Last year, the Spanish Administrations subsidized more than 500 million euros to energy companies in which foreign States participated, according to an analysis of the aggregate data on public aid published by the Ministry of Finance. 87.5% of that amount was European funds and the bulk of the aid went to Iberdrola, Naturgy, EdP, Repsol, Cepsa and Endesa, which have foreign public capital through companies in the sector or sovereign funds.
The analysis of the large subsidies granted in Spain in 2023 (the nearly 1,700 companies that received at least one million euros in subsidies) reflects that 100 companies in sectors such as energy, automotive, training, ‘telecos’, technology or transport received more of half of the largest aid last year.
In full distribution of the Recovery Plan funds, energy companies absorbed 20% of the largest subsidies in 2023, with more than 1,500 million. And a third of that money went to companies in which foreign governments participate. Of those 500.9 million, 437 million, 87.5%, corresponded to funds from the Recovery, Transformation and Resilience Plan (PRTR).
The data should not be surprising if one takes into account that all large companies in this sector have, to a greater or lesser extent, foreign state shareholders present in their capital, through specific companies or through sovereign funds. In a country without public electricity since Endesa was privatized almost three decades ago, the government put this idea on the table in August 2021, at the dawn of the energy crisis, when Vice President Teresa Ribera suggested that a public company manage the hydroelectric dams as their concessions expire, but ended up discarding it. Then the matter has periodically returned to public debate without much echo. In September, PSOE and PP knocked down in Congress a non-legal proposal by Sumar to create a public business entity to manage these concessions.
At the head of the distribution of those 500.9 million in subsidies for energy companies with the participation of foreign States is the largest Spanish company in this sector, Iberdrola, which last year received 121.6 million in aid. The largest shareholder of the Basque multinational (although it does not have a presence on its board of directors) is the Emirate of Qatar. It has a package of 8.694% which, according to various media, this absolutist petromonarchy is considering expanding to 10% or more. Another relevant shareholder of Iberdrola (also without a presence in management) is the Norwegian sovereign fund (3.116%), one of the largest in the world, through Norges Bank.
At the end of last year, Iberdrola signed an alliance with Masdar, the state company of the emirate of Abu Dhabi, to co-invest 15 billion in offshore wind and green hydrogen in Germany, the United Kingdom and the United States. A few weeks ago, Masdar signed the purchase of the renewable energy platform Saeta Yield, from the Canadian fund Brookfield, for almost 1.3 billion. And last July it signed another agreement with Endesa to co-invest in a portfolio of photovoltaic and battery projects of up to 2,500 megawatts, valued at 1.7 billion.
Next is Naturgy, which received 79.10 million in aid in 2023. In the largest Spanish gas company, the third company in the electricity sector, the Algerian state giant Sonatrach has 3.85%, a consequence of an arbitration over the price of gas resolved against the Spanish company in 2010. The former Gas Natural has two of its main shareholders, the GIP and CVC funds (in alliance with the March family), seeking to sell their 40% for a long time because they consider their investment cycle exhausted. Naturgy has been the subject of negotiations this year for the entry into its capital of Taqa, the state electricity company of the Emirates. The move aroused misgivings in Algeria, a key supplier of gas to Spain. The operation was going to be articulated through a joint public acquisition offer (takeover bid) with Criteria Caixa, the investment arm of the La Caixa Foundation, but it was ended up being discarded in June.
Given the uncertainty about the future of that 40% of Naturgy’s capital, there has been speculation about an entry by the State Industrial Participation Company (SEPI) into its capital, in the style of the one carried out in Telefónica after the entry of the Saudi STC, in a movement that Sumar has openly called for.
As the CEO of Criteria Caixa, Ángel Simón, said a few days ago in an interview in La Vanguardia, replacing the funds that want to leave Naturgy “is a complex issue”: It is a “strategic company for the country, for the Government, the one now and the one that may come, and also for reference and historical partners like us. But we will find the solution.”
The third energy company with public participation that received the most aid in 2023, with 66.2 million, is the Portuguese EdP, in which the Portuguese State had to sell its last package of shares in 2013 due to the demand for the Troika’s rescue. In the shareholding of this company, which is the fourth largest Spanish electricity distributor and one of the five dominant operators in the sector, the Chinese state-owned Three Gorges stands out (21.08%), along with a large Spanish fortune, the Masaveu family (6. 8%), and again, the Norwegian Norges Bank (5%).
Next, with 60.7 million in subsidies in 2023, is Repsol, the largest Spanish oil company, the fifth largest electricity operator and the energy company most affected by the extraordinary tax on the sector that has just declined due to the refusal of Junts and the PNV to extend it. “Fortunately, the problem is over,” its CEO, Josu Jon Imaz, said on Thursday. The oil company, whose privatization was completed by José María Aznar’s government in 1997, currently only has two significant shareholders: the investment giant Blackrock (6.2%) and Norges Bank (5%). This year, Repsol has entered into negotiations with the Saudi state giant Aramco to give it entry into its renewable energy subsidiary, valued at around 6 billion.
And after Repsol, with another 60.5 million in public aid in 2023, is the second Spanish oil company, Cepsa, recently renamed Moeve to illustrate its green turn. The historic company had also conditioned a few days ago its multi-million dollar investment in the so-called Andalusian Hydrogen Valley (with million-dollar public subsidies) to the future of that tax. The largest shareholder of Moeve (63%) is the emirate of Abu Dhabi through Mubadala, which in 2021 and 2022 distributed dividends of 1,400 million from Cepsa together with its partner, the Carlyle fund, taking advantage of the oil company’s record profits and after the sale of half of its Exploration and Production assets.
Mubadala also has a small stake in Enagás, owner of the gas pipeline network, now focused on the development of green hydrogen, and which in 2023 received 18.3 million in public aid, according to Treasury data. Enagás is one of the few energy companies in which the Spanish State has a presence, with 5% of the capital through SEPI. The public holding company is the only shareholder that does not have its political rights limited in the gas operator.
Another notable name is Endesa. The former state electricity company privatized in 1997, together with its parent company, the Italian semi-public electricity company Enel, received 58.3 million in public aid from the Spanish Administration last year.
The list of energy companies with foreign public capital that received million-dollar public subsidies in 2023 is completed with the Reganosa regasification plant (17.9 million), owned by the Xunta de Galicia (59.64%) and Sonatrach (11.76%); the Norwegian state electricity company Statkraft (12.355 million) and the French company Engie (2.42 million).
Basquevolt received another 27.67 million in subsidies, a public-private initiative promoted by the Basque Government in which Iberdrola, CIE Automotive and Enagás also participate; and Biscay Marine Energy Platform, owned by the Basque Energy Agency (75%) and the Institute for Energy Diversification and Saving (IDAE), with 2.63 million.
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