Iberdrola: Digesting expensive acquisition and high capex

Research evidence excerpt

Iberdrola: Digesting expensive acquisition and high capex

Jorge Alonso Suils +34 915 893 913 jorge.alonso@bernsteinsg.com 28 July 2026

Growth prospects are robust

Based on Fingrid (Finland's TSO), the Finnish Energy Authority and government energy-transition plans, the outlook for both

transmission and distribution networks is very strong, with grid expansion becoming one of the key enablers of economic growth

and decarbonization. Fingrid forecasts that electricity production and consumption could be around 50% higher by 2030 and

potentially double by 2035, requiring significant investment across both the national transmission grid and local distribution

networks.

The usual suspects backing such growth are data centers, the electrification of industry, heating and transport, and additional

renewable generation. As a result, Fingrid has significantly increased its investment plans. The company expects to invest

approximately €2.0bn during 2025-28 and around €5.2bn by 2035. The stated objective is to enable up to 10GW of new industrial

electricity demand.

Caruna specifically, expects electricity consumption in its service areas to increase by approximately 50% in Caruna Oy's regions

and more than 100% in Caruna Espoo's urban network by 2034, driven by data centres, industrial electrification, renewable

connections and electrification of heating and transport. Caruna estimates investment requirements of around €200m per year

for the next decade, slightly below Iberdrola’s suggestion of €200-300m annually.

Ultimately, the Caruna transaction raises the question of why Iberdrola is deploying capital into a relatively expensive

Finnish network asset rather than pursuing the greenfield opportunities it highlights in the US transmission market

and Australia.