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Eni (E) Creates New JV GreenIT to Focus on Renewables in Italy

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Eni S.p.A. E recently announced the creation of a new joint venture, GreenIT, with the Cassa Depositi e Prestiti (CDP) Equity. The JV will develop and produce electricity from renewable sources in Italy, primarily from solar and wind energy. The companies plan to invest €800 million (around $956 million) over five years in renewables.

While Italian energy major Eni will hold 51% in the JV, CDP Equity will own the rest. By 2025, the JV will likely have an installed capacity of 1,000 megawatts. The move is expected to support Eni’s plan to install a total of 4 gigawatts (GW) of wind and solar energy across the globe by 2024. Moreover, its power generation capacity will likely rise to 15 GW by 2030 and 60 GW by 2050.

GreenIT will also enable Eni to capitalize on the growing demand for cleaner energy in Italy. The country’s energy transition efforts are highlighted by the 2030 Integrated National Energy and Climate Plan, which was submitted to the EU Commission at 2019-end. In that case, Eni can support the country’s climate goals.

While Eni itself is targeting net-Zero emissions by 2050, projects like GreenIT show its strong focus on renewables. The company recently received a 20% stake in the first two phases of the Dogger Bank Wind Farm project, from Equinor ASA EQNR and SSE Renewables. The massive wind farm, located 60 miles off England’s North East coast, is expected to have a total capacity of 3.6 GW, upon completion, by 2026.

The news of the JV creation follows the recent reports of retail/renewable spinoff. Per Reuters, the company is considering making the new retail and renewable energy business an independent unit in 2022. It can list a minority stake to raise money, which will likely be used in the energy transition.

Price Performance

Eni’s shares have increased 65.4% in the past year compared with a 51.5% rise for the industry.

Zacks Rank and Other Stocks to Consider

Currently, the stock sports a Zacks Rank #1 (Strong Buy). Other top-ranked players in the energy space include Berry Corporation BRY and EOG Resources, Inc. EOG, each holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Berry’s bottom-line estimates for 2021 have witnessed four upward revisions and no downward movement in the past 60 days.

EOG Resources’ bottom line for 2021 is expected to increase 205.5% year over year.

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