[Non-English content ] Good morning, ladies and gentlemen. First of all, we would like to offer a warm welcome to all of you who have joined us for our 2021 first quarter results presentation. Secondly, we wish you a healthy year 2021 for all of you and your families. Now, onto the reason why we are all here, our Q1 results presentation, which will follow our normal format. Firstly, we will begin with an overview of the results and the main developments during the period given by the senior executive team that we usually have with us. Our Chairman and CEO, Mr. Ignacio Galán, Mr. Francisco Martínez Córcoles, Business CEO, and finally, the CFO, Mr. Pepe Sáinz. Following this, we will move on to the Q&A session. I would also like to highlight that we are only going to take questions submitted via the web.
Please ask your question only through our webpage, www.iberdrola.com. Additionally, we expect that today's event will not last more than 60 minutes. Hoping that this presentation will be useful and informative for all of you. Without further ado, I would like to give the floor to our Chairman and CEO, Mr. Ignacio Galán. Thank you very much again. Please, Mr. Galán.
Good morning, everyone, thank you very much for your participation in today's conference call. The results we are presenting today demonstrate our commitment to promote economic recovery and sustainable growth in all our geographies. In the first month of 2021, Iberdrola is performing better than expected despite COVID-19 and its negative effect on economic activity. The key reason for this positive evolution are higher revenues, mostly due to increased demand, more production, new tariff frameworks, higher number of contracts, and better prices. Also for our ongoing effort on operating efficiency, with net operating expenses flat despite the increase in activity. We have also accelerated our investment with all our major projects, most of them in offshore wind, achieving relevant milestones. This is allowing us to contribute to economic recovery.
With close to 6,000 new internal recruits globally in the last 12 months and several dozens of thousands of new jobs created along the supply chain. The integration of PNM Resources of New Mexico and Neoenergia Distribuição Brasília are progressing better than anticipated as well. In the current volatile markets, we maintain FX impact better than expected due to our geographical diversification and our hedging policy. All this has allowed us to offset unexpected negative factors that happened in the first three months, like the COVID-19 impact, as I mentioned, which unfortunately is still affecting some of our markets. Also the impact of major weather events in Spain with Filomena storm and Mexico.
As a result of these factors, in the first quarter of the year, adjusted net profit increased by 12% to EUR 1,082 million. Reported EBITDA reached EUR 2,814 million, up 2%. Excluding COVID and foreign exchange impact, EBITDA grows 12%, showing the group's strong underlying performance. Investment increased by 45% to more than EUR 2.5 billion, confirming the acceleration anticipated in February despite difficult external circumstances. With 8,700 MW of renewable capacity currently under construction and a 65% growth in networks investment. Thanks to these green investments, in January alone, we have incorporated close to 2,500 professionals to our group. We combine growth with an even stronger financial position, as shown by all our solvency ratios and our liquidity to close EUR 17 billion.
Driven by all these factors, after a record year reached in 2020, the board of directors proposed to the annual shareholders meeting a total remuneration of EUR 0.42 per share, 5% increase compared with the previous year. Reported EBITDA, as I mentioned, was up 2% to EUR 2,814 million. Mainly thanks to the good performance of our renewables business, which grew almost 30%. Excluding COVID-19 effect of EUR 65 million and foreign exchange impact with amounts EUR 231 million, adjusted EBITDA grows 12%. Renewables EBITDA reflect the contribution of new operating assets like East Anglia ONE in the U.K., the group's largest offshore wind farm, as you know, up to date. A higher production of existing assets driven by increased availability and load factors, mainly in onshore wind in Europe and in Brazil, and hydropower in Spain.
Growth in networks EBITDA was driven by increasing results in the United States, thanks to the New York rate case approved in November 2020. Additional transmission projects and tariff reviews in Brazil, and expansion of U.K. regulatory asset base. Finally, generation supply was affected negatively by higher electricity prices due to the storms in Spain and Mexico. The contribution of our rated countries to EBITDA, like the United States, U.K., Spain, Germany, Australia, France, reached 81%, reflecting the group's optimal geographical diversification. As mentioned, over the quarter, we have accelerated our investment up to EUR 2,500 million, 45% more than the first quarter 2020, with 92% allocated to renewables and networks. Doing our part to promote the green recovery through the creation of activity and jobs in the communities where we operate.
Networks represent half of the total investment, up to 65%, driven mainly by Brazil, which includes EUR 400 million on the intervention on Enel Distribuição Brasil, Spain, and the United States. Renewables investment increased by 30%, with growth coming mainly from European Union countries, Australia, and the United States. We continue to lead the build-out of new renewables in all our markets. In Spain, since the beginning of 2020, we have installed more capacity than the three next competitors together. We have 8,700 currently under construction. Globally, one third is being built mostly in European countries like Portugal, France, or Germany, as well as Australia, with almost another 30 in the United States, and the remaining 33% mainly in Spain and Brazil.
By technologies, 2,600 MW correspond to offshore wind in Europe and United States, 2,800 MW of solar PV, 2,000 MW of onshore wind, and 1,300 of storage technology, including Tâmega pumped storage hydro facility, as well 150 MW of battery located in Australia, Ireland, and U.K. If we add other secure project, we'll reach 18,750 MW. This mean we have secured already 100% of the capacity for 2021 and 2022, and three quarters of our target for 2025, when we expect to reach 60,000 MW of renewables. We also continue identifying and adding new high-quality project, in our pipeline. We has reached 78,000 MW with expected success rate of more than 60%, in which a balanced mix that include more than 20,000 MW of offshore wind. Over the last 12 months, we have expanded significantly our portfolio in this technology in markets with high growth potential and ambitious target.
In Japan, the country with the largest offshore wind target worldwide, 45,000 MW, we have closed two transactions, creating a hub of more than 3,000 MW of projects. We also reached agreement to gain access to large projects in Sweden and Poland that will mature over the decade. Very recently entered Taiwan's attractive offshore market with two projects of 600 MW each. The country is already preparing auctions to achieve a target of 15,000 MW of offshore wind by 2035. Finally, we closed an agreement to develop the portfolio of 3,000 MW in Ireland. We are already working in the Brazilian market as well. After 40 years working in the offshore wind industry, today, we have a team of high-skilled professionals of 30 different nationalities, fully dedicated to offshore, which in the next month will reach 1,500 people.
In 10 offices across the globe in engineering, construction, and maintenance, with operation coordinated from our core centers in Boston and London, and more recently, also in Tokyo to develop the Asia-Pacific market. We are expanding our presence in a hub approach to combine critical mass and global know-how with a strong local support. All this together with our proven track record of project delivery and our long-term strategic agreement with suppliers. That reinforce Iberdrola's excellent position to lead the development of offshore wind and benefit from the impressive momentum of this technology all over the world. We're going to take full advantage of our expertise as first mover to reach at least 12,000 MW operational by 2030. We already have 1,300 operational in the U.K. and Germany, which contributed close to EUR 100 million EBITDA last year.
Four projects under construction totaling 2,600 MW with that progression according to plan. 500 MW and Saint-Brieuc project in France will be commissioned in 2023, already in construction. In the United States, Vineyard Wind off the coast of Massachusetts will become the first large-scale offshore wind farm in the country. The project completed yesterday all permitting authorization process with a Record of Decision submitted by BOEM, and it has secured its PPA with Massachusetts electric distribution companies. Park City Wind already secured a PPA with the state of Connecticut as well with 100 MW, and is progressing through the permitting and procurement process. Finally, for the Baltic Eagle in Germany, with nearly 500 MW, we closed the selection of main contractors and started the construction of the offshore substation with full commissioning of the wind farm expected by 2024.
Beyond this project already under construction, the auctions announced in the next 18 months will bring new routes to market for our projects in different geographies. We already have 3,600 eligible to compete in auctions that will take place in the United States. In the U.K., 3,100 East Anglia Hub will be ready to participate in the fourth round of allocation Contract for Difference. In Windanker in Germany, the 300-MW project will take part of the next offshore wind auction, with a preferential right for the site. We also have projects to compete in the next three auctions in Japan. Are looking and bidding in processes in France, where Iberdrola has already been pre-qualified up to 1,050 MW in Normandy, Scotland, Poland, Denmark, Ireland, or Taiwan.
Moving to networks, this business take 50% of the group investment with increases in all markets. In United States, the New England Clean Energy Connect transmission project initiated construction last January. The first steel pole had been installed, and works on the DC converter station have started. This high-voltage transmission line to transport zero-carbon hydro generation from Quebec to New England will involve a total investment of almost $1 billion. In New York State, the Rochester Area Reliability Project was fully completed after several years of work. We are increasing transmission and distribution investment following the new rate case closed last November. In Brazil, networks investment almost tripled, driven by the integration of Neoenergia Distribuição Brasília, increased investment in lower distribution companies, and the significant expansion of the transmission grid, driven by the auction won in the last year.
Finally, in Spain, we continue to invest in development of smart grids and distribution network reinforcement. As recognizing the National Integrated Energy and Climatic Plan, more investment will require in the future to achieve Spain's decarbonization target. We already have presented to the government a plan of EUR 4,353 million for this activity, which represent 80% more than the previous period, providing a great tool to accelerate green recovery in the country. The group's strong operational performance is fully reflected in our generation of cash flow, which reached EUR 2,270 million in the first quarter, up 7%. As a result, our financial ratios improved, with FFO-adjusted net debt growing 140 basis points to 23.2%. In addition, our liquidity position reached EUR 17 billion, proving our access to financing in very competitive terms.
Over the first quarter, to give you an example, Iberdrola signed a new credit line with 21 banks linked to sustainable indicators for EUR 2.5 billion and launched the largest sustainable commercial paper program of a Spanish company with a maximum balance of EUR 5 billion linked to our contribution to United Nations sustainable development goals. With these two transactions, the group reinforced its global leadership in green and sustainable financing, reaching EUR 32.1 billion to date. As you know, our listed subsidiaries, Avangrid and Neoenergia, released their results in the last days, showing a strong performance. In the case of Avangrid, adjusted net profit increased by 50% to $354 million. EBITDA reached $752 million, up 21%, thanks to the increase in renewables and networks. Gross investment rose by 24% to $663 million.
In the case of renewable, the company is building 1,600 MW of offshore wind, 900 MW of solar, and 400 MW of offshore wind. In networks, investment grew by 42% following the approval of new rate case, as mentioned. As you know, we also expect to close the transaction with PNM Resources of New Mexico in the coming months, creating additional growth opportunities for Avangrid Networks business. Major federal permits had already been obtained, as well as the approval from the Public Utility Commission of Texas last week. The company has reached a settlement with several key parties in New Mexico. The transaction is on schedule to close in the second half of the year. The performance of this quarter has driven an increase in the company guidance, with full-year adjusted net profit now expected to reach between $696 and $750 million in 2021.
This will represent an increase up to 21% compared to 2020. In the case of Neoenergia in Brazil, registered 50% increase in EBITDA to BRL 2,384 million, driven by ongoing investment in the networks business and a strong growth in renewables. This, together with the reduction of financial expenses, led to a 75% increase in net profit, exceeding BRL 1 billion for the first time in a quarter in the company history. Following the tariff review, just approved by CELPE, Pernambuco company, up to March 2025, all Neoenergia distribution companies have already regulatory framework fixed at least up to April 2023. Gross organic investment increased almost by 85% to BRL 2,027 million, mostly allocated to construction, new transmission projects, the expansion of distribution networks, and the addition of more than 1,000 MW of wind capacity. As I said, Neoenergia Distribuição Brasília acquisition was closed in early March.
This integration is moving faster than expected. The company has achieved already one of the best monthly indices for quality supply ever recorded, and we expect already positive contribution from April. Our investment plan for the coming years are increasingly supported by global ambition on climate action. The consensus on this subject was shown once again in the leaders' summit on climate organized by the Biden administration three weeks ago, where all major economies announced reinforced target to achieve net zero emission. The European Union, who has led elite action globally for years, reached an agreement for new climate law that included an emission reduction target of at least 55% in 2030 from 2019 levels. United Kingdom, which will host the upcoming COP in Glasgow, increased its reduction commitment for 2035 to 78%. This is the world's most ambitious target in comparative terms at this moment.
After United States re-entering the Paris Agreement, the country has now committed to cut emission at least by 50% by the end of the decade compared by 2005 levels. The transformation of the energy sector implied by this announcement will only be implemented if there is full coherence between target energy policies and regulation. We also have the good news on this front. Some governments are already creating the framework required to reach net zero and, at the same time, to build back better from the pandemic. In the case of United States, the American Jobs Plan will dedicate $100 billion to reach a fully decarbonized power system by 2035, with more tax incentives to promote investment in renewable, storage, and high-voltage interconnectors. There will also be an additional initiative to modernize electricity grids and boost innovation in technologies like green hydrogen.
The federal administration is also promoting the development of the offshore wind industry with more agile permitting and new leasing areas to reach 30,000 MW of capacity by 2030. In Spain, the Climate Change and Energy Transition Law is concluding its approval process with a significant consensus. The government has already submitted to European Commission its Recovery and Resilience Plan, choosing clean energy investment as one of the main destinations for European Union funds. A proposal to create capacity market has also been published. We still have to see the final version of this regulation. This shows the awareness of the Spanish authority about the relevance of maintaining firm capacity in the system and bringing more storage to secure supply in the context of growing penetration of renewable generation.
The U.K. is promoting its Green Industrial Revolution based on the 10-Point Plan that support initiative in offshore wind, greening building, zero-emission cars, and green hydrogen. This increased climate ambition is fully aligned with Iberdrola pioneering strategy. We anticipated the energy transition 20 years ago and started taking decisions at that time to close all our coal and oil power plants and to invest heavily in renewables, networks, and storage. Over this period of 20 years, we have often found the position of energy company regulators and climate change deniers. Fortunately, today, there is a consensus on the need to reduce emission and instead of opponents, we only have competitors. We still continue improving. This first quarter of the year, we emitted only 28 grams of CO2 per kilowatt-hour produced, which is around 10 times less than average emission in our peers.
On top of that, 90% of Iberdrola long-term plan is included in the list of investment considered sustainable by European Commission in its EU Taxonomy. We have also zero coal and fuel oil production. This will avoid additional risk, as well as the commissioning and labor cost that other competitors will probably need to incur. Through green investment, we will accelerate net zero and contribute to the economic growth and the creation of thousands of qualified jobs. Only in Spain, our actual investments are sustaining 30,000 new jobs in our supply chains. The challenge is huge. Net zero implies transforming the energy consumption all sectors to promote electrification and investing in the renewable energy power networks and the energy storage required to support it. We need all public and private agents on board.
Iberdrola, after two decades leading this effort, is now creating several strategic alliances with major companies from different industries to accelerate green investment. In the financial sectors, we are forming a co-investment vehicle with a leading insurance company in Spain, Mapfre, to accelerate the build-out of solar PV and offshore wind in the country. We've also partnered with other energy companies interested in a specific large-scale investment project, mainly in offshore wind, like Total, with a joint venture to participate in the next auction of offshore wind in Denmark and to develop onshore wind and solar projects together in France. In electric mobility, we are closing a strategic partnership with leading car manufacturers like Volkswagen, Renault, or Mercedes to accelerate the deployment of charging infrastructure, manufacture batteries, create a full value chain for electric vehicles, and decarbonize their facilities. Also, with charging system developers at Wallbox.
We are entering commercial alliance with leading distribution company, Mercadona, to install charging points and electrify their fleets. Finally, we are closing agreement with industrial companies interested in reducing their carbon footprint to lead development of green hydrogen for different uses. Green ammonia production for Fertiberia, the supply of hydrogen to the fleet of buses of Barcelona Metropolitan Transport Company, the generation of heat in distilleries for companies like Diageo in the U.K. or to produce ceramics in Porcelanosa, among others. This agreement and synergies are the ones need to take full advantage of the potential of the common European recovery funds to create job and industrial development.
In our previous presentation, I announced we have proposed more than 150 projects for the Spanish Recovery, Transformation and Resilience Plan to access the Next Generation EU program. Involving close to 350 small and medium-sized companies, we will mobilize investment for more than EUR 21 billion. We have continued working with several companies to bring new ideas and strengthening our proposal for a stronger recovery. As a result, we are already leading or taking part in 175 projects with a c. EUR 30 billion investment, with the capacity to generate 60,000 jobs along the supply chains. I can say that all our projects are included in the scope of the plan presented by the Spanish government in Brussels. I will now hand over to the CFO, who will present the group financial standing for the details. Thank you.
Thank you very much, Chairman. Good morning to everybody. As you can see in the slide, first quarter reported EBITDA was EUR 2,814 million, up 1.5% versus last year. Excluding EUR 65 million COVID impact, our adjusted EBITDA increased almost 4%. FX impact in this quarter has been large, EUR 231 million after the devaluation of all our reference currencies, 9.1% the dollar, 3.7% the pound, and 27% the real.
Excluding also the FX impact, our EBITDA would have grown 12.2%, showing the real recurring performance of the business as the first quarter of 2020 was marginally affected by COVID. Revenues increased 7% to EUR 10.1 billion, and procurements 12.4%, reaching EUR 5.5 billion. Gross margin rose by 1.3% to EUR 4.6 billion, and 10.7% excluding COVID and FX impact. Net operating expenses remained flat at EUR 1 billion, thus improving the efficiency of the group by 110 basis points as gross margin grew by 1.3%.
Excluding positive FX impact, net operating expenses grew to EUR 99 million due to the contribution of new businesses, including Neoenergia Brasília from 2nd of March onwards, as well as storm costs in the U.S. From Q1 2021 onwards, net external services include as other operating results, the gain and loss on the sale of control assets following the Spanish Securities and Exchange Commission recommendation and IAS 1 draft expected to be approved. In this respect, Q1 2021 has not registered any relevant amount. In the annex, on page 44, there is a more detailed explanation of this change. Analyzing the results of the different businesses and starting by networks, the EBITDA grew 4.3% to EUR 1.3 billion and 19.5% excluding EUR 161 million negative FX impact and EUR 26 million negative COVID impact. That will be partially recovered. Excluding FX and COVID impact, EBITDA grew in all geographies.
As you can see in the slide, Spain contributed 32%, Brazil reached 25%, the U.S. were 23% of the total, and the U.K. contributed another 20%. In Spain, EBITDA grew 8.8% to EUR 421 million due to the impact of 15 million of positive settlements from previous years as a consequence of improvements in quality and 11% lower net operating expenses driven by efficiency plans. Despite lower remuneration that came down from 6% in 2020 to 5.58% in 2021. In the U.S., IFRS EBITDA was 17% up to $358 million, due to increasing investments and to past cost recognition, but affected by storm costs. Excluding COVID-19 impact, EBITDA would have grown 21%.
U.S. GAAP EBITDA amounted to $438 million, $125 million over IFRS EBITDA, mainly due to the difference in the timing of accounting of the levies that in the IFRS are fully accounted in the Q1 and in US GAAP along the year. In Brazil, EBITDA grew 44% to BRL 2,126 million, driven by BRL 338 million positive impact from tariff reviews in distribution companies and increasing contribution from transmission assets. BRL 8 million are due to the Neoenergia Brasília integration from March 2nd, as well as cost contention due to efficiency plans. Excluding COVID impact on demand, EBITDA would have been growing 48%. Finally, in the UK, EBITDA fell 1.6% to GBP 235 million, affected by GBP 7 million lower demand due to COVID. Excluding COVID, EBITDA would have grown 1.4%.
In renewables, EBITDA grew close to 28% to EUR 932 million and 34%, excluding EUR 46 million of negative FX impact, driven by strong growth in Spain, the U.S., Mexico, and Brazil. Production increased 19% with 8.5% more installed capacity that reached 35,200 MW and higher load factor, with average price in Spain and the U.S. As you can see in the slide, Spain contributed 35% to EBITDA, U.K. 25%, the U.S. 23%, and Iberdrola Energía Internacional 10%. In Spain, EBITDA was EUR 322 million, 76% over last year, thanks to higher sales price to the supply business and 40% higher output with 54% higher hydro, 17% higher onshore, and 128% higher PV, whose installed capacity has already reached 1,264 MW. In the U.S., EBITDA increased 74% to $260 million with positive impact from the Texas cold snap and from the new capacity.
In the U.K., EBITDA fell 2.5% to GBP 209 million, due to 29% lower onshore production, partially compensated by 56% higher offshore production due to East Anglia ONE contribution. Also the decrease has to do with lower prices. In the international business, EBITDA fell 16% to EUR 91 million due to the lower contribution from Baltic Eagle and higher development cost, despite Infigen and Aalto Power increased contribution. In Brazil, EBITDA grew 64% to BRL 197 million, thanks to positive impact on settlements in hydro concession agreements. Finally, in Mexico, EBITDA grew 68% to EUR 46 million, thanks to higher operating capacity coming from Pier II and Santiago onshore plants and Cuyoaco PV plant. Generation and supply, EBITDA decreased 31.8% to EUR 528 million and 24%, excluding EUR 21 million negative effects and COVID-19 impact. The business has been negatively affected by extreme weather conditions, as I will comment.
In Spain, the EBITDA was down 39% to EUR 279 million, with 13% lower output and higher energy purchases at higher prices, with additional impact of the Filomena storm and COVID. In Mexico, the EBITDA decreased 33% to USD 147 million, negatively affected by the Texas cold snap on price rises of around USD 50 million that are expected to be recovered as CFE tariffs will reflect the higher cost of gas. In addition, there has been an increase in access fees. In the U.K., the EBITDA grew 30% to GBP 106 million with higher sales despite COVID effect mainly due to weather conditions and improved margins in electricity and gas. Excluding COVID, EBITDA grew 49%. In Brazil added BRL 118 million to the EBITDA, highlighting the better performance of our CCGT plant.
In the international business, EBITDA was EUR 14 million negative, affected by cold snaps, development costs and lower revenues due to COVID-19. EBIT was up 3% to EUR 1.7 billion. Excluding FX and COVID-19, EBIT grew 14.4%. D&A fell 2.6% to EUR 986 million, but excluding FX, grew 4.3%, mainly due to the increased asset base and activity. Provisions were up 20% to EUR 115 million, but excluding FX and COVID-19 impact, grew 56%, mainly due to Texas cold snap provisions and others.
Net financial expenses grew EUR 85 million to EUR 265 million, driven by EUR 111 million, mainly linked to one- off positive FX hedges accounted for in Q1 2020. More than offsetting the EUR 26 million improvement in debt-related costs. EUR 13 million due to the lower cost of debt that improved 12 basis points and EUR 13 million positive results due to lower average debt. Our reported credit metrics improved.
First, the adjusted net debt due to the decrease in adjusted net debt of EUR 1,319 million to EUR 36.3 billion despite the investment efforts and thanks to the hybrid issues during last year. Second, due to our resilient business model, improving cash flow generation even in these difficult times. As a consequence, our adjusted net debt to EBITDA remain at 3.6 x. FFO adjusted net debt improved 1.4 percentage points to 23.2%. Retained cash flow net debt improved to 21%, and our leverage ratio strengthened to 41.9%.
As the chairman has mentioned, two recent transactions reinforces our group leadership in green and sustainable finance. Iberdrola has signed with 21 banks a EUR 2.5 billion new sustainable credit facility at pre-COVID-19 levels. After this transaction, 90% of the group credit lines are sustainable, expecting to reach 100% shortly. The line was linked to two sustainability indicators related to environmental and social issues.
It is also the first transaction of a Spanish company reference to risk-free rate instead of LIBOR. Let me also highlight the social innovation component. For the first time, a facility will include an annual contribution to a sustainable project. The contribution will vary according the degree of utilization of the line and will be made in collaboration with all the financial institutions that have signed this sustainable credit line. Also, last April 15, Iberdrola launched a EUR 5 billion sustainable promissory note program. Iberdrola, as of today, remains the world largest private issuer of green bonds. Adjusted net profit grew 12.4% to EUR 1,082 million, compared to the Q1 2020 adjusted net profit of EUR 963 million. Adjusted net profit exclude extraordinary impact, including COVID and other non-recurring items, but not FX impact, as we consider FX part of the risks that brings being a global player.
Regarding corporate taxes, in March, the U.K. government presented a new tax package that increased the corporate tax rate from 19% to 25%, starting on the 1st of April and 2023. As a result, we expect to account EUR 450 million negative impact of deferred taxes in 2021 in our P&L, but with no cash impact. This will be accounted when finally acted, either in the second or the third quarter of the year. We expect this negative impact to be totally or partially compensated by other positive impacts. There is today in the press some related news that we are still analyzing. In the annex, you will find the calendar for the final dividend payment. The Chairman will conclude this presentation. Thank you very much.
Thank you, Pepe. To conclude, I would like to highlight that the first quarter result have exceeded our expectation and forecast. 20 years ago, we saw clearly the need to decarbonize the economy and the opportunities that this could bring in terms of investment, industrial development, and job creation. Since then, we have been leading the deployment of clean energy and power networks, and now we continue accelerating. In fact, we are already ahead of the plan we presented to you last November. 75% of the renewable capacity addition expected by 2025 are operating under construction or secure. 90% of our distribution investment are covered by regulatory frameworks already closed at least to 2023, and we continue to expand our transmission activities.
We expect our subsidiaries invested in United States to continue performing ahead of estimate, driven by a strong business outlook and the integration of Neoenergia Distribuição Brasília and PNM Resources. Our offshore wind projects are progressing faster than initially planned, we will benefit for increasing opportunities thanks to the new auction and the growth platform we have recently created in countries such as Japan, Poland, Ireland, or Taiwan. Finally, we are reaching relevant strategic alliances to accelerate electrification with leading companies in different industries. All this give us an even additional assurance to reaffirm our guidance for 2021 and beyond. Today, we confirm our 2021 outlook to EUR 3.7 billion-EUR 3.9 billion in reported net profit. This excludes, as mentioned, potential adjustment due to the changes in tax regulations underway in some countries, which is the case like U.K., will largely be non-cash items.
Growth will be driven by the contribution of new renewable capacity, positive impacts from new rate cases and additional networks investment, and the ongoing improvement in operating efficiency in all countries. Given this net profit outlook today, we can also ratify our outlook for a shareholder remuneration of EUR 0.44 per share against 2021 result. Now, we'll be more than happy to answer your question in this moment. Thank you.
Let's move to the Q&A session. The first question comes from Rob Pulleyn, Morgan Stanley, and Fernando Lafuente has two couple of questions. First of all, his first question is a clarification about the guidance 2021. The net income guidance now excludes non-recurring items and the deferred tax charge. Does this therefore exclude COVID impacts, and if so, to what quantum? Can you give us a guidance for EBITDA in 2021 or at least your views on the different business countries?
Well, I think what I can say is what I said already. The execution of our plan is progressing better than expected in 2021. I think we have already had higher revenues, the demand recovery, new tariff prices, higher production, operational efficiency, the acceleration of investment, Saint-Brieuc, Vineyard Wind, et cetera, integrations of PNM Resources and Neoenergia. Our financial performance, which is improving our ratios. The FX impact and the control due to geographical footprint, which are well are already offsetting all these negative factors. We are already expected to close PNM Resources along the second half of the year. In terms of net profit, which we are not already expecting, despite reserves of hydro higher than average, they are not already expected anything is different on that one.
With relation to countries, I think in networks, I think United States is performing well, and I think their expectations, they're going to continue performing well. They already updated their outlook. In Brazil, I think the results are moving very well as well, and I think they are increasing heavily, and I think we are not expecting any negative things in this direction. In renewables, we are already expecting to add between 4,000 MW and 4,500 MW, new megawatt, before the year end, which I think they're going to contribute as well. The new prices, I think we expect them, they are ready to come as well, to have already positive impact in that.
In another side, I think the negative side of the COVID-19, we hope with the vaccination which is being made and the situation which is in most of the countries coming back to a certain normality, I think that can be already be much minor than it was already in the first month. I think the only thing what we can already say it as non-recurring, I think is this tax impact with non-cash, which we need to already to adapt, to adjust already to our accounts because of the British changes in the corporate tax from 19% to 25%, I think. Which I think that can represent something of a few hundred million, EUR 400 million, EUR 300 million, which we can already adjust for our different taxes. That is what we are contemplating in this moment.
There are things, as Pepe mentioned, which still we have not already included because we have still not properly analyzed this recent news which appeared in the media today about the hydro tax in Spain. I think still we have not already had time to. We will let you know. I think in this moment, we will provide with this as soon as we make already an impact about the numbers will be affected. Should be certain positive. We will let you know how much is going to be. In any [audio distortion] t hat is something which is not affecting to the tariff deficit. That is going to be something which is directly connected between the Ministry of Finance and the companies. Is not at all already nothing related with the tariff itself. I think those are the main things I would like to clarify to you.
We are very comfortable with the outlook we are giving to you, because I think the things are going better than expected, and we have not seen, for the time being, apart of these tax things which I'm mentioning, we have not seen already special risks in the horizon. We are already positive in our approach.
The second question comes from Jorge Guimarães, JB Capital, and Fernando Garcia, RBC, and is related to the topic you mentioned before. It's related to the tax effect, and the writing of this question is the following: Could one of the tax effects mentioned as compensation for U.K. impact to be related to today's news in Spanish press about the recovery of the hydro tax in Spain for 2013 and 2014? If so, is it possible to quantify this hydro tax recovery? Probably the question has been already answered, but if you could add something additional.
What tax effect mentioned in the U.K., I mentioned, I explained already.
That's right.
In Spain as well, I just insist on that one. I think that is positive. We have not still, we are studying the impact and how many years will be affected. We will know in the next few days, as soon as the lawyers can already read in detail. I think what we know is that is not affecting at all to the tariff deficit. That is something which is between the companies and the Ministry of Finance.
Third question comes from Javier Suarez, Mediobanca, Jorge Guimarães, JB Capital, and Manuel Palomo, Exane BNP Paribas. Comments from another company on aggressiveness from other suppliers in Spain. What is our commercial policy? Sustainability in supply margins currently?
Well, it's funny. Well, I don't know. I think it's true, and the country is increasing competition on the entrants. I imagine they're talking about that one. I think I was saying all the time, I welcome competition. I've never been already criticizing the new entrants come. I think it's good. That way, I don't know what competitor they're talking about. What I can say in Iberdrola, we have a very good marketing team. I think our marketing people are already making a good product, good services. They are already a very competitive cost of serve. They are a wide range of offers, and a brand which is already well-positioned in the country. I think that is helping ourselves to maintain our customer base. We don't need to go already to the price war for that one.
It's not our style. I think that is not what we are making already in this particular time. I imagine they're talking about another, the newcomers, which I think their job to do, I don't know what they're talking about on that one. I think what I can say, our marketing team is gaining their money. I think they are well paid, but they're working very hard.
Next question comes from Harry Wyburd, Bank of America Merrill Lynch; Rob Pulleyn, Morgan Stanley; and Antonella Bianchessi, Citigroup. It's related to the power prices in Europe. What is Iberdrola view on the sustainability of the higher prices given the forward curve in Spain is heavily backward dated, 2024 forwards, well below 2022? Second point is, do you fear any windfall tax to compensate? Number 3, are you seeing renewables PPA prices rise in response to higher power prices? Finally, can you remind us on power price hedge for 2021 and 2022?
The first thing is the prices with this happen in Europe is very simple. I think it's the CO2 is represent roughly EUR 50, which I think that is more or less is contributing to the price on the range of EUR 20-EUR 25 on the tariff. The second one is the price of the raw material. I think the gas is already at levels of EUR 60 or EUR 65 per megawatt hour, which I think altogether it makes a price on the range of what we are achieving today, on the range of this one. In the case of Spain, even more, because we have already 7% increase, a 7% tax in the production. I think it's something which is absolutely logic and as I used to say, the carbon prices are not coming from Saudi Arabia.
The carbon is already a tax, which is already being used for other purposes for decarbonizing the economy. I think that is collected by the fiscal authorities in different countries and which can be used already and is being used for giving already support to other activities and taking the decision to move from one part to another. We expect then the PPA prices can already be made according with the prices of the market. I think PPA is not something different, is not apart from the reality. I think those are the terms. I think it's something which is all across Europe. The natural gas prices have increased. The CO2 prices have increased for helping to make the decarbonization of the economy.
I think that two thing is driven already the price of electricity, which is already making in this moment. Saying that, I think position, Paco, of our position of prices and hedges, et cetera. Can you explain on that in detail?
Yes. Starting with the figures for 2021, we don't expect any impact because all the price-driven output is fully hedged right now. 2022, 70% is hedged around this at EUR 75 to EUR 80 per megawatt-hour. In the United Kingdom, similar prices and in this case, 100% of the price-driven output. Of the plan, this is very important because planning is one thing and the reality is another one. When we have to face the reality, there are adjustments in terms of demand increases and production that cannot be produced. That's for 2022, as I told you. For 2023 onwards, we have sold decreasing annual quantities according with customers' appetite. Can say that, for instance, for 2023, we have 30% already sold and so on. That's our position.
The open position now with the forecasted prices at the higher levels will allow us to recover more money that we probably have forecasted before. In this case, this 30% that is sold for the next year will allow us to get more money. Still early to provide specific figure, but this is what we are seeing coming on. For sure, when you have extreme weather conditions as we have had in Mexico or in Spain, all these hedges work partially.
I think I would like to add this point that Paco is already mentioned. I would like to add that, I mentioned that the storm of Filomena has already affected our P&L in Spain. However, returns in Spain. Why? Because we are forced to buy electricity or buy already gas at very high prices to sell to our customers who we already agree fixed prices. we have hedged already a normal demand, but not a punctual excess of demand. I think that is affecting to our result for this reason. I think we are already covering, hedging the normal than expecting normal demand. I think when there are already extraordinary circumstances, I think we are already affected negative. The same thing already in positive. I think we have already not all the electricity hedged, as Paco mentioned.
I think if the prices are higher, we have 30%, which still is not already hedged for 2022, and the prices are higher, we can already benefit of these better prices for the future as well.
Next question comes from Rob Pulleyn, Morgan Stanley and Nicola Pearce, Nineteen Point, and is related to offshore wind. What impact from global supply chain inflation and bottlenecks should we anticipate for Iberdrola? Is Iberdrola concerned by inflationary pressures reducing offshore wind IRRs given fixed price for future and cost yet to come?
The first thing, I hope that this temporary situation of the price of the raw material, steel, copper, oil, et cetera. In our case, our needs for investment already are almost covered. All the projects underway have a very high share of CapEx cost already fixed, let's say 80%-90%. Major equipment contracts have price indexation generally hedged as well. I think I will remind to you that I think last year we advanced orders for EUR 14 billion, this year for EUR 4 billion. I think altogether EUR 18 billion, which I think that is already with prices we have already reached an agreement. I think in the case that's become structural, I think I am sure that will be passed into the price in the same way which has already happened with increases in price of equipment in the past.
I can give you an example of solar in the last few years, which has been already happening in this manner. Which I think gives you already tranquility that most of our investment are already for the next period, already with contracts already signed and with hedges already done, and the minor part is already still not in this. If that is not already temporary, that is structural, that will be passed to the prices. I'm sure that is going to happen.
Question number 6 comes from Harry Wyburd, Bank of America Merrill Lynch, and Javier Suarez, Mediobanca. What are your most recent expectations for European Union stimulus funding from projects, and could there be upside to the CapEx plan if you are successful with your funding applications?
I think you know that Spain has already sent the plan to Brussels. As far as I know, it has been welcomed because that is absolutely fitting with the European plans and expectations. We are leading this part on that one. As I mentioned, we have already made the 775 projects in several fields, in floating offshore, green hydrogen, electric mobility, energy storage, with very many partners. I think it's 300,000, 150 people already, companies which are together with us. In certain of those projects we are leading, certain of those projects we are already participating, but we are not already leading those projects. As you know, together they represent roughly EUR 30 billion investment already presented. We can already create dozens of thousands of jobs, 65,000 people.
As far as I know, all who has been presented in Brussels, all our plans are already allowed to participate in this one. I think all are already being included in this. I would like to insist on that one. In our investment plan, in our long-term plan, is not already included those things. I think that is an additional thing that has to be already added to our existing target. I think our 2025 plan, you know, EUR 75 billion investment, is not included. All these things which shall depend already of the different process of what ones will be approved in Brussels, have to already pass through to the countries, and they will make already imagine just a certain market mechanism or whatever for making already auction or whatever thing to have access to those things. We will see when that will be approved.
Next question comes from Rob Pulleyn, Morgan Stanley. What impact does Iberdrola see from the U.S. climate plan and proposed tax credit changes for its business, given the company 2030 plan was outlined before the U.S. announcements? Is there sufficient balance sheet flexibility to do more growth CapEx?
With no doubt, that will bring massive investment opportunities. The positive thing is the main proposals are very well aligned with the Iberdrola plan. Which has been, we've been for 20 years dreaming that that happen, and it's already happened. Tax incentives for clean energy and storage will accelerate renewables. Push for power grids driven by tax incentives to transmission and measures to improve resiliency is positive as well. New target of 30 GW of offshore wind by 2030 is good. They make already more agile permitting. I think you know that yesterday we got already the final permit which allow us to build Vineyard Wind in Massachusetts. I think it took us a long time. Now they would like to make already this in a more agile manner.
I think we have already 7,000 MW of pipeline in this area for that one in the United States. All the things which are related to this ambition of offshore, we are ahead of the race because we have already the site. The site is analyzed, the project design, et cetera. I think in networks, I think the only point is the potential increase in corporate tax, we don't know if it's going to happen or not. In any case, I would like to stress that 80% of our business is networks, and it has already regulatory framework which are based on after-tax returns. Means whatever changes in taxation is going not to affect in an important manner, apart the one-off that can already happen, as is going to happen in the case of Britain, no cash item, cannot really affect our P&L.
In renewables, I think that increases in taxation has a positive effect in the sense of a faster monetization of our tax credit. I think that is going to help already in all these things. Which I think globally, we feel is very positive. I think it's already absolutely in line what we've been dreaming for years, and I think that I'm sure that is going to provide to our subsidiary, Avangrid, just huge opportunities of growth, either in renewables, onshore, offshore, especially offshore, and as well in terms of networks and transmission.
We have a couple of questions from Elchin Mammadov from Bloomberg. First of it is, can you please provide an update on the regulatory political situation in Mexico and Brazil?
Well, in the case of Mexico, there are no news, I think, from the last presentation. I think, as you know, the proposed modification of electricity law was now suspended by courts. In the case of ANEEL has approved just the new tariff for CELPE, for Pernambuco company, for Pernambuco. It has already adjusted the annual tariff for Coelba concerned. The integration of Brazilian utility is going well. I think that is going to start in April. We continue for looking new opportunities of the new auctions, which is going to happen. I think the administration maintaining very stable and predictable regulation. I think a good example was already the Conta-Covid, that they make for helping finance the distribution companies during last year already COVID confinement.
Which I think that is the news. Mexico, no news, apart from the modification of the law is already suspended by courts and the company is already performing with normality. In Brazil, things are going really very well.
The additional question from Elchin Mammadov is related to offshore wind. Some peers had problem with offshore transmission cabling. Is that a risk for Iberdrola?
It's funny that one. Well, I say the answer, no. We have no that one. I think we've been already making this sort of projects of in networks and transmission for 100 years. I think we know a bit all those things. Our offshore wind farm are designed to minimize this impact of water, stream, and cable. I think that is no new for us. I think that remind to me what already happened a few months ago when one of these guys who has already suffering this problem talk about the blockage and wake effect. Which I said the same thing, things of our experience, we consider all these operating scenarios when we design, and we include all this in our future operation and maintenance cost.
I think for us it's not a secret, and we already take in all this when we make already in our design to avoid negative surprises. I think when we design and we make our calculation of CapEx and OpEx for coming into the auctions, we take into consideration all these potential scenarios included in our design, included in our operation cost for the future. I think we have not that one.
Next question comes from Fernando Laf uente, Alantra, and Elchin Mammadov, Bloomberg. Your cost of debt fell 12 basis points in Q1 year-on-year. How do you expect your cost of debt to develop in the coming years if the recent increase of the bond yields continues? Debt expected by year-end as well?
Pepe?
First what I have to say is that we have most of our debt fixed. Even with forward swaps. At this level, our group debt is fixed at levels of 75%. Mainly, the euro and the dollar, because in the Brazilian real, there is a pass-through between the remuneration and the cost of debt. That is the part that we have more open. A little bit also with the British pounds. We are obviously, if interest rates, the long part of the curve, that doesn't mean that interest rates are going to rise. This means that not necessarily an increase in bond yields will affect strongly our cost of debt. It could affect, as I was saying, the Brazilian real rates, but that is compensated by a bigger EBITDA.
In principle, obviously, if we finance our long term, that will have some impact, but we don't think it's going to be very big if it happens, at least in the next couple of years. The debt that we are expecting by the end of the year, if we including the PNM acquisition, will be around $43 billion. If we exclude that, will be in the $36 billion-$37 billion, but we expect, as the Chairman has said, to close PNM before the year end.
Antonella Bianchessi from Citigroup makes the following question. At which level are currencies hedged for 2021?
Pepe?
We have already done them. I would say around 80%, 90%, we always leave a margin depending on the results, et cetera, but I think that we are comfortably fixed and at better rates what we are seeing today, for example, in the U.S. dollar.
Javier Suarez, Mediobanca, and Elchin Mammadov, Bloomberg, makes this following question. After BOEM approval, what other projects should follow Vineyard Wind in the U.S.? Do you see permitting process accelerating? What IRRs are we targeting?
As I mentioned, in the United States, we have already in this moment, Vineyard Wind start construction and I think we have already Park City Wind, what we have already a PPA with Connecticut. which I think is the next one we are going to continue construction. I think one is we plan to be by 2023, another one I think is 2024, which I think that one follow the other one. Altogether is 1,600 MW. I think we have already another additional 6,000 MW-7,000 MW, which I think is mostly concentrated in Kitty Hawk in North Carolina and in the Zone 522 on the Massachusetts water, which I think is going to be part of the new offshore auction, which is going to be already produced in the next few months.
I think it's announced new auctions in New York and announced new auction in Massachusetts and I think Long Island, I think as well, one of those. I think that is the point. In terms of our return, I think the return of Park City is similar levels of Vineyard, I think we will see already for the next one, we will try to make, as we are making always, that they will already gave us some basis point over our WACC in all cases, which I think that has been happening up to now, which returns in most cases is over 200 basis points above the WACC, that is our expectation. We are already the next We start construction is already Park City, which is already awarded.
We have the PPA, we have all the team, and we are already in the process of the permitting, which I hope with the new administration, that is going to take much shorter than Vineyard for obtaining. I think our plan on that one is then one in 2023, another one 2024 could be fully in operation. Another one we will already with our 7,000 MW or close to 7,000 MW of civil available, site available, I think we will participate in the new auction, which is going to appear in the next few months and for Massachusetts, for New York, for certain of New England and as well for Carolina or one of those states as well. Which I think we are working on that one, and we are very good position on this.
I think I mentioned, we have already in Boston a very good team in design, and I think we are already making all this for development of the zones of North Carolina, which is called Kitty Hawk project, and the Zone 522 we won a few years ago as well for being ready for participating in this auction in the future.
Question number 13 from James Brand, Deutsche Bank. What new markets would you like to enter in renewable offshore?
Well, I think we've been already. It's a good question because in the last 12 months we've already opened very heavily the number of markets. I think we have started 15 years ago in Britain because that process takes a long time. I think now we have 1,300 MW already close to that one in operation. We follow with Germany. We expanded to France, where we are already in construction. We continue with Germany on that one in construction. We moved to the United States, where we have a couple of them awarded with PPAs and we started construction of both. I think in the United States, we won already sites in North Carolina for Kitty Hawk. We won already sites as well in the Massachusetts area, Lease Area 522.
During the last months, we had already got new opportunities in Japan, in Taiwan, in Ireland, in Poland, in Sweden, and we are looking some opportunities in Brazil. I'm telling you that because this project takes, in most cases, very long period of maturity. I was telling you that we have started with that one. East Anglia, I think if I remember, we got already the permit of CEB on the 2008, 2009, 12 or 13 years ago. It took 12, 13 years before this we found start already a construction. That why I think we have to move already fast in all this thing and try to get already the opportunities.
I think I can say we are across the globe in this moment, from Japan to the State, from Taiwan to Sweden, and from Poland to Britain, and from Britain to Germany, and from Germany to United States or Brazil.
Last question for today comes from Javier Suarez, Mediobanca. It's the following: how important do you think that for a utility is to be vertically integrated and structurally long clients versus generation? Would this mean that expansion on renewable has to come together with a proactive supply strategy?
Well, I think we've been traditionally just an integrated company, which I think is not new for us. I think it depends on the places. I think certain, if they are not ready, you have to look who is going to buy your electricity. I think you are in a country that you have already millions of customers, I think we have dozens of million of customers in some countries. Certain you already have the possibility of selling your electricity to your customers. If not, you have to look for your customers as well, unless there were already an auction, the system already takes all this electricity. I think we are already this very proactive supply strategy. I can tell you, for instance, the case of Brazil, that we have started recently to be already active on that one.
I think we have in this moment some hundreds of thousands or millions of customers where we are selling electricity. We are the same thing already doing in Britain, or we are doing the same thing in Australia, where we went recently. Yes, I think we feel I'm coming from the industry, and I think you need an industry, you need a factory, but you need as well a market. I'm very much convinced that we need to be very efficient in our factory, but to be very efficient in our marketing approach. That's why the question that some of your colleagues make before about our behavior in Spain, I was saying that our marketing people are doing very well their job, and I think that is what they have to do.
The marketing people and the sales force to do the necessary for selling in a good condition the electricity we produce. I think that's positive in any case.
Okay, now please let me now give the floor again to Mr. Galán to conclude this event.
Thank you very much for being part of this conference call. As always, our investor relation team will be available for any additional information you may require. Thank you very much, but I think I would like to give you the last word. I am optimistic about how the things are performing. Thank you.