(Alliance News) – European utilities are entering the most challenging phase of the infrastructure cycle: the increase in investments in electricity grids is now the main challenge for the sector's credit quality.
This is the finding of a report by Scope Ratings, which maintains an overall Stable outlook through 2026, thanks to strong industrial profiles and new capital inflows.
As explained by Milano Finanza on Tuesday, according to the agency, the sector's focus is shifting from resource gathering to the execution of investment plans. Only 20% of the companies monitored have a Negative outlook, mainly in the Nordic area.
Integrated utilities with a strong presence in networks – such as Enel, Iberdrola, and Enbw – are better positioned to handle the increase in capex, which is estimated to rise on average between 30% and 35% in the 2026-27 period compared to 2023-24.
Scope forecasts a slight increase in leverage by 2027, still in line with historical levels, thanks to greater self-financing capacity, positive free cash flow, and asset rotations, particularly in renewables. The scenario is more challenging for grid operators, whose annual capex will double, bringing European investments to around EUR45 billion per year.
The misalignment between investments and cash generation, however, will require more debt.
The maintenance of ratings will depend on the execution of funding plans, which are currently considered balanced.
On the industrial front, the context remains favorable, with stable electricity prices and margins for gas-fired power plants still supported.
By Giuseppe Fabio Ciccomascolo, Alliance News senior reporter
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