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E.ON unveils €60 bln investment plan

Europe's biggest energy group E.ON AG unveiled plans Thursday to build 18 new power plans as part of a €60 billion ($80.7 billion) investment drive in Europe.

At the same time, the German-based company signaled moves for further acquisitions and said it wanted to buy back €7 billion in stock. „We want to strengthen our business particularly by organic growth, in addition, by targeted external growth steps in our core European market and in adjacent growth regions,” said E.ON AG chief Wulf Bernotat at a press conference in Dusseldorf. Shares in the group rocketed up by 5.6% to €124 ($167) following the announcement that it planned to buy back the shares by 2008.

E.ON, which was forced last month to pull out of a rancorous takeover battle for Spanish energy giant Endesa SA, said it planned to roll out its new €60 billion investment strategy by 2010. Instead of pressing on with the €42.4 billion ($57 billion) Endesa bid, E.ON hammered out a deal with rival bidders enabling the German energy group to pick up assets from the Spanish energy group valued in total at €10 billion. This primarily included interests in Spain, Italy and France, with the move also helping to hasten consolidation in Europe's energy market.

Speaking at E.ON's shareholder meeting earlier this month, Bernotat stressed his company's focus on Russia, which is the world's fourth biggest energy market. Last week, E.ON said it had entered the Russian electricity business by establishing a joint venture in the western Siberian area of Tyumen with Russian partner STS. E.ON has set itself an ambitious target of reducing its CO2 emissions by 2030 to about 50% less than in 1990. With this in mind, the German energy giant said it had earmarked €12 billion to help the company focus on the construction of technologically advanced and climate friendly power plants.
Another €3.0 billion has also been set aside for renewable energy, particularly new wind power plants, the company said. (monstersandcritics.com)