(Adds net profit growth forecast, background)
MADRID, Nov 21 (Reuters) - Spanish energy group Endesa plans to raise investment in renewables over the next three years and trim the proportion of profits it will pay in dividends, it said on Wednesday.
In an update to its strategic plan, Endesa laid out proposals for 5 billion euros ($5.7 billion) in net capital expenditure, with investments in renewables like wind and hydropower taking the lion’s share each year.
It committed to continuing an existing policy of paying 100 percent of net profit to shareholders until 2020, but set an 80 percent limit for payments in 2021.
Setting new forecasts for earnings in the period, Endesa said it expected annual net profit growth to pick up to around 7 percent - versus around 6 percent in its previous plan - with the total hitting 1.8 billion euros in 2021.
Endesa’s parent, Italian utility Enel, pledged on Tuesday to invest more in its green energy and network businesses to boost earnings and meet growing demand for electricity and new digital services.
Spurred by stricter government targets to contain climate change, Europe’s power sector is increasingly turning to renewable energy as new technology helps drive down costs.
In Spain, investors are coming back to green power some six years after the government cut subsidies to balance a tariff deficit, leading many to flee the sector.
$1 = 0.8776 euros Reporting by Isla Binnie and Jose Elias Rodriguez; Editing by Jan Harvey and Mark Potter