Iberdrola reveals 'extraordinary opportunity behind surprise $6bn capital raise

Utility giant Iberdrola unveiled plans for a €5bn ($5.9bn) capital raise to grab a “unique opportunity” for investment in power grids.

The Spanish group – one of the world’s biggest renewable energy operators – will issue new shares as well as sell existing assets to fund expansion of its networks business, which it had already said would form a bigger part of its plans in future.

Executive chairman Ignacio Galan said the company had a chance to tap into huge opportunities presented by regulatory clarity in Britain and the US if it moves rapidly.

"We need money for an extraordinary thing", said Galan.

Investments in networks will exceed €55bn over the next six years, a 75% increase on the prior period, under the plan, which Iberdrola will detail at its capital markets day in September.

Executive chairman Ignacio Galan said the capital raise would help it “take advantage of historic investment opportunities in electricity grids in the US and UK, accelerating its strategic focus on Networks in countries with high credit ratings and attractive regulation and preserving financial strength and dividend policy.”

The Spanish group aims to tap into what it believes will be a massive global expansion in power networks to support electrification and boost energy security.

Analysts said the capital raise was unexpected and trading in Iberdrola's shares were suspended on the Spanish stock market following the announcement.