Endorsement for Enagás: Agreement on H2Med hydrogen underwater inter-connection between Portugal, Spain and France


Renta 4 | On December 9th, as was expected, the development of the H2Med project, interconnecting Portugal, Spain and France for the transport of hydrogen, was agreed. An investment of 2.850 billion is anticipated (2.5 billion for the underwater connection between France and Spain, and 350 million for the connection between Portugal and Spain). Up to 50% of the total amount could be subsidised (requests for aid expected on December 15th). It is planned that the project could be operational in 2030 (start of construction foreseen in 2025).

Valuation: Positive news, although expected. We will have to wait to find out details of the investments corresponding to each of the countries involved. In Spain’s case, Enagás will make these investments, an important endorsement for the company’s growth plans looking to the future, ahead of the awaited development of the European regulation on hydrogen. It is expected this will be ready during 2023.

We reiterate our HOLD stance, with a T.P. under review (previously 18,50 euros/share).

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