Italy’s A2A lifts investment plan to $27 billion on data centre demand

By Francesca Landini and Giancarlo Navach

MILAN (Reuters) -Italian multi-utility A2A said on Wednesday it had raised its total projected investments for 2024-2035 to 23 billion euros ($27 billion), with 1.6 billion euros earmarked for creating and managing data centres.

A2A’s updated business plan increases projected investment by 1 billion euros and nudges up financial targets in the final part of the strategy period. The company also confirmed it would deliver minimum annual dividend growth of 4%.

Shares in A2A were down 7% at 1230 GMT, while Milan’s blue-chip index rose, with traders citing overly cautious financial estimates for next year as the reason for the drop.

A2A stock has risen by around 14% in the last 30 days.

PRIVILEGED POSITION TO SUPPORT DATA CENTRES

CEO Renato Mazzoncini told reporters that A2A aimed to become a developer of data centres as well as a power supplier.

A2A estimates in the most positive scenario that Italian data centre demand for electricity could reach 42 Terawatt hours by 2035, from 3 TWh this year.

Italy’s northern region of Lombardy, which encompasses the country’s financial capital Milan and the industrial city of Brescia, could see a surge in digital infrastructures that would boost electricity demand, network connection and thermal management needs.

“A2A’s long-standing presence in Lombardy together with the significant acquisition of electricity networks in the provinces of Milan and Brescia, put the group in a privileged position to actively support the roll-out of data centres”, Mazzoncini said.

A2A also sees scope to boost its district heating business by exploiting digital infrastructures.

LOOKING AT POTENTIAL ACQUISITIONS

Mazzoncini signalled A2A was ready to expand beyond Italy, with potential acquisitions in some European markets.

He said the group was not interested in acquiring a minority stake rival Edison, adding he did not expect Edison’s parent company EDF to completely sell out of its Italian subsidiary.

Separately A2A, which specialises in energy and waste management in Italy, reported a 4% year-on-year decline in its nine-month core profit to 1.73 billion euros.

($1 = 0.8575 euros)

(Reporting by Francesca Landini and Giancarlo Navach, editing by Gavin Jones and Alexander Smith)