Good morning, ladies and gentlemen. First of all, we would like to offer a warm welcome to all of you who have joined us today for our 2025 first half results presentations. As usual, we will follow the traditional format given in our events. We are going to begin with an overview of the results and the main developments during the period, and additionally, and on this occasion only, we will provide details of the equity rise currently underway. Everything done by our top executive team that is today with us: Mr. Ignacio Galán, Executive Chairman; Mr. Pedro Azagra, CEO; and finally, Mr. Pepe Sainz, CFO. Following this, we'll 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, so please ask your question only through our webpage, www.iberdrola.com.
As mentioned previously, in today's event, we will be discussing, in addition to the H2025 result, certain information regarding a proposed capital market transaction. Access to which is restricted for persons located in the United States of America. Accordingly, persons located in the U.S. will be unable to log in at this time, and if any such persons have logged in here, we would kindly ask them to please log out. Finally, we expect that our event will not last more than 75 minutes. If any questions remain unanswered, we at IR Department are, as always, fully at your disposal. Hoping that this presentation will be useful and informative for all of you, now, without further ado, I would like to give the floor to Mr. Ignacio Galán. Thank you very much again. Please, Mr. Galán.
Thank you, Ignacio. Good morning, buenos días, everyone, and thank you very much for joining this call. Today, as usual, we'll present our result, and we will give you also all details of the equity rise announced this morning, which I can already inform to you that now is fully oversubscribed in this particular moment. In the first half of 2025, net profit reached EUR 3,562 million, up 20% year-on-year, excluding the capital gains from the last year's investment of thermal generation assets. And the reported EBITDA was EUR 8,287 million, driven by strong performance in our network business, with a 31% increase in EBITDA in the first half of 2025.
EBITDA from production and customers was impacted by lower prices and one-off system costs in Iberia, particularly offset by the contribution from new assets in operation and the recovery of production in the second quarter compared with the first three months of the year. Investment rose by 7%, reaching EUR 5,762 million in six months, driven by a 14% increase in network investment to EUR 3,082 million. Also, we expect this upgrade trend to accelerate in the coming quarters thanks to the new regulatory frameworks and the negotiation that showed significant increases in investment. Up, in the case of the U.K., EUR 14 billion, following the RIIO-T3 draft determination, and EUR 15 billion additional in transmission and distribution according to the rate filings made by Avangrid subsidiaries in New York and the expected increase in the common rate case in Maine.
Renewable investment reached EUR 2,152 million, in line with the first half of the last year, with 40% of the total invested in our offshore wind project and the construction. All of them, I can already confirm, are progressing under schedule and budget. We have also continued making progress in our asset rotation and partnership plan. In last weeks, we expanded our partnership with Masdar, with an agreement to co-invest in a single tree of strong wind farm in the U.K., which, combined with Baltic Eagle, takes a total co-investment to almost EUR 7 billion. And we have also closed other asset rotation transactions, worth EUR 1.5 billion, from which EUR 1.3 billion will be cashed during the second half of the year.
This, together with our strong cash flow generation up to 15%, has led to a reduction of EUR 3 billion in our consolidated net debt in the second quarter, which now stands at EUR 52.7 billion and to a strong improvement in our FFO to net debt ratio, already above 24%. Now, moving to the EUR 5 billion equity rise announced earlier today, the recent progress in our regulatory framework in the U.S. and U.K. has materialized an unprecedented investment opportunity to accelerate our growth that is fully coherent with our strategic focus in regulating network in every country with stable and attractive regulatory frameworks.
The draft determination published by the European Commission RIIO-T3 and the rate case filed by Avangrid subsidiaries in New York will imply investment of around EUR 30 billion, leading to a total networks investment of EUR 55 billion up to 2031, 75% more than the previous six years. The group total gross investment, including power, will increase to around EUR 15 billion per annum compared to the EUR 11 or EUR 12 in the last years. This new long-term stable framework in the U.K. and U.S. also offers an attractive return, driving expected average regulatory return on equity of 9.5% up to 2031. This makes the transaction accretive on EPS, thanks to the contribution of those additional profitable investments.
The equity rise, together with our ongoing financial sources, operating cash flow, access to market, liquidity, and our asset rotation and partnership plan, will be sufficient to fully fund our investment plan with no expected additional equity needs, at least until 2030. All in all, this transaction allows us to take advantage of a unique investment opportunity to grow faster and take a major step in our strategic focus on networks in the U.S. and the U.K. Moving back to our first half result, as mentioned, EBITDA reached EUR 8,287 million, driven by 31% growth in networks, thanks to the positive impact of the investment on our regulators and the developing countries. The full integration of electricity in the Northwest and the strong result in the United States, which includes the recognition of past costs, as explained last quarter.
This positive performance in networks more than offsets the evolution of production and customers, with a 13% decrease in EBITDA due to lower prices and non-recurring impact of one-off costs of more than EUR 135 million in the Iberian Peninsula, related to higher auxiliary service requested by the system operator to reinforce the power system after blackouts suffered in May. We expect this impact to reduce in the second half, as contracts with our customers are rolled over, reflecting this cost. These two effects were partially offset by additional production from the 2,000 MW put in service in the last 12 months and the recovery of production in the second quarter after a very low beginning of the year, especially in the United Kingdom. By region, 82% of our EBITDA comes from rate-regulated countries, with the United Kingdom and U.S. accounting for close to 50% of the total.
Investment grew by 7% year-on-year to EUR 5,762 million, mainly due to the strong expansion in networks up to 14%, reaching close to EUR 3.5 billion, 65% in distribution, 35% in transmission. By region, the United States and the United Kingdom represent two-thirds of the total. Transmission and distribution investment in the United States exceeds EUR 1 billion, with two-thirds in distribution, mostly in New York. The investment in the United Kingdom also reached EUR 1 billion, with 60% in distribution, including electricity in the Northwest, and 40% in transmission, driven by RIIO-ED2 and RIIO-T2 frameworks. These investments have resulted in total regulated asset base of close to EUR 50 billion, 70% more than just five years ago.
We expect to continue accelerating growth until the end of the decade to reach more than EUR 90 billion by 2031, multiplying our net worth base by three times in just one decade. With around EUR 35 billion in the U.K. and EUR 30 million in the U.S. for the total combined contribution of these two countries, of 75% of our total RAB. This unprecedented increase is driven by energy policies across our regions that are reinforcing expanding power networks, with the objective of increasing energy security and autonomy and improving competitiveness. Like the national policy statement for electricity networks infrastructure in the U.K., recently published, which has improved clarity and efficiency in planning processes. In the U.S., a national transmission planning process has been designed by the Department of Energy to modernize and expand the electricity transmission system.
In Brazil, the renewal of distribution concession will provide long-term visibility to investment. Finally, the European Commission recently published its guidance on electricity grids fits for the future, urging member states to develop policies to attract EUR 730 billion of investment that will be required just for distribution by 2040. Like the elimination of investment caps or delays in the recognition of investment made, and the implementation of rate systems capable of attracting those massive new investments. Following these policies, most regulators are proving a stable and predictable framework with a strong increase in investment and the right incentives.
In the United Kingdom, we expect our investment to reach EUR 26 billion from 2026 to 2031, four times more than the last six years, following the draft determination published by the European for RIIO-T3 in transmission and the strong increase in distribution expected until 2028 under RIIO-ED2, already approved in RIIO-ED3 from 2028 onwards. In transmission, the RIIO-T3 draft determination recently published shows that the European is moving in the direction to promote investment by increasing cash generation, improving returns on equity, and introducing inflation protection measures. We expect final determination by year-end once we finalize the ongoing negotiation. Our investment in the United States are expected to almost double in the next six years, reaching EUR 20 billion, mainly driven by a large increase in New York, where our rate case negotiation also making positive progress.
In the case of Brazil, we expect the renewal of distribution concession for 30 years will be completed in Q3, creating the right framework to increase investment in these businesses. While in transmission, we do not anticipate new investment once the project already under construction has finished. Finally, in Spain, where expected investment has clearly lowered in the other three regions, we expect the initial terms proposed by the regulator will be improved along the process. Moving to renewables, investment remained flat in the first half, EUR 2,155 million, as higher investment in offshore wind offset the decrease in onshore, especially solar PV in Spain. By region, 60% of the total investment were made in the U.K.
and the U.S., where we expect no impact from the new federal budget legislation, as it does not affect the 1,100 MW we have under construction or the additional pipeline onshore wind and solar PV that are ready to be operational before 2029 that could qualify for tax credit under the current guidance. Also, New England ONE offshore wind farm will continue to qualify for tax credit if it is in operation before 2023, if we decide to go ahead with the construction. Offshore wind investment reached EUR 150 million in the first half, and all our projects under construction are progressing as planned, with their revenues and supply chains already secure. In the U.S., more than one-third of wind turbines are already installed, with more than 25% of them already sporting energy.
In the U.K., our two offshore wind projects under construction, with a total capacity of almost 2,400 MW, continue advancing as scheduled. East Anglia Three is expected to be fully operational by 2026 year-end, and the works of East Anglia Two are progressing. Additionally, East Anglia One North project, with 900 MW of capacity, has already secured its permits and could participate in the coming ER7 auction. As you know, the U.K. government recently announced an extension of Contracts for Difference from 15-20 years for this new auction. Finally, in Germany, the construction of Windanker, of 350 MW , is ongoing, with a COD expected by 2026.
We recently commissioned Baltic Eagle, with 476 MW , the first investment included in our strategic alliance with Masdar, as was recently expanded to co-invest in the East Anglia Three wind farm in the U.K., with 1,500 MW of capacity in a deal value of EUR 5.2 billion, driving our total co-investment with Masdar to almost EUR 7 billion between these two projects. The East Anglia Three transaction allows us to reduce our consolidated net debt by EUR 2.5 billion as well. In the last several months, we also signed a co-investment agreement with Kansai Electric Power Company for the Windanker offshore wind farm in Germany, with a total investment of EUR 1.3 billion. In addition, our EUR 2.4 billion partnership with Northwest Bank for renewables in Brazil is also progressing as scheduled, with 1,500 MW under construction.
Finally, in Brazil, our agreement with EIC for transmission assets has already delivered EUR 150 million in co-investment. Over the first half of the year, we also closed asset rotation deals worth EUR 1.5 billion, such as the investment in Baixo Iguaçu Hydroelectric Project in Brazil, with EUR 200 million already cashed in, and other transactions like Smart Metering Business in the U.K. and Armaguir Grand Distribution Asset in Maine, that all in all will allow us to receive EUR 1.3 billion in the second half of 2025. Moving to operational cash flow, our FFO increased by 15%, reaching EUR 6,796 million, driven by higher cash flow in our network business in the U.S. and the U.K.
This strong cash generation, together with the asset rotation and partnership, has led to a reduction of EUR 3 billion in our consolidated net debt to EUR 52.7 billion, and to stronger financial ratios, with FFO for consolidated net debt improving by 190 basis points, up to 24.2%, even after the full consolidation of EUR 2.2 billion of debt from electricity in the Northwest. Finally, as you know, following the approval of our total dividend of EUR 0.645 per share in our AGM, tomorrow we will pay a supplementary dividend of EUR 0.409. On top of the dividend paid in February of EUR 0.231. And the engagement dividend of EUR 0.05 per share paid in June. Now, let me give you some more detail of the transaction announced today. The unprecedented investment in network infrastructure in the U.K. and U.S., explained earlier, constitutes a unique opportunity to accelerate our growth.
This 75% increase in investment, expected in the next five years, will allow us to reach a regulated asset base of EUR 90 billion by 2031, multiplying its size by three times in one decade, and increasing the combined weight of our U.S. and U.K. up to 75% of the RAB. With clear and stable framework, delivering average expected return on equity of 9.5%. As a result of this increase in network investment, total gross investment, including power and others, will reach around EUR 15 billion per annum in the coming years compared to the current EUR 11-12 billion. Taking a major step in our strategy to increase our focus on network in the U.S. and U.K., improving our profitability in our risk profile. Financially, the transaction will have a positive impact on EPS, reinforcing our long-term outlook of mid to high single-digit growth in net profit.
In addition, the amount of this equity rise, together with our other ordinary financial sources, including operational cash flow generation, avoiding access to debt market and liquidity in our asset rotation and partnership strategy, will allow us to fully fund our plan without any further need to increase share capital, expected at least until 2030, preserving our rating and our current dividend policy, and therefore strengthening our value proposition of growth, dividend, and financial strength. I will now hand over to our CFO, Pepe Sainz, who will present the group financial results in detail.
Thank you. Thank you, Chairman, and good morning to everybody. Let's go through the results. The first half-net income reached EUR 3.5 billion and grew 20% once compared with the first half of last year's adjusted net income. Underpinning, as the Chairman has said, the underlying growth of the business.
As main change of perimeter, let me remind you that E&W is fully consolidated since March of this year. FX evolution has had a minor effect on results thanks to our FX hedging policy, with the dollar being 0.5% lower, the pound 1.8% higher, and the real 13% lower. A 0.5% increase in revenues due to the network business, combined with a 1% decrease in procurements, drove a rise in gross margin of 1.6% to EUR 12.7 billion. Excluding the EUR 1.7 billion thermal generation asset divestment in the first quarter of 2024, the first half results net operating expenses improved 9.8%, mainly due to EUR 300 million lower storm costs that are also diminished at gross margin. Net personnel expenses fell 2.3%, including a net positive EUR 24 million pension adjustment, and external services fell 8% due to lower storm costs.
Other operating income grew 29% versus the first half of 2024. Adjusted, as I mentioned before, due to the indemnities of past year costs, E&W consolidation, all of them partially offset by an EUR 81 million negative impact of the East Anglia Three deconsolidation. Excluding also the mentioned storm reconciliation impacts and other impacts, net operating expenses improved 0.5%. Analyzing the results of the different businesses and starting by networks, EBITDA grew 31% to EUR 4.3 billion, mainly driven by better performance in the U.K. and in the U.S. In the U.S., EBITDA reached $1,547 million, or 129% up, with higher rates in distribution and better contribution in transmission, and positively impacted by the decision from the New York regulator that allowed us to register under IFRS regulatory assets regarding past costs already accrued and registered under U.S. GAAP, aligning both standards.
In the U.K., EBITDA increased 23%, reaching GBP 745 million, including four months positive E&W contribution up to GBP 150 million, and better contribution both in distribution and transmission. In Brazil, EBITDA increased 9.6% to BR 6,755 million, thanks to higher inflation over a higher asset base and a positive contribution from transmission lines as construction progresses. From April onwards, rate increases in Coelba, Pernambuco, and Cosern improved second quarter EBITDA and will continue to do so during the second half. In Spain, EBITDA increased 9.5%, reaching EUR 892 million, positively affected by adjustments to past year's remuneration following core decisions. The first half energy production and customer business EBITDA reached EUR 4 billion, compared to EUR 4.6 billion in 2024, excluding the already mentioned EUR 1.7 billion thermal divestment capital gain. The business reached 88% emission-free generation.
In Iberia, the EBITDA was EUR 1,960 million, 21% down, with higher production partially offsetting margin normalization. There are EUR 110 million higher ancillary services costs, mainly linked to the reinforced operation of the transmission system of the transmission system operator Red Eléctrica, and EUR 136 million higher levies despite 1.2% revenue tax termination. Record hydro reserves, 9 terawatt hours, will help the performance in the second half of the year. In the U.S., EBITDA increased 5.4% to $508 million, with better wind and solar performance, and despite the fact that the first half of 2024 was positively impacted by the Arctic blast storm, one-off, and there has been during the last quarter lower thermal generation due to maintenance. In the U.K., EBITDA fell 18% to GBP 691 million, due to lower EBITDA from the supply business driven by prices and volumes.
Also, an 11% lower wind resource and lower prices, partially compensated by the recovery from last year's offshore operating problems and lower wind tax contributed to this fall. Net operating expenses, including GBP 68 million, equivalent to EUR 81 million I commented previously, negative one-off impact linked to the East Anglia Three reclassification as held for sale, more than compensated this EUR 81 million or GBP 68 million, more than compensated at the net financial result accounts. In the rest of the world, EBITDA grew 31% to EUR 411 million, with 68% higher offshore production due to the full entry in operation of Sunbrook in France and Baltic Eagle in Germany offshore wind farms, while the supply business lowered its contribution mainly due to the GBP 25 million negative impact in Portugal due to the again ancillary services costs, mainly as a consequence of the blackout.
In Brazil, EBITDA decreased 31% to BRL 564 million, with lower thermal contribution compared to a strong first half of last year. Finally, in Mexico, EBITDA reached $278 million, 87% lower contribution compared with the first half of 2024 that included the thermal assets capital gain in the first quarter, and 42% excluding it, as the remaining business had a higher availability and a better balance in revenues. Depreciation and amortization and provisions are up 2% to EUR 2,820 million, driven by higher asset base, partially compensated by lower depreciation thanks to the full year 2024 adjustments, mainly in the U.S. onshore, and also due to lower bad debt provisions in all geographies, but especially in Spain and the U.K. EBIT reached EUR 5.5 billion and grew 6% on unadjusted terms.
The net financial result improved EUR 183 million, from EUR 848 million to EUR 665 million, thanks to a EUR 292 million positive impact from the East Anglia Three derivatives as a consequence of the consolidation of the asset. Other derivatives, mainly linked to the P&L hedges, had a EUR 69 million positive impact. Debt-related costs grew EUR 157 million due to the higher average net debt, while interest-related costs improved by EUR 48 million due to a better cost of debt, as you can see in the slide that decreases 19 basis points, mainly thanks to lower short-term interest rates, especially with the euro and the pound, and to the depreciation, especially of the real, despite higher interest rates in Brazil. Net debt reached EUR 52.7 billion, improving from the EUR 55.7 billion peak at the end of March and increasing only EUR 1 billion from December 2024 closing.
This positive evolution was driven by a EUR 6.8 billion FFO, plus EUR 3 billion asset rotation and debt disconsolidation that covered the EUR 5.7 billion CapEx, EUR 2.3 billion dividend, and E&W net debt consolidation. Net evolution, together with a 15% growth in FFO, drove credit metrics to be comfortable within rating agencies' thresholds for BBB/Aa1. FFO adjusted net debt reached 24.2%, improving versus 22.9% December closing, and our adjusted net debt to EBITDA reached 3.3 times. Our adjusted leverage ratio was 46.8%.
In the first six months of the year, Iberdrola has signed EUR 11.4 billion of new financing, completing some very important transactions like the East Anglia Three project finance for GBP 3.6 billion, the recently signed sustainable GBP 2.5 billion credit line, the first green senior bond fulfilling EU GBS and ICMA standards, and being the first European company to be financed by the National Wealth Bank. We have also got financed from the European investment banks based on the next generation funds, where we have obtained in all of these transactions benchmark conditions, and we continue leading the green and sustainable financial markets. Net profit grew 20% to EUR 3,562 million on unadjusted terms compared to the EUR 2,969 million adjusted first half 2024 net profit. And now the Chairman will conclude the presentation. Thank you very much.
Thank you, Pepe.
As you have seen, our fair result shows a strong operating performance that we expect to improve even further over the rest of the year. With networks as the key growth driver, thanks to double-digit increase in our regulated asset base, mainly U.S. and U.K., reaching more than EUR 51 billion altogether. On top of this, we will benefit from the new rate cases closed in the first half, mainly United States and Brazil, and the positive impact in the full integration of electricity in the West.
In production and customer, we expect higher production in the second half of the year, driven by the 2,000 MW added in the last 12 months, plus 1,400 MW more that we expect to put in operation before the year-end, as well as the higher wind resource expected in the U.K., where wind conditions in the first quarter were one of the worst in the last 25 years. We have also signed a new PPA for almost 5 TWh per annum in the last 12 months that will deliver revenue certain at the attractive prices for the future. Our hydro reserves remain at record levels of around 9 TWh, allowing us to expect even new record in pump storage, hydropower storage, at the moment with strong spreads.
This positive business outlook, together with our ongoing financial strength, leads us to reaffirm today our 2025 net profit guidance of double-digit growth or mid to high single-digit growth, excluding the recognition of the past costs of the networks business in the United States. To conclude, the equity rise launched today provides us further visibility and security in our long-term growth outlook and gives us a unique opportunity to accelerate our growth fully aligned with our strategy focused on networks in the U.S. and the U.K., reinforcing our value proposition based on strong growth, sustained dividend increases, and financial strength. We will give you more information about our future outlook for the coming years in our Capital Market Day, which will be held in London on September 24. I hope to see you all there this day.
Thank you very much for attending this call and for the trust you always place in us. Now, we will answer all the questions you may have. Thank you.
Okay, starting with the Q&A session, the following financial professionals are asking us questions today: Fernando Lafuente, Alantra; Gonzalo Sánchez Bordona, UBS; Ahmed Farfan, Jefferies; Pedro Alves, CaixaBank; Rob Pullain, Morgan Stanley; Fernando García, Royal Bank of Canada; Jorge Guimarães, JB Capital Markets; Daniel Rodríguez, Bestinberg; James Brand, Deutsche Bank; Javier Suárez, Mediobanca; Andrew Mulder, Credit Suisse; and Jorge Alonso, Société Générale. The first question, the first group of questions are related to the capital rise deal. First one is the main question analysts are asking is related to the rationale of the equity rise. Why do you think the equity rise is a preferred option versus other means of financing?
I think we have an extraordinary and impressive opportunity to invest in networks. I think it's no news for us that we said already in our CMA that our priority is investment in networks, and we will prioritize networks and will be selected from renewables. I think we were expecting that the network business, the network demand increases in most countries, but we are not expecting to increase as soon as it's increasing in the size, which is already being produced. I think once we got already the confirmation of the numbers from the U.K. regulator and once we have already started conversation with the American regulator, we saw what is the size of the investment we have to afford in the next few years, and we feel that that is the best solution. Why? I think it's a sector which is clear, stable, and attractive frameworks.
We are investing in Arab countries that need this huge investment. I think that is regulated, and regulated means they require a minimum equity requirements. I think there are limitations to finance only with debt if we would like to maximize the return. If the debt is paid by the regulator and the equity is paid in different terms. That's why I think we feel it's better to make equity instead of to put already debt, because I think that will be no good for the shareholders. Apart of this one, for the rest of our investment, we will continue to be financed with our operating cash flow, where you saw the needs increasing by 15% in the first half. With our liquidity, we have more than GBP 20 billion, and with the asset rotation and partnership, we will continue.
I think we have already signed very many during the first half of this year, as you saw already, I presented already. I think what is clear is with this opportunity, we are going to accelerate our growth. It's absolutely in line with our strategy. I insist that our priority was network in Arab countries with attractive reserve frameworks. With this increase in share capital, we are preserving our triple B plus rating, and we are keeping and maintaining our dividend policy, which, as we have already done in the last 25 years, as you know, in the company. We feel that is the best opportunity for shareholders. Making that one in this manner is to make it in the form of debt, which I think in the form of debt will not generate the positive returns that can already be obtained if we inject equity in these opportunities.
It's clearly, I think, has no sense. If we have already prioritized networks, it's no sense to sell networks to invest in networks. I think it's clear that our priority is networks, and we would like to give networks, not to sell networks, to invest in networks. It's no sense. I think we would like to be coherent with our strategy. Priority is networks, and we would like to increase our networks. I think to give you some numbers, I think in 2020, we have EUR 30 billion RAB. Today is around EUR 50-EUR 51 billion. In 2030, we'll be EUR 90 billion. If you have an average of equity debt ratio in this RAB, that means we will be paying on the range of EUR 45-EUR 50 billion equity at 9.5.
That generates already just a net profit of the company in these regulated activities on the rates of close to EUR 5 billion per annum. That is the size of the company we are in this moment creating. That is a unique opportunity. That's why I think there has been such a huge demand of investors that they would like to participate in that one. We are very pleased because we are working for investors, and I think it will like investors happy, and that is an opportunity for investors to be even more happy.
Okay, before the following with the question number two, we have had two more analysts: Dominic Nas from Barclays, and Filippo Arpaglian from Rodo. Obviously, I'm sorry for that, Jorge Alonso-Bilongs-Bernstein not Soggen, as I said. Second question: how much buffer financial flexibility are you trying to obtain with this capital increase?
Can you give guidance about what do you expect in terms of leverage metrics over the next five years?
We are fully confident that this transaction is more than sufficient to fund our extraordinary investment and opportunities in the U.K. and U.S. I think, as I was saying, it is 75% more investment in these six years toward the previous six years. I think this transaction will come together with another source of financing. I think we are generating additional cash flow. I think we are seeing that our cash flow in the first half is increasing by 50%. It also will increase more thanks to the new investment, which I think the regulator is already generating cash flow from the very beginning. Liquidity as well, we have more than EUR 20 billion liquidity. Recently, we signed another line of liquidity of EUR 2.5 billion, Pepe, no?
Yeah.
Yeah, EUR 2.5 billion, and we have more than EUR 20 billion liquidity. I think we have plenty of access to the debt. I know the bankers knocking on our door all the time for giving more money, and we have easy access to the bond market. I think Pepe will explain, has already explained clearly. Also, we will continue with our rotation. Those things we consider are not already strategic for us, or we continue making partnerships. I think only with Masdar, we have partnerships of EUR 7 billion. With Norges, it is EUR 2.4 billion, and with others, I think with Kansai, we have EUR 1.2 billion, and others, and others, and we continue on this.
I think with all those things that we consider, we have money enough to cover and to fully invest in this opportunity and preserve our ratios and preserve our dividend policy. It is very important on that one. I think for the 25 years in the company, I was already maintaining a very consistent and coherent dividend policy for our shareholders. I think we start already, we committed with our shareholders, the dividend is a must, and we are already just following these criteria in the 25 years. That means we will keep already our financial solidity. We may increase our growth or speed up our growth, and we keep our dividend policy. Nevertheless, I think that is the basis of our Capital Market Day on the 24th of September that we can already present with more detail. I insist on that one.
I think it is a unique opportunity, and that is what today the shareholders or the investors are already asking for more and more over-subscribing this opportunity.
Next is, given the recent changes in our management team, if this equity rise related in any form to the naming of the new CEO. And given his past as M&A officer in Iberdrola, should we expect these proceeds to be allocated in a big M&A transaction?
Absolutely it is not related. Pedro is a good guy. He has a lot of things to do. Already looking for improvement of the business. He's fully committed with the company. He knows the company very well. In a few days, he's in the company fully, taking care of all those things which are related with the business. I think this rationale of transaction is nothing to see with himself.
It's something which is rational, which is an opportunity what it appeared. I think that this transaction, this opportunity of increasing the investment plan in networks in the U.K. is just because the RIIO-T3 has been published. It's as simple as that one. It's not Pepe, it's not Pedro, it's not Juan, it's not Lope. It's just Ofgem, we have already published a RIIO-T3, which is GBP 14 billion investment, which I think is absolutely confirming our expectation. That's why, for confirming this expectation, we are already just looking for this money. Same thing with the United States. I think the new New York case has been presented, negotiated with the regulator. Now it takes their time, but I think it's aware. They have not already accepted our proposal, and now we are in the negotiation how that can evolve.
I think certain those are the reasons, nothing to see with Pedro, which I'm delighted what he's doing and what he has to do. That is nothing to see with himself for the moment.
Next is related to the asset rotation plan. Shall we conclude from your messages that you are not going to do any meaningful asset disposal?
I think it's absolutely not. I think we will continue with our asset rotation. We'll continue with our partnership strategy. Last year, I think it's business as usual plus this extraordinary opportunity. That is the approach. I think this destination of this equity rise is for organic growth, organic growth, organic growth, which means investment in transmission and distribution, mainly in the U.K. and United States for already providing and delivering the commitment we can take with the regulators. This equity rise is linked, I insist, in this extraordinary investment.
I think, I insist, we hope it is sufficient to fully fund our plans together with another sources for ordinary investment, which I insist is the cash flow generated, the liquidity we have, the access on the market, and the asset rotation and partnerships that we will continue as we've been doing during the last few years. This transaction is not triggering additional asset rotation and partnership on top of what we are expecting. I think it's business as usual plus this extraordinary opportunity. If there are any potential opportunities for investment arise, we will not expect the moment at all that additional asset. Any rise equity again. We will make already with asset rotation as we did. I think tomorrow we have to make any, let's say, small opportunity. I think we'll make as we have already done another one.
I think we divest something for investing in another thing. I think we are not going to use this money for making already a new, let's say, acquisition. No, it is for that. It is for extraordinary investment in networks, mainly U.K., United States, in the lines defined by RIIO-T3 and defined by the new rate case which we are underway in New York and Maine.
Next, you have publicly stated that you now do not expect to need to come back to the market until at least 2030. Under which circumstances could this situation change?
Please, I think we can foresee what we can foresee. We have the picture of today. With the picture of today and with the situation of today, that is what we are foreseeing in our commitment. You know we are not already a company which changes our rules every night.
When we said something, we are committed and we deliver what we committed. We are committed that today's picture, knowing what we have today. We need money for an extraordinary thing. We have been for many years already maintaining our dividend policy, maintaining our investment policy, delivering our commitments, always ahead of our outlooks. That is our style. I think now with the visibility we have already for the next five years, with this visibility, we do not need any other increase in share capital. With our cash flow generation, with our liquidity, with our asset to the market, we are able to invest the visibility. We are going to present to you all these numbers on the 23rd of September. Enough resources for affording the visibility of the investment we have to afford in the next few years.
Keeping and maintaining our dividend policy, keeping and maintaining our financial solidity as we did, and using our asset rotation if needed and continue with our partnership as we have already done in the last months. Next query is about other means of financing the plan. How much debt hybrid do you expect to raise over the next five years? I do not know the numbers, but I think what I think for us is very clear that our FFO net debt will be in line with our triple A plus rating. That has increased in the size of the company. Also, if the size of them grows, the debt will grow. I think we will preserve our strong ratio and we will maintain our dividend policy. In any case, I think we will give more details on CMD. I think you, Pepe, would like to add anything.
I think the data we will share with everybody on the 24th of September.
Yeah, absolutely. Absolutely right. I think the idea is to maintain this. Capital raise has been done to maintain, to be under the triple B plus rating, which is where I think that is the cost of capital. Lowest for us. That is the idea. Obviously, we have the numbers here, but I mean the message is that we will be in the triple B plus rating well into this range. That is what we are expecting. Obviously, we will raise a little bit the debt, but as the Chairman was saying, we will also expect to raise the FFO. The ratios will be comfortable between the triple B plus rating.
Next question is about dividend policy. I understand you are maintaining the dividend policy, but could you explain if your decision of issuing equity has been driven by the need to continue to pay an attractive dividend? By how much should you have cut your dividend to avoid the capital increase? Just in case.
I think I would like to insist again. That is an extraordinary opportunity. What we can already increase our RAB at nominal value instead of paying a premium of 40-50%, which is the normal transaction which is made in all transactional regulated activities. For that, we would like then the shareholders' benefit of this opportunity of in value increase of the company. I think nothing to see with the dividend and nothing to see with the debt. The debt is decreasing, the dividend is increasing, and we would like to finance that one, maximizing the return for shareholders.
If we increase the debt, that should be bad for shareholders because the debt will not be remunerated. It will be only a pass-through. The equity is going to be remunerated. The debt is a pass-through. If we put more debt in the regulated activity, it's good for banks. It's not good for shareholders.
Next, why is this capital increase aggressive for Iberdrola shareholders?
Because it's aggressive. I would like to insist. I think they paid the equity at EUR 9.5. The money is costing to us a 4% betweenEUR 9 and EUR 4. You see how much, what is the return. It's very simple. I think, Pepe, you can make the numbers. For me, it's very clear. The equity is paid at EUR 9.5, and the money is costing at 4.5%. The difference is aggressive.
That is what the Chairman says.
This allows us to invest an additional EUR 5 billion in networks, as the Chairman was saying, with an average return equity of 9.5%. Obviously, that is aggressive both in terms of net profit and in terms of EPS.
Last question related to the capital rise, although I think it has been already explained in the previous answer. Why do you think now is the right moment to raise equity? Why not wait until your next Capital Markets Day on September 24th?
I think we would like then the Capital Market Day will be we talk about business. We talk now how to finance the business. I think making that one, we can already just confirm then the way how we will finance is already fully solved. Also, it's because I think it's the audit I mentioned before. The audit and draft determination was published a few days ago.
I think it's the time for saying, okay, how to make that money to give already to a regulator the certainty that we have financial resources for affording the investment required. Same thing in the U.S. I think we just filing the new rate case. I think the amount of money we are already presenting is such a huge. The obvious question for a regulator is, do you have money enough for funding this investment? I think we can say now, yes, we have money enough. We have equity enough for funding either of Jin and either U.K., either in the United States. I think that is already. I insist on that one. It's an unprecedented opportunity for accelerating our growth and delivering our strategy in networks, which is our priority in two countries, which is clear, stable, well-known for us.
I think we are almost 20 years in both countries, attractive with predictable frameworks. I was recently with the British Prime Minister, and I think he was already explaining the policy-related electrification of the country and the measures they would like to make for making this country more attractive for rising, for attracting investment. That is what we would like to already benefit of this opportunity.
Moving forward to the question related to the results, the first one is, could you please provide your view on the extension of the nuclear facilities, possible extension of the nuclear facilities in Spain?
I think nuclear plants, I think, I said as an engineer many times, I was repeating this for many times, are efficient, are safe. I think they provide autonomy and stability to the national energy system. I insist it's the most efficient solution to keep the lights on.
That's why I think all European countries are already extending, European and non-European, extending the life of this nuclear power plant. However, in the case of Spain, with the current taxation, with around EUR 30 MW h, which is compared with 15, is half with Spain and France, may then not be viable with the forward prices we are expecting in the future. We was already what happened between 2010 and 2020. We were in a lost in our nuclear power plant. Why? Because a nuclear power plant are not already manageable. It's a price takers. So whatever price is set in the daily, I think we have to, we are paying on these stamps. That's why I think we cannot, as another, I think we can offer, make an offer, other price, another one. In those one, we cannot stop and put in service.
I think it's already working 24 hours a day. That's why I think this. Baseload system, which are not already, you cannot manage in the sense of others like hydroelectric or like CCTs of gas. That's why we are asking if that is the most efficient solution to keep the lights on. I think it's not at our cost. It's already. Has to be already in a manner that we can already not be in a loss. That's why we ask for the reduction of this tax burden. I think even if this tax burden is already, let's say, flexibilized, I think some region, Valencia, is already flexibilized in that one. It's already announcing in this region to reduce this taxation. I think even though I think the existing legislation. If there are no changes. They don't allow us to ask for this extension.
I think it's needed changes in the actual legislation to allow us for asking for extension. We are not allowed to ask. I think that I'm sure then that can be solved. I think the point is the first and the second. First one, taxation. The second one, the government has to allow us to ask for the extension even after reduction of this taxation. I think in any case, what I can say for the Spanish citizens, we are power enough in CCTs in gas, more than double than that power we have already in nuclear to provide the service. They have to pay an extra price of this already. Make already by the analysis of Pricewaterhouse that we disclosed last time. We are expecting an increase of 35% extra cost for consumers if the nuclear power plant are closed. That is analysis made by PricewaterhouseCoopers.
Which is confirmed as well by PricewaterhouseCoopers, what is happening in Germany since they closed the nuclear power plant. The German consumers are paying more than those countries that are keeping the nuclear power plant in operation. I think that is our proposal, very clear. With the present taxation, make this power plant not economically not viable, even if they are absolutely the best. Most efficient economical solution for keeping the lights on. I think the lights on will be made with combined cycle of gas, then we have double power than the nuclear. I think the Spanish citizens can be sure that we can provide that one, but the cost will be much more expensive than keeping those ones open. That is the point we have to be taking a decision. We are not making the energy policy. The energy policy is making by the governments.
The government has to decide. We are already, if they like to close, we close. If they would like to keep open, we keep open. And we have the solution. But I think nevertheless, I think we are in continuous dialogue with them. The thing is, the decision is not in our hands. It is in the hands of those ones who are making the energy policy, which is the government.
Next is related to the CNMC proposal for the next regulatory period in networks in Spain. Our opinion. I come to the same point.
I start with the same comment. Energy policy is made by regulators and the government. I think we have to adapt to these policies. I think it is clear the European Commission has provided very clear guidance how to incentivize the networks investment.
They said clearly the first thing they are talking is elimination of the investment caps. We have investment caps in Spain still. We need, that was said by the European Commission, anticipatory investment to meet the national integrated climate plan change. Means they need to incentivize investment now in that front if we would like to electrify. They talk about the elimination of delays on recognition of investment. We are having problems on that one. The fact we have in the court several demands or several litigation because of no recognition of certain investment already done in the past. That is recommended not to happen. Last one, they are talking about rate. We have already to cover full cost recovery to be attractive for attract this. Hundreds of billion euros the Europe need already in investment in the grid.
However, this last proposal, I think, in my opinion, is providing a clear negative signal to the market, signaling the side of reducing the maintenance cost, so the recognition of the cost of maintenance of the current network infrastructure and not incentivizing the investment in new assets. I think that is my reading of what they have already done. I think we will make our answer and our response to the consultation in August. I think we expect then the things will move in the right direction. Nevertheless, as you saw, the size of our regulated business in Spain is quite small compared with the rest of another country. By 2030, it is less than 10% of our total regulatory asset base, which I think is important, but I think it is not crucial for us.
Next is, what's your take on the draft proposal draft determination on the RIIO-T3 framework elaborated by Ofgem?
I think opposed to the Spanish one, I think our view to that one is positive. It recognizes the need of significant more investment in electricity infrastructure. It is aligned with the U.K. government energy and industrial strategy, which positions electrification as the key driver of the economic growth, which was reflected in the industrial strategy of the government. It's as well, the government is also underlining the relevance of creating a stable and attractive framework to enable private investment. That is what is reflected.
I think it's that why I think the draft determination, including our case, this EUR 14 billion new investment in transmission up to 2031, on top of the EUR 8-EUR 10 billion that will be invested in the distribution in the next five years, so which part of them corresponds to ED2. Another one we expect already will be in the ED3 once ED2 is finished in 2028. The draft also introduced improvement in the financial parameters to make that more financeable. I think we are now in talks with Ofgem because for looking for some details and to improve some of those parameters. I think globally, we are positive, but I think they are thinking that we are already negotiating to improve certain things. Also, I have to say about the British government, the coherence of the British government, the British regulation.
I mentioned to you as one of your questions in the last conference, you asked about the zonal pricing. I will say that that is going to happen. I can confirm that the government has already confirmed my advice that that is going not to happen and is not to proceed with this zonal pricing.
Next is related to the East Anglia Three. Can you please outline what is the impact booked in the different lines in the P&L of the sale of East Anglia Three?
Pepe, you can explain that one.
Yeah, as I have mentioned in other income, which is in the expense part, so over the bid that we have a minus EUR 81 million negative impact. We have around EUR 250 million positive impact on the derivatives part. In this first half, the impact is plus EUR 170 million.
The only thing is that in the third quarter, we will have to book another negative impact, precisely in net operating expenses of around EUR 60 million. That will reduce at the end of the third quarter the total positive impact to around EUR 100 million before taxes, which is around EUR 75 million after taxes. As of the first half, we are booking EUR 170 million before taxes. In the third quarter, we will add a negative impact of around EUR 60 million. That will give us a net profit for the whole transaction of slightly over EUR 100 million before taxes and around EUR 75 million after taxes by the end of the third quarter.
Next is related to the effects, possible effects of the gesture, this rejection of the Spanish Parliament of the anti-blackout decree.
As always, we respect the decision of the Parliament.
I'm going to enter into the local debate. We have enough debates and we are going to continue the debate. I think as far as I know, some of the measures included has already a sense. Sense in the area of increasing security of supply of the system, reduction of the bottlenecks that we are creating. Letting demand, which is not covered, especially for industry. We have been already for years already claiming for that one. Promoting the new electricity demand. With level playing field. I think it is. I am sure that I heard as well that another position is thinking to present just a law for covering all these things, which I think I do not know if it has to be a royal decree or a law. Sorry, it was off. I will come back again.
I said then I respect already the decision of the Parliament, and I do not like to enter into the local debate. I was saying that there are some measures included we have already sensed, such as security of supply in the system, reduction of the potential bottlenecks, covering the latent demand we cannot be covered today, especially in the industry. One thing which is very important is promoting the growth in electricity demand with a level playing field. I think what I heard is that the position is presenting or preparing just a law covering all these things and others. I do not know which ones. I think we will see what is the point. I do not like to come into the parliamentary debate. I do not know some reason for that one.
I think the important thing is to solve the problem that we have in the system. I think those one, they have to look what is the best way for solving those things.
Last question received is one related to the press news of today about the possible plan of Iberdrola to sell the remaining assets in Mexico. Can you comment on this?
I do not comment on rumors. No idea.
We have several questions about the next Capital Markets Day to be held on September 24th. Obviously, we will drive all these questions to these Capital Markets Days. Now, please let me now give the floor to Mr. Galán to conclude this event.
Thank you very much for the participation in this call. As always, investor relation team will be available for answering whatever questions you would like to pass.
I think I would like as well to use this opportunity to thank the teams we have already worked on the transaction, which I think is becoming already a success. Pepe and your team, thank you very much because you have already done a great, great job in that few hours where you prepared all those things. Thank you very much, all of you. I hope you enjoy already with this new opportunity that we have already in this moment. Thank you very much for your attention. If you have not seen the opportunity, I wish you a very good summer holidays. Rest of it and see you in September. Thank you.