Good morning, ladies and gentlemen. Thanks for being here with us today for the strategic update presentation of EDP 2019/2022. Going through the agenda. First, we'll start with the 2018 results presentation, which was already released to the market before market opening today. The first part of main highlight will be presented by our CEO, António Mexia, and then a more detailed part by our CFO, Miguel Stilwell. We'll have a short Q&A session, and we'll move to the strategic presentation, which in the meanwhile, will be also made available in the CMVM. We'll also made available to the people in the room pen drives with the presentation, so we'll not have hard copies given our sustainable policy. The strategic presentation, the first part will be presented with the strategic part by our CEO, followed by the presentation of the platforms and financial part by our CFO.
Afterwards, we'll have a Q&A focused on the strategic presentation, and we'll invite everybody to a light lunch afterwards. We'll start then with the 2018 results by our CEO, António Mexia.
Thank you, Miguel. Thank you, everybody. Good morning. We will have basically two parts, one talking about 2018 and one talking about bright future. Just a note, the question of not having the small book that everybody loves to take notes is because of saving the planet, but also being digital. It's mandatory now. Thank you again, I would like today to start with the results and let me see. Okay. I'm just showing in this screen. Can we move this to this screen to the left? We see on this first slide that starting with the recurrent EBITDA, it decreased by 3% to around EUR 3.3 billion. This includes, of course, the positive contribution from the increase of 2% of our installed capacity, 100% of it through renewables addition.
On the negative side, we need to talk about this, our results were penalized by a very weak wind resource this year. Namely, in the second half, we fell short 6% of the long-term average, we were at the six years low. Regarding the hydro resources, despite the full year of 2018, in line with annual average, the first quarter alone was marked by a very weak hydro conditions. Our performance in 2018 continued to strangely penalized by heavy taxes and levies and adverse regulatory decisions in Portugal. They were already anticipated. They were basically introduced in 2017, of course, the impact, the full-fledged, was in 2018. We will see these in detail because I think it's important that you analyze the 2018 regarding these figures.
We also had a strong performance regarding OpEx, posting a 3% decline in Iberia and 1% improvement in real terms in Brazil. I think that you'll see now, but also looking to the future, now we all need to talk about efficiency. We have been talking about efficiency for a long time, and clearly, we have been delivering. Our recurring net profit rose 3% to EUR 797 million, positively impacted by the 12% decline on interest costs, following the decline on cost of debt by 30 basis points to 3.8%, down from 4.1%. Note that the report that year-on-year profit, slightly above 50%, is strongly impacted by non-recurrent items. Namely, a negative one-off provision of EUR 285 million related to the decision, as you know, of retroactive cuts on the CMEC revenue, which EDP is currently challenging in courts.
The second item was EUR 600 million positive, says a very sizable gain on the sale of Naturgas in 2017. This one-off, we are going to challenge it, and we are pretty sure that we'll be successful. Not tomorrow, it take time. Anyway, we fully provisioned the EUR 287 million. Our net debt was down from EUR 13.9 billion to EUR 13.5 billion comparing December to December, reflecting a 50% growth in our recurring organic cash flow. I think that's an important item that we want to share with you. We grew for a little bit more than EUR 600 million to EUR 1.2 billion. This due to a good news is we have also a EUR 600 million decrease year-on-year in regulatory receivables. Regarding dividend distribution, the management is proposing the maintenance of a dividend per share of EUR 0.19, which corresponds to our floor. We are committed to this floor.
Of course, subject to the approval of our annual shareholders' meeting that will take place on the 24th of April. We expect that this dividend will be fully paid in May. Moving to slide three, highlights from focused growth, optimization, and efficiency. What we see is that we were rather busy in terms of our business plan execution, despite all the challenges that we have shared with you. We have continued our growth strategy based on renewables and also in Brazil. Regarding wind onshore and solar, in 2018, we have built over 800 MW of capacity and secured PPAs of 1.3 GW, of which 0.4 GW refer to two big solar projects, one in the U.S. and another one in Brazil. Regarding offshore, we also had a busy year.
On Moray East project in U.K., started construction following the closing of the final investment decision and the project finance in December. In France, we finally got full visibility after a long work on the long-term tariff regime, and our projects were granted the environmental permits. Finally, in the U.S., we were awarded the lease area in Massachusetts, as you know, which could accommodate up to 1.6 GW, and which we will now start to develop in a partnership. Moving to Brazil. Clearly, the keyword in terms of growth is networks. We have commissioned our first transmission line last December, 20 months ahead of the initial schedule. I think it's important. Basically, we have been repeating here what we did also in the generation project, well ahead of and clearly different to the other players in the market.
Furthermore, we have built a 23.55% stake in Celesc, which grants us management involvement in the company and, of course, optionality for the future. We were also very active on portfolio optimization with the execution of the first sale of a majority stake in a portfolio of wind farms, 500 MW in the U.S. and Canada, which allowed us to recycle capital with upfront value crystallization. In order to maintain a low-risk profile for our investors, we have also reduced our stakes in wind offshore projects from 77% to 33.3% stake in Moray East, and from 43% to 29.5% in our two French projects. Lastly, we have disposed several non-core assets during 2018, namely mini hydro assets in Portugal and Brazil and biomass operations in Portugal with more than EUR 280 million cash effect. I think it's a step.
There are steps in a clear direction that shows exactly what we want to do. In terms of efficiency, we have kept a steady outperformance of our targets, reaching EUR 20 million savings in 2018, anticipating our OPEX target by two years. In terms of financing, we have sold EUR 1.3 of tariff debt, as I mentioned, and we have been pioneers in green bond issuing in Portugal with the seven years EUR 600 million bond in October with a yield of 1.95%. More recently, already in January, we issued a EUR 1 billion green hybrid priced at a yield of 4.5%. I think that's two important instruments. Moving to slide four and understanding Iberia. Clearly, we are heavily penalized by adverse regulation.
The largest negative regulatory item was the decision of the alleged inventory cost of CMEC, representing what, as I mentioned, the EUR 285 million provision, and the lower than contracted final adjustment of the CMEC as decided by the government, which together represented EUR 303 million one-off cost in 2018. Since EDP considered such decisions violate contracted terms, it has taken the necessary step to protect its interests and rights. Notwithstanding this, EDP prudently provisioned these issues. The energy tax, CESE, corresponding, as you know, to 0.85% on assets kept in place despite its supposed extraordinary nature, and represented a negative impact of EUR 65 million earnings, EUR 40 million in generation and EUR 25 million in distribution. Worse is to note that something that people have talked a lot in the past.
The Portuguese electricity system debt decreased by EUR 800 million to an overall debt of EUR 3.8 billion, proving the system steady, deleveraging path, which will enhance the progressive phasing out of the energy taxes envisaged in the public accounts. Clearly, we are on the phasing out, and this gives rooms and credibility to that idea of the CESE vanishing. In terms of generation tax. In 2018, this amounted to EUR 56 million, reflecting the changes introduced in the second half of 2017 until the suspension of clawback since October 2018. In any case, contrary to the European Commission recommendations, the cost of social tariff in Portugal continued to be supported by conventional power plants, representing an EUR 84 million extra cost to EDP.
The start of the new regulatory period for our electricity distribution in Portugal had also an adverse impact on regulated revenues, which showed a EUR 164 million year-on-year decrease last year. Our results in 2018 encompassed a EUR 672 million negative impact from sector taxes and revised retroactive cuts on CMEC and year-on-year cuts on regulated revenues. Some, of course, a lot of them are one-offs, but the figure is big. In slide five, we control what we can control. Of course, we can work, we challenge what we cannot control. Talking about another thing that we cannot control, but we see that 2018 was marked by the normalization of hydro resources in Portugal, although very weak, as I mentioned in the last quarter, and abnormally low wind resources in our main markets.
We have a significant gradual improvement of hydro resources, but six-year low for wind. Hydro production was 5% above historical average, despite a dry last quarter. This compares to a very dry period last year, which justifies the 85% year-on-year increase on our hydro production area. Wind resources, as I mentioned, was at this record low. On slide six, talking about recurrent EBITDA. It increases 2% ex-Forex because of this hydro improvement and growth in Brazil, offsetting weaker wind resources and regulatory cuts in Portugal. Recurrent EBITDA is penalized by a 5% negative impact from Forex. It was significant last year, resulting from the depreciation of Brazilian real and U.S. dollar versus the euro. Excluding Forex, recurrent EBITDA would have grown 2% versus last year.
In Brazil, EBITDA grew 14% in local currency, propelled by a decrease in energy losses in distribution and higher demand, coupled with our low-risk hedging strategy on hydro volumes and energy prices. In Iberia, an increase of 1%, -2% in Portugal and +12% in Spain, due to the increase of hydro production, partially mitigated by regulatory measures in Portugal. In renewables, EBITDA, excluding Forex impact, went down 2% year-on-year, reflecting not only the wind resource, as I mentioned, 6% below long-term average, but also the decline in average revenue per megawatt, as you know, expected with the extension of some of the PTCs after 10 years in U.S. This trend, as explained in previous conference calls, is associated to the increased competitiveness of renewables, and of course, with this change of the U.S. market. In slide seven, the strong performance.
Let's go to what really you control. Strong performance on operating costs. We continue to see a strong performance. Excluding Forex, operating costs show the 1% nominal growth in a period in which our average generation capacity grew more than 1%, and the number of customers connected with rose by 1%. In Iberia, OPEX fell by 3% in nominal terms and almost 4% in real terms, in line with a 4% reduction in average headcount in Iberia. We lost 275 people. In the last three years, we are talking about lost 560 people. In Brazil, OPEX in local currency increased 3% or almost -1% in real terms, considering the inflation of close to 4% in the period of the expansion. Activity with 2% increase in the number of customers connected in distribution. Recovery clear in Brazil.
At EDPR, core OPEX per megawatt, excluding Forex and one-offs, rose 3%, reflecting the development of our O&M self-performing strategy. We are sure that will allow us to achieve significant efficiency improvements in the near future. Moving to slide eight, let's talk about recurring net profit. Overall, our recurring net profit grows 3% to EUR 797 million, benefiting from lower financial costs, hydro recovery from weak levels in 2017, and underlying growth in Brazil, which more than compensated the effect from adverse regulatory changes in Portugal and the non-ops, and weak wind resources in 2018. Recurrent net profit in Portugal decreased by 16% as the hydro recovery and OPEX nominal reduction was offset by those regulatory changes.
In Spain, recurring net profit rose by 8%. Note that in Portugal, the company showed a reported net loss of EUR 18 million for the first time since the first privatization stage of the company in 1997. The contribution of Brazil to our consolidated profit rose 29%, or EUR 25 million, following the 108% increase of EDP Brasil's reported net profit in local currency. EDP Brasil's contribution also increased by 21%, propelled by a 14% increase of EDP's net profit and our EDP stake, 82.6%, since August 2017. Once again, I would stress the organic cash flow growing and being enough to not only to support the dividend proposal that we have presented, and we will be voted by shareholders, but also the expansion CapEx. Having said this, I will pass to Miguel. Thank you.
Thank you, António. Good morning, everyone. Moving on to some of the more detailed results analysis, if we see here on slide 11. You can basically see that the focus continues clearly to be in the growth in renewables. Now renewables by capacity already represents around 75% of the total capacity. This is including also hydro and wind and solar. In terms of electricity production, also representing two thirds of the total production. An increase in 22% in the year of 2018, mostly driven by, obviously, the increase in hydro production versus the previous year. Moving forward to look at the different business units. If you look at EDPR EBITDA, obviously this decreases 5% year-on-year to approximately EUR 1.3 billion. This includes a negative Forex impact of roughly around 3%. On one hand, EDPR's average installed capacity rises by 6% to 10.8 gigawatts.
However, some of these benefits were offset by the weaker wind resources, which António just mentioned, which were 6% below the long-term average in 2018. The EBITDA was also impacted by a 7% decrease in the average selling price, excluding Forex. This was a consequence, mostly of the lower prices in Poland, Romania, and the U.S., and also by the termination of some of the 10-year PTCs, which led to a 15% decrease or a 14% decrease in PTC revenues. Again, this was already anticipated when we were looking at 2018. Moving forward to look at generation supply in Iberia. Here, there's an increase in recurring EBITDA of roughly 40%, mainly driven by the hydro resources, which increase overall to roughly EUR 800 million. This has got to do with, obviously, the normalization of the annual hydro resources, despite the weak hydro resources in the fourth quarter.
Overall, we have roughly 13.7 terawatt-hours of production in 2018, which accounted for 39% of EDP's own production, prompting a 14% decrease in the average sourcing cost to roughly EUR 29 per megawatt hour, which you can see here, a 14% decrease. The end of the CMEC of the old regime, which ended in June 2017, also had an impact of roughly EUR 103 million year-on-year in terms of EBITDA. The EUR 5 million left over is just a correction from previous years. Looking at EDP Brasil in local currency, we see that there's an increase of 12% in EBITDA to roughly BRL 2.5 billion. In terms of efficiency, the trajectory is very good. Decreasing the non-technical losses over the last quarters, which we've been seeing in the DisCos.
You see here both for Espírito Santo and São Paulo, a decrease of 0.8 and 1.1 percentage points. Pataxó also had a very strong performance in 2018, and were able to maintain the availability levels well above the contractual benchmarks. This translated into an availability premium of BRL 135 million, compared to the penalty we'd had in the previous year. This was partially offset by the programmed maintenance that occurred in the second half of 2018. Finally, I think it's worth noting the good results on the hedging strategy, which reached a total amount of BRL 151 million, BRL 121 million greater than the previous year. Looking at regulated networks in Iberia. This decreased 19%. This is already excluding the gas distribution networks, which had been sold in 2017.
This decrease reflects mainly the networks in Portugal, which represent obviously 77% of the EBITDA in the segment. The OPEX had a good performance, it improved 3% year-on-year, despite the 3% growth in volumes distributed. However, this was not enough to compensate the impact from the regulatory review in Portugal, which mostly justified the 13% decrease in regulated revenues. Additionally, in terms of EBITDA from our distribution network in Spain, it's amounted to EUR 145 million and reflects a relatively prudent accounting approach to some possible negative regulatory changes. Now let's look at net debt. Net debt decreases to EUR 13.5 billion as of December 2018. This reflects, as António mentioned earlier, EUR 1.2 billion of recurring organic cash flow.
Reflects the dividend payments to our shareholders of EUR 700 million, also around EUR 400 million of net expansion investments in the period, mostly allocated to wind onshore in the U.S., but also the regulated networks in Brazil. Additionally, the net debt was also positively impacted by the EUR 600 million reduction in the regulatory receivables, which we sold over 2018. This was relating to the tariff deficit and also the good performance of the electricity system debt, which as was mentioned, reduced roughly EUR 800 million over the period of 2018. As a result, the stock of debt in the electricity system is now roughly EUR 3.8 billion in 2018, benefiting from the demand growth in Portugal and also the past cost cuts. Overall, the net debt to recurring EBITDA stood at roughly four times. Now, talking about financial liquidity.
We have EUR 7.6 billion of liquidity, including the EUR 1.9 billion of cash in equivalents. We also have EUR 5.6 billion of available credit lines. Part of these were recently extended as of March 2018, for another five years, plus extendable for another two years. This covers our refinancing needs beyond 2021, so very comfortable position. It's also worth highlighting the EUR 750 million bond issued in June with a yield of 1.67%, the securitization of EUR 900 million of tariff deficit in Portugal, and as has already been mentioned, the first-ever green bond of EUR 600 million, which we issued in October, with a seven-year maturity. 2018, we continued down this green path, and we're now reinforcing the balance sheet as of January with a EUR 1 billion subordinated green note of the 4.5% mentioned. Looking at financial costs.
The net financial costs decreased 32% year-on-year. Firstly, this is related partly to the net interest costs, which reduced by 12% or EUR 77 million year-on-year. This is supported by a 30 basis points decline in the average cost of debt to 3.8% overall, and an 11% year-on-year decrease in the average debt, obviously relating to in 2017 when we sold Naturgaz. Secondly, there's a positive impact of EUR 30 million from Forex and derivatives that are essentially tied to the evolution of the US dollar against the euro. Thirdly, a EUR 87 million gain on the reduction of our equity stakes in wind offshore, mostly in the U.K. and France, just part of our recurring asset rotation strategy.
Finally, EUR 46 million, which is relating to other items, mostly the badwill associated with the acquisition of our stake in Celesc, some higher financial guarantees revenues in Brazil of around EUR 14 million, and also lower costs with our tax equity investors of around EUR 8 million. Finally, in terms of the last slide. Reported net profit amounts to EUR 519 million in 2018, with the obviously significant year-on-year decline, which is very impacted by one-off results. In particular, when comparing with 2017, the EUR 558 million gain from the sale of the gas distribution in Spain, which was booked in the third quarter of 2017, and also the EUR 285 million one-off provision relating to the CMEC, which António mentioned.
There's also an issue that the higher share of results in EDP Brazil and EDP Renewables, as they had better results, there's also a more significant percentage of minorities coming out on that line. Excluding some of these extraordinary items and one-off impacts, the net profit in 2018 increases 3% to EUR 797 million, which benefits, as has been mentioned in this presentation, from the strong improvement in financial results in associates, which increases by EUR 238 million, and also the very strong net profit growth in EDPR and EDP Brazil. Overall, this positive evolution of financial results together with the underlying growth in Brazil and the hydro recovery, more than compensates the decline in the EBITDA, prompted by the regulatory changes in Portugal, the weaker wind resources, and Forex. That basically would conclude the presentation.
I think the idea now would be to turn over to Q&A. Thank you, Miguel. Thanks.
Thank you, Miguel. We'll go for a short Q&A session on the results before moving to We have there Rui Dias from UBS. The micro, please. Just to get the people in the webcast could listen. In the third row there. There.
Good morning, everyone. I have a few questions. I'm going to keep this one. I'm just going to start with one, specifically on the 2018 results. It's about the other cash flow line. Just very quickly, just to confirm if the EUR 300 million of other cash flow includes the CESE that you haven't paid since 2017. Also, you mentioned that you have extraordinary pension contributions on that line. Last year, you also had extraordinary pension contributions. The question is, when should we expect to see these extraordinary contributions to stop? Thank you.
In relation to the first question, yes, the CESE payment was done in 2018, it's included there in that cash flow item. In relation to the extraordinary pension, we are contributing to the pension plan in relation to medical acts and death, if you want. That's sort of the technical term. There was a particularly strong contributions over the last two, three years.
It will now settle into a more recurrent, lower level of contributions to the pension plan along a more foreseeable line. The contributions should reduce quite significantly going forward versus what they were in the previous years.
Next question. I don't know if someone else has some more questions on the results.
If there is no more questions, we'll move for a short video, an introduction of the strategy update, and then our CEO, António Mexia, will start with the strategic part of the presentation.
Hope you like the movie. It's a pleasure to be here. I would like to start remembering the first time when I arrived the industry, coming from the oil side. It was in 2006, we were presenting in London, our vision for the sector and what we believe that would be the evolution. I remember at that time that EDP was considered eventually not very interesting because we were not enough exposed to energy prices in the market. Finally, then, we have seen that some of those contracts were challenged, but anyway, we were not there. Clearly, what I would like to stress is that moment, in 2006, we have decided that we wanted to be driven by renewables in a world that should be different. Also having the idea of the disclaimer, it takes just one hour.
When we have decided in 2006 this is what we are going to do, we are going to see two people on stage, our context, our vision, our platforms, our financials and our final remarks. Clearly, when we started in 2006, we needed to create a vision that, I believe at that time was really different. Different in the sense that, renewables were considered, now it looks absurd, but they were considered by a lot of them as pet projects. Too small, not enough centralized, not big enough. It was against what was the philosophy of the sector. I would say that eventually we were not the first mover, but we have a first-mover advantage, even if we're eventually the number two. Clearly, we moved into an exciting journey that I believe, we need now to retell the story. Why?
I think that we have basically anticipated the energy transition. Not on its full-fledged, namely including all that now is today digital and the client focus that is clearly stronger than anybody expected. Clearly, the scaling up of renewables. And also the needs to go global. In this period, we have multiplied by more than three renewables, and you will see today that we define renewables as water, wind, and solar. That's an important element. I think that we created a distinctive story because we have more than tripled our CO2 generation, and we have more than doubled our international presence. We went abroad and we went greener. I think it was the size of moment.
The idea is, we have anticipated. The idea that I want to share is we have, in a certain way, anticipated, and this is important because the price and the potential of getting in first is better and it's cheaper than coming in last. That idea of anticipation, I think it's important. Also, of course, we have also eventually underestimated, not anticipated, issues related with the regulation or legal structure in Portugal, inherited from those words that we have been hearing, like the CMEC for a while, that basically replaced the old contracts. Clearly, this had an effect, as we have seen in 2018, mainly. What we have today is a story that I believe is very compelling, that is a little bit blurred. Blurred by the last, I would say, 18 months in terms of regulatory issues in Portugal.
We call regulatory, but a lot of them is basically also legal, but regulatory, legal in terms of pen, having a pen. Also to the fact that we are now under an offer by our biggest shareholder, CTG. For one reason, we have spent a lot of time on our one-on-ones talking about Portuguese situation. Everything else disappeared. It was difficult to explain what we have been doing. Typically, we focus on the what is the issue, what is the hot topic, what is the problem. The second is, of course, when you are under an offer, you need to be consistent with that situation. You need to say, you can say what you can say. We have done our report. You know what is our position. We have been doing what is expected to do in this kind of situation.
Clearly, we have a plan. We have a vision. We have a vision that is shared by a team. By the way, today, besides Miguel Stilwell, I have here Manso Neto with us, João Manso Neto, CEO of EDP Renewables, and also Miguel Setas, CEO of EDP Brasil. We are a team that believes really on this vision that we are going to explain today, and all the key targets that we want to share with you up to 2022. We felt the need that was more or less obvious to reconnect with the market and to tell us about this story, and especially how this vision, shared by all of us in the team. Shared by 12,000 people that have been very focused on delivering this value. Sometimes it's easy to pass in the current situation, those news, we are very focused.
We have anticipated, we have that vision. We believe in this. We need to share it with you. By the way, the last I mentioned, 2006, my first visit to London to share our vision. The last time we were here was in May 2016, it was already a long time. Since 2016, a lot of things happened. A lot of things blurring our story came over. We want to say that, okay, clouds, look through the clouds and look into what we really believe is a good vision and good fundamentals. That's a critical thing. Having that long-term perspective up to 2022. Starting by what eventually we have been missing, people have been missing is what we have done because of that focus on the issue of Portugal.
Basically, I would like to stress four things, the sustainable growth, the strong value creation, the improved efficiency, and also the stronger balance sheet that we have reached between 2016 and 2018. Since last time we met in Investors Day, today we are just doing a strategic update, lighter, no deep dive, clear, giving due to the circumstances. We will be sharing our key targets. The key idea that I want to share is that all platforms over-delivered. We have over-delivered in everything that we committed in 2016. Of course, we were impacted by these relevant cuts in Portugal. I want to stress really what we have delivered since 2016. What we have been doing basically in the last almost three years. First, sustained growth. What we see is we have deployed more than two gigas and secured 1.
gigas of wind and solar for this period. We have, as you will see, strong visibility even post 2020. Clearly, this is an element that I need to stress is we know exactly where, when, how. The big chunk of this has names, dates, so clearly earmarked. Also, we have anticipated, and I think that's very relevant as you'll see and the figure shows that it is very relevant. We have anticipated the interest of going into this transmission market in Brazil, and we open a new vector of growth with an investment that will present more or less EUR 800 million. As I mentioned already, delivered with more than 20 months in advance the first line. We have been creating this optionality in a very visible way. At the same time, we have been also strongly crystallizing value with the shareholders.
I believe that the change, and we will see towards the future, the change of the nature of the business, mainly in renewables, calls for this. This makes sense because it crystallize values, it de-risks, and it helps financing a sharper growth, diversifying your risk. We have done in this period EUR 1.6 billion of cash of these minority sales, what we call asset rotation. We have executed at the end of last year, the first majority, the big, the first farm down for 500 MW with a huge impact and we will see, we have a slide for this, Miguel will show this. It's a way of really using less capital, having a huge impact up front and a very important return in terms of our shareholders. You will see this in detail. Of course, we have disposed a significant amount of non-core assets in Iberia.
It's a process that it's not starting today. It has already started. We sold EUR 3.2 billion of assets in Iberia. As you've seen, both in Spain and in Portugal, of course, the biggest being Naturgy. Relevant, we have done this with EUR 700 million gains. It's relevant. We have rebalanced our portfolio, and we have done this in a way that has immediately created, capture the value, for our shareholders. As an example, we have the $70 million net equity cash in the U.S., is a good figure. We had multiples like in Naturgy, you remember it was 16x EBITDA. Here we have been above, as I mentioned, we have been above the commitments of 2016. The idea of over-delivering in what you control, it's important. We promised, we committed, and we have done more in terms of giving visibility.
We have done more in what concerns creating new areas. We have done more in terms of crystallizing value and de-risking. Also, we have done more than we have committed in terms of OpEx savings. Eventually, 2015, 2016, people were not very interested in cost, but now a lot of people talks about costs. I think it's important. We also always thought that it was relevant. We are already in what we call the OpEx 5. As you know, it's like those movies, with several, five, six, seven, eight. We have reached the 2020 target with three years in advance. The figures that we have shared with you that would be reached by 2020, we reached them by 2018. We have an OpEx reduction of 4% nominal in Iberia and clearly also real in real terms in Brazil.
We have an improvement management of renewable assets with 3% reduction on core OpEx per MW in our platform. I think this is important. We have basically also an issue that, of course, a lot of you always ask this, we reduced our net debt by EUR 4 billion, supported by free cash flow, by disposals, and by decline in regulatory receivables. Here, -EUR 2.2 billion. Of course, also the improvement of our financing costs going almost 1% down. To be more exact, 90 basis points. I think that we have going in that circleOf growth, value, efficiency, and stronger balance sheet. I think the 2018, 2016, 2018, it's good. We have done this having behind us also a track record of sustainability. Sustainability. Let's talk about this a little briefly. Sustainability is what?
Do we have inside the company and in our behaviors and in our culture, the mentality, the needs, the competitive advantage for the future. We have been clearly recognized by more than those critical indexes for more than 10 years. In the Dow Jones Sustainability Index, we have been, in the last years of the integrated utilities, either number 1 or number 2. In 2018, we were number 2. In 2017, we were number 1. I think in 2016, we are number 2. We are moving from 1 to 2. We have been clearly, in all of these indexes, performing well. In FTSE4Good, on MSCI, on Euronext, on STOXX, on Green Awards.
What I like to share with you is the idea that we are considered leader, so best ranking, number 1 of those utilities in risk management, in growing capital allocation, climate change issue, human rights, biodiversity, talent attraction. These are elements that are important. Here, it's not my data. It's people that score companies and try to understand if you have it or not. The idea is we have it. I think that we are basically talking about the triple bottom line, so people, planet, and profit, I think it makes a lot of sense. We have this structure in a good way, and it also talks about what's going on in our people. Basically, companies are better or worse also considering if you have the right people in the right place. Looking forward, we can spend here a lot of time.
Now everybody in any presentation will share with you a lot of data about how the future will be. There are enormous amount of figures, billions and trillions, it looks very big. What I would like typically to share with you is something that I've been stressing for a while, is that the future will be electric. That's clear. We want to deliver this on a clean, affordable, reliable. You have all of these figures that everybody knows that are important. What does it mean? There is a lot of opportunities. If you see this as an opportunity, and we see this as an opportunity, if this is consistent with what we have been doing previously, it makes sense that you can grab that opportunity. Clean, affordable, and reliable.
Of course, at the core of this, renewables growth will be supported by sound fundamentals. We'll have an enormous amount of capacity additions. This will be very strong. We will be going to more than 42 gigas a year between 2019 and 2022. The key issue is that we go in a system with sound economics. Wind, onshore, and solar already are competitive at market prices. Of course, as we have seen, learning curve, if anything, everybody was surprised by the movement on that learning curve. All these three technologies will become more and more efficiency, so lower cost. There is no doubt that the future will be electric and will be greener. Also because we have a solid support now to reach long-term renewables and climate targets, both in Europe and the U.S. Also, why?
Technology has helped also to commit to this target. You don't have any longer that perception that eventually, if you target too nicely, too strongly, you could have problems. Typically, these squares, something that makes sense is, of course, renewable, supported by sound fundamentals. Besides decarbonization, we have another two Ds. Decarbonization, digitalization, decentralization. These, of course, will accelerate new client solutions and smarter networks. Clients are at the center of the energy transition, pushing for new solutions. Energy efficiency, decentralized generation and storage, new business models, EVs. Also smarter, and grids needs to be smarter. This looks very intelligent. As green, also in the green part. Probably it's difficult to meet somebody that will be in this stage talking about different topics. The topics are the same. The question is, how do you address those topics?
Where do you put the money? How do you put the money? With which criteria? Of course, already anticipating the new economics associated with these trends, because that's the critical issue. Of course, everybody knows that it will be greener, and everybody knows that we'll be client-focused. The question is, how do you do it? The devil is in the fourth D, on the details. Decarbonization, digitalization, decentralization, of course, the details is the issue. Clearly, I think that we have been proving that we know how to choose those details where that make the difference and how to translate, transform these into targets and execution capabilities. What is our vision? Clearly, probably it doesn't look very different from when we started in 2006.
Of course, the word then, energy transition, was not still there for anybody, but was clearly going into a sector that was changing, should be greener, with less CO2. Leading the energy transition to create superior value. It's what basically we have been doing. The question we want to lead, and leading is not a question of scale. It's a question of creating value and doing differently. We will be showing exactly how do we think that we are different. What everybody tries to do is why we do it better. Clearly, we will do through five pillars and anchored on three consistent platforms. There are strategy of five pillars. They accelerate and focus growth, continuous portfolio optimization, solid balance sheet and low risk profile, efficient and digital enabled, and attractive shareholder remuneration. Is it a total transformation from what we have been doing? No.
It's again, a transformation. It's again, a new phase of the company. If you pick the words, of course, as we have been showing, this optimization will be probably enhanced, clearly. We have more of this rotation. It makes a lot of sense. It's not because you need, it's because it makes sense. You'll see, of course, more probably of new enablers in the market, clearly it's consistent with what we have been doing. It's again, a transformation of the company. Even how we organize ourselves and the relation between these platforms is also a signal, clear, of how we intend to transform. Let's start by focusing on our vision of leading the energy transition to create superior value. Where do we start from? I believe that we are in a very privileged position to capitalize on the energy transition. Why?
We are an early mover in renewables. We have a total installed capacity of 21 gigas. We are top five in wind in the world with 12 gigas installed, and we have more than nine gigas of hydro. We have invested more than EUR 20 billion over the 12 years, 75% of which in wind onshore and 40% of this in the U.S. market. We are in a privileged position because the weight of renewables in the energy production increased from 20% in 2005 to 66% in 2018. It will be clearly above 70% in 2022. Of course, this includes, let's recall, always, we are talking about water, wind, and solar. So wind onshore and offshore. We will be clearly well above 90% in 2030, where we see, of course, still a presence of gas as a backup.
Excluding gas, that will present clearly less than 10%, we will be basically a green generator company. We are already leading. The word green is the key word. If you look into a green, we have already distinctive positioning. Why? We are already leading that green utility. We have 65% of our EBITDA from renewables, 40% from wind and solar, and 25% from hydro. It means that we have 2.5 times more renewables than our average integrated players. We are more comparable to renewables player on the other side. We have only one to the left. Basically, also, the high quality and the young fleet. Age matters. We have more than 25 years of residual life, 22 for wind and solar, and 33 for hydro. We are greener, and we tend to be younger.
Younger in the sense of the visibility of the years that we've in front of us. We start from a leading position. Our vision is what? Those three Ds plus the details that we are going to share is decarbonization, renewables to present more than 90%, coal-free by 2030, lead the coal-free movement of the sector. We want to be in that line. We are in that line. Reduce 90% specific CO2 emissions by 2030 versus 2005. That's the rule. Second, digitalization and decentralization. Helping our clients to embark on our mission of decarbonization. We have installed more than four million decentralized solar panels, we have one million with e-mobility charging solutions clients, and we have 100% of smart grids in Iberia due to digital enablers. Typically, we see ourselves moving from generation into the client relation into this total sustainable green world.
Let's go and have a dive on those strategies before I pass to Miguel to talk about the platforms. Accelerate and focus growth. Our first pillar. We will accelerate investment with a 60% increase in the annual CapEx to EUR 2.9 billion with the previous plan. Between 2016 and 2020, the targets were EUR 1.8 billion. We will be investing EUR 2.9 billion. We will continue to focus more renewables, 75% will be renewables, 20% relates to networks, we have networks and the smart part, and 5% in clients and energy solutions. We will be investing EUR 12 billion in the period with an increase of 60% on annual basis. Of course, more international growth. Basically, 40% in North America and 35% in Europe. We have clear visibility. This is an element that really is very important. Throwing figures on the paper, it's easy. You need to trust those figures.
Clearly, the element that I want to share with you is the high visibility on the EUR 12 billion CapEx between 2019 and 2022. We have 75% of CapEx secured or under active negotiation. The remaining 25%, as you'll see, refers to an existing pipeline of renewables of more than 16 gigas. Typically, the figures are important. If we look closer to 2019 and 2020 period, we have 100% of that CapEx is secured or under active negotiation, so full visibility for 2019 and 2020. For 2021, 2022, the figure is slightly above 60%. Key figures for you to retain. 2.9 gigas already secured, two gigas under active negotiation, so it means close to the end, and two visible pipeline, two gigas to find in the pipeline of 16. I think that's interesting enough to see what is coming in front of us.
We are really increasing the pace. We are increasing the pace with full visibility, but we are doing this with a very disciplined framework, as always. I think that we are used to it. Basically, as you know, we have certain thresholds, and I think these is figures that we like to share. Not a lot of people share with the investors and other stakeholders, but clearly, we have a minimum threshold of IRR over WACC of 1.4, 25% of NPV relating to the CapEx, so returns, and also contracted period above 15 years and contracted NPV should be a percentage above 60%. We have been checking this. The last big 60 projects, so we are talking about 60 projects, we have been achieving the recent past, 1.5, 35%, 20 years, and more than around 70%.
It shows that whenever you invest, you need to respect criteria. It's not piling megawatts. It's basically creating value, respecting those attractive returns, having the idea of time to cash, having the idea of low risk. Everything matters in whenever you take a decision, in whenever country, in whenever technology, even when you are talking green. We have a track record of delivery, not only these figures, but also in terms of PPA origination. We have been top three PPA secured and number two in C&I segment in 2018. I think it's important. These figures are important because it shows that we are doing it, so typically, you repeat what we have been doing well. With a selective approach, we have answered more of around 200 RFP, and we have won 5%.
We have been on top, but we have been also doing this with visibility on the profitability that we want. Also, another example is the Brazilian transmission auction. We have 40% above peers' remuneration based on public and comparable information from the auctions. If you see the auctions, as you know, we have reference prices and costs. If you compare this, so this is public data, our returns in the auctions that we won, the returns are 40% above what was attained by our peers. I think this is an interesting figure because it shows discipline. Green must be wild in the sense that you are in the nature, but it needs to be disciplined also. Besides this, I would also like that we are going to use our proven asset rotation model to create value and to accelerate renewables growth.
Here again, we have a good track record since 2012. It allows the development, the crystallizing value up front. We had EUR 3.1 proceeds between 2012 and 2018. It shows what? It shows recurrency. It shows capability. We have a growing appetite for majority stakes, so full upfront value crystallization. Now flowing through P&L. When you sell minorities, it goes only to your balance sheet. Clearly, you are going to have going through the P&L. That first deal closed in December with a significant value creation of around EUR 129 million. What is our commitment for 2019-2022? EUR 4 billion of proceeds assumed in the plan on sales of majority stakes. It allows to retain industrial value, O&M contracts, it allows you to speed up your development plan. Clear visibility on 2019 execution, more prudent assumption post-2020.
This is clearly, it shows, in our opinion, we are first mover in the asset rotation. I think that other people are doing this, especially in the offshore, we understand that this clearly makes sense because it allows you to de-risk, to crystallize value, to go faster, to do more that we could do. Of course, to create value for your shareholder. We are doing this basically also with a huge track record. The secondary market exists. If you have any question, the doubt is not here. What I've tried to explain is on the other side. Are we ready to do the EUR 8 billion investment on renewables? Yes. Does the market exist for this? That's the easy part. We will generate basically EUR 6 billion of sale proceeds to reinvest in renewables and to strengthen our balance sheet.
Keywords, is of course, creating value and deleveraging. We continuously assess portfolio optimization strategy that create long-term shareholder value. We have a EUR 12 billion investment plan combined with a EUR 6 billion capital reallocation plan. EUR 4-plus billion of asset rotation with the merits that I have already shown, EUR 2-plus billion disposal in the next 12 to 18 months, mainly in Iberia. The criteria typically is we want to deleverage, it means it needs to be significant. We want to reduce the merchant exposure, of course, starting with the thermal position. Improve risk profile and free capital to strengthen the balance sheet is critical. I've shown you we are going to invest EUR 12 billion. We are going to asset rotation more than four disposals, more than two focus in Iberia and focus on reducing.
It also shows that we have already sold EUR 3.2 billion in Iberia. It shows that we want to rebalance each time our portfolio being more, focused, of course, in renewables and improving this risk profile. We want really to have visibility on those items before the year ends. We want really on disposal to have visibility by the year end. We will keep adjusting our portfolio to better align. It's the reason why it's a transformation. The pillars are the same. The strategy is driven towards the same vision, driven by the same ideas. But it's again, a transformation. Our diversified portfolio, the key issue is it's going to be further optimized. If we pick the keywords here, you have what? Renewables and networks, 90%. We want to reduce merchant. We want basically to reduce thermal. Decrease exposure while managing for value.
These are the key items. If you have a title, you know exactly what we want to do. Growth geographies, North America and rest of Europe. Clearly, North America is the key engine, but also the rest of Europe. In what concerns Brazil, Latin America, maintain exposure, but also having this idea of growth optionality. We need to understand exactly what is the characteristic of those markets and behave accordingly. Of course, decreasing the exposure to Iberia. We have started being basically only a Portuguese company. We are a company in more than 16 countries, and this rebalance is clearly moving. We want to keep delivering where we control and exit everything that we don't like or we don't control. Basically, you should focus where you are better. We have also a solid balance sheet and low risk profile.
We are targeting a solid investment grade, BBB. We will deleverage in the short term. Here I would like to say the following. When we met last time, the three times that you see this here in 2022, you saw it in 2020, and now we are below 3.2. Postponing. It's not postponing. We have a clear target. The net debt that decreased, as you know, by EUR 4 billion in the recent past. We are going to decrease it by EUR 2 billion to 2020. Clearly the figures in 2020 would be reached and the figures of 2018 will be already reached, the ones that we have talked in 2016, if it was not for the surprises in regulation that I've mentioned previously. Strong cash flow generation, we have seen this already in 2018. Disposable and EUR 2 billion net debt reduction.
Of course, reinforcing this low risk profile with more than 75% contracted exposure and 80% Europe and U.S. to be maintained. Targeting BBB flat. This EUR 11.5 billion debt between 2020 and 2022, and the FFO over net debt above 20% in 2022. Also a word in terms of low risk profile and solid balance sheet. We have a better regulatory visibility, and we can approach this in Portugal, in Spain, in U.S. and in Brazil, key markets. We have seen the trends in what people, the full support of this energy transition that's today clear in Portugal. Portugal needs EUR 23 billion investment until 2030. We'll have auctions for solar, the wind over equipment. Things are moving in what concerns energy transition. As I mentioned, a very steady decline.
In our balance sheet, we had a peak of more than EUR 5 billion tariff debts in our balance sheet, and we ended up 2018 with slightly more than EUR 200 million. From more than EUR 5 billion, EUR 200 million. The overall system is clearly going down. It's now north of EUR 3 billion. Clearly, this evolution of the system is good news for everybody, for the sector, for the clients. Of course, it leads to the expectation of the sales as it was stated by the government, progressive reduction. Of course, everything that relates to the special taxes that we have seen recently, reduction or elimination. The important climate targets in Spain. Additional visibility of returns to up to 2025. We have elections, I know, but as we speak. Renewables portfolio standards in U.S. in 29 states, covering 56% of U.S. electricity sales. Environment restriction.
The clear visibility on PTCs and ITCs. A lot of elements that were uncertain, especially in U.S. market with the political changes. Now we have full visibility. Of course, only in Brazil, the annual return distribution at 1.1% until 2022-23 in what concerns now our business. Of course, a government that is today totally focused on attracting foreign investment. We have an environment today that is better than it was before. Moving now to efficiency. We will keep driving efficiency across organization. The clear commitment. Once again, can we trust the future? Let's talk if you have walked the talk in the past. 4% nominal reduction in Iberia, 4% real terms in Brazil, we will not stop. We are targeting EUR 100 million like-for-like annual savings until 2022. The effort will be steady, EUR 50 million already expected by 2020.
Maintain the generational replacement, embedding new skills in the organization, of course, the levers, operational excellence, zero-base. We have been doing zero-base budgets everywhere. Natural accounts reduction. We have now a ratio for any two people that leave, retire, we have only one getting in with different skills, and digital enablement. Typically, this is an important commitment going back to figures that we like, leading the industry with 27% of net OpEx of gross margin. I think the figures are quite relevant and cumulative. We are talking about a EUR 300 million cumulative between 2019 and 2022. EUR 100 a year and EUR 300 cumulative in the period. Here, just to mention what a lot of people spend a lot of time talking about this, but I think it's relevant, but let's be focused. EUR 800 million in digital CapEx, including the platforms.
It will deliver efficient revenue gains across the organization. We are not obsessed of piling digital, but it relates with the IT, digital, smart meters, everything that relates to that intelligent part. We will have more than 300 digital MVPs initiatives. I think it's important for the client relations, for the assets and operation, including a very interesting domain for us, predictive maintenance and the process 95% digitalized. Everybody's trying to do a smarter organization. Not a smarter grids, not a smarter relation with the clients, but also a much smarter organization. I think that we are committed to doing this. This, of course, is very, very enhanced by open innovation. We have partnership with more than 50 trusted partners. Biggest sponsor of Web Summit. We have venture capital in small and small companies.
Basically, we really believe on this open innovation, and changing the skills that we have, leading to what I call everything will be electric and everything needs to be intelligent power. We will foster a more flexible and global organization. People, people. It's not very easy, but I think that one of the things that probably you already recognize about EDP's team is that typically we have good teams and we have top teams in the industry. We have more than 500 agile experts as part of embracing people on digital and agile mindset. We are more flexible, more collaborative ways of working. On those indexes, people recognize that we do better on this front. We want to be multiply by four top performance to critical position ratio.
Signal competition to critical positions, and we diversify in digital skills and upskill current workforce by up to 85% new competencies needed. Everybody's trying to do the same. We have been doing this in a rather good way in terms of changing the culture of the company. If you visit our office and you see people working there, you see immediately that everybody feels smart and digital. Attractive shareholder remuneration. We have clearly a distinctive green position. 65% share of retained renewables. It's top two among European utilities. More than 25 years average life of renewables, our renewable assets. I think that is relevant. We want, of course, to deliver strong earnings growth. Our commitment, once again, commitment is to grow by 7% on average per year. We will be around EUR 900 million in 2020 and clearly above the EUR 1 billion cap in 2022.
Attractive shareholder remuneration as dividend per share. Why? We have a solid floor. This floor has resisted to everything. We have never seen, I think it's quite unique, we have never changed our commitment in terms of a solid floor of EUR 0.19 per share. We are targeting now a different range, a target payout of 75%-85%. The sustainable EPS growth, if achieved to be delivered, as a DPS increase. Sustainable EPS growth to deliver DPS increase. We keep the floor. We change the target payout, and we will share growth with the shareholders. That's a clear commitment. What I've tried to do is. We are transforming again the company. Very focused growth, very ambitious optimization program, totally committed. It's a commitment. A much stronger balance sheet.
A very flexible, focused, disciplined, and efficient organization, and a clear commitment to share these with the shareholders. The commitments are clear, and also how we are going to deliver this through platforms. This positioning in renewables, networks, client solutions and energy management shows that we structure ourselves and we take decisions. The competition for those decisions in terms of capital allocation and who goes where, and where people move inside the company, we need to understand exactly how to structure our business in a way that allows us to deliver those commitments. The commitments are clear, and our platforms. Now I pass the word to Miguel to explain about this platform, and I will come back to the remarks. Thank you. Miguel.
Thank you.
Floor is yours.
Once again, good morning, everyone. I will go into the detail now of the fourth D that António talked about, in terms of the platforms and some of the concrete numbers. I think the first point to make is that we will be reporting now on a new segmentation, which is basically these three platforms. This is clearly aligned with the energy transition, and it's also clearly aligned with how we see ourselves evolving from a structure and organizational point of view. Renewables, including wind, solar, and hydro. As António mentioned, 65% of our EBITDA is already in this platform. 25% in networks, which includes distribution in Portugal, Spain, and in Brazil. It also includes the transmission, which is being built out in Brazil.
Roughly, well, less than 10% around client solutions and energy management, which includes both the client, the trading, and the residual thermal we still have in our portfolio. Clearly much more simple and focused structure, how we see the company aligned with the energy transition. Clearly, also enables us to share best practices and efficiency across the organization. Where will we be investing? We talked about the EUR 12 billion of CapEx investment over this period, 2019 to 2022, 75% on a growth basis going into renewables and 20% into networks. We will be doing over EUR 4 billion of asset rotations to get the roughly EUR 7 billion of net investments, and then EUR two and a half billion of maintenance, and you get EUR 5 billion of net expansion investments, 83% of which will go into renewables.
Most of this, as has been mentioned, will go into either North America, Europe, and also something to Latin America, mainly in renewables, and also the build-out of the transmission networks in Brazil, which is included here in this 30%. We clearly see value in having this diversified renewables platform. As you see, it's a platform which is basically 50/50 in terms of hydro and in wind and solar. Although the wind and solar will continue to grow over the next couple of years, and I'll show that in more detail further on. Clearly, we believe we have distinctive development and operational capabilities, and that's been shown in the track record over the past decade in terms of build-out. We see it as a key growth platform for the future.
In terms of hydro, in the geographies where we're present, we see an enormous flexibility value from the pumped storage, which we have a lot of. Very strong cash flow generation. It's efficient, and it's got a very long-term value. We're talking about long-term concessions in all of the geographies where we're in. Overall, it's a technologically and geographically diversified portfolio with a very unique green profile. Specifically, let's talk about growth. What we're seeing is from a build-out of roughly 700 MW per year from the 2016 to 2018, we will double that for the period 2019 to 2020. As was mentioned, we have extremely high visibility on this, all of this with PPA is already locked in. We will triple it for the period 2021 to 2022.
For this period, 40% already secured, 30% under active negotiations. We have a pipeline, as was mentioned, of over 16 GW, in the various geographies where we're in, from which we will be able to source the additional megawatts for the remaining period of 2019, 2022. How do we see these four technologies evolving in terms of net additions? Clearly, wind onshore will be growing from the roughly 11.5 GW, adding an additional 5.5 GW. 70% of the net additions. It's a mature technology. There's definitely a lot of market appetite out there for this technology. We are already a top five global player with a distinctive track record, so we're very comfortable with achieving these growth rates. Solar PV, we haven't been as present in the past, but it is definitely increasing the relevance.
We have strong visibility already with 400 MW secured and another 400 MW under negotiation. We see it as a sizable opportunity, high market competitiveness. We're targeting 1.5-2 GW, mostly in the 2021, 2022 period. As I say, already with pretty good visibility on 800 MW of that. Wind offshore, again, a very interesting high growth area. We see a lot of growth potential there. What we've looked at doing is building the projects, diversifying the risk by selling down and partnering up with other companies, and we've shown that track record over the last couple of years. We've got 4.4 GW gross under development in these joint ventures. Most of it will come after 2022, so beyond the scope of this business plan. However, by 2025, we would expect over 2 GW of gross capacity to come online basically around these projects. Finally, hydro.
Here, a relatively mature technology. We have a nice portfolio both in Portugal, Spain, and in Brazil, and basically managing this portfolio for efficiency. A residual addition over this period, but a very nice business to have. Definitely, this is a platform which will be driven by this development, the PPA generation, O&M, and the hedging capabilities that we've shown over the last couple of years. Maybe just a deep dive on solar and wind offshore, which is probably less familiar to you. In Solar PV, it's already cost competitive in most of our geographies, and I think what we like about this renewables platform is we should be in the technologies that are most competitive wherever we are. If solar is competitive, we will be there. If wind is competitive, we will be there. If hydro is competitive, we will be there.
It is cost competitive. It will increase the competitiveness in the U.S. post 2020. As you know, the PTCs phase out and the ITCs will still remain for a while longer, solar will become more competitive in 2021, 2022 period. We'll leverage on the client base in Iberia and Brazil also to lock in corporate PPAs to make this project viable. We already have secured 400 megawatts, as I mentioned, a 15-year PPA in Brazil. COD, beginning of 2022. Riverstart in the U.S., which will come online in the 2021, 2022 periods, again, with a 20-year PPA. Additional initiatives we have in the pipeline. We know, we have upcoming auctions in Portugal of around 1.5 gigawatts, we will be participating in those auctions.
We're also exploring hybrid wind solar solutions, which quite frankly we think is quite interesting because this is a good way of reducing the cost associated with the new solar. You basically use the existing infrastructure to connect to the network, you become more efficient and competitive in those projects. In relation to wind offshore, again, a technology which is becoming increasingly cost competitive, we've seen that in one project we are present in the U.K., in Scotland, where we've got a 15-year CFD, 950 megawatts. As you know, we sold part of that down now in 2018. We are definitely developing these partnerships to de-risk. These are big projects. We like developing them. We also like to share the burden with some of our partners. We are building our capabilities, both in France with the 20-year feed-in tariff, for 2023, 2024.
We recently won a lease in the U.S., we will also be looking at the PPAs that will come online over the next couple of years in the U.S. for that. Looking also at an extension of Moray West, again, preparing for an auction which may come this year or the following year. That's by technology. Let's look at in terms of geographies. North America, as I mentioned, a very liquid market, good visibility on the PTCs and ITCs. We've got a very diversified geographical footprint. We work in many states. That allows us to take advantage of, for example, in the Midwest, where there's a lot of wind resource, very low costs, very competitive, including with coal and gas. Then you've also got the coastlines with higher costs, but also a very big predisposition to contract renewable projects.
We work the full geographic scope. Approximately 4 to 4.5 gigawatts of additions over this period. In Europe, around 1.8 to 2.2 gigawatts. Again, Europe, very strong targets in terms of renewable build-up, we'll definitely take advantage of that. Then in Latin America, mostly Brazil, also strong fundamentals. We've been present there. We are one of the top three wind developers in Brazil in terms of megawatts, we will continue to develop that over the next couple of periods. We will look at new markets, clearly some key criteria. Strong market size, strong fundamentals, low risk and contracted profile. As António mentioned, we will go into projects when we have clear visibility on the returns and that we can lock in part of that risk and revenue. Obviously, stable market and regulatory context.
Let's talk about asset rotation, because this is a very big part of our plan and a very relevant one. I talked about the added additions that we are going to have coming online to approximately over two gigawatts in the 2021, 2022 period. Roughly 50% will be to keep and manage, and the other 50%, we will be selling down, rotating that, just leveraging on the market appetite and liquidity. There is a huge market appetite and liquidity for these assets once they have been de-risked, and we have shown that over the last couple of years. This allows us to crystallize the NPV up front, makes it less capital intensive. Unlike a lot of utilities, we have a lot more opportunities than we have capital, which is a fantastic thing. It means that we can develop those options, crystallize them, and redeploy that capital back into the business.
Recycle capital in the renewable space. It allows us, in some of the structures, to retain the industrial value added because we continue to manage those projects and we continue to manage those wind farms even after they are built and once we have sold the majority stake. We have been showing that, as I mentioned, since 2012, over 15 transactions already done in terms of asset rotation with over EUR 3 billion of proceeds and historically, a 2%-3% margin or 2%-4% margin between the rate of return when we start building it. Once we have de-risked it and we sell it, the buyers are accepting a much lower rate of return. Basically, that is the value crystallization you get from doing this asset rotation. Really, it allows us to accelerate this plan and not be limited by our capital base.
It is a good way to create more value for shareholders. Let me give you a specific example, and this is just a case study on the U.S. transaction we did at the end of the year in which we worked on over the second half. This was a 500 megawatts case study, included 2 wind farms in the U.S. and one in Canada. One of the U.S. wind farms had a COD at the end of 2018. The Canadian one will only be at the end of 2019. Because people believe in EDP, they believe in our track record, they believe in the quality of the assets that we build out, we have done a EUR 200 million equity investment, and we basically sold already 80% before we have even completed 2 of the wind farms.
People believe that we can deliver and that we can deliver on time and on budget. We cashed in EUR 270 million. That meant we got a EUR 70 million net equity cash in, 100 megawatts for free, because basically, you not only got paid all of your capital put in, but you kept the 20% corresponding to 100 megawatts. Capital gain of EUR 120 million, roughly EUR 260,000 per megawatts. Basically, we sold before the projects were even completed and had a fast turnaround of less than one year in terms of this build-out. This is a good case study, and this is the type of transaction we will want to keep doing within the context of that asset rotation strategy. Just to wrap up this section on renewables, just three sort of key numbers.
Over EUR 8 billion of investment plan in renewables over this period, with over EUR 4 billion of asset rotations and roughly EUR 4 billion of net investments. We expect installed capacity to increase to roughly 25 GW and under management, 28 GW, because we will keep managing some of the projects that we sell down. In terms of EBITDA, to grow by 17% to EUR 2.5 billion. This already includes the disposals that António talked about. This is very important. This already factors in the sale of some assets. If you want to exclude that, you will then have to add that to these numbers. This includes already those disposal numbers. Then roughly EUR 100 million of additional equity coming in from the projects that we sold down. Let's talk about networks. We have a low-risk portfolio, stabilized with growth potential.
It's a nice, solid, stable, long-term cash flow generation. It helps fund growth also in other areas of the business. It's got a low-risk profile, which is important for the balance sheets, and rating agencies like it, and they should. It's got a sizable capital deployment. Recurrent every year, you're reinvesting and getting a rate of return on that. It allows us basically to align the networks with the energy transition. The investments we're doing are typically modernization and maintenance of those networks. In relation to Iberia, clearly maximizing the value by modernizing the grid and getting maximum efficiency, obviously, keep monitoring the regulatory settings. We will analyze partial value crystallization, leveraging on market appetite. This is something we are analyzing, and we will look at going forward to make sure we are maximizing the value and extracting maximum value for shareholders.
In Brazil, we are aiming for superior execution of existing projects, mainly in the transmission, as you know. An ambitious plan there that we have been delivering, not on time and on budget, but before time and below budget. Also continue to improve the operations and then be open to consolidation and value accretive growth opportunities that may come up. We've shown that we go to the auctions when they make sense, and if we get the right returns, we also go to the auctions. If we don't get the right returns, that's no problem. We walk away. We will not do anything below what we think are fair returns that we like. Overall, I think the networks are well positioned for the energy transition. They're clearly a key pillar here as part of the strategy and underpinned by an improving regulatory environment.
Now just two slides, one on Iberia and one on Brazil. Just to recap, most of you probably know this. In Portugal, we have roughly EUR 3 billion of RAB with different rates of return on the high voltage and medium voltage, also on the low voltage. In Spain, we've got roughly EUR 1 billion to EUR 950 million, actually, 6.5% rate of return. Here, typically, we go doing the investment in modernization, and the depreciation amortization is in line with that CapEx. You have a stable RAB. The focus has been very much on efficiency. We've got a historical efficiency gain of 3.6%. We're increasing the smart meter penetration. Over 70% smart meter penetration by 2022. In Spain, it's already 100%. It's a legal requirement. In Portugal, we are building that out at roughly 500,000-600,000 smart meters per year.
In general, continue to modernize the grids, as I mentioned. The current regulatory cycle in Portugal is in place until 2020, so it's stable. As we saw in the results 2018, we had a decrease in the regulated revenue from 2017 to 2018. It's now stable for this three-year period. The low voltage tender process in Portugal, there's ongoing analysis. The regulator came out with their plan or a study, which foresee a couple of regions. The government has said they would prefer to have one region. The framework is not yet defined. Quite frankly, we don't expect any visibility on this really this year. There will be ongoing analysis. In 2020, we'll probably then get better visibility on that going forward. Our base case is that will be there in our business plan numbers.
As you know, in a worst-case scenario, you get RAB back. If that was to disappear. There's additional visibility on the returns in Spain, and many of you know that, also from the Spanish regulator and government. Obviously, there's now elections. Let's see, in general, I think we're fairly comfortable with the rate of returns we're assuming here. In general, I think grids have a role to play in the energy transition. What there needs to be is a good, solid regulatory framework to support this. In Brazil, in distribution. Clearly, unlike Iberia, where you've basically got CapEx and depreciation amortization in line, in Brazil, there's a strong build-out or a strong CapEx program. It's a good return on RAB. The RAB overall increasing roughly EUR 900 million.
Strong track record over the last three years in terms of reducing the grid losses, reducing the grid interruption time, and also in terms of OpEx per client reduction. A very good business that has all the right tendencies in terms of operational improvements. In transmission, over BRL 3 billion of investment, 12%-14% implicit return on equity. We'll be talking about this, but I just want to highlight. We went into the auctions with certain investment thresholds, which was the 12%-14%. We have actually managed to anticipate construction well ahead of what we had planned, and also get much cheaper funding than we had also planned. We've doubled the NPV that we were expecting to get from these projects, which is obviously a very nice thing to happen for shareholders.
We'll keep assessing future growth and are open to value crystallization opportunities. This is how we look at rotating capital, including in also Brazil. We've been doing that, and you saw also some of the sell downs of the mini hydros in Brazil this year. That is definitely a part of our business. Rotate capital, deploy it into businesses or new projects that add value. When you can crystallize it at good value, you then recycle that back into the business and keep generating NPV. Just to wrap up this section on networks, EUR 2.4 billion of total CapEx over this period, roughly EUR 600 million per year. EUR 1.1 billion in Iberia and the rest in Brazil, in distribution and transmission. EUR 0.7 billion is in transmission. The regulated asset base to increase 16%, mostly in Brazil. As you can see, Iberia is expected to stay roughly flat.
The EBITDA to grow, driven by the investments in Brazil, again, mostly in transmission projects as they get built out. Now talking about client solutions and energy management. Here, we've put clients in the middle, and this basically because it relates energy management and also the client solutions that we're developing. In energy management, this is increasingly relevant, particularly when you have a big renewable portfolio. Not only do you need to sell the energy and to manage the renewables intermittency, but the thermal capacity backup, especially gas going forward, is a useful complement to that renewable intermittency. In terms of sourcing, it's definitely very important to be able to originate corporate PPAs and to do hedging in the various geographies. In the U.S., typically we do that through corporate PPAs or with regulated utilities.
In Iberia, increasingly, we were the first company to sign up a corporate PPA in Spain in relation to Pascual, which was one of the clients we had there. We manage the spot on the forward energy market, both in electricity, gas, coal, CO2, and we also provide ancillary services, typically through our thermal plant. That's also a very important part of this energy management. In clients, definitely supplying electricity and gas with good quality of service, be cost efficient, and this is an area which is relevant, which is things like e-mobility and just more generally distributed generation, which we think can have a very attractive opportunity to grow in the future. We are being very active in Portugal. Spain, until recently in distributed generation, from a regulatory point of view, it wasn't possible to do.
If that market opens up, we will definitely look at it as a complement to the client portfolio. Talking now specifically on energy management and the value we see there. This allows us really to optimize the energy we're producing and trading. In the case of Iberia, you see clearly we have a balanced portfolio between renewables and non-renewables and also our B2C and B2B customers. This allows for a certain natural hedge with the customers, and the pumped storage also allows us for some flexibility. We do see value in this integration in Iberia. In Brazil, this is really for 2016 or 2017, 2018. You see the losses we would have had if we hadn't had an active energy management strategy.
Basically, with the second was the lack of water, we would have had a EUR 600 million loss as a result of less water in the PLD costs. Because of the active hedging strategy, we actually had a positive result at the end of the day. This shows the value of being proactive energy management. On clients, a 10 million client base, basically with improved operations. Here, the focus is on quality, increasing the service contracts, penetration, digitalization to really reduce costs, and that's obviously a huge trend if you want to be competitive in this market. Also the fostering the new solutions, namely services, solar, e-mobility. We do see an opportunity there. For example, we've given a study here in terms of distributed generation we have in Brazil building out over the next couple of years. Overall, we do expect this to expand the margins significantly.
This is the average of 2016, 2018. We have been higher than that. 2020, we're expecting roughly EUR 60 million and EUR 100 million. This looks like a big increase, but in terms of EBITDA margin, we're talking still about 1.7% EBITDA margin. Basically wrapping up this section, we see a strong increase of energy under management to 81 terawatt-hours, mostly driven by the increase in the renewables. Growth driven from services. You see here, we're not focused on growth for growth's sake. Here, we're focused on growing the services, which adds a nice margin to our client business. We do see significant EBITDA growth, driven mostly from Iberia. Overall, putting this all together and some of the key numbers in renewables, the installed capacity growing to 25 gigawatts and EUR 2.5 billion of EBITDA. The networks, the RAB, increasing to EUR 6 billion, so a 15% increase.
The EBITDA growing to EUR 1.1 billion of EBITDA. Client solutions, energy management, mostly growing as the services contract and the margin, increasing to roughly half a billion of EBITDA. What does this plan translate to overall? I think these are five key numbers really to look at. EBITDA growing to over EUR 4 billion over this period, mostly driven by renewables and networks. Net income growing to over EUR 1 billion. Investments, roughly the EUR 2.9 billion per year. The net debt decreasing to EUR 11.5 billion, that's a EUR 2 billion decrease. The net debt, EBITDA, basically around 3.2 or below 3.2 in 2020 and below 3 in 2022. These are commitments to the market. From a financial policy perspective, this is one slide, but it's really in line with what we've been doing in the past. We have a prudent financial policy.
We typically have a strong liquidity position. I think you saw that in the 2018 results presentation. We do liability management to improve the cost of debt. We did that at the end of last year. We've done that also in 2017. Typically, we have liquidity for 12 to 24 months of refinancing ahead, that's obviously critical for rating agencies and for ourselves to feel comfortable going forward. Funding, we do that at a centralized level with one exception, which is Brazil, which is ring-fenced, that's done at the local level. 80% of that is done at a centralized level. Rating, we will be targeting a BBB rating over this period, driven by this decrease in debt. Our funding sources, typically, we get them from the debt capital markets, we also have significant liquidity resources from revolving credit facilities.
Finally, how do we manage our risks, both interest and foreign exchange? We typically invest in the same currency where we'll be getting our revenue from. We also typically have a prudent interest rate. We're assuming here 55% fixed rate debt. That's been increasing over time. We've been benefiting also, obviously, from the low interest rate environment we've had over the last couple of years. We will continue to manage this proactively. Finally, just in terms of the overall sources of cash and uses of cash. Where are we getting the cash from, and where are we using it? Where are we investing it? We're getting over EUR 8 billion of organic cash flow. This is before maintenance CapEx. We're assuming over EUR 2 billion of disposals. We are assuming roughly EUR 2 billion from tax equity investments or from the green hybrid.
Actually, part of that is already done. That was done in January. That adds up to a total of EUR 12 billion or over EUR 12 billion sources of cash. We will be paying out roughly EUR 3 billion of dividends. We will be de-leveraging roughly EUR 2 billion, and we will be investing over EUR 7 billion in both expansion CapEx and in maintenance. The expansion, as we saw, is roughly five, and the maintenance roughly two and a half. We are committing our funds to de-leverage, to pay dividends, and to invest in the business. I think that's the cycle of generating the cash and reinvesting that and sharing that with the shareholders and paying down debt. I'll pass it over to António to closing remarks. Thank you.
Thank you, Miguel. Leading the energy transition, could it be here or in other presentation? Eventually, but not in the same way. The question is, really, I would like to, after this morning, that people understand exactly why we are distinctive equity story that has been blurred by at least those recent events. Then I will try to understand how we are not just talking about one thing or another. We are basically finding a good balance of all the critical details to reach this leadership position. We have been continuously engaging with all the stakeholders. We have a focused company. We have exposure to renewables and networks. We have been clearly sponsoring liberalization and client services everywhere we are. Of course, Portugal, but it's clear again, the case in Brazil and Spain. It's in our DNA. Investment grade, shareholder remuneration, everything.
By the way, we are here today after supervisory board yesterday approving this vision to 2022, where you have key shareholders, but as you know, a majority of independents. The idea is we are ready. We have been ready for the future. Forget about the clouds, those clouds that appeared for a while. We have been ready also because we have always embraced this sustainability model, this triple bottom line of business in a consistent way. I'm not putting this because it's politically correct or because everybody does this today. We have been doing this for a long time, when nobody give a damn about showing those charts of sustainability or indexes. Clearly, this relates with gender equality because it makes a smarter organization, employees that are engaged with society, investing in access to energy.
As you remember, the first refugee camp in the world in Kenya, where we don't have either investors, as I know, or clients. The safety standards, the social investment, the question of leading by example on several items. Typically, we have been clearly focused on eight of the Sustainable Development Goals, but I think that we have been consistent. I will not spend, we can talk for hours, but I think it's clear. As Miguel showed, wrapping up all the five pillars that I've mentioned, the figures are clear. They are ambitious. They are mainly credible. This acceleration of our vision, I think it's very, very clear. Why? Because it leverage on what we do well, and we just go faster. The track record is important. The question is the growth, the EUR 12 billion investment, the asset rotation.
We explain why clearly it makes sense and how we can do it. The very focused more than EUR 2 billion disposals, consistent what we have been doing already. The solid balance sheet in what concerns the targets, the efficiency, the attractive shareholder return. These figures that were already shown, so I would not repeat them, not to have an overdose of the same figure. I would like to announce this, the credibility issue. You can say, you can tell people whatever you want, but people, every institution, every company is about a story, a story that people need to like. I suppose. If not, we would not be telling those stories. They are credible. That at the end everybody will be happy.
The nice stories that they need to have that vision, that idea of future, something that you mix better than others, something that is, I would say, attractive, but at the same time credible. Those even when you. Credible why? Because the story that we have been telling previously, it's already good. Clearly, we have been delivering. This company, I think, has been for more than clear one dedicated, a good storyteller. Why? Because the story was true. Clearly, we committed, we delivered. We were surprised by things that we did not anticipate, yes. We mainly anticipated the key items. Credibility, 7 gigas gross in renewables. 70% already secured or being negotiated up to 2022, and everything secured for 2019 and 2020. I think it's good news. It's visibility. Let's take the cloud out and see exactly what we have.
Asset rotation. We have EUR 3.1 proceeds, EUR 3.1 billion proceeds since 2012. I think it's a good figure. Strong visibility for 2019 and prudent approach for 2022. This asset rotation where we were one of the first to understand the value of this strategy. Disposals. Not only we have a good quality asset base, because when you can. We have several alternatives, by the way. You have several alternatives, that's important. Clearly, we have a track record of EUR 3.2 billion in the last two years. It's not starting. Strong efficiency capture. We have always, since we met, always either with one year or two years in advance. You say, "We should promise more." No, we promise and of course, it's not the end of promise for our delivery, the targets have been tough, clear, and delivered.
4% reduction between 2016 and 2018 in Iberia, I think it's interesting. Real terms in Brazil, also in that country, you need to do it. If you see those, if you compare in Brazil the net OpEx of a gross margin, we are probably the number, the reference now in the sector, clearly. Attractive shareholder remuneration. EUR 8 billion dividends since 2005. Keeping a secure and growing floor. We started from EUR 0.10 and we grew up to EUR 0.19. Clearly, we can and we will deliver the commitments. Just as a final slide, we have anticipated from 20% to 70% more than renewables generation in 2022. We have delivered superior value. If you compare total shareholder return or stock utility in the same period, we delivered 150% compared to 65%. I think it's better than the reverse. We are uniquely positioned. Why?
We are greener. Basically also, we have people that now need to talk a little about structure and costs. We have been talking about this for a while. You have people that are buying gross platform because they were not exposed. All of this is organic. We are not buying. We are not moving from a non-organic to organic. We are already organic growth. With the exception of the first move, where we bought the platform in the U.S., we have been basically organic. We don't buy growth. We grow. I think it's interesting, this. Of course, do we need focus? Companies of our size, of course, compared to what eventually was five or six years ago, need what? More focus. Yes.
Today, companies of our scale and even bigger, we are no longer expected to be good in everything everywhere and be the setting the example. It's the reason why I believe that this plan, this strategic update, shows a transformation based on the same pillars. It's a transformation in a world where you need to explain exactly what you do better than the others. Why? Because then it's the only reason or the best reason for people to understand why you are an option to be better exposed to this energy transition. Why we feel that we are a better option for people to be exposed to the energy transition, exposed and invested in the energy transition. We don't need to criticize our old structure, our old team, our old asset portfolio. I'm just mentioning this, I don't know why.
We don't need to be talking about how things are going now to be so fine. They have been fine. We have been really doing. Of course, there are other people that do this. Don't ask me names, but there are other people. There are other people that don't do this. Don't ask me names. The list will be longer anyway. The question is, we also recognize that we need to focus. This focus, recognizing what we do best and also, this adjustment is made through capabilities and through means that we have already used and done. It's not changing with no track record. It's track record in what we grow, but it's also track record in what we won't grow anymore, and eventually even reduce. I think that's the key issue. I've started the presentation talking about 2006. It was a long time ago.
When I see the pictures taken at that time, I see that I'm eventually different. We are all different. Typically, one thing is the same, is that the vision is we believed exactly what was our goal, our destiny, and I think that we delivered rather good. What I don't like is clear. Something that blurs and makes people out of focus of what we should be focused. We are focused, and clearly what this reconnection with the market in the current circumstances is, of course, because we have not been talking, and we need to talk. Not only what we have been done in the last six to 10 months, I think it's a huge scope, especially in the current context.
Clearly, to have this visibility, hopefully, we were able to say that we know we are going and that we are clearly a distinctive value proposition. By the way, sometimes is discounted by those clouds that when it's going out, clouds are, I would say, whiter. The sky is bluer, much more blue today. Typically, even if it was not a deep dive, I believe that the commitments are very clear, very strong, and very detailed in what concerns how we are going to reach those. Thank you, and now let's
We'll have also some questions from the web, we can take some questions maybe from here. Just to highlight for the people that are following us on the webcast, I think we have more than 500 people following us on the webcast. You can also make your questions.
Miguel, sit there.
I think we can start with the questions in the room. In the left here, maybe for the micro so that everybody can hear. Carolina Dores from Morgan Stanley.
Hi. Hello, good morning. Thanks for taking my questions. I have two. First, on the EUR 2 billion of disposals that you mentioned, António, most of it seemed to be on the new division, the energy management, where the thermal is. Still that, the EBITDA guidance for that division is going up a lot. I guess my question is, how is the dilution of these disposals that you are baking into the plan? Second one, on the slide where that's probably for Miguel. There you go through the sources of cash. There's EUR 2 billion of sources that it's basically hybrids, tax equity, and changes in regulatory receivables. I was wondering if you could give us a breakdown. Are you just doing more tax equity or this is also a function of more hybrids and lower stock of disposals?
Thank you, Carolina. About the EUR 2 billion, the leverage and where they are. It's true. Clearly, first of all, the leverage is a top priority. In this context, clearly, because also it makes sense in terms of business structure, we envisage to reduce our year. At the divestment of an hybrid generation portfolio can make sense to consider. Probably, of course, we want the key priorities at all this. It needs to be meaningful. It needs preferably to reduce our merchant exposure. We are aware that probably we need an hybrid generation portfolio. Of course, this will have thermal, but eventually also non-thermal assets. We cannot, of course, at this moment, tell you exactly the portfolios. We have been working on those, by the way. We will not start today. We have been working on this.
Of course, the final decisions will depend upon interest funds, values, of course, and impact on our portfolio. Clearly, we are talking about Iberia. On the other side, what we see today on the CESE side and the EUR 2 billion disposal, it's a clear commitment. What concerns your question, why that part clients energy management grows up? As Miguel has stressed this already and showing not only what we have been doing in Brazil, but also we have been doing and the margins evolutions that we expect to have in Portugal and in Spain and in the markets that we have, where we are.
Clearly, we see ourselves have the evolution in the last four years make it totally credible to more than triple the results, and I think the figures were presented, more than triple the margins that we make with the clients through services, through energy management, through energy solutions. We are really confident and the last three or years show this increase. Even with the CESE, let's say what we can call the service parts to our clients and energy management, will assure that growth. Let's be clear about the disposal. Let's be clear also with what we expect about that energy management part. Miguel?
On the cash flow part, what we're assuming in those EUR 2 billion is roughly the EUR 500 million of the hybrid, which is already done and locked in as of January. We're also assuming tax equity, roughly EUR 1.2 billion, and the rest is regulatory receivables. Essentially, that's sort of the three key components of those EUR 2 billion.
We can go for a next question here. José Ruiz from Macquarie. Second row here.
Hi, José Ruiz from Macquarie. Just two questions on dividend. The first of all, I would like to test your commitment to the EUR 3 billion dividends in this period because your dividend policy is based on dividend payout. If we see other clouds, would you reduce that commitment? The second question is regarding, you mention other potential disposals. You talk about crystallization of networks, which I understand is a minority stake. I would like to understand why would you do that, considering that with the existing plan, you are deleveraging and you're delivering on dividend. Just on that question, would you consider returning cash to shareholders if that was the case? Thank you.
José Ruiz, thank you. Dividends. The advantage of you have been bearing us and me, particularly for a long time, is that you can test exactly what we have been doing in the past and if we have told the truth. We have never changed dividend policy, even when the clouds were tough, even when everybody was talking that Portugal would leave the euro, and everybody was asking me how I would pay the debt in escudos. You don't remember those times, but of course, with the recent clouds, regulatory, we have not changed, and we will not change. The best thing is clouds bigger than the ones that we have lived, impossible. I'm old enough to say that it's impossible. The clouds are gone of that scale, clearly, and we will not change the dividend policy. Shareholders can vote otherwise.
They can vote less if they want, sometimes. It will be curious, but they can vote less. Networks, minority stakes, of course, the question is we want to be very clear in what concerns the two plus disposals. We have been clear, and sometimes people have not noticed because it was mini-hydros here, mini-hydros there, then biomass, but all of these was more than 200. People eventually not even noticed. Clearly, in terms of cash proceeds more than in terms of value. The question is why? Because typically we don't have taboos. Of course, the only taboo is to fulfill the commitment. We need to fulfill the two plus. We try, as we showed, we will go.
Our preferred path is reducing merchant in Iberia, we also need to show people that if it's by any chance impossible for any reason that I don't see, clearly we are studying alternatives. The question is, we always need to have alternatives, but also always in the scale that makes sense. It's a reason why. Clearly, as we speak today, even the current situation of the decisions of the low voltage in Portugal probably being postponed to 2020 would advise not to take any decision that will leave money on the table before time. Clearly, we are moving in the right direction. Smaller number of region, eventually only one. Let's see. Clearly, uncertainty is not the best thing, so let's try whether it makes sense. The other is clearly just optionality because the commitment is there. The EUR 2 billion commitment is there.
We have a question there from Credit Suisse, from Stefano Satto.
Yes. Hi. Stefano from Credit Suisse. Thank you for taking my questions. I have three. The first one on renewables and on EDPR minorities. Looks like renewables is your core engine of growth in this plan. Given also the valuation of EDPR today, would it make sense for you to reconsider taking over EDPR minorities? The second question is on the sell downs. If you can share with us what's the level of capital gains that it's embedded in your current forecasts. Finally, the third question on the energy tax in Portugal. What's your best guess on the timing for this tax to be reduced or removed? Thank you.
Thank you, Stefano. EDP Renewables, we are comfortable with the current situation. We are not at all in a hurry. One clear thing, we will not spend cash buying minorities. We have a huge amount of organic opportunities that we want to implement now. We have visibility and on that pipeline that we need to find, besides that we have clear visibility, we need additional 2 on the 16. Our focus is on that part of the story and not buying minorities. We consider EDPR to be integrated within EDP Group. We are convinced it's the reason why we shared with these moves, to have a solid plan that will benefit all the shareholders in EDP and EDPR. Our portfolio optimization plan will allow firepower to boost investment in renewables.
Even the question of when we talk about the platform cash providing hydro, the constraint of balance sheet in that part reduces. We are centered on this, but we are not really in a hurry to change anything. The renewables pipeline will be supported by the generation cash that we have proven here. We are considering, of course, we have this integrated in the group, but we are not considering any transaction at this stage, to be very clear. Second, energy tax. The energy tax, as you know, the government was clear, in the last budget they approved that the energy tax would be reduced progressively with the reduction of the tariff deficit. The tariff deficit evolution has been really strong. Last year we had a reduction of EUR 800 million on the system, everything is credible.
In our assumptions, we believe that in 2022, the tax will be around-
40%
40%. We'll have a progressive, probably towards the end, but clearly our assumption believes that the tax will still be around with 40% in 2022.
The capital gain embed.
The capital gain embed.
In terms of the capital gains that are embedded, as we mentioned, we've taken a relatively prudent approach. We showed the case study on the U.S. and, I wouldn't want to get into specific numbers, but you can assume it's quite a bit lower than that what we've incorporated in our numbers, just to be prudent and on a descending basis. That's what's in those numbers.
Next question we have here, Gonzalo from CaixaBank, BPI.
Hi, good morning. Gonzalo Sanchez-Bordona from CaixaBank, BPI. I found couple of questions on my side. On the EUR 2 billion disposals program, would you consider going above that level if the right opportunities arise or you're just limiting yourselves to the EUR 2 billion? I'm just assuming you might find more opportunities on renewables for that or even you reduce the sale of majority stakes, if that's the case. I would like to get a view on that. Second question on, I've seen, I think it was this week in the Portuguese press, that the European Commission has been looking again into the hydro concessions renewal in Portugal. I was wondering if you could provide an update on how's that going and what next steps do you expect? I think it's been a process that's taken many years already.
Just wondering if you could update us on that. Thank you.
Thank you. Going above the EUR 2 billion. We have put EUR 2 billion plus, above EUR 2 billion. At this stage, I think that we have clear balance between what is asset rotation, the farm downs with EUR 4 billion and the EUR 2 billion disposals of other assets. I think it makes sense, but of course it can be adjusted by, what, EUR 2.5 billion. The only thing that we wanted to be very clear here is that we have a figure, a minimum figure that we want to reach. It's a figure that we want to show that has full credibility still in 2019. It could be implemented in the 12-18 months, but with visibility. We have tried in every detail not to overdo it in the sense, oh, but then it's too big, you cannot do it.
Of course, if the opportunity is there, we could do more than the EUR 2 billion. European Commission. As you know, it's an old question that basically is related not only with Portugal, but a lot of countries where part of the European Commission, because there are different parts of European Commission, always consider the idea of the obligation today, of course, of doing auctions for the hydros. As you know, the decision in 2007 was totally based on legislation that existed, applying what was the legal structure at that time, by the way. The European Commission has already considered two things that, by the way, that the result of the extension was fair according to market conditions. That was a really important part.
They understood that, by the way, doing a competition at that moment would look strange because there were assets that were not available in those moments, so people, nobody would be bidding. It's true that whenever there are other countries that would like to keep their hydros for the locals, they always go back to this. If anything, the other thing is it supports a vision of eventually a hybrid, not the hybrid that Miguel was mentioning, but the hybrid generation mix that we consider to sell. If anything, it enhances what everybody loves it. More competition, even if I remind people, the Iberian market is a fully integrated market, very competitive, and where EDP has 14% of generation market share. Just for us to understand exactly what we are talking about.
We have one more question there from Fernando Garcia from Royal Bank of Canada.
Fernando Garcia, Royal Bank of Canada. I have a couple of questions. First one is on the 2019 tariffs. Portuguese regulators achieve a reduction of tariffs thanks to EUR 285 million commented in the presentation of CMEC global. My question here is, in absence of any regulatory cut for 2020, what is your estimated tariff increase necessary to achieve the reduction in tariff deficit that is forecasted by the regulator? Second question is regarding taxes. You have reached very low taxes in the last year. I wanted to know what is your forecast and if, let's say, you continue maintaining this very low tax rate, could you provide for the reasons? Last one on a clarification is you mentioned 5 million customers in Portugal. You have 4 million in liberalized. I wonder if the figure is liberalized on regulated customers. Thank you.
Fernando, thank you. For the taxes, I will pass to the taxpayer when we pay taxes. Miguel. Tariffs. As you know, we totally disagree with the EUR 285. We were very clear. It cannot be considered an innovation because, by the way, the regulator, the different governments for 10 years approved everything that had to do with this item. We challenge this. Whatever, we will challenge this. Of the EUR 285 that we have totally provisioned this year, only around EUR 90 were used to reduce the tariffs in 2019. It means that they still have a margin of the EUR 285 to be used in any reduction that people would like to see on the tariffs.
I wanted to be clear in one thing, is that the system evolution is going exactly as foreseen, and we have been very clear for years, and it was three, four, five years ago, it was much more difficult to believe, that the tariff deficit would peak, and then we have surpluses that clearly are consistent with tariff evolution that is acceptable, whatever. We can say what is acceptable. I believe that the dynamics today in the market are clearly in the sense that the credibility of debt going down makes no need for any measure or any new invention about creation, innovative measures to cope with the tariff evolution. The system is totally sustainable and the tariff deficit is clearly vanishing well before, for example, our neighbor. Clearly, if it's 2021 or 2022, it's more or less irrelevant, the final year.
The evolution is clearly positive according to what was estimated five or six years ago. Taxes.
On taxes, we're assuming that the tax rate converges to a normal tax rate in the mid-20s, sort of around 24% up to 22. This current low tax rate will not be maintained going forward. That's what's in the assumptions.
Your question was about liberalized clients. I'm sorry, Fernando, can you repeat? I've lost a little bit of
Changing for you with regulated.
Oh, it's the five million clients.
Yes, it includes the regulated.
Yes, includes the regulated clients.
See the different I think also part of the question, if I understood, was the evolution of the distribution tariffs. Is that it? Or the sort of overall tariff rates?
I want to be sure that we capture your last question.
It's answered, I think.
Okay. Thank you, Fernando. Sorry.
Next question from the room. We have one.
Pablo Rios from Seagull Capital. Yeah, my question is regarding the asset sales that you have. Are you considering also as a part of those potential asset sales, Energias do Brasil, either entirely or some part of it, like the distribution or the transmission or the generation business? Thanks.
One question. At least I don't lose the third question. Brazil plays today a relevant role in our business, as you see. There's been value created for EDP. It has an exposure fully aligned with our strategy, basically renewables and networks, so regulated. Highly accretive, providing significant in growth. As you see, net income is growing at a solid double digit. It's a growth with significant visibility, so it's a de-risk growth, namely transmission. We never went crazy there. Let's be clear that we have been always in the moment where everybody was excited.
I remember moments when Europe was in a bad situation, that everybody on the one-on-one say, "Why don't you sell everything you have in Europe and buy more in Brazil?" Two years later, say, "Why don't you sell everything you have in Brazil and you buy all in Europe?" I've seen everything in all these 13 years that I've been doing roadshows in EDP. Going back, we have a long-term track record, analyzed total share of the return, so above 14% since the IPO, a year. Brazil provides growth optionality to our equity story with the level of exposure that we are comfortable. As we have seen, we were clear in the sectors that we want to grow, the regions where we want to grow, and here we talked about maintaining an optionality.
Of course, having this in consideration, we always consider any value creation opportunities that reinforce our strategy and enhance our value. Typically, once again, we will not be buying minorities. Just to repeat the answer that I was asked about renewables, we will not be spending money. We will not be buying. It is curious because three months ago, the question is if we would be buying Brazil. We will not be buying the minorities in Brazil. Brazil is consistent with our strategy, but once again, we consider anything that enhances value for that asset in a platform that can be very interesting.
We have more questions from the room.
Yeah.
Yeah.
Yeah.
Okay. Rui Dias from UBS.
Thank you, Miguel. Just one last question. On net debt to EBITDA, the question is, do you really have to go below three times by 2022? In case you are successful in crystallizing much more of your current project pipeline in renewables, wouldn't you be comfortable with a higher level? What would be that level?
Thank you.
The question about the three times is eventually the one that sometimes I feel, I'm not saying embarrassed, I'm never embarrassed, but I'm sometimes worried. Do people believe because we have been postponing that three times? Okay. I've explained exactly why. The question is going into that direction. The firm commitment is about the level of depth. To show that after 2020-2022, we will reduce from 3.2, below 3.2 in that direction through pure growth of EBITDA. Of course, we have also strong commitment with the rating agencies, and we will be looking not only for that ratio. It's the reason why we explained, we are focused also on the FFO over net debt, because we have a clear rating committee. Once again, the three times is because it's a figure that we have been keeping with us for a long time.
We have been consistent with the targets of deleveraging, of course, we can live depending upon the FFO of net debt, we can live eventually with a slightly different figure. I agree with you.
Maybe we can put now some questions from the web. We have from ODDO, from Philippe Ourpatian. Regarding the net debt EBITDA target for 2022, what is our assumption in terms of regulatory receivables? How much do we assume in 2022 in terms of this amount?
Felipe, thank you for your question. I think it is totally residual. We have at the end of 2018, I think it is slightly more than EUR 200, and I think at that time, if I am not mistaken, we are talking about slightly above EUR 100 million. It is a very small amount.
From Javier Garrido, a question regarding the payout ratio, the 75%-85% payout ratio, a question regarding the gains on the target disposals, on the EUR 2 billion. If these gains will impact or not the dividend regarding the payout of 75%-85%.
It depends very much on what will be the capital gain on those sales. It depends. I cannot answer you today. It depends on what you are going to sell. As you have mentioned, we are studying different alternatives. We have also been clear about the criteria, meaningful, reducing merchant, are our key priorities. Depending upon what we move, we will also act accordingly. We tend to stick to our If we can prove people that you can accelerate growth or you are doing the right step with shareholders' money, I do not see any reason to have bumps on the dividend policy, on dividend amounts. As we have been talking in the future, since we arrived, we have increased from EUR 0.10 to EUR 0.19, we have almost doubled the dividend.
I think dividends should avoid bumpy roads because we have been behaving like a utility should be. Low risk, visibility on the cash flows, asset allocation, anticipating the energy trends. I think that, let's not talk about something that I really do not know exactly what will be the item that we are going to sell.
Well, we are already almost three hours of the session. I think we get the opportunity to continue making some questions in the light lunch afterwards. I will pass now to the CEO for just some final remarks.
I don't know what is the lunch menu, I must confess. I just wanted to share what is the menu that we have in front of us. I think it's a very interesting menu with We like proteins. We exclude the fat. It's a very healthy menu for our shareholders. I think that we know exactly what we need to do. Throughout the lunch, I can share with you any individual or collective question that you want to raise to our team, from me or to the team. Thank you very much. Thanks.