N.V. Eneco

The stable outlook on Eneco reflects that on its main shareholder, Mitsubishi. It also reflects our expectation that Eneco's subsidized or long-term contracted and district heating operations will continue delivering stable cash flows, underpinning the group's credit quality. Furthermore, we believe Eneco will be able to sustain funds from operations (FFO) to debt consistently above 50% while expanding its renewable fleet due to a supportive financial policy. This is despite the risk that the company could engage in small-to-midsize mergers and acquisitions (M&A), which historically has been part of its strategy but was put on hold during the company's sale. As such, we expect the company's metrics to remain within the range for the 'bbb+' stand-alone credit profile (SACP). We

...Eneco's updated strategy focuses on remaining a leading player amid the energy transition, targeting climate neutrality by 2035. On June 15, 2021, Eneco updated its long-term strategy and announced that it aims to be carbon neutral by 2035. This entails Eneco's own activities and the energy supplied to its customers, meaning that the strategy's reach covers scope 1, 2, and 3 emissions. Eneco aims to provide 100% of green electricity to its residential customers by 2020 and to its business customers by 2030. To this end, Eneco targets doubling its own renewable capacity to 3.2 gigawatts (GW) by 2025 from close to 1.7 GW as of end of 2020. At the same time, Eneco will accelerate innovation and investment in about 2 GW of sustainable heat sources, such as geothermal, large-scale heat pumps, heat buffers, and residual heat utilization. These investments should support customer contracts increasing to 6.9 million by 2025 from 5.9 million today, which is another target of Eneco's updated strategy....

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