Italy’s A2A boosts 2035 investment plan to €23B, adds €1.6B for data centers

Italian multi-utility A2A has increased its investment projection for 2024-2035 from last year’s €22 billion to €23 billion, earmarking nearly €1.6 billion solely for data center projects. The company has seen a surge in new digital infrastructure around Italy’s northern region of Lombardy, encompassing Milan and the industrial city of Brescia.

The updated investment plan also nudges up financial targets in the final phase of the strategy, according to A2A. CEO, Renato Mazzoncini, stated that A2A’s long-standing presence in Lombardy positions the group to support the rollout of data centers.

The acquisition of electricity networks in the provinces of Milan and Brescia will also boost electricity demand, alongside heat management needs and network connections.

Mazzoncini expects data centers around Milan to add approximately two gigawatts (GW) of capacity over the next five years. He estimates it will be a tenfold increase from the current level. A2A also emphasizes that over 35% of the investment plan has already been completed, is ongoing, or has already received the necessary approvals. 

A2A’s ambition for 2035 expands on two fronts

The group said its ambition for 2035 is growing on two fronts. For the energy transition, the company expects a return on investment (ROI) of RAB 4 billion in electricity grids. It also expects to serve over five million customers and operate 3.7 GW (gigawatts) of solar and wind capacity.

On the second front, the circular economy is expected to treat 6.6 million tons of waste. New data centers will also be built using energy assets as a development platform. Additionally, the Lombardy-based superutility aims to extend its horizons beyond national borders for greater geographical diversification. 

The selection of countries for expansion will be based on market potential, development speed, and performance criteria. Expansion initiatives will also be selected as alternatives to projects in Italy, and at the same level of investment. 

A2A says EBITDA is expected to be at €2.4 billion in 2028, up to €2.8 billion by 2030, and at €3.6 billion in 2035. Meanwhile, net income is expected to be €0.7 billion in 2028, increasing to above €0.8 billion by 2030, and surpassing €1.1 billion by 2035. 

A2A leverages waste-to-power expertise

The company said its projects will focus on key sectors of the waste-to-energy and power supply chains. It will leverage its expertise in waste-to-energy recovery and generation while evaluating the integration of upstream and downstream activities. 

CEO Mazzoncini mentioned during a press conference that his company is looking at the UK, Spain, and Portugal for the waste-to-energy segment.

The executive added that the company is also exploring opportunities in Poland and Germany for renewable energy. He emphasized that the strategy will begin with acquisitions that will lead to inorganic growth, followed by gradual organic growth. 

Mazzoncini has also disclosed that his company decided to bring all capex back to Italy due to the war in Ukraine. He explained that the company’s decision was crucial in contributing to the country’s energy sovereignty.

The CEO predicts that the company will close this year with roughly 4 TWh of hydroelectric production. He also predicted that electricity demand for data centers will skyrocket to 42 TWh by 2035, up from 3 TWh this year.

However, Mazzoncini clarified that his company aims to become a data center developer, not just an energy supplier. He pointed out that A2A has identified several data center projects to develop in Italy. The company is also looking at a few acquisitions in Europe.

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