Investors have made their expectations very clear; they want Italy to appoint an individual specialising in renewable resources, with a global outlook, to the helm of state-controlled energy giant Enel. The company has made a significant bet on renewables, but its large debt pile has become a major focus for Prime Minister Giorgia Meloni’s administration.
Enel is currently being screened for potential successors to current CEO Francesco Starace, though several sources are reporting that a decision should be made by mid-April. The government has expressed concern over Starace’s apparent lack of conformity to the administration’s wishes, and so are looking for candidates that fulfil the investors’ criteria. Possible contenders for the job include Stefano Donnarumma, CEO of Italian power grid operator Terna; Luigi Ferraris, who held the position of CFO at Enel for 16 years, before becoming Ferrovie dello Stato’s chief executive; Francesco Venturini, who is currently heading up the Enel X division specialising in technology and energy transition; and Flavio Cattaneo, vice president of high-speed train operator Italo.
The investors have requested that the new CEO continues Enel’s focus on an international presence. This strategy has won international plaudits and has grown installed capacity to a total of 60GW. A reduction in the global focus could result in a loss of investors and a growth restriction. Simone Siliani, director of the Fondazione Finanza Etica, said that “Enel can make the difference if Italy wants to meet its decarbonisation goals”.
Enel was founded in 1962 and has become a world leader for green energy, boasting a presence in countries such as Italy, Spain, the United States, Brazil, Chile, and Colombia. It has previously engaged in asset disposals to reduce debt and has recently released a new strategy to 2025, pledging 37 billion euros of investment and an increase in renewable capacities of 21GW.
The potential 2020 presidential candidate Joe Biden’s green energy subsidy package could contribute to double-digit returns for Enel in the United States. This will support the resilience of the company and its attractive dividend policy.
Enel has managed to establish itself as an international leader in renewable energy, and this should be maintained. Investors now await the final decision before the 15th of April, conscious that the right choice could benefit not only Enel, but the entirety of Italy.
