting on profit and loss on a recurring basis. We had higher depreciation, which reflects the contribution of the new assets, so a perimeter effect. Net financial charges at EUR 7 million versus EUR 6 million in Q4 2021, mainly influenced by the investments made in the period. Tax rate in the quarter was 24%, against 30% in Q4 '21, mainly due to the higher impact from tax benefit on the lower EBITDA driven by the lower EBITDA. Taxation in the quarter does not include the effects of a contributory in Italy, and it is accounted as nonrecurring items, EUR 19 million. As of January 2022, CCGT is consolidated in the discontinued items. In Q4 '22, we recorded an EBITDA of EUR 5 million and a net result of minus EUR 2 million. As a result of all of this, the adjusted net profit for the quarter amounted to EUR 42 million versus EUR 72 million in Q4 '21. If we look at the full year 2022, the adjusted profit is equal to EUR 232 million, EUR 30 million higher than full year '21. on Page 17. In this chart, you can find a summary of the clawback measures and windfall profit tax that we accounted as nonrecurring items in the full year '22. Windfall tax Italy includes extra profit loan, EUR 57 million already paid during the '22 and contributed solid area for EUR 19 million that will be paid in 2023. Windfall tax for Romania at EUR 15 million, the same figure as September -- is the same figure as September because the Romanian government in Q4 introduced the elevation for our brands to sell electricity to a PPA at the cap price, roughly EUR 90 per megawatt hour. Clawback includes all the measures introduced by European governments during the year. The major impacted is in Italy EUR 7 million and France roughly EUR 7 million. We believe these measures are unfair, unjustified and unground. For this reason, ERG has taken all required actions in order to protect its interest in all countries where it operates, including by challenging the relevant regulation before a competent court. Finally, let's take a look at the cash flow statement and the net financial position for the 2022. The net financial debt closed at EUR 1.4 billion, EUR 600 million lower than the end of 2021. Following the cash in from idle disposal, we invested in the period EUR 946 million in a year of solid cash generation EBITDA EUR 527 million, notwithstanding the extraordinary windfall taxes. The net financial position includes EUR 153 million due to the mark-to-market derivatives on commodities. Within the short-term effect that will have a positive reversal in 2023. I think I have touched all the relevant items. Thank you for your attention. I will now hand over to Paolo.

Thanks, Michele. And now let me take you through our vision of the future and our targets. I'm on Page #19. I always like to start from here. So what we are today. We have 3 gigawatt of installed capacity on the left side, well balanced between Italy and abroad based on 2 technologies, wind and solar. We have a pipeline of projects of 3.8 gigawatts on the right side of the chart, which keeps improving over time in size and quality, pipeline, well spread across Europe, both in wind and solar based on greenfield like powering codevelopments agreements. We are present in 9 countries. That's what we are today, and this is the platform we want to expand from. Our pipeline, Page #20 is growing over time as the outflow, so the 321 megawatts which were commissioned over the last 12 months was more than replaced by new additions. New additions were in Spain all solar PV projects through codevelopment agreements in Italy, where we have enlarged the number of projects eligible for powering, including some multi-megawatt turbines. Our pipeline is technological, well balanced between solar and wind and well spread out in different geographies, consistently with our objectives. In particular, solar PV projects are mainly located in the south of Italy, Spain and France. It's worth noting that our pipeline refers only to projects which may have a count by 2027. So we are not including for the time being, very early-stage projects with longer-term deployment that has always been our practice. So we see it as a solid and highly feasible pipeline of projects. To pursue our growth ambitions, we kept strengthening our business development teams in 2022 in Italy and in Europe and commenting Chart #21. We can now rely on a larger organization dedicated to development and construction, which moved up consistently with our growing pipeline. We have insourced in [oil] in all the phases of development from real estate to construction, adapting our organization to a multi-country business model. Despite this, the group workforce narrowed as a consequence of asset rotation. So let me say, a lighter, more international and focused organization. So we are not simply reshaping our portfolio of assets, but also our organization consistently. Now let's comment a bit on the price environment, which is very, very highly volatile, let me say. Since we presented our business plan one year ago, the energy markets have been appended by the war in Ukraine and all its consequences. The geopolitical tensions resulted into an unprecedented energy crisis with security of energy supply and the need to free up Europe from Russian gas dependence at the center of any European countries agenda. Notwithstanding this very high volatility, we still believe the market sooner or later will find an equilibrium, but at a higher level compared to the prices we were used to see in the past. Based on our internal outlook, energy prices will in fact remain higher for longer as well as volatility will remain stronger. On the right side of the chart, anyway, we reported our updated price outlook for business plan, price outlook, sorry, our business plan is based on. Let me now comment I don't want to enter into details. But I think it's fair to underline that the regulatory landscape remains uncertain. I don't want to said, elaborate on each statements here. I'll just provide you with the right sensitivity about what's going on in the different state members. Michele, already commented the impact so far on ERG, but here, I would like to share with you the complexity we are facing and likely we continue to face all over 2023. All the countries introduced the different set of clawbacks or windfall taxes. Often, these revenues have not aligned with the one set out by the European regulation, preparing to the EUR 180 per megawatt hour. And this chaos of different rules are increasing the regulatory risk perception on all the sector. As a matter of fact, I repeat it, we have different price caps in any country we operate. But as for the price scenario, we remain quite confident that Europe will find sooner or later, and we think soon an equilibrium easing all these measures in order to unleash the growth of rest in Europe as needed to meet the targets to tackle climate change and to provide for energy security. There are not quick solutions. That's our view to this long-term trend, and we still believe RES is part of the solution going forward. Let's move now on Page 25. Here, you have the installation across the different countries in Europe. And despite this since common view, I mean, the fact that renewable will have to grow, RES are not yet growing as fast as they should be. In particular, new wind installation in many countries are still lagging behind and well below expectation. Italy is an example. Solar PV grew faster across Europe than 1 show wind, but mainly boosted by residential and commercial installations instead of large utility scale plants as it should be. The bottleneck for new large-scale installations, both wind and power and solar is always the same, permitting is still an issue, and it's causing delays to the decarbonization process. But again, we should expect that 2023 will be the year where Europe will completely work on simplifying permitting instead of hitting the sector with extraordinary measures and the like. We remain confident about this. Let me elaborate a little bit on the supply chain. When looking at the supply chain, I'm commenting Page #26, it seems a completely different world compared to just a few years ago when everybody expected LCOE to trend down forever. In reality, European manufacturers were heavily affected by cost inflation and supply chain disruption. This translated into generalized CapEx increase and due to the tune of 30% in wind and 25% on solar, at least according to those third providers. Even though in our case, the framework agreements we had in place partially protected our investments by these trends. We expect pressure on supply chain to remain strong in the plan period, and it's been factored into our updated CapEx plan. At the very same time, when looking at investment returns, we also expect this higher capital intensity as well as the higher cost of capital to be offset or more than offset by higher CfDs and PPAs. We can tell you that as far as PPAs, we are already experiencing higher prices to reflect these trends. While for the time being, we can say yet the same for CfD, which are still lagging beyond. In fact, if I turn the Page #27, an awarded capacity through auctions in 2022 across Europe has been significantly lower than the one available partly for the lack of authorized projects, but partly because of CfD's level not consistent with recent inflection trends. In other words, CfD levels awarded through options must be adapted in order to be able to attract the investments needed. Only France and Germany, have amended a little bit the auction routes, increasing the caps providing for more window of time under merchant prices, but still not enough as recent results demonstrated. Again, we expect 2023 to be the year where member states will work on adjusting and adapting those mechanisms to boost RES growth. In the meanwhile, PPA will remain our main tool. And in fact, I'm on Page #28, the positive news here is that PPA market is globally taking on more and more a crucial role as an effective alternative go-to-market for new renewable projects. Despite the recent high volatility of energy prices, coupled with uncertainty about regulatory evolution has slowed down PPA deployment in Europe. We nevertheless this growing trend to continue in the forthcoming years. Okay. Let me now update on our targets for 2026. The strategy is still there, basically unchanged. But given the market context, we have been talking about so far, we thought an update on main KPI was needed. And so we are Page #30. Growth, we confirm our target to reach 4.6 gigawatts of installed capacity by 2026, that will become about 5 gigawatts in '27. Investments and EBITDA. But to do so, we would need higher CapEx from EUR 2.9 billion to EUR 3.5 billion. But at the very same time, we see a higher EBITDA in 2026 from the previous EUR 560 million to more than EUR 650 million. Route to market. We are also confirming our target to have 85%, 90% of quasi regulated EBITDA. So backed by incentives, tariffs or PPA. This is consistent with an investment-grade profile and the financial policies with a 4x net debt EBITDA ratio. We are confirming our geographical diversification to derisk the portfolio. We want to push more on solar PV in '26 In fact, we expect basically 25% of our portfolio to be made by this technology. As far as innovation is concerned, we are working on a pipeline of projects in battery storage, and we are exploring some opportunities in other business lines, such as floating offshore, though it's too early to say something and there is non megawatts included and not CapEx whatsoever included in the business plan. Asset rotation, we are relaunching the CCGT disposal process as part of our transformation into a pure RES player. We remain committed to -- we want to close it down by 2023. ESG remains at the core of our strategy. We improved some targets, leveraging also on the strong results we reached in 2022. Last but not least, dividend policy was raised EUR 1 per share from EUR 0.90 and we deemed it sustainable during the business plan period. Now moving to Page 31. We here have provided you with the same breakdown of the 2.2 gigawatt needed to reach 2026 installed capacity target. And I think this number gives quite high visibility to our target for '26 because 0.6 gigawatts have already entered into operation in 2022. Remember, this is a comparison on the very same years '22, '26, but '22 is already actual. And in 2022 and in the first -- in the start of 2023, we installed roughly 600 megawatts. On top of that, we are working. We are bringing forward 300 megawatts currently under construction. 0.4 gigawatts will come from our proprietary greenfield pipeline wind and solar, 0.1 gigawatts from repowering projects already in a very advanced phase of authorization. 0.8 gigawatts, this was slightly lower than the number contained in the previous plan, we expect to come from M&A and core development. Another stream will come from battery storage, though limited, geographical and technological diversification will be pursued. We expect to have almost 60% of our asset base outside Italy in '26, when about 25% will be solar PV. Let's move on. Here, a little bit more visibility on what we have under construction right now, 422 megawatts on a gross basis, which is basically the same number I just mentioned in the chart before. 300 megawatts if we consider it on a differential basis. So including the megawatts we are going to switch off from repowering. It's important to highlight that we have right now an important stream of repowering on the construction, meaning that we are finally realizing the -- our idea to rejuvenate the assets while increasing significantly the energy productions. Current construction sites are spread out in Italy, U.K. and France. All these projects are well on track, and you can find all the details in the chart. Now -- let me, Page #33. Let me elaborate a little bit more on CapEx. That has moved from EUR 2.9 billion to EUR 3.5 billion. So over the same period of time, '22, '26. Basically half of increase, say, the first 2 histograms are fully justified by a higher quality of assets. As regards to M&A, we paid in 2022 is not a secret. We already publicly announced higher multiples on an EV per megawatt basis, but with a better cash generation profile and EBITDA profile that also reflected in our improved EBITDA target over the planned period. We also have EUR 0.1 billion CapEx more associated to new projects, the powering projects with commercial operation date in 2027, which weren't including in the old plan. While the remaining EUR 0.3 billion are basically overruns related to the green inflation, we explained earlier and which is impacting all the sector. Please also consider that out of the EUR 3.5 billion, that's quite important, about EUR 1 billion was already invested and expensed in 2022. Now a few words on the EBITDA evolution, Page #34. We show the trend from '22 EBITDA net of clawback to 2026. So we prefer to present here the number of '22 net of clawback in order to give you like-for-like comparison. So at the end of the plan, we expect an EBITDA in excess of EUR 650 million compared to the EUR 560 million that was the number of the old plan. Out of the total, we expect 25% to come from solar with a more or less 50-50 split between Italy and abroad. We also expect 85%, 90% of our EBITDA to remain backed by price stabilization mechanism as simple as that. Now to Michele again for some detail on our capital structure.

Here, you find the picture of our financial structure, a solid base for our business plan. The last part of 2022, we signed a EUR 600 million ESG-linked the revolving credit facility to enhance the liquidity profile of our group to cover any short-term needs and to be ready to catch in the short term an opportunity that may arise to accelerate our growth. We are currently referencing EUR 0.3 billion of corporate loans expiring in 2023 at very competitive conditions, thanks to the prehedge excluded a few years ago that allow us to benefit -- for the 5 years, interest rates were near to 0. We do not have any further refinancing needs until 2025, and it is a very important extinction point of our financial structure. Our financial structure we saw before translates into a solid investment-grade financial profile, which we are committed to maintain in the whole business brand fees. The investment-grade rating is the feed of our financial strategy. And on this basis, we can lever our growth, maintaining a competitive cost of capital, which, as you can see, we expect to remain low in particular in the first part of the business plan. We see our current rate is consistent with the leverage in terms of net debt to EBITDA of up to 4x, which already includes a dividend payment of EUR 1 per share sustainable in the planned period. And now I hand over to Emanuela for third party.

Thanks, Michele. And now let's have a focus on ESG. So we start from Page 39. Here, you find our updated ESG plan in a show as an abstract. We have now 18 targets, which are perfectly aligned to 14 out of 17 such as development moves. As far as planet, we are confirming the net 0 target at 2040, and we are still working on circular economy as far as our wind repowering and solar revamping are concerned. The engagement, we will continue to support local communities where we operate with the contribution of at least 1% of our revenues. In 2023, we will also lauch ERG Academy to involve the younger generations in educational activities on sustainability and renewable energy in the target of optimistic 20,000 students by 2026, which could be even higher in 2027 with 25,000 students in Italy and abroad. ERG Academy will also provide training activities to all our people. And I think the base is certified plans for development of our employees. As far as people, we are reinforcing our commitment in the D&I in order to create a more international and increased ERG, I will explain more in detailing our ESG strategy in a specific chapter. As far as governance, we want to maintain a best-in-class governance and our commitment to ESG is still well embedding in the short-term, long-term management remuneration. As Michele explained before, our financing is now mostly green. In our plan, we are committed to keep it green with at least 90% of our loans classified as green funding. To sum up, I will say a solid ESG strategy based on defined KPIs that we need monitor throughout the planned period and recognize a significant step-up in 2022 in all the ESG ratings. Here on Page 40, I will share with you the achievement I was mentioning before. So we are continuing to receive important external recognition, improved our ESG ratings, the top tier in ESG practices, thus recognizing the strong commitment towards ESG, which is well invested in our strategy. So we are well rated in all the pillars of our ESG plan from the planet with the inclusion in the EV for the CDP, for our commitment towards decarbonization and action towards climate change from our supply chain as we have been welcomed in the CDP supplier engagement leaderboard recognizing the value of our sustainable [indiscernible]. Even in the area of people, we have been included as the most improved our rating during the year in the Bloomberg Gender quality index, thanks for commitments in the D&I into the disclosure we have provided for as i refer to this issue. In governance, Moody's including ESG in the top 2% of the world's ranking with the score of 65 out 100. So our ESG approach has been valued even by external recognition. Now decarbonization, I'm on Page 41. One of our priority remains the actions towards climate change, which is becoming more and more evident with increasingly frequently extreme weather events. From this perspective, the journey led us to decarbonize our portfolio assets significantly. The actions taken over the last lever plan allowed us to reduce our carbon index further by 11% in 2022. Another significant steps that will be taken with the compression of the asset rotation, as Paolo was explaining to you before, which will be gearing direct emissions. The decarbonization of our portfolio remains at the center of our strategy. Next, I'm on Page 42, it's evident that climate change is becoming one of the new risks, the entire system is facing, temperatures in Europe are increased at more than twice the global average over the past 30 years, the highest of any countries in the world. As the volume trend continues [indiscernible] and other extreme climate change impacts in society, ecologies and ecosystems. In this context, our commitment towards decarbonization in Europe remains of interest priority for ESG. So we are aiming at becoming a 0 by 2040, and we are waiting for the last approval by size we target. I hope this could come in the next couple of weeks. Let me remind you the key steps. It's crystal clear that the asset to the [operation will be true forgetting the next deal]. We are relaunching sales, the CCGT disposal, which will bring Scope 1 and 2 emissions to almost 0. Secondly, on cost, we remain committed in large on a red portfolio and we will keep on covering our average need with green energy. A key aspect of our strategy is also supply chain. With the sustainable procurement, we are aligning our supply chain to our ESG targets as we are going to improve their performance in the clear focus on the reduction of the carbon foot print So the EU green taxonomy, I'm on Page 43, after asset rotation and will be perfectly aligned green taxonomy a clear sign of our commitment in decarbonization and climate change. So as simple as that. On Chart 44, a focus on D&I. We want to achieve a just transition. So we do not want to leave anyone behind. We strengthen our inclusive approach as we want to keep on working to create even more inclusive in international ESG, where everyone may play an important role in the decarbonization part. So as part of our ESG plan, we have 3 main targets to softer gender quality and promote greater crystallization of our companies. Last year, we said that we wanted to increase the number of women, about to acheive. And that's what we did. It was from 14% to 18% and now when we talk about initial trend, which is a level higher than 25% in 2027. As far as our decarbonization in 2022, we made some important advancements, key leaders abroad [ 11.8% ] to 20%, as part of our commitment to push the international growth. We are improving this target for 2027 to higher than 25%. As far as women in workforce this year without considering CCGT, we already exceeded our target of 25% in now at almost 24%. And we intend to at least keep this target in the range of 25% to 30% till 2027. So all of us are proudly committed to create an increasing ESG where all the people can express their talent also by leveraging on an inclusive culture, which is on the basis of a sustainable development. And now over to Paolo for his final remarks.

Thank you, Emanuela. And let me conclude by giving some guidance for 2023. EBITDA first, we see it in the range of EUR 500 million EUR 550 million, higher versus 2022 net of clawback remind you was EUR 502 million. Let me point out that clawback impacts us in -- clawback measures are still in place. So -- as you can see in the chart, the numbers are affecting also 2023 by an amount which is expected to be stronger than the one in 2022 being most of caps effective since December 1, 2022, even though it's difficult to estimate this number, but you can imagine and figure out looking at the figures, the amount expected desire than in 2021. CapEx. We expect to invest between EUR 400 million and EUR 500 million. Those investments will be mainly related to the assets that right now are under construction. Of course, we can lever on our financial soundness to accelerate the CapEx plan, we may find some interesting opportunities on the M&A side, and we are for sure working on that. The net financial position is expected to be slightly lower than the one at the end of 2022. So in the range of EUR 1.3 billion, EUR 1.4 billion. And this, thanks to the strong cash generation we expect in 2023, which is not given just by the EBITDA, as said, we expect in 2023 to have all the reversal effect related to the mark-to-market derivatives, which still accounted for EUR 150 million or a little bit more than that at the end of 2022. So those are the traditional guidance that will be updated quarter-by-quarter as usual. And then let me conclude I'm on Page #47 by summarizing, say, the main targets of the plan. And let me go through them one by one. Capacity, as I said, 4.6 gigawatt in 2026, while we see 5 gigawatt in 2027. EBITDA above EUR 600 million -- EUR 650 million, of which 85%, 90% secured or stabilized through any kind of mechanisms, incentives, COD, PPA, and EBITDA that will be based on quite significant geographical and technological diversification. We expect to invest EUR 3.5 billion over the '22 '26 period. And I repeat it, out of which almost EUR 1 billion already done in 2022. The CapEx -- we are envisaging in our business plan is fully compliant with the United Nations SDGs, just to recall the importance of ESG in our model. Very limited maintenance. As you know, you can assume a figure in the range of EUR 10 million, EUR 20 million per year for maintenance. Net debt, we expect net debt to increase to deleverage, say, up to EUR 2.3 billion in order to boost and to sustain the growth envisaging the plan, but in accordance with a sustainable investment-grade rating. Dividend, and it was more stable yearly dividend of EUR 1 per share. Our dividend policy has always been based on an absolute amount of dividend this time is EUR 1 per share. So thank you very much for your attention, and we are now ready to take your questions.

[Operator Instructions] The first question is from Roberto Letizia of Equita.

A few questions at the beginning, maybe some follow-up leaving space to the colleagues. First, a comment on the new directive that we saw yesterday from Europe with regards to the new market design. I think you all is no longer looking for strict separation of two markets, but just leaving current taxing markets as they are pushing for, of course, a higher penetration of PPA market and long-term negotiation with CCGT contract in case of incentive. Maybe you want to give some comments on if this is in line, what were you expecting if this is a potential upside to your business model? Maybe a derivation of this question also on the price assumption that we saw in 1 of your slides, if I got it correctly, your business plan is based on prices between EUR 70 and EUR 90 per megawatt hour. Is this range of level we should expect for new PPA contracts signed in the coming year? Or do you expect specifically for new PPA something different, also considering of the new market design, as mentioned before. A very quick question. I don't know what you can say about that, but you still have a committed new shareholder in the holding above view which is possibly sustain the growth of the group in the coming years. But this is something that has not been yet talked again and actually is potentially affecting the strategy. So -- and it's actually asked also by investors as a questioning on what is going to be the role of these new shareholders and how a potential new commitment materialize in the control of ERG. And this, I would say, create some uncertainty lead you as a comment in many shareholders, which year any potential deal of operation, which is unclear. I don't know if you can just elaborate a little bit on this. I leave space to the colleague and maybe some follow-ups later.

Okay. Thank you, Roberto, for your questions. So I'll try to answer one by one in chronological order, say, about the market design, let me say, I've always been saying that the only way to the couple conventional and renewables or in from original technology is to keep going on with CfDs and PPAs. And now Europe came to the same conclusion apparently because there's been a lot of talking different ways to the couple the two markets, but it's impossible in other way. So we remain convinced that this is the only way. It's a very easy way. It just say, it's the time just to adapt, say, these mechanisms to the current environment. So let's take, for instance, the CfDs and the options. Let's take, for instance, the last auction results in Germany, they raised the price cap at EUR 75 per megawatt hour and the capacity they allocated was less than of the one available. That means that given the higher capital intensity, the sector, as a whole, needs to have higher pricing, higher prices, say, for a longer period of time in order to make reasonable returns that can attract investments. So I'm not scared about the market design because I said the only way to do it and to implement it is going on the same way we have done so far. So we see positively instead because we expect in 2023, Europe with a sort of jackleg, let me say like this, they will realize the only way to push forward the energy transition is to adapt this price mechanisms. So we expect all the countries to work on that instead of introducing extraordinary measures that resulted, as you can see, not just for air, but for all the operators very penalizing. And they are subtracting resources that would have been available for the energy transition. And about the price assumptions, yes, we reported in some chart our expectations that are basically in line, if you see the first years very, very in line with the forward market, please consider that our revenue structure is for a major part related to CfDs, incentives, PPAs. So we have no full exposure to the price scenario. Let's say, basically, for 2023, basically, 70%, 80% of our revenues are already based on tariffs and hedging and whatever stabilization mechanism. Going forward, yes, you are right. We expect prices to go down a little bit, but still remaining higher than the expectation we had just 1 year ago because the capital intensity is higher, the interest rates and then the cost of capital is higher. And I suppose the substitution of Russian gas from other gas coming from other countries and in particular, LNG is not at the same price, the Russian gas was. About the new shareholder, I can just say that one representative of the new shareholder entering to the Board, and they are acting very, very proactively. They are supporting the business plan. They -- with us, approved yesterday the business plan in the Board of Directors, and we are all thrilled to say, carry our objective forward, and we are confident that we have all to succeed and to reach the results we set out in the business plan.

Sorry, just a clarification on the prices because I was mentioning to the -- sorry if I ask it back again, about the EUR 70, EUR 90 in '26 as an exit price for the business spend. I was looking if this is a price range that you consider what the market is going to express for the PPA. You signed a PPA recently with an Italian group. So maybe you can just give a little bit of more detail on what the pricing expressed by PPA contracts in these markets?

Say for obvious reasons of confidentiality, I can't say the exact value of the pricing of our last PPAs. But let me say they are very, very much consistent with the price scenarios being reported here in the chart. So figures that are well above the prices we could imagine just 1 year ago. So they are pretty in line with the feed tariff we have been enjoying, say, in the last decade. So near or around EUR 100 per megawatt hour. Let me say like this. I hope to have answer your question.

The next question is from Enrico Bartoli of Mediobanca.

First of all, a general question on the strategy. You kept your target 4.6 gigawatts and chain for 2026. In the last year since you presented the plan in March '22 several things have been moving on, particularly in terms of political support, in terms of better pricing where you mentioned the better environment for PPAs also on the wholesale market. I was wondering actually, what is preventing you from accelerating the development of it possibly, so you're spending probably more visibility on the new price setting mechanism by the EU from the revision of the CfD mechanism. Just was wondering what could trigger a further acceleration in your CapEx? Second question is related to the IRRs that are implied in the new EBITDA guidance for '26 lighted an increase in the -- also some inflation in the CapEx, we are now in an environment of higher cost of capital. So I was wondering how compared to the previous plan, your IRR assumptions have moved and also in terms of spread between IRR and [indiscernible]. And last one is related to the guidance for '23. If you can guide us a bit on the moving parts that you expect during this year in terms of the hedging price that you have locked in compare to '22, the capacity additions. And how you think that will move EBITDA in Italy and outside Italy during this year?

Okay. Thank you, Enrico, for your questions. Again, in all the chronological order, say, the target of 4.6 gigawatt 2026 is also consistent with the financial power of the group in the sense that we have still a quite big headroom from a financing point of view, but don't forget we want to keep our investment grade rating, and then we need to stay below full-time net debt to EBITDA. And we expect, based on the business plan we are today presenting to deleverage the group from now to 2026. So this is one constraint, let me call like this, we have to our growth. I can also say that the target we set out for '26 is very much consistent with the pipeline we can rely on today because if you see the portion that will come from M&A is basically the same as the previous plan, but -- or even less than the previous plan, because part of it has been already done in 2022. But for sure, for sure, we have the financial power to accelerate the deployment of the installed capacity. And that's what we will try to do. So we will try to accelerate as much as possible, of course, pushing on M&A, the deployment of capital and then the megawatts, say, in our portfolio. What prevents to further accelerate I don't know, it's based on our pipeline. So we have this pipeline. We don't want to let's say, enlarge the number out of the projects where we are sure we can bring forward within a reasonable horizon of time and the reasonable horizon of time is 5 years, ofcourse pipeline is something that evolves over time as we demonstrated in these numbers because every year, we try to add new projects. So we are doing a very good work on Solar PV in Italy, in France, in Spain. As you can see, a large portion of our pipeline is now based on solar. But we prefer to remain, as you said, conservative while providing our numbers. For sure, the acceleration could come from M&A, but maintaining our strength in the financial structure, which is an old mark we want to maintain in our business plan. About the returns, I had already the chance to touch this point during my speech, but I repeat it with a little bit more details. For sure, the cost of capital has increased quite significantly over the last 12 months. And in our case, but I think it's a general view. The work has increased between 1 and 2 percentage points. Even though -- even though our cost of debt has remained basically flat. But when we assess new investments, we tend to use a theoretical work that is much more consistent with the interest rates. And you've seen the cost of debt and is basically fully hedged for the next few years is 1.4%. If we use that cost of debt, we would come to a much lower work than the one we use for investment purposes. And on top of the work, we -- some buffer that depends very much on the kind of projects we are talking about. If it's a project fully secured from a route-to-market point of view, then the spread could be in the region of 1%, up to 2.5% depending on sales on its route to market and the country where the project is based on. But for the time being, I would say the key message is the increased CapEx and the increased cost of capital, at least for our project, I can assure you, is more than compensated by higher pricing. We see and we have executed at least for the time being in our PPAs. And third, there was a third question, right? About the guidance, okay, it's a little bit more complex. Guidance, our guidance for 2023 is net of clawback measures, which I said are different country by country despite the European regulation, the one 1854 regulation guided, say, the member states to introduce a price cap of EUR 180, that wasn't the case. So in any country where we are, there are different price gaps. So let's take Italy, for instance. In Italy, we have 2 caps. One is related to the Article 15-bis, which covers, say, all the RES assets with a commercial operation date before 2010. Here, the price gap is at EUR 60 and should last until June 30. Then for the other assets, there is a cap of EUR 180 per megawatt hour in line with the European regulation. For the Solar PV and the so-called count Energia, again Article 15 applies. So we have a cap for the merchant portion of EUR 60. So the picture is not as simple as it may seem when looking at the European regulation because in the end, every state converted into different rules into different price gap. I just gave you the example of Italy. But let's move to France. In France, the price gap is not EUR 180, it's EUR 100 per megawatt hour. In Germany, price cap is EUR 120, EUR 130 in Spain, Poland, Romania, there are different price cap ranging from EUR 70 to EUR 90, okay? Even in the countries where the EUR 180 has been taken, for instance, Bulgaria and Sweden, they have introduced an hourly settlement. That results into a much lower real price cap because if you measure the cap hour by hour, the hours where the price is higher, you give money back okay? But when the price is lower, nobody will give you back what you have left for the price cap, okay? So the picture is much more complex than the one it may seem from the outside reading the newspaper, it's much more complicated from an operational point of view. And then coming back to the guidance, we gave a guidance between EUR 500 million and EUR 550 million, which is completely net of our best estimates of the impact and the effect of those say, uncoordinated measures across Europe. But the effect of those measures is expected to be significant in 2023. And based on our best estimate, could be in the region of EUR 100 million and shouldn't become as a surprise because most of those measures are effective as of December 1, 2022. So in 2022, Michele has shown you that the cost -- the total cost that the total impact of these measures was EUR 91 million before taxes and EUR 83 million after taxes. 70% of this amount comes from Italy and is related to fiscal measures, the Article 37 and then the solidarity contribution as per the budget law, okay? Those are fiscal measures, plus EUR 35 million that is in our EBITDA. And most of it comes from the clawback measures effective as of December 1. So you can -- we do not expect further windfall taxes. And I think over the last few days, Europe was quite clear on that. Even yesterday, they repeated they don't want to -- they don't want state members to introduce further windfall taxes because this should result in penalizing the energy transition. But still, there is uncertainty about the duration of those measures which on paper should last until June 30. But in reality, some states like France, for instance, introduced the cap till the end of 2023 before waiting for the resolution of the European Commission. So let me say, it's a patchwork of different measures or let me say, my way, it's a mass and we hope in 2023, Europe in the European Commission will realize that those measures will turn into slowing down the deployment of investments and the deployment of the energy transition. So we remain confident that Europe will in the end cancel those measures and will push forward the investments. If not, the targets they have always declaring to the world will not be sustainable. And we do not see other solutions to this to the energy security and to decarbonization to fight it, don't forget, climate change because nuclear is too long to come. It's impossible -- it will be a reality in the next, say, 10, 15 years, new -- I mean, new nuclear. So rest are the easy and at end solution in our opinion for the energy transition. But let me come back to the guidance because I am passionate about these themes. The guidance that is already net of what we expect to be an impact in the region of EUR 100 million coming from those measures. In other words, if there weren't those say, clawback measures, the guidance of the EBITDA, would have been roughly EUR 100 million higher than the one we just disclosed. From an accounting point of view, this is the guidance we decided to give to the market because it's more consistent with the cash generation we expect from the company. From an accounting point of view, we will discuss with audit -- our auditors, statutory auditors, the best event. But if it were for me, I would say those should be treated as temporary and extraordinary measures because in the European regulation is written like this. So I hope to clarify this point because it's very important. So the guidance is very much limited by all these measures.

That was clear. Just if you can add a quick comment on net of the effect of the clawbacks, what are going to be the moving parts that are actually leading to from EUR 500 million adjusted in '22 to '23. So the contribution from new capacity a bit, if you can give us a flavor on the pricing evolution that you assume in that guidance?

The price, let me say, given those price cap is, say, limited in the sense that we expect a negative price effect compared to 2021 when some of -- most of those measures weren't in place. And the growth should come from new investments because don't forget, we had -- we installed 560 megawatts in 2022. And those megawatts are basically fully up and ramping right now. On top of that, other megawatts say we expect further 300 megawatts to enter during the course of the year. So some will be already in service for the 2023 part will be contributing in 2024. But part of this will be in service over the course of the year, so giving further contribution. But let me say, all in all, the price effect on our guidance is significantly negative, significantly negative. And all the growth will come from perimeter. So it means new in store -- have new megawatts and new store capacity and another important part from higher volumes because as you have seen, the last part, in particular, the last part of '22 was very negative in terms of wind availability. So in particular, in the fourth quarter, we lost a lot of production compared to our budget it's not just ourselves, but all Italy, all Europe was under low wind conditions, especially in November, December when we enjoyed the 25-degree Christmas. So those are the two main contributors. The new capacity and the expectation for a higher volumes that more than offset a lower price effect in 2023.

The next question is from Nash Cui of Barclays.

I have a few, if that's okay. The first one is, could you please give us an update on your CCGT asset sale? Do you expect that to happen this year? And the second question is, I know you have a very large solar pipeline expand. Some of your peers are talking about a much lower you need CapEx costs and PPA price around low-40s, just wonder if you can talk about the competition spend? And the next question probably related to that, I'm still a bit confused by IRR. Just wonder if you can give a bit guidance on your IRR, especially for the new projects? Do you have a hurdle rate? And last question probably is on dividend. I just want to understand the rationale for the dividend increase. So strategic shareholders involved in as.

Okay. Nash, so say about the CCGT, absolutely, yes. We are relaunching the process to sell the plant. We needed, first of all, to close down the profit and loss for 2022, which is going to be the reference say, accounts for any buyer. And we are actively working with the idea to receive the offers say, in the next coming months and for sure to close the transaction before year-end. That's a very strong commitment I can confirm to the financial community. About the CapEx, I don't know, other peers. But for the time being, our projects have CapEx per megawatt, which has been well protected by the framework agreement we had with some important OEM. Going forward, exiting the framework agreement for a majority of the projects that are in the new business plan, we have to stay with the market. And the market -- it's different than the one it was 1 year ago. If you look at the numbers reported by the main listed companies providing technologies for wind and solar, you could see that the pricing, the capital intensity is going up. So we benchmarked with other third -- with other parties, our CapEx per megawatt. We have tested it with our procurement department, and we are quite confident that the CapEx we have put in the business plan are very much consistent with the current trends in the market for wind turbines, for BOPs, for solar panel, for lithium, for the battery storage and so on. But let me repeat, let me repeat. When it comes to returns for the investments, the last projects we have approved and we have concluded had a return near double digit or if sometimes even more double digit, thanks to the fact the PPAs we covered those projects were well above the initial estimates for those projects. And that -- this has much more than compensated for the overruns, some overruns or the higher cost of capital. And let me say, another rate, it's difficult to say another rate because it depends on geography, it depends on technology, it depends on the route to market. But let me say in the region of 6%, 8%, sometimes even more in some geographies. For instance, in Eastern Europe, we are looking for are the rate well above double digit, for instance. So -- but if you take as an average between 7% and 9% unlevered, you are not far away. But this is another way, we try to optimize the value of our projects, working on the PPAs, working on all around 360 degrees the project as I think our numbers are demonstrating.

I think there's one more question on dividends.

Sorry, sorry. can you repeat it?

Yes, I just want to understand the rationale for the dividend increase and how are the strategic shareholders involved when making that decision. I mean strategic investors, including constructure funds?

Consider that with this trend for inflation, the fact that the net profit of the company has been much higher than the one expected in the business plan. Considering the positive view we have for the forthcoming years, considering the fact that the company right now is under leveraged. We see this increase as absolutely sustainable and our value proposition is always the same and probably different from other peers. We want to have a fair mix of growth and remuneration to our shareholders. That has been and will continue to be our value proposition.

[Operator Instructions] Mr. Merli, there are no more questions registered at this time. Excuse me, there is one more question from Roberto Ranieri of Stifel.

Just 1 question, if I may. On the supply chain, you Paolo was talking about supply chain issues potentially in the future. I'm wondering is -- and you are acting to reduce the supply chain issues. So I'm wondering -- there are -- in addition to that, there could be also grid the connection issues in terms of bottlenecks, not only in Italy all over Europe. And my question. If I may, just one more quick question on the framework agreement that you have with your suppliers. I'm wondering if this agreement could be revised in case of CapEx inflation.

Okay, Robert. About grid connection, let's say, the -- all the projects we put in the business plan already includes, say, the timing of the connection availability based on the, say, the current operational plans of the values TSO and as well the cost of grid connections are already updated based on the offers we received when we have visibility on this. On the more, say, back-loaded projects in the plan, the one we have a code in '26, '27. For instance, among those, there are three quite large projects. We are -- we have been working on in Spain, Solar PV. There, we are waiting for the so called [indiscernible] that should be taken in 2023 in order to gain a little bit more visibility on the timing, on the cost and so on. But let's say that we have been sufficiently cautious on our plan about this. About the framework agreement, I'll leave Michele our CFO, who is also in charge of procurement in the group.

Yes, regarding framework agreement with [indiscernible], but we are -- all the constructions that are currently ongoing that will reach our -- the commercial operation date in 2023 and 2024 are covered by the framework agreement. After the split framework agreement partially aspire. And we stop benefiting from the price, et cetera, at that time. Having said that, the framework agreement remains as a strong contractual base with these 2 suppliers. But in this specific moment, we do not see this is the right moment to fix in the long term, the current prices of the wind turbines for long period of time. So the strategy for the time being for new orders that we'll do in 2023, 2024 for plan that will enter in operation in 2025, 2026 will be based on tender-by-tender projects, looking at competition as the suppliers, in particular for wind, but it's more than to than for solar in order to get the best condition possible. Again, the framework agreement is strong contractual protection that will remain because we set a standard of our relationship with a key supplier, some file but we'll be open again to to find a new supplier that can allow us to be competitive also in terms of CapEx cost.

The next question is from Emanuele Oggioni of Kepler Cheuvreux.

I have only two, three questions left. The first 1 is to check basically on the acquisitions included in the plan, the investment plan and embedded in the target. So it computed basically some 0.4 gigawatts could be included in your target and to get EUR 2.5 billion of capital expenditure in 2023, 2026 so excluding the past, excluding 2022, we can get an implied valuation of EUR 1.5 million, EUR 1.6 million per megawatt for a total cash out of EUR 0.6 billion if you consider -- if you assume the CapEx per megawatt that you displayed, you disclosed on Slide 26 for wind and solar for the additional capacity of 0.8 gigawatt for wind. So basically and 0.9 gigawatts for solar. So could you confirm my computation? And still as regards the CapEx per megawatt, I suppose that this is referred to greenfield projects mainly. But I would like to understand or to -- if you can update on the CapEx per megawatt for powering in Italy. So I suppose this is lower compared with greenfield. And the last final question is on the CCGT disposal plan. So of course, the -- recently, the high dimensional strategic, this plant owned by a was included among the facilities under the Italian national strategic interest. So I wonder if this could increase the visibility of the future cash flow on this plant and thus speed up or facilitated support your disposal process?

Okay, Emanuele, thank you for your questions. So the first one, yes, your computation is quite right, say on average, you can assume EUR 1.5 million per megawatt, consider, please, that the the unknown or the M&A we put in the plan is in our mind more oriented to Solar PV. So the EUR 1.5 million is on average between the megawatts for wind, the per megawatt for wind, which is higher more in the regional [indiscernible] and solar more in the regional one just to rounding the numbers. So on average, the number you said is not far away from the one we have in mind, but please consider the -- having a quite big pipeline on wind and having today a higher stake in our portfolio of wind versus solar, the M&A tool will be more used for increasing our, say, stake in the solar business. For the greenfield and the powering, if you want the AV per megawatt for sure, is lower than the one for M&A. It's obviously evident. And -- but for powering the powering is a new project. There is -- you don't save -- the only thing you save say is the goodwill you may pay for buying the right to make the project. That's for sure, but the cost is absolutely in line with a new greenfield because instead, you have the cost of dismantling the old towers. But this will more than compensated by the fact that usually the powering is being done where you have the highest wind availability and -- also the connection is already there, it's already done, et cetera. But in our business plan, say that the cost per megawatts of our wind is moving from, say, EUR 1.2 million, EUR 1.3 million at the very beginning in the first year where part of the construction have already been negotiated to EUR 1.4 million, EUR 1.5 million in the next year, say, in the last part of the business plan. This is more or less the EV per megawatt we have in our business plan, but you have all the figures to extract these numbers because we provided the cap -- the breakdown of the CapEx and the breakdown of megawatts. Please consider that the return of the projects are not just based on CapEx and not just based on the route to market, so the price at which you sell the energy, but also the quality of the projects. And we are powering for instance, are the best assets where we can change in the layout of the wind farm, changing the platform of the wind turbines, we can extract 3 or 4 times the production of the plant used to generate that making the real return of the project. Yes. I think I have touched all.

Thank you for your clarification. Indeed, it was a last question on the CCGT disposal. The plan that was included or the facilities under the Italian strategic interest, so this could be supportive for your disposal process?

I say, absolutely, we see positively the recent evolution, the sale of the [indiscernible], we are waiting as you to understand better the government what it's going to do with evolving power. The expiration of time for taking a decision, I think, is in the next few weeks. So we will be -- we will not more, say, by the end of March, also the decree that makes the real side as a strategic side for Italy is guaranteeing the continuity of the site and that can help -- but we are repeat, we are confident that to find the right solution for the asset, for our people because forget in the CCGT is not just a plant, but it's a company with an organization structure, and we care about much about this. So we want to sell it at the right counterparty, a counterparty that can guarantee say, the continuity of the business. And as I said, we hope in the very coming months to gain much more visibility on the outcome of the process. So in the next webcast, I hope to be in the position to say a little bit more.

Mr. Merli, there are no more questions.

Okay. So thank you all for the attention. Emanuela and our Investor Relations team will remain available for any clarification, follow-up you may have. I look forward to meeting with you the next occasion. So -- good morning, everybody, and thank you very much.

Thank you.

Thank you.

Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones. Thank you.