Good morning, ladies and gentlemen. Welcome to this NRS earnings call for the first June. Our earnings were published this morning before the market opened, and the figures are already available on our website, www.energas.es. Arturo Gonzalez, Chief Executive Officer of Energas, will be leading this call, which should take about twenty minutes, his presentation, after which we will start a Q and A, in which we will try and answer your questions in as much detail as possible. Thank you very much for your attention.
I'm giving the floor now to Arturo Gonzalo. Good morning, ladies and gentlemen, and thank you very much for your attention. I'd like to welcome you to this earnings presentation for the first semester twenty twenty five. And here with me are our CFO, Luis Romero our Board Secretary and COO, Diego Triglio our Chief Officer for Communications, Institutional and Investor Relations, Felisa Martin our Head of Investor Relations, Tessa Garcia and the Head of Management, Control and Business Analysis, Natalia Morajil. I will begin my presentation with the main milestones in the implementation of our strategic plan during the semester.
And then I will go into further detail behind the headline figures of our financial performance, which is completely in line with our expectations for the year as a whole and in fact, better than expected given the capital gains booked in this semester, which I'll describe in detail later. Finally, I'll go over the progress we've achieved in our ESG commitments and our year end targets, and I'll wrap up with a few conclusions. We are implementing the 2025, 2030 strategy update as scheduled. And in these months, we have made some significant progress along its three main lines of action. Along the first line, supply security for Spain and Europe, during this semester, we have unquestionably demonstrated the crucial role of gas infrastructures in guaranteeing the security of our energy system.
The gas system made a decisive contribution to getting Spain back to normal after the electricity outage we had last April 28, guaranteeing power again to all consumers and in particular to combine cycle plants, which went from producing approximately 5% of electricity in Spain to 49% during some of the critical hours of the outage for the entire country. This reflects just how strategic gas infrastructures are. In the short and the medium term, they will continue to play an essential role in serving electricity generation peaks and contributing to the energy transition just as the new green molecule infrastructures will. Total demand for natural gas in Spain rose 5.6% in the first June. Including exports, increase was 7.6%.
And the reasons behind this number are a 41.2% increase in gas demand for electricity generation, a 24.1% increase in total gas exports in the first semester, particularly the 98.2% increase in gas exported to France is behind this figure, which again demonstrates that gas infrastructures are critical not just for supply security in Spain but also for the rest of Europe. The Spanish gas system continues to stand out, thanks to its tremendous flexibility. So far in 2025, we have received LNG and natural gas from 14 different points of origin. Spain's underground storage facilities are currently at above 75% capacity, exceeding the required 64% minimum established by the European Commission for July 2025. Also, our gas system has continued to make an outstanding contribution to the decarbonization of key sectors in our economy such as maritime shipping.
In this quarter, G and L earmarked for bunkering grew 30%. Second line of action is the control of our operating and financial expenses through our efficiency plan. We've continued to hold core operating expenses in check with no increase versus the same period of last year, meeting our target not to let their annual compound growth rise above 1.5% from 2024 to 2026. Our financial income has also improved up to 46% in the year with a reduction in the financial cost of gross debt of 2.2%. In the third area of our strategic plan, green hydrogen is making tremendous strides both in Europe and in Spain.
The European Union has taken highly significant steps in this direction. A very relevant milestone took place last week. The European Commission presented its draft community budget for twenty twenty eight, two thousand and thirty four with a fivefold increase in investments infrastructures such as the hydrogen corridors and networks. The new multi annual financial framework increases the funding from €6,000,000,000 to nearly €30,000,000,000 for the CEF for the next budget period, with a goal, as pointed out by the President of the European Commission, Mrs. Von der Leyen, reinforcing energy independence and accelerating the transition to clean energy in Europe.
Moreover, last July 8, the committee the commission adopted the delegated act defining the official methodology for calculating greenhouse gas emissions from hydrogen and low carbon gases, which will come into force once it goes through the consultation process through parliament and council and once it is published. With these actions, Europe will have a comprehensive regulatory framework for hydrogen, offering certainty and once again demonstrating its commitment with the creation of a European market for this kind of vector. In this sense, the European Commission has also launched its hydrogen mechanism to connect supply and demand for hydrogen and its derivatives and to support the development of the infrastructure. All EU member states are taking significant steps. For instance, the German government has just published for public consultation its hydrogen acceleration draft bill, deeming hydrogen projects to be of overriding public interest and underlying its contribution to national security.
And last week, the German energy regulator, BNETSA, announced a fixed tariff for the use of the country's core hydrogen network. Green hydrogen also got very solid financial support from Europe and its member states. Between January and June, the European Commission has allocated 1,240,000,000 for funding hydrogen development. Of this figure, $992,000,000 went to the second round of the European Hydrogen Bank auction, which has provided a very precise snapshot of the level of maturity of renewable hydrogen in Europe. As in the first round, the message of the second round is very clear.
Spain is the most competitive country in Europe for green hydrogen production with the lowest average production price, 5.5 per kilogram. And it's also the country with the largest number of projects presented 36 out of 61 submissions and awarded eight out of 15. Also the one with the greatest capacity for electrolysis and production and the country that has received the most funding. The auction has also made another message clear. In order to connect hydrogen projects, infrastructures are essential.
And 64% of the projects submitted for the second auction of the European Hydrogen Bank require pipeline infrastructure with an average length of three eighty four kilometers per project. Equally relevant is the fact that 38% of the projects have a total or partial direct renewable generation connection to the electrolyzers without going through the grid. And Spain is moving the same direction as the European Union, and it's consolidating its leadership in the development of renewable hydrogen in Europe. The Spanish government has approved an additional €377,000,000 for another three hydrogen projects that were submitted to the auction, but which were not shortlisted by the European Hydrogen Bank since it had exhausted its budget. Moreover, in the regulatory context, the Ministry for Environmental Transition and the Demographic Challenge has initiated the partial transposition of the third renewable energy directive for transport.
And last July 3, it started public consultations for its draft Royal Decree for Fostering the Development of Renewable Fuels with targets to meet the 16.5% reduction in emissions established by the National Energy Plan for the transportation sector in 2030 and goals for the consumption of renewable fuels of non biological origin or RFNBOs, fundamentally hydrogen derivatives. Spain is becoming increasingly ambitious, increasing minimum 2030 demand for non biological fuels for transportation from the EU threshold of 1% to 2.5%. Additionally, it has defined a 1.5% target for the intermediate use of these fuels, renewable, non biological fuels in refineries. We estimate that this would be equivalent to a minimum annual consumption of approximately or a minimum regulatory demand of approximately 180,000 tons of hydrogen green hydrogen in 02/1930. This amount could more than double to over 420,000 tons of hydrogen if our FNBOs over and above the 12.5% threshold established for the transport sector were also to cover the 5.5% advanced biofuel and biogas quota.
Energas' strategy fits neatly into that of both Europe and Spain. We are moving forward in the rollout of our European projects of common interest, PCIs, for hydrogen infrastructures. At great speed, we have already signed the grant agreements with the CINEA in order to receive €75,800,000 for the studies and engineering phase of the backbone network and associated storage and the Barmar and Celsa interconnections for the H2 Med corridor. As for the Spanish backbone hydrogen network, we've continued to take steps towards a final investment decision by 2027. We're designing a conceptual public participation plan for a network of 2,600 kilometers in length following its presentation in April at the National Hydrogen Center in Puertollano.
The plan has the backing of the Ministry for Environmental Transition as well as from regional governments. I've been in contact with the presidents of all 13 autonomous communities in Spain, which will be crossed by the network to report on the deployment of the plan to them, and we've already explained the project in over 100 municipalities in Castilla Mancia, Extremadura, Andalusia and Cantabria. We have also awarded the engineering both basic and detailed engineering for the pipelines as well as for the three compression stations. And we have started work on the basic engineering. As for the North one PCI, for the development of underground hydrogen storage facilities in Cantabria.
During the semester, we've signed a partnership agreement with our chemical group partner, Solvay, who operate the mining concession where the infrastructure will be located. And as far as H2 Med, it continues to grow as the most mature hydrogen quarter in Europe. Perhaps the most relevant milestone in this semester was June 25, when we set up the SPV for the Barmar interconnection, which provides a clear cut business structure for the project. The shareholding of this joint venture will be evenly divided between Spain and France. Energas will hold 50%, and the French operators, Netran and Tarega, will hold 33.316.7%, respectively.
The new company's CEO will be Enagas' current executive, Francisco de la Flor. European Commission support for the H2 Med is decisive. In the last quarter, the Executive Vice President for the Clean, Just and Competitive Transition, Teresa Rivera, has visited the site of the Bar Mar plant and its compression station in Barcelona and has also hosted the five development partners for H2MER in Brussels to hear about the latest developments in the project. On the technical side, we've already awarded the feasibility study for the corridor lending in Barcelona and the set of geophysical studies for Barmar. We've also launched the tender for Barmar's pre FEED engineering and basic engineering pipelines and the two compression stations on the interconnections.
These infrastructures, and specifically the Spanish core network, will be essential to connect the hydrogen production projects with the demand centers. The Spanish government, through its recovery transformation and resilience plan and its addenda, has already awarded €3,150,000,000 in grants to over 100 renewable hydrogen production projects with a total of about four gigawatts. And on top of that, the European Hydrogen Bank has granted an additional €50,000,000 to Spanish projects for hydrogen production. All in all, these projects add up to an installed electrolysis capacity of approximately 4.4 gigawatts. In summary, the progress that we're making in Enagas fits neatly with the European Union's strategic vision, promoting renewable hydrogen as a pillar for three of its key priorities: strategic autonomy, competitiveness and decarbonization.
For decarbonization, the drive to boost green hydrogen stems from the belief that urgent action is required to tackle climate change as shown by data and scientific evidence. 2024 was the first year in which global warming rose above the 1.5 degrees above pre industrial levels that the Paris Accord set for 02/1950. And extreme climate events are becoming increasingly frequent. In just five years, we will have used up the carbon allowances budgeted for 2050 if we continue at this rate. The European Commission has put out clear signals that its green agenda does not just remain as it is, but has actually upped the ante this month.
It raised the greenhouse gas emission targets from a 90% reduction to a 90% reduction by 02/1940. So decarbonization cannot be delayed. Before going through our financial performance, I'd like to briefly refer to two other especially relevant events that have taken place this semester. First is regulation. The CNMC has published on July 4 its paper on the methodology for calculating the financial remuneration on electricity transmission and distribution and natural gas reclassification, transmission and distribution methodology for public consultation.
The tariffs resulting from using this methodology for the gas system of approximately 6.4% are very close but do not reach the minimum threshold that Energas used for its financial projections from 2027 onwards. The regulator's proposal incorporates elements that are clearly positive. Nevertheless, Enagas will be presenting its comments and feedback before the established deadline of August 4, underlining the fact that the methodology to be applied to existing assets must be the same for gas and electricity and that no correction factor is justified for the cost of debt since both kinds of assets have to be refinanced in the same capital markets with similar prices. After they review all the feedback, it is expected that the CNMC will publish the final methodology in the fourth quarter of the year. As for the specific CNMC public consultation on the guidelines for the natural gas regulatory framework for twenty twenty seven, two thousand and thirty two, they're also very much in line with Energas' regulatory vision in its twenty twenty five, two thousand and thirty strategic update.
The CNMC has emphasized that natural gas will continue to play an essential role in supply security, and that the remuneration methodology must be adapted to promote the penetration of renewable gases and that the regulatory framework must provide incentives for gas assets and establish sustainability and efficiency requirements. In this sense, it's important to point out that Energas is the most efficient TSO in Europe according to the Council of Europe's Energy Regulators. And on the spaces of gas infrastructures to continue to ensure security of energy supply, it is vital that future regulation consider not just the financial remuneration rate I've just mentioned, but also other components such as cost updates and incentives for supply continuity and the sustainability of infrastructures. And this should lead to a regulatory framework that will guarantee a fair return after taxes of between 6.57%, in line with that of other European operators, which will enable us to continue to make an essential contribution to supply security and decarbonization. And the second topic I'd like to refer to is the arbitration on the Gaso Ductos Sur Peruano, GSP.
Last May 23, the tiari once again found in favor of Enagas rectifying the amount awarded. The total amount, which Peru will have to pay Enagas, is $3.00 $2,000,000 Once the rectification appeal is resolved, the figure has been updated using prudent fair value criteria on the credit rights, generating net capital gains of €41,200,000 which is the figure we've included in these financial statements. Subsequently, on June 2, the CRA lodged the request for annulment of the award filed by the Republic Of Peru, which meant it was automatically suspended on a provisional basis. And last week, the CRA Secretary General proposed the ad hoc committee members that will rule on this matter, which is an important step towards the resolution of this case. From the moment we were notified of the award until the provisional stay on its execution, we've optimized our cash and bank balances in Peru and we currently hold deposits in financial institutions in Peru for a total of $72,000,000 which exceeds the quantity of the collateral assigned to the Peruvian authorities in compliance with provisions of Law 3,070 three-seven and its regulations.
Likewise, we're still waiting for the CRA to rule on the second arbitration case regarding Transportado de Gas de Peru or TGP. Let me now review the most relevant figures in our financial performance the first semester of the year. Our EBITDA was €329,300,000 on track with our year end target. After tax profit, 06/30/2025 was €176,000,000 This includes the capital gains from the rectification of the GSP award in Peru and the sale of our stake in the So To La Marina Station in Mexico. Recurrent profit without one offs was €129,800,000 Apart from these two transactions, there are four factors driving the performance we're reporting for the first half of the year: the impact of the regulatory framework the effectiveness of our efficiency plan, which has enabled us to keep our core operating expenses under control in line with the targets of our strategy plan, better financial returns connected to the significant reduction in the company's debt down to €2,290,000,000 Our fixed rate debt now represents over 80% of the total.
The rating agencies, Standard and Poor's and Fitch have ratified Energas' BBB plus rating with a stable outlook. We have an FFO to net debt ratio of 28.3%, and our liquidity position is extraordinarily comfortable with €2,730,000,000 And fourthly, our subsidiaries have contributed €80,100,000 to our EBITDA, which reflects their excellent performance. Keep in mind that in 2024, we sold our stake in Tallgrass Energy and in the Sotola Marina station. TAP continues to be vital for supply security in Europe. And since it started operations, it has transported over 45 BCMs of natural gas to the continent.
The company continues to work on the 1.2 BCM expansion scheduled for January 2026, together with our consortium partners, Hansi Energi Hub, we have continued construction of the two LNG storage tanks of 240,000 cubic meters each for in the Stade plant in Germany, tanks which will be set up for renewable ammonia, reinforcing the flexibility and sustainability of that terminal. DESFA has received an award of €5,400,000 in CF funds for the technical environmental studies for the PCI H2 DREA for the Greek section of the Southeast European Hydrogen Corridor. Meanwhile, Energaso Nuevoble's projects with Repsol, Mohebe and CIP have received over 50% of the grants awarded under the latest Hydrogen Valleys program of the Ministry for Environmental Transition and Demographic Challenge of around €650,000,000 And finally, in the field of sustainable mobility, Scale Green Energy has signed a grant agreement with the CINEA to develop six hydrogen refueling stations within the ECO Hainet project. In this semester, we've also continued to meet our ESG commitments on all three lines: environmental, social and corporate governance. And thanks to this, as you can see in this presentation, we have maintained our leadership positions in the key sustainability indexes globally.
And just to mention some of recent examples, we've been ranked on the A list in the CDP supplier engagement leader for our ongoing commitment with sustainability and the strategic focus, which we apply to involve our suppliers in the fight against climate change. Likewise,
Anagas has been appointed the best company in the world in gender equality by Equileap About complying with our objectives for 2025, with the results we bring to you today, we meet the expectations as we announced at the beginning of the year and if we particularly if we consider nonrecurring deals. I will remind you that this presentation involves profit after tax of €265,000,000 and EBITDA of €670,000,000 a year and net debt of approximately €2,400,000,000 and maintaining our funds from operations to net debt ratio above 15% remains compatible with our BBB plus credit ratings. We have a sound balance sheet, which along with prudent regulatory assumptions is or can be matched with our priority to provide attractive sustainable returns to our shareholders and maintaining our dividend payout policy of €1 per share beyond 2026. So I will wrap this up with six conclusions. Our half year performance shows a high degree of success in rolling out the twenty twenty fivetwo thousand and thirty strategy update as presented in February.
And Energas is clearly well positioned for the future with a sound balance sheet compatible with its sustainable dividend policy. Gas infrastructures play a critical role in guaranteeing the security of the power system and to enable Spain and Europe to transition to more sustainable energy. As published by the CNMC, the twenty twenty seven-two thousand and thirty two regulatory framework needs to establish a fair return on investment to motivate long term sustainability. Decarbonization requires renewable electrons and also renewable molecules. Europe and Spain are moving fast towards a full take up of green hydrogen with sound institutional, financial and regulatory support.
Decarbonization must be competitive. And on this matter, Spain has a lot to say. No other country in Europe has the same level of mature market or such lively competition for producing green hydrogen. Hydrogen infrastructures are vital to take advantage of this potential, and we are rolling out our investment plan as announced in the strategy update with significant progress both in the core Spanish hydrogen network and in the European H2 Med corridor. And last but not least, Europe has reaffirmed its commitment to decarbonization, disproving rumors of a hypothetical slowdown in the fight against climate change.
This is completely in line with Energas' strategy. Scientific evidence clearly shows that we cannot afford to bring down our level of ambition. Decarbonization is urgent and at the same time, it is a duty and an opportunity for Europe, for Spain and for Energas. Thank you very much. Now if you wish, we will be glad to take your questions.
We're starting the Q and A period. Please go ahead. Thank you. Ladies and gentlemen, the question and answer period is open. Thank you.
Our first question comes from Javier Suarez from Mediobanca. Please go ahead, Javier. Yes, hello and good day everyone. Thank you for that presentation. I have two or three questions.
The first one is about the regulatory bill, the bill for regulation published early this year by the CNMC. And I would like to understand the rationale Energas will provide to enhance remuneration. In your presentation, you state that the remuneration calculation for the gas network would be approximately 6.4% and you consider that this payout should rise to 6.5% or 7%. So what factors should be improved according to you and the regulation to shift that regulation a little bit higher? Also, I understand that when you talk about this regulation, you're talking about existing assets, but not investments proposed to create a next novel hydrogen network.
So my second question is, what should be the remuneration spread or margin for those assets connected to hydrogen? Well, that was the first question. The second one is about adjustment to GSP compensation. I understand that in calculating the net present value, you also adjusted the discount rate and the period during which you consider you will get flat GSP compensation. Could you provide further details to understand the way you calculated these figures and to understand how much the reception of that money could take.
And the third one is about the Spanish Hydrogen Bank. Operations are expected to start in early two thousand and thirty. So could the CEO please give us an update on that starting point? Because it feels a tiny bit too ambitious today. So how can you give us reassurance that this schedule could be maintained or delayed beyond 02/1930?
Thank you. Well, thank you, Javier, for that question. Good day to you. First of all, about the proposed rate of financial retribution or remuneration published by the CNMC, Their proposal already includes a specific value for the electric industry, which is 6.44. And although they offer detailed methodology for gas, they do not provide the final data for the gas system vis a vis the TRC.
So we applied the same methodology and we get 6.4%, slightly below the remuneration of the power industry and slightly below the minimum we consider necessary of 6.5% as we show in our forecasts. The key element for us, Javier, in the TRF methodology published by the CNMC, we read about deducting ratio applying on the cost of debt in the gas system for assets considered BAU, business as usual. With this reduction is about 2.5% of the cost of debt annually. And this reducing coefficient is increased with the rationale that the gas system needs to develop lower CapEx, lower refinancing needs and therefore, lower cost of refunding. We believe that this does not necessarily match the truth.
The existing assets of the gas and power system were financed in the same capital markets, and we'll have to continue to refinance in the same markets. Lower refinancing needs are do not represent a lower cost of debt, not by any stretch. So we believe it's a sound rationale to say that such reduction ratio or coefficient should not exist as it introduces an unjustified difference between the cost of debt in the electricity system and in the gas system for existing assets for present assets. For newly built assets in the future, upon deploying renewable gas systems, we will have to deploy the same incentives as for deploying the electric network in the future. And this is a part of all the forecasts made by the CNMC.
For future natural gas assets, an incentive will be required. How much? Well, we believe that those assets will require a remuneration rate ranging between 7.58%. We need to think that other remuneration elements in the gas system, allowing an increase in total post tax profit to 6.5 or 7% will not be present in new renewable gases assets, particularly green hydrogen. So we will need a TRF with a delta that will place us between seven point five percent and eight percent.
As for GSP and the adjustments we introduced in our plan, obviously, we have been very cautious and prudent. We do realize that there are new court initiatives like the appeal for annulment admitted to court by the CIADI Secretariat as established in their regulation. We believe that this might lead to a delay of up to one year. That means late two thousand and thirty for the collection of the right of credit established or ruled by the arbitration court. That leads us to a prudent value of the recoverable amount of approximately $60,000,000 after taxes, which converted to euros would be 41.2.
As for the Backbone Network, we maintain our intention and our schedule for the Backbone Network to be commissioned in 02/1930, and we're doing we're taking every step to meet that deadline. We're conducting all the studies, engineering, consultations. We are counting on the involvement of the Spanish government and local administrations. We are working on the planning for the entire procurement process for the backbone network. We're launching our SEIs to all suppliers.
We are certifying vendors and suppliers, and we're doing everything we can for the plant to be commissioned in time. It is certainly a significant challenge, I admit it, but we continue to maintain our deadline and because we are convinced we can meet our promise to commission in 02/1930. Do we witness delays in Europe? I would say yes, but those are very limited. The European directive states that the regulated hydrogen system in Europe should be enforced by 02/1933.
And we can see that member states are setting up deadlines for their hydrogen infrastructures in a range that goes between 2030 and 02/1932. So maybe not for the backbone, but for other elements of the European structure, there might be a slight delay of, say, two to three years considering the actual deadline established by the directive in view of the projects and initiatives launched and commitments acquired by different member states. I would highlight Germany, for instance. Germany is bound to be the heart of the European hydrogen network, not only because of geographic reasons, but also because most of the consumption is located in that country. As I said during my presentation, Germany already has a full legal framework for hydrogen.
Even tariffs have been approved. And we know that the hydrogen network in Germany will be launched this year and will be completed by 02/1930. So Spanish backbone and European infrastructures might take until 02/1932, but in any case, compatible with the directive's deadline of 02/1933. Thank you, Javier. Thank you, Javier.
Next question? The next question comes from Javier Garido from JPMorgan. Please go ahead. Hello, good day, and thank you very much for taking our questions. My first question is about demand for hydrogen.
You have explained in detail the development coming ahead in law and regulation and backbone networks seem to be moving ahead. But can you tell us about the expected evolution of hydrogen demand and the apparent lack of interest in signing new contracts. Is it a concern for you to see that the future contract hydrogen market is not taking off? Are you at all worried about that? And the second question is about Spain.
When do you expect those 4.4 gigawatts of electrolyzing capability receiving public funding in Spain to be ready? And third, pretty much related to the second, what do you think the total demand will be for green hydrogen in 2030 in Spain, particularly after the progress brought by the transposition of the Net three directive in Spain? Thank you. And thank you, Javier. About the forecast for green hydrogen demand in Europe, allow me to introduce a nuance here.
I wouldn't call it a lack of interest in contracts. I would say that large hydrogen consumers are trying to get the maximum visibility possible on the regulation framework and the legal framework. And this requires the transposition of the Red III directive as it will be the first big driver to create regulatory demand in Europe. And we're just beginning to see how the transposition takes place. I would say that even exceeding the deadlines because the Red Three directive should have been implemented already or transposed, but these things take time and all member states are showing some degree of delay.
As I have said in more than one occasion, the use of gray hydrogen in Spain and industry is approximately six fifty tons. The PENEIC, the national plan establishing a target of up to 74% of the present demand to be turned to green hydrogen rather than gray, plus our new obligations in the transportation industry that go beyond the hydrogen being used for land transportation fuels. We have seen that just by transposing the directive for transportation, the demand stands between one hundred and eighty and two hundred tons of mandatory demand to continue to maintain the levels of transportation in Spain. And we're still yet to transpose the directive on the industry side, which will probably be more complex as it pertains to different ministries. Plus there are other drivers already on the way like the refuel EU aviation this year or as of this year, CRNBO is supposed to be included in air fuel and the Fuel EU maritime doing the same thing for sea transportation.
So the numbers we get while studying market data in our call for interest, we may have a demand of approximately 1,000,000 tons of green hydrogen around 02/1930. So I wouldn't say demand is not taking off. I would say that uptakers are waiting for maximum visibility. And also, Javier, they want visibility on the infrastructure because in the absence of infrastructure, there can be no market. Without infrastructure, many contracts cannot stand.
One thing I find very interesting is the contract signed by Total Energies with RWE to provide 45,000 tons of hydrogen per year produced by RWE and carried along 600 kilometers of backbone network to supply the Leuna refinery in Germany for Total. So there's no contract without backbone network. There's no hydrogen market without a backbone network. And big uptakers will not be able to meet the European demand to integrate green hydrogen into their projects. So this element is also a headwind.
The higher the visibility on infrastructure timing, the faster this demand will, as you say, take off, which requires regulatory and infrastructure availability visibility. About the 4.4 kilowatts, Javier, I do not have the details with me, but considering the deadlines established by the regulation of the European Hydrogen Bank for the commissioning of projects After signing the grant agreements, my estimate is that those 4.4 gigawatts should be commissioned approximately in 02/1930. I believe this was a rounded up answer on total hydrogen demand by 2030 and the transposition of the directive. Beyond my answer, I would like to send out an optimistic message about the development of hydrogen. We are immersed in a project that has no turning back.
It is gaining momentum. Member states make it clear with actions. Over €3,000,000 have been granted to hydrogen production by the Spanish administration, and that is only during the first half of the year, over €1,000,000,000 granted by the EU. And the same situation is repeated in other European countries. So hydrogen is here.
It is happening. And well, uptakers need to have greater visibility, which is becoming more and more specific in recent months. Thank you. Thank you, Mr. CEO.
Please let's go ahead with the next question. The next question comes from Fernando La Fuente from Alantra. Please go ahead. Hello. Good morning, everyone, and thank you for the presentation.
My question is about investment in the backbone network. Is there any sort of update on your estimate? Are your estimates the same as they were six months ago? And in that context and those small delays you were talking about, you made a comment on the sustainability of euros and the dividend beyond $20.26. So what are your numbers on or your estimates for investments in '27, 2028?
And how sustainable it would be to confirm the sustainability of euros of the euro beyond 2026? Thank you. Good day, Fernando. Thank you for your question. Both on the side of investments on hydrogen projects and on dividend payout beyond 2026, we do stand in the same position we stood when we provided the strategy update in February.
So on investment on hydrogen projects. In gross numbers, Anagases is 4,400,000,000.0 while discounting public funding, which provides a net investment of €3,140,000,000 We do not have any new cost estimates. The data we get as in basic and detailed engineering move ahead do confirm these forecast numbers. We are moving ahead on basic and detailed engineering for the entire line structure. And also in basic extended basic engineering for compression stations, we're also moving ahead.
The detailed engineering for these stations will have to wait until the compressors are selected when the time comes. But all the present data confirm our initial estimate. So as engineering moves ahead and the final maps are traced, perhaps we can make a more accurate estimate. All other financial magnitudes for the company stay or remain in line with our numbers for February, which comes to reinforce Enagas' commitment to the sustainability of our payout of €1 per share beyond 2026. So these first elements we hear from the new regulation period tend to confirm our commitment and our forecast.
I will still ask Luis, nonetheless, to remind you how our 40% or 45% payout of the FCO is maintained considering the updated forecasts we have. Thank you, Fernando. Yes. Good morning, Fernando. I would say the first thing we need to make clear is that in the past eighteen months, Energas has made a significant effort to reinforce its balance sheet.
If we compare this to the strategy plan we communicated in 2022, the company will be closing 2026 with a net debt $2,000,000,000 under expectations, meaning that the new regulation period twenty seven to thirty two will have a new net debt provision of approximately 20% to 21% that is nearly 600 basis points above the requirements of rating agencies, which gives us a huge extra leverage capability. And beyond that, I would say that the expected flow generation for the period '27 assumptions mentioned by Arturo will yield fund fund operations that will be stable around €340,000,000 to which we should add full visibility flows in connection with international flows that would lead us to 170,000,000 to €180,000,000 And on top of that, we would have an average fund fund of approximately €60,000,000 In total, that would be €580,000,000 fund fund to tackle the hydrogen CapEx of approximately €3,100,000,000 for the same period and also tackled a €1 per share dividend, which is approximately €260,000,000 That's a payout of 40% to 45%. And I would say that this fund is fully visible with full support of prudent forecasts following the guidelines established by the ministry and the regulator for the new framework. Thank you.
Thank
you very much for that question, Fernando. Let's move on to the next question. The next question is from Ignacio Domenic from JB Capital. Please go ahead. Yes, good morning.
Thank you for the presentation and for answering my questions. And the first question is about the other components in the remuneration, which should be published by the July. I'd like to hear your views on the remuneration for work progress, which would be particularly relevant for Enagas, whether your view has changed there. And as for the regulatory review, I'd also like to hear your opinions on if this review is not favorable, would you consider revising your investment objectives from 2027 onwards? And my next question is about GSP so on.
How much progress have you made in your talks with the Peruvian government after the formal ruling to suspend the award because of the appeal from the Peruvian government. And as for dividend repatriation from GST, I was wondering whether you are now in a better position to rotate that asset. Are you in talks with potential investors to divest? Thank you. Thank you very much for those questions.
Ignacio, good morning. As for the other components of the remuneration for the gas system for the period twenty seven-thirty two, I can tell you what's in the regulatory time line and the letters from the CNMC for this year. So the plan by the CNMC is to have in October the publication for consultation of the draft letters for the remuneration components for regasification, transport and storage infrastructures and for the feed in tariffs for the next period. And so their draft, their proposal will be published for consultation in October. So we'll see whether that actually happens.
It's really important, of course, for us to know that as soon as possible. But here, I need to point out that I'm referring to the regulatory proposal for gas, not for hydrogen yet. Why? Because the CNMC doesn't have those responsibilities formally under the law for hydrogen. Those responsibilities under the law are assigned to the future CNE and the project for the creation of the CNE, which is currently going through Parliament.
And that's why the CNMC hasn't yet announced the time line for hydrogen regulation. It's only included those elements that are connected with hydrogen, but also with the rest of the gas system. For example, the regulations on connections and access, just like they have for biomethane. So we're waiting for the law to assign the hydrogen regulation responsibilities either to the CNE if it's established in the next months or to the CNMC. But that those responsibilities haven't yet been legally assigned.
As for work in progress, that's a remuneration and regulatory concept, is key for hydrogen because there, of course, we're speaking about our new asset base and greenfield investments. And in order to be able to finance those before they are commissioned, we need to have that work in progress consideration, which is a key element for hydrogen, but not for the rest of the gas system. And we've already done some prudent regulatory estimations. And I have to say, Ignacio, that events have proven us right the most part, and I hope they will do so completely for the TRF after the public consultation, but also in the preliminary consultations on the new remuneration period for the gas system. The approach for the challenges faced by the gas system, which the CNMC has presented and the questions raised and the challenges that they've identified and the aspects to be taken into account, I would say, as we've shared in the presentation, with some actual quotes from that prior consultation from the CNMC are very much in line with what we've been proposing and demanding prudently from Enagas.
And so I think we think that it's a very good reference for our own financial forecasts and our strategic update. So we don't really see the need to revise these forecasts or these planned investments. As for GSP and TGP, we are, of course, always willing to talk and negotiate with the Peruvian government, and we do so regularly and repeatedly. So far, the Peruvian government has preferred to continue to follow the arbitration route and particularly this appeal, which I have to remind you that the decision of the FCRI on the effect that this appeal has on the award in the sense of a temporary suspension is something we believe will be resolved pretty quickly. As I said, the CRE notified us of the members of the ad hoc committee, which will be deciding on the appeal.
And the first task of this ad hoc committee will be to rule on the suspension of the award. We believe that pretty quickly in the next few months, The award will be resumed and we will therefore act accordingly. Whether this puts us in a better position to rotate the TGP asset. I've always said that our priority in Peru is to complete or conclude the litigations with the Peruvian government, but at the same time to make clear that TGP is not a strategic asset for Energas long term. But in any case, for this point, we cannot proceed until we resolve our litigation with the Peruvian government as we have done through the different arbitration procedures, which have ruled in our favor and have even improved on the award in the May decision with three zero two million dollars in our credit rates.
So that's our position. When the time comes, of course, we will think about rotating that asset because it's true that it's not a long term strategic asset for us. Thank you, Ignacio. Thank you very much, Ignacio. Let's hear the next question.
Thank you. There are no more questions in Spanish. So let's now switch to the English questions.
Thank you. We'll now take any questions from the English side. On the English side, so I will hand back to management.
We've received two questions online. First one is from Arthur Sidbourne from Morgan Stanley.
The remuneration rate for networks to improve from the initial proposal to the final decision by the end of the year. The second question is, have you already had early discussions on the evolution of regulatory parameters for gas, more broadly, in particular, for the RCS?
Thank you for your questions, Arthur. Good morning. Regarding the remuneration rate, we have set a 6.5% value in our financial projections and this is the minimum rate we are aiming at. We think this is very, very reasonable. It should go above 6.5.
We think that it makes a lot of sense to bring that value nearer 7% than 6.5%. But being prudent and conservative, we've set a 6.5% value for the remuneration rate for the gas system, and that's the minimum value we are aiming at. Above that, I would be speculating and I like to be as clear and as prudent as possible. Regarding the rest of the remuneration elements for the gas system, we maintain an open discussion with the CNMC. And I think we are very much aligned in how we see the next remuneration period.
And Arthur, I really let me suggest to go back to this preliminary public consultation text published by the CNMC for the next gas system remuneration period. I think it's very clear the CNMC when sets the importance of ensuring the sustainability and the security of supply of the gas system to back up the electricity system to state clearly that adequate remuneration is key for the gas system continuing to support the energy transition. So, really, Arthur, I think that, that public consultation initial text shows very clearly that our assumptions are, to a large degree, shared by the CNMC and, in particular, the need of instruments to ensure that the gas system continues providing backup and support to the electricity system. I think I don't know if this will be the RCS with the same name or a similar instrument to ensure this critical role of the gas system to support the electricity system as we saw last April 28. Thank you.
There aren't any additional questions unless someone has come up with one in either English or Spanish this last minute. Well, it seems there are no further questions. So thank you very much, everyone, for following this call. We are, as always, at your disposal in the Investor Relations department if you have any additional comments or questions on our call. Thank you.