German giant aims for massive €20 billion spend

Germany’s RWE plans to invest €20 billion through to 2009 in order to upgrade and maintain its core electricity, gas and water operations. With annual expenditure estimated at around €4 billion, RWE will invest about €1.2 billion at RWE Power, €200 million at RWE npower and €1.0 billion at RWE Energy along with around €1.6 billion at its Thames Water business.

The company has also announced plans to finalise proposals for the development of a €2.1 billion lignite plant in Neurath near Cologne by the autumn. The company has yet to decide whether to develop one or two 1,050 MW units at the Neurath project, part of the €12 billion investment programme planned for the German generation market alone over the coming 15 years. Germany needs to replace around 40% of its capacity over the next 20 years as a result of the nuclear phase out and as plants reach the end of their lives. A significant portion of RWE’s capacity is coal-fired but there is also investment cash earmarked for development of the German transmission system.

The announcements follow its latest full year results showing net profit for 2004 doubling while operating profit grew 8%. RWE also significantly reduced its debt through asset sales, which generated more than €3.4 billion.