Good morning, ladies and gentlemen, and welcome to the conference call on ENGIE's 2020 full-year results presentation. For your information, this conference is being recorded. Thank you for holding. I will now hand you over to Aarti Singhal.
Thank you. Good morning, everyone. I'm Aarti Singhal, Director of Investor Relations at ENGIE, and welcome to our 2020 Annual Results Conference Call. A quick word on the agenda for this morning. First, you will hear from our new CEO, Catherine MacGregor, on the highlights of 2020, followed by our CFO, Judith Hartmann, on our financial performance. Catherine will then come back and share our priorities, following which, as usual, we'll open the lines for Q&A. As always, my team and I are here to assist you, so do please reach out. And with that, I'm pleased to hand you over to Catherine.
Thank you very much, Aarti, and good morning, everyone. It is such an exciting time to have joined ENGIE, an exciting time for the group and for the energy industry as a whole. We are facing an unparalleled opportunity to play a clear and meaningful role in tackling climate change. By 2050, over $15 trillion are expected to be invested in power generation globally, with over 70% in Renewables. Significant growth is also expected in the use of renewable gases to accelerate the energy transition. According to the IEA's latest Sustainable Development Scenario, in Europe alone, energy from biomethane and hydrogen could potentially grow three times from 2019 levels to over 300 TWh in 2030. As we are reminded by extreme events, such as the recent ones in Texas, it is critically important that decarbonization of the energy mix is both reliable and affordable.
This will mean a transition based on a combination of electrification and decarbonization of gas, as well as on the development of flexible and resilient energy systems. ENGIE is a major player in the energy sector, and we are extremely well placed to tackle most of the challenges posed by this transition. We have 101 GW of gross power generation capacity, of which around 30% from Renewables. We have a French-regulated asset base of €28 billion, which makes us one of Europe's largest gas network operators and a growing footprint in Networks internationally. These factors, together with a track record in decentralized infrastructure and a fast-growing position in renewable gases, mean we are very well placed indeed. In just eight weeks that I have been here, I can already see the tremendous potential ENGIE has in accelerating this energy transition. This is what I am committed to.
Before I say more on this, let me review the group's overall 2020 performance. EBITDA and COI were both down significantly from last year, mainly due to the impact of the pandemic. However, our results were ahead of our expectations on both metrics, and this was driven by the fact that the second-half confinements were lighter in our main markets and that we adapted our processes, contributing to improved activity levels, and as a result, the second half of 2020 was actually similar to H2 2019 on an organic basis. Net Recurring Income Group Share was within the guidance range, and Judith will cover financial performance in more detail shortly. The board has reaffirmed the group's dividend policy and proposed for 2020 a payout ratio of 75%, which is at the top end of the range.
This translates to a dividend of EUR 0.53, which will be proposed for shareholder approval at our AGM on the 20th of May. In terms of operational performance, I am pleased that the group made progress at pace despite the challenging backdrop. For this, I would like to say a big thank you to Judith, Paulo, and Claire for their strong leadership in 2020, as they had the dual challenge of advancing the group's simplification agenda while, at the same time, ensuring we continue to deliver essential services to our customers. Following the launch of the new strategic orientation in July, ENGIE completed the disposal of its 29.9% shareholding in SUEZ in October. We also rapidly launched strategic reviews of businesses, including part of Client Solutions, GTT, and ENGIE EPS. In addition, ENGIE also progressed geographic rationalization and strengthened its position in key regions.
For example, we significantly enhanced our Renewables footprint in the U.S.. Operationally, in 2020, the group continuously evolved processes to tackle COVID, and we maintained high health and safety standards for both occupational and process safety. We invested EUR 4 billion of gross CapEx and successfully commissioned 3 GW of Wind and Solar assets. In Nuclear, following the announcements of the Belgian government in Q4 2020, it has been decided to stop all preparation works that would allow a 20-year extension of two units beyond 2025, as it seems unlikely that such an extension can take place given the technical and regulatory constraints. This change led to an impairment, which Judith will cover shortly. Our group remains committed to Belgium and to contributing to the country's security of supply. Alongside Renewables, we are also developing projects of up to 3 GW of gas-fired generation.
These projects could participate in the Belgian capacity remuneration market auctions in the second half of this year, once approved by the European authorities. Let me now turn to our ESG performance. Carbon neutrality is at the heart of ENGIE's purpose and central to our strategic directions. Today, I am very pleased to announce a commitment to exit all coal assets in Europe by 2025 and globally by 2027, in line with our purpose to drive carbon neutrality. We are focused on driving our ESG performance using a wide range of metrics, three of which I will discuss here. Our greenhouse gas emissions from power production reduced 9% to 68 million tons, as the share of coal has further decreased in 2019. We also increased the share of Renewables in our portfolio to 31%, and I will cover this in more detail shortly.
On gender diversity, we maintain 24% women in management of the group, and this must continue to be an area of focus for us in the coming years. The final area of 2020 performance I would like to highlight is the group's continued progress in growing our renewable portfolio, which has grown significantly by 32% since the end of 2018. The 3 GW that we commissioned last year is in our key growth market for Renewables, namely the U.S., Europe, and Latin America. 2020 was really a milestone year for ENGIE in the U.S., with nearly 2 GW of this new capacity commissioned across four states, taking our total installed renewable generation there to over 3 GW . In 2020, most of our newly commissioned assets were onshore wind, followed by Solar.
For the first time, through our Ocean Winds joint venture with EDPR, we commissioned both fixed and floating offshore wind. In addition to this strong organic growth, we also added 2 GW through acquisition of operating assets. These included 1.7 GW of Hydro plants in Portugal, which benefit from long-term concession arrangements. Finally, we also strengthened our position in the rapidly growing market of corporate PPAs, with over 1.5 GW of contracts signed in 2020. For example, we signed several corporate PPAs with Amazon for a 650 MW global portfolio of Wind and Solar projects across the U.S., Italy, and France. Turning to an update on the strategic review of part of our Client Solutions business that was launched in the second half of last year. In November, we discussed the creation of a new leader in multi-technical services, which would benefit from scale and strong growth prospects.
I am very pleased that Jérôme Stubler, who has more than 30 years' experience in the construction industry, joined us recently and will be leading this important project. Employee consultation on the proposed organization design started this month, as planned, and we expect it to conclude by the end of the second quarter. We will then consider next steps and review future ownership options for the new entity in the second half, maximizing value and acting in the interest of all our stakeholders. Now, the guidance for 2021. We expect financial performance to improve significantly from 2020, driven by a combination of strong recovery from COVID impacts, growth in Renewables and international Networks, improved Nuclear availability and higher achieved price, and reversal of warm weather effects. Overall, these positive factors are expected to more than offset year-on-year negative evolutions.
With respect to the recent extreme weather events in Texas, we are assessing the situation. It mainly affects our Renewables and Supply activities. Within this guidance, we have included our current estimate of the potential impact. We remain focused on executing disposals at pace, continuing to simplify the group, creating value, and reallocating capital towards growth. To this end, we expect to invest between EUR 5.5 billion- EUR 6 billion gross CapEx, with over 90% of this in Renewables, Networks, and Asset-based Client Solutions. Let me now hand you over to Judith to cover our financial overview, and I will come back on strategic priorities. Judith.
Thank you, Catherine, and good morning, everybody. It's a pleasure to welcome Catherine to ENGIE, and I'm looking forward to executing our strategic plan together.
We have ambitious goals to continue to simplify ENGIE at pace, to play a key role in accelerating the energy transition, and to focus on the long-term profitable growth of the group. Before I share my view on 2021, here are our 2020 financial highlights. The second half of 2020 showed a strong recovery after a second quarter, which was heavily impacted by COVID. This very unusual year translated into a mixed set of numbers. EBITDA and COI at EUR 9.3 billion and EUR 4.6 billion were down by 11% and 21%, respectively, on a gross basis. Organically, these evolutions were slightly better. This decrease in total COI was mainly driven by a negative EUR 1.2 billion COVID impact, a negative EUR 300 million pressure from foreign exchange, mainly due to the depreciation of the Brazilian real, and a negative EUR 160 million impact from French temperatures.
Net Recurring Income Group Share amounted to EUR 1.7 billion, down 37% year-on-year. Net Income Group Share stood at negative EUR 1.5 billion. This was mainly due to impairments, especially related to our nuclear reactors. This was partially offset by capital gains, the main one being EUR 1.7 billion due to the sale of the 29.9% shareholding in SUEZ. Compared to 2020 guidance, I'm pleased that both EBITDA and COI stood above the ranges we indicated last summer. Net Recurring Income Group Share was in line with guidance, but at the bottom end of the range. This was due to higher contributions from entities with minorities, which fully contributed at EBITDA and COI levels, but only contributed at share at Net Recurring Income Group Share level. We also posted higher financial costs.
This was notably due to the discounting of liabilities related to Hydro concessions in Brazil that are indexed to inflation and which increased significantly in 2020. Let's keep in mind that revenues are also indexed to inflation and will benefit from that increase over time. Although we were in crisis management mode most of 2020, we did not lose focus on our long-term objectives and continued to invest for the future. We invested EUR 7.7 billion of CapEx in total. This included EUR 4 billion of gross CapEx, almost exclusively in our areas of strategic growth, with approximately 40% in Renewables, 40% in Networks, and 15% in Asset-based Client Solutions. We also continued our relentless pursuit of simplifying the group. We completed the SUEZ transaction in October and launched further strategic reviews. Let me give you the 2020 COI highlights.
COI was adversely impacted by roughly EUR 300 million due to foreign exchange and by an aggregate negative scope effect of EUR 75 million. On organic evolution per business line, Renewables, Thermal, and Nuclear were resilient and even grew organically. Networks were mainly impacted by warm temperatures and by higher D&A. COVID weighed particularly heavily on Client Solutions and on supply. Let me now move to a detailed view per business line. Renewables showed continued progress and overall operational resilience to COVID, with organic growth of 11% in 2020. However, the gross COI evolution was negative EUR 125 million, mainly due to foreign exchange. Starting with our biggest contributor, Latin America, we had EUR 195 million headwind from FX and an unfavorable energy allocation for Hydro in Brazil. These negative effects were partially offset by the positive GSF ruling in Brazil of approximately EUR 165 million.
This was linked to a recovery of past energy costs following the agreement on renegotiation of hydrological risk, which was finalized at the end of 2020. The contribution of French Renewables was also lower due to the reduction in DBSO margins in 2020. This impact was partially offset by higher achieved prices for our Hydro power production and higher volumes produced mainly by our Wind assets. In other geographies, we benefited from commissioning new capacity in the United States and from higher wind production. We invested EUR 1.5 billion of gross CapEx in 2020, mainly for the acquisition of 1.7 GW of Hydro assets in Portugal. Moving to Networks, which were resilient despite the pandemic. The EUR 281 million year-on-year COI decrease notably reflects warm temperatures and higher D&A in France. The negative temperature effect was roughly EUR 100 million in France, with lower gas volumes distributed by GRDF.
French networks had limited COVID impact, also mainly on distributed gas volumes. Remember that for regulated activities, volume effects are recoverable in the short to medium term through the clawback mechanism and are therefore value neutral. Higher D&A was mainly due to accelerated amortization of some distribution assets. This is value neutral over time as D&A is integrated in the regulated revenue. The reversal of a positive internal one-off from the fourth quarter 2019 offset in supply, as well as the first effects of the RAB remuneration rate decreases, also contributed to this lower COI in France. In Latin America, COI was up significantly, driven by the scope in effect and higher organic contribution of TAG, which I'm very pleased to say has outperformed our expectations. In addition, we had higher contributions from power transmission lines in Brazil as their construction is progressing well.
Together, these drivers helped to more than offset negative foreign exchange in Brazil, Mexico, and Argentina. We invested EUR 1.5 billion gross CapEx in 2020, mainly in Brazil on power transmission lines and for the acquisition of the remaining 10% in TAG. In France, we continued to invest into the gas smart meters rollout. On the next slide, you can see Client Solutions, which faced unprecedented headwinds in 2020. COI decreased mainly driven by a EUR 600 million impact from the pandemic. Access to customer sites was much reduced during the strict lockdowns of the second quarter 2020, and we were not able to perform various services. Revenue declined on a gross basis by approximately EUR 900 million for the full year. Strong management actions allowed us to variabilize and reduce total OpEx by approximately EUR 300 million. Lower results from SUEZ also impacted Client Solutions COI by approximately EUR 160 million.
The second half showed a clear recovery with less stringent confinement measures, but also with improved processes and protective equipment for our teams. We also continued to benefit from the cost actions launched in the second quarter. Excluding the scope-out effect of SUEZ in the fourth quarter, the second half performance in 2020 was similar to previous year. Despite unfavorable temperature, our district heating and cooling and on-site generation activities were resilient. We continued to develop these activities, including through an acquisition of the world's largest district cooling scheme in Dubai, allowing us to increase our DHC net install capacity by 9%. In green mobility, we are a leading global provider of smart charging solutions for electric vehicles through EVBox, a startup we acquired in 2017. We announced last December that EVBox would be listed on the New York Stock Exchange.
We are expecting this to happen in a matter of weeks following the closing of this back transaction. Regarding Client Solutions project backlog, we recorded a total increase of 5% since December 2019, representing approximately 13 months of activity. Let's now move to Thermal, which was impacted by scope and FX, notably EUR 90 million of disposals, mainly in Thailand, and close to EUR 40 million negative FX impact. On an organic basis, the business line saw 1% growth, which was a strong result considering that there were over EUR 100 million of positive operational one-offs in 2019 from LDs on newly commissioned power plants in Brazil and Chile. We had very good results from our Italian assets due to higher level of ancillaries, as well as to higher spreads captured throughout Europe.
This was also driven by higher operational contribution of Brazilian assets and by improved performance from Middle East gas contracted activities. The COVID impact on our Thermal activities was minimal, with lower demand mainly in Chile and Peru. To conclude on Thermal, let me highlight the de-mothballing of two Dutch gas units demonstrating this fleet's flexibility to take advantage of market opportunities. Let's now move to our Supply, Nuclear, and other activities. Supply suffered a net COVID impact of roughly EUR 290 million, mainly due to lower consumption, bad debt, and lower B2C services. Warm temperatures in the first half also weighed on energy consumption, mainly in France for B2C gas volumes. These headwinds were partially offset by various one-offs, including an internal negative 2019 one-off mirrored in Networks. We continued to put in place dedicated action plans, including OpEx reductions and G&A resizing.
COVID had little impact on Nuclear, and its contribution improved by EUR 203 million, mainly reflecting higher achieved prices and lower OpEx. These positive effects were partly offset by lower volumes, mainly due to a decrease in availability of our Belgian assets caused by the last planned LTO maintenance works on Doel 1, Doel 2, and Tihange 1. Lastly, COI for other activities decreased as 2019 benefited from a positive one-off related to partial sale of a gas supply contract in 2020, which was impacted by COVID, mainly due to credit losses for GEM. These headwinds were partly offset by the outperformance of GEM activities on the back of market volatility. We also benefited from higher contributions of GTT, thanks to a strong past order intake. Next, a few words on the bridge from EBITDA to net recurring income group share.
D&A was up mainly because of acquisitions, asset commissioning, and accelerated amortization for some French gas distribution assets. Net interest expense was also slightly higher, driven by negative FX and lower cash remuneration. Tax charges were EUR 300 million lower, mainly due to the decrease in profit. This was partly offset by a temporary higher effective recurring tax rate at 32.5% in 2020 versus 28.2% in 2019. This higher tax rate included notably the adjustment of carrying value of some deferred tax assets and the one-off effect of the tax rate change in the U.K. Minority interests were lower, mainly due to lower contributions from our listed entities in Latin America and to the scope effect of Glow. Now, I'll comment on the bridge from Net Recurring Income Group Share to Net Income Group Share, which was negative EUR 1.5 billion in 2020.
First, we recorded significant impairments, mainly driven by the EUR 2.9 billion Nuclear impairment caused by the change in lifetime assumption for Belgian nuclear reactors, as well as by changes in the commodity price scenario. In addition, the extension of fair value accounting to a European gas contract and its related assets also led to a net impairment of EUR 500 million. These negative figures were partly offset by capital gains, mainly coming from the SUEZ transaction. Let me now focus on the evolution of net debt and on our leverage ratios. Financial net debt decreased by EUR 3.5 billion to EUR 22.5 billion from December 2019, primarily due to disposal proceeds. CFFO was EUR 7.1 billion in 2020, down EUR 500 million versus 2019, mainly driven by the following effects. First, operating cash flow was EUR 1.1 billion lower, mainly reflecting the drop of EBITDA.
Second, change in working capital requirements from activities excluding energy management had an impact of negative EUR 200 million. These headwinds were partly offset by a EUR 700 million positive change in working capital requirements from energy management activities driven by dynamic management of margin calls in 2020 in a context of extreme volatility of commodity prices. We reshaped the portfolio by investing EUR 7.7 billion CapEx and by disposing of EUR 4.2 billion of assets. Overall, the average cost of gross debt was 2.38%, down 32 basis points compared with December 2019. At the end of 2020, the financial net debt to EBITDA ratio was 2.4x , a slight decrease compared to December 2019. Economic net debt to EBITDA ratio was four times, stable compared with December 2019 and better than 2020 guidance.
We maintained a high level of liquidity with EUR 23 billion, including EUR 13.3 billion of cash as at the end of December 2020. This is particularly noteworthy in the context of the unprecedented pandemic. We strengthened our leadership in green bonds, having issued EUR 2.4 billion green bonds in 2020 for a total of EUR 12 billion since 2014. We also dynamically managed our hybrid bonds, which are showing an average outstanding amount of EUR 3.9 billion. The current total coupon of EUR 100 million per year has been reduced by 28% since 2017. Lastly, no change on the rating since mid-November, in line with the strong investment grade we aimed for. Let's now look at the outlook for 2021, starting with our capital reallocation to fund growth. We expect to invest between EUR 5.5 billion and EUR 6 billion in gross CapEx, with over 90% allocated to our strategic priorities.
We will continue funding nuclear provisions in Belgium and invest for maintenance with a total of approximately EUR 4 billion. In addition to EVBox, we expect to execute disposals of around EUR 2 billion aligned with the group simplification. On the following slide, I'll share our 2021 expectations for each business line. In Renewables, we expect growth from asset commissioning in the United States, from higher achieved prices for French Hydro, and from the potential positive effect of the CNR concession extension. This growth will be partly offset by a lower benefit from the GFOM ruling in Brazil and by the assumed FX deterioration. In Networks, lower RAB remuneration rates in France should be offset by the reversal of 2020 warm temperatures, as well as continued growth in Latin America. In Client Solutions, overall, we are expecting a strong recovery from COVID, albeit with a relatively slower recovery for asset-light activities.
We are also expecting a year-on-year accretion resulting from the partial disposal of SUEZ and EVBox, which contributed negatively in 2020. In Thermal, we expect a COI decrease due to the normalization of a strong 2020 performance in Europe, which was supported by high spark spreads and ancillary contributions. In supply, the outlook is improving as these activities should strongly recover from COVID and on the assumption of temperature normalization. In Nuclear, we expect contribution to increase as volumes should be higher, thanks to better availability. We have already secured better pricing for 80% of our 2021 output at 46 EUR per MWh . Included within this guidance is an estimated impact that follows the extreme cold weather in Texas earlier this month. We are assessing the situation, which mainly affects Renewables and Supply activities.
Overall, we currently estimate a potential net impact at the group COI and net recurring income group share level of between EUR 80 million- EUR 120 million. Now, the 2021 guidance. We expect EBITDA to be in the EUR 9.9 billion-EUR 10.3 billion range, COI to be in the EUR 5.2 billion-EUR 5.6 billion range, and Net Recurring Income Group Share to be in the EUR 2.3 billion-EUR 2.5 billion range. Regarding COVID, our projections assume restrictions similar to the fourth quarter 2020 and a gradual easing over 2021. We assume up to EUR 100 million dilution effect at the COI level from approximately EUR 2 billion disposals, in addition to previously signed transactions. We remain committed to a strong investment grade credit rating and continue to target a ratio of below or equal to four times economic net debt to EBITDA over the long term.
Importantly, we reaffirm our dividend policy, which relies on a 65%-75% payout ratio on the basis of Net Recurring Income Group Share. I will now hand you back to Catherine for our 2021 priorities. Catherine, the floor is yours.
Thank you very much, Judith. Let's now indeed look at our priorities for sustainable long-term value creation. The Executive Board set out strategic orientations for the group last year in July 2020. My new executive team and I have three clear priorities. Firstly, simplifying the group at pace. Secondly, investing further, investing in Renewables, Networks, and Asset-based Client Solutions, as these are areas of competitive strength for ENGIE. Finally, strengthening our group's commitment to the energy transition. While the overarching priorities are clear, we now need to translate them into an action plan for consistent delivery.
To this end, I'm very pleased to announce our next event on the 18th of May, where Judith and I will cover both our Q1 results and provide you with a medium-term strategic plan and guidance. On 14th of January, I announced a new executive committee, and I'm very pleased that Paulo, Edouard, Cécile, and Sébastien have started their new business roles. I can confirm that the whole executive committee is passionate about moving along our strategy and enhancing our performance culture. Turning to our major focus areas, starting with Renewables, they represent a key long-term growth engine for the group. Our portfolio of Wind and Solar assets has an average age of five years, with an average residual contract duration of 15 years, which offers us good visibility of earnings.
Currently, we have 3 GW under construction for commissioning in 2021, and we are on track to achieve the 2019 target of commissioning 9 GW in three years by the end of this year. A key area of value creation from Renewables is the ability to commercialize energy with new and innovative solutions for customers, and we have made great progress on this front. For example, in addition to the Amazon contract that I mentioned earlier, ENGIE will supply 3 TWh of renewable energy to the global chemicals group INEOS through a 10-year corporate PPA. This is one of the largest renewable PPAs signed with an industrial group in Belgium and demonstrates the growing appetite for PPAs from a broader range of customers. We intend to retain a higher ownership of our Renewables project where it is strategically and economically rational, as we indicated in our strategic orientation.
Stepping back, it is important to say that our Renewables growth ambition is not about entering a gigawatt race. Our focus is on disciplined investment through organic growth and through targeted acquisition that offers good returns. With our strong local presence in key geographies, our leading capabilities across the power generation value chain, including in energy management, which is a key for commercializing renewable energy, we are confident in our ability to drive long-term value creation from this Renewables growth. Now, turning to Networks, we are investing significantly in these activities to ensure safety and reliability, as well as improving energy efficiency. An example of the latter is the continued rollout of smart meters, where we installed an additional 2 million smart meters in France last year. Our regulated networks offer stability and visibility of earnings to the group, with regulatory remuneration arrangements in place through to 2024.
As a leader in gas networks, we are playing a critical role in enabling an affordable and smooth energy transition, and we are promoting a progressive increase in the role of renewable gases. We see a huge potential for hydrogen, and we are already making significant progress in biomethane. For example, last year, 91 additional biomethane production units were connected to the French gas grids, and over 85% of these were connected to GRDF. Altogether, these units can contribute to a yearly production of up to 3.9 TWh , equating to the annual gas consumption for heating approximately 1 million new build homes in France. We have also started to adapt the existing gas transport networks by commissioning three reverse flow installations in 2020, which allow biomethane to flow from the distribution grid to the gas storage unit.
Moving now to our international Networks, where we are leveraging the deep networks experience we have in Europe. In emerging markets, the importance of gas is driven not just by economic growth, but also by reducing exposure to higher emitting sources such as coal. A particular region of international growth in Networks has been Latin America, where, in addition to gas, we are also building power transmission lines. Our near-term priority in the region is to commission two major electricity transmission projects. Currently under construction is the 1,000 km Gralha Azul project and the 1,800 km Novo Estado project. Both include the construction of new substations and upgrades to existing substations, and are expected to be commissioned in the second half of this year.
Finally, on Client Solutions, we see a strong growth potential driven by decarbonization and energy efficiency, especially in heating and cooling networks, on-site generation, and green mobility, among other asset-based solutions. We currently have leadership positions in all of these activities, and recent successes include a 30-year contract signed in Monaco to design, build, own, and operate a seawater heating and cooling network that will enhance energy efficiency. Overall, we have 100 cooling networks with a total installed capacity of 6.1 GW and 300 heating networks of various sizes that distribute 19 TWh yearly. Delivering on decarbonization, while ensuring reliability and affordability, can only be achieved through a combination of centralized and decentralized solutions and with a mix of energy sources. ENGIE has developed a strong platform in Client Solutions from which we can tap into the growth in this space.
In DHC Networks, the worldwide market is expected to grow over 5% per year on average across the next five years. Long-term growth drivers for asset-light activities are also strong, underpinned by major international action plans such as the European Green Deal towards making the EU's economy sustainable. In our asset-light activities, we have a healthy order book and a project backlog of over EUR 11 billion, offering good visibility for 2021. So, to summarize, ENGIE made progress at pace in 2020. We delivered for our customers while continuing to invest in major capital projects. We have progressed on simplifying the group. We are investing in our strategic priorities for long-term value creation. We have a new business organization and leadership team who is focused on performance and who is committed to executing our strategy to accelerating the group growth and to strengthening our commitment to the energy transition.
I would like to take this opportunity to thank all ENGIE employees who have worked so hard to deliver critical services for our customers in unprecedented conditions. I have only started to get to know them, and I'm already extremely impressed by their engagement, their professionalism, and their talent, and I look forward to leveraging their strengths to deliver on our full agenda in such critical times for the energy industry and for ENGIE. Thank you very much for your attention, and I would like to turn now the line back to the operator for the Q&A session. Operator?
Thank you. If you would like to ask a question, please signal by pressing star one on your telephone keypad. Please limit your questions to two per person at a time. Again, press star one to ask a question. We will take our first question from James Brand with Deutsche Bank.
Please go ahead.
Thanks for the presentation, and good luck with the new role, Catherine. So, I'll ask two questions. The first is on the supply business. You're obviously guiding for a significant improvement in supply COI this year versus last year. But where should we be hoping that supply COI gets back to either this year or perhaps over the medium term? Because there was a time when that business was making around EUR 600 million of COI. And it's hard to know. There's obviously been some pretty big changes in competitive dynamics over the last couple of years. So, I was wondering whether you could share some thoughts on perhaps where you might be able to get back to perhaps over the medium term in that business. And then I just had a question on the coal phase-out.
You mentioned that you would also phase out coal in district heating. I was wondering whether you could just remind us why you're still using coal in district heating and what the options are there, whether you're planning on investing in converting those units to cleaner fuels. Thanks.
Thank you very much, James, for your question. Maybe I will start with your second question, which relates to the coal use in DHC. You're right to point out that some of our DHC Networks rely on a mix of inputs or feedstock, and part of this feedstock sometimes continues to rely on coal. Often, it's actually a very small proportion of coal that is being used, but it is indeed the case that it is part of our feedstock.
We are working really hard on these networks to find alternatives to use, preferably Renewables, things like biomass, for example. Our whole plan that we've announced today, and obviously very pleased to have made this announcement today, includes for each of these networks a solution to convert the coal to other sources of feedstock. In terms of the supply, we're really expecting supply to recover mainly from less COVID impacts, also looking at the temperature, which will improve. Nothing much more structural than that, really, James, on supply improvement.
Thank you.
We will now take the next question from Rob Pullen with Morgan Stanley. Please go ahead.
Thank you, and welcome to the utilities world. Two questions, please. The first one is, following the impairment on Belgian nuclear, could you indicate whether there will be any impact on depreciation and amortization going forward?
And if so, what quantity? And the second one, if I may ask around Client Solutions, why the effort to reorganize this entity given the strategic review regarding a potential disposal? Thank you very much.
Let me start with your second question, and then I will hand over to Judith, who will go through the details of the impairment impact, if you don't mind, Rob. So, in terms of creating an entity as part of our strategic review of Client Solutions, one of the things that is important to understand about this business is that it has grown within ENGIE as a series of acquisitions and local developments. And so, today, it doesn't quite belong into a coherent entity, and it's not led as an independent or well-defined part of ENGIE.
All of the work that we've started last year and that we are doing as part of this consultation is to bring these activities into a coherent entity, and this is really happening now, with a commonality in terms of métier, activity type, expertise, purpose, and also industrial project. That's really the key part of what we do. It's a first step, and then we've announced that there might be a second step, but we will obviously cross that bridge when it comes to it. The key here is really to give that business its own industrial project, its own identity. We are, in fact, very positive and excited about the opportunity of these businesses, very, very different from other more traditional métiers that we have in ENGIE. The idea is really to form a very coherent entity, which Jérôme Stubler is very busy doing right now.
Judith, you want to comment, please, on the impairment?
Yes, on the positive impact on 2021. On the impairment, it was about EUR 2 billion related to goodwill, so no impact there, of course, on DNA reduction and about EUR 800 million of assets. On these assets, if you assume there's five remaining years until 2025, it's about EUR 150 million of impact a year, positive.
Thank you. That's very helpful. I'll turn it over.
We will now take the next question from Sam Arie with Union Bank of Switzerland. Please go ahead.
Hi, thank you. Good morning. I have one question for Judith and one for Catherine, please.
Yeah, Judith, just to follow up on the Nuclear, can I just ask, setting aside the provisions and the cash payments against those which we know about, can I just ask, do you anticipate any positive free cash flow from the Nuclear fleet now in the rest of its life? I mean, if you just look at operating cash flow and essentially operating CapEx that you've got to put in. Hopefully, that's an easy one, but it would be very helpful. And then the second one is for Catherine. And yeah, let me start by saying also welcome and wishing you success in the new role. You certainly have a lot of people out here who want you to be very successful. But that brings me to my question, actually.
I think the way I want to say this is, I think we know the broad plan now for the business, but I think it's also important to look back at the last five years and understand why essentially the investment thesis has not delivered so far for shareholders. It's been a period in which the sector was exceptionally strong. The peer group's done very well. Iberdrola shares nearly doubled, Enel nearly tripled, Ørsted quadrupled. Other generators like Uniper and Fortum have been very strong as well. But ENGIE shares have gone, let's face it, sort of sideways and even down a bit in that time.
So, I thought on this occasion, it would be great if you could take a few minutes just to share with us sort of your perspective on why the last few years have been so difficult for ENGIE, why the 2016 asset rotation plan didn't really deliver in the end, and why the current asset rotation plan may be more successful. I know we've heard from the chairman very helpfully on this last year, but I think we'd love to hear your thoughts on this, and I'm sure that's a question you've been reflecting on as you took up the new role. Thank you.
Okay, thank you, Sam, for your welcome message and your welcome question. Maybe some thoughts. First of all, I think you are highlighting through your question the fact that we have at ENGIE significant tailwinds that some of our peers have enjoyed and we haven't.
Now, that makes me and that makes the team obviously extremely motivated and optimistic that we are going to get the benefits from these tailwinds because as a team, we are extremely focused in making sure that we do outperform and outperform our peers, outperform the market. There is a very, very strong willpower within the team to do that. Now, it's a little bit difficult for me to really be critical about the past. I would say that some of the things that were decided last year with these strategic orientations, I am very, very convinced that will address some of the shortfalls that can explain some of ENGIE's underperformance in the past few years, and I think here, namely, complexity is one thing.
The issue of having métiers and activities that are so different from each other, and I think we've talked a little bit about the multi-technical services as an example that require a management focus, a capital allocation policy, a system, and an attention to every cent that you have to spend, which is not necessarily something that is ENGIE DNA. And so, these are some of the things that complexity and ability to manage activities that are very, very different from each other, I think, really get in the way of performance. That's one thing. And second, it's really focus and making sure that everybody pulls in the same direction.
And I am personally convinced, enthusiastic about the idea of having a very sharp focus on capital allocation, making sure that all of our managerial efforts go in the direction that we've announced and we'll be able to show very positive results. And maybe the last point, which is around the performance culture, which I think can be improvzed within ENGIE. And here again, I can assess that the first reactions to this discussion within the company lead me to believe that we can make some inroads on that topic as well. So, really, in summary, three elements: complexity, sharper capital allocation, everybody pulling in the same directions, and performance culture are three important elements I think that are going to make a difference and allow ENGIE indeed to thrive in those strong tailwinds that continue to be there for us. Thank you.
I'll turn to Judith maybe for the cash flow from Nuclear.
Yes, thank you, Sam, for this question. Indeed, you can expect positive cash flow operationally from our Nuclear activities. I mentioned earlier two things, actually. Price is going up. In 2021, we already have hedged 80% of the production at 46. We have not seen prices like this in many years. And on the availability, given that last year was the last LTO maintenance, we are confident on good availability for the years to come. You have, of course, in mind that we have committed to fund our waste provision until 2025. And so, every year, we will allocate capital to that, and that's EUR 1.3 billion a year.
Then the last thing I would want to mention, too, is on the positive side of this decision. This will help us reallocate some earmark, let's say, CapEx into, again, our growth opportunities in Renewables and in Networks.
Thank you. That's really clear. Thank you, Catherine, too, for your answer, which I think we all appreciate, and we wish you luck with that. Just final comment from my side, then I'll turn it over. One observation is that a key part of success, I think, for some of your peers has been laying out quite detailed guidance over a three-year period. I suppose when we see you're planning a CMD in May, I think lots of us are hoping that you'll be able to do something similar at the May event.
Thank you, Sam, for putting more pressure on us.
In a good way.
And I wish you very good luck with it. And thank you, as I say, for your excellent answer just now.
And we will now take our next question from Vincent Ayral with J.P. Morgan. Please go ahead.
Yes, good morning and welcome also and again. And similar thing for the CMD and mid-term outlook, I would concur. I think that's clearly something the market will be expecting there. So, for my questions, the first is on the asset rotation. So, you say the inflection on the strategy last summer. ENGIE already has started pretty fast on that, as you flagged. Now, the market is looking at the remaining energy services. You're talking about Q3, Q4 for the end game, but on defining the structure. But does that mean we have a disposal in Q3, Q4?
That's what I'd like to understand because we need to consider what's the dilution of as well, the mid-term period, not only 2021. And still on the asset rotation, this leaves you probably, I don't know, EUR 12 billion of total proceeds maybe overall when we put everything all together. So, we've been talking about investment discipline. We've seen peers in Renewables showing a bit of a lack thereof of investment discipline, among other things, the auction in U.K. offshore. This has been a concern for the market. You can see that on the recent months' trading for renewable players. So, when you will reinvest, what is your philosophy there? What are you looking at? What will you be looking for? So, I think this is a key point I'd be interested in. Thank you very much.
Yeah, no, thank you. I think these are really, really good questions.
I'll start maybe with, again, the second one on Renewables. So, first to reiterate that we are very pleased with our position on Renewables. We are a leader in France. We have in the U.S. the largest development pipeline. We have a strong position in Brazil, in Peru, in Chile. So, in general, with our 31 GW portfolio, we're very pleased. I think the team has done so far a really nice job. And side comment also on this is that our employees are obviously very excited about Renewables being a growth engine for us in ENGIE, as well as obviously being a key goal of our ESG roadmap. So, loads of enthusiasm around renewable. Now, that doesn't mean that we should not have discipline. I think, as you pointed out, there's been a little bit of a race to gigawatts.
And as you might have noticed, lately, we have not really entered the race of announcement of gigawatts. Obviously, we'll give you more color on our ambition on Renewables in May. But we really want to focus on a return-based growth strategy. And sometimes, it's okay to lose auctions if we don't get the right returns. We have strict criteria, and we will stick to them. We're going to really focus on a few geographies. We think it's important to have a system play on Renewables. We want to develop and further our differentiation. We have some core competencies. We have a team of about 300 developers who are really good at what they do.
They are experts in sourcing projects, in dealing with permitting, land ownership issues, financing, partnering, environmental assessment, and all that good stuff, as well as aspects of social acceptability, which is really important in the development of Renewables, as you know. The ability to manage risk. We see merchant risk increasing in the renewable arena, and we are really good at that. We have a lot of experience over the years developed through our generation and Thermal activity. We really have some really nice differentiation that we want to use in order for sure to be competitive, but without sacrificing the return. And then maybe I'll add that there is also, I think, a lot of things we can do and we are doing and we will continue to do and even increase around industrialization, procurement, supply chain.
Of course, digital, we have a very nice digital platform to help us manage our assets better. And this is something, obviously, that we're going to continue and push. So, in short, obviously, it's a topic we could talk for hours, but in short, we have big ambition, but we will be disciplined. We do believe that it's important to keep return in mind whenever we bid. And there is no must-win auction in ENGIE. I think there was another question which was related to the calendar. And maybe I'll just say a few things, and then I'll pass on to Judith just to say that the Client Solution project is a big project. In that entity that we are forming, which is the object of the consultation we've talked about, there will be 34,000, roughly 74,000 people. So, it's a huge project. It's going to take us some time.
And so, from a financial impact standpoint, unlikely to be a 2021 story. And Judy will give you a little bit of the background and more details on the rest.
No, absolutely. That's a good clarification. It's not likely a 2020 event. When we mentioned the EUR 2 billion of additional disposals to drive simplification, the topics you know about, of course, are the strategic reviews that we have announced. It's the geographies, our every focus. It's coal exits. And as in the past, we will be very mindful of timing. We will run processes. We will make sure that we get the right price. And so, we will not give specific assets, of course, at any given time. But let me reassure you, there are several processes that have been launched. And so, we're confident that we can move at speed to really help simplify the group through the disposals.
Thank you very much.
And we will now take our next question from Ajay Patel with Goldman Sachs. Please go ahead.
Good morning. Firstly, I'd like to share everyone's sentiments and wishing Catherine well in her role. But I have a couple of questions, one for Catherine and one for Judy, which seems to be the trend last few questions. The first one is on strategy. So, 25% of your business is in Thermal, and it's an area that you're not particularly resting hugely behind if you look at the growth CapEx numbers. I'm just wondering, you've identified sort of the identity of Renewables, Networks, and Client Solutions. What is the identity of the Thermal business?
Is it something that could be you realize value of and take advantage of low rates and given that they're contracted to maybe accelerate other areas of the business, or does it have its own game plan? And then the second question is more for Judith. It's two, and it's probably a little bit more nerdy, but what is the tax rate that's assumed in the guidance, and what DBSO is assumed?
Thanks. Okay, so let me start then with your question on Thermal. We have a high-performing gas fleet, as you know, which is very important in our mind to bring the flexibility to the system. And when we reflect about some of the trends around electrification, around the growth in Renewables, we realize that flexibility, dispatchability are going to be very important to the future of the energetic mix.
And so, our Thermal fleet has a very, very important role to play there. We've proven that over and over again in the very, very recent past. In terms of geography, we have a stronghold in Europe. We have also a good fleet in the Middle East and also Latin America. And so, we consider that these are going to be very important in the near term, at least, in order to maintain a power system that is both robust and affordable, which was some of the features that I described in my talk as extremely, extremely important for this energy transition. So, we feel very good about our Thermal fleet. Obviously, we have made the decision to exit coal, which is run under Thermal. So, that's one aspect of it. And then, of course, in terms of Thermal, we will be very opportunistic.
If we have opportunities which from an energy transition make sense because, for example, they would replace coal or even worse, fuel assets and bring a solution of flexibility to the system, it's something that we might consider. Now, the other aspect, of course, is that we are obviously, and we've not talked too much about it yet, but the hydrogen opportunity for us is very, very material. When I think of hydrogen for ENGIE, I think all of our activities, all of our mission will benefit. But the idea is that for the big production projects, we will give the Thermal people and the Thermal team the responsibility to run those hydrogen production plants and projects because some of the skills are actually quite similar. That will be something that we will be describing a bit more in detail in May.
But so, yeah, Thermal is a good fleet for us, good asset. And while we're not going to grow it at the same rate as Renewables and Networks, we will be opportunistic in managing this fleet. And Judith?
Yes, on your two questions, one was on the tax rate. Indeed, we had an increase, a temporary increase in 2020 to 32.5%. This was really driven by a mix of the results, changes in some tax laws, including in the U.K. And we're expecting to go to a more normal level at the 25% kind of range in 2021. So, that's a positive. And then on your DBSO question, what we were expecting for 2021 is roughly in line with what we had in 2020, so just below 100. You will remember last year we had close to 200, which was really driven by two things.
In 2019, sorry, we had roughly 200. Two things, it was in this ramp-up that we were doing on Renewables. It was the first time that we had significant sell-downs. And then, of course, you also remember that in 2020, we have decided to have more consolidation where it makes strategic and financial sense, as it was mentioned earlier. So, naturally, we're landing more just below a EUR 100 million figure for 2021.
Fantastic. Thanks a lot for the answers.
We will now take our next question from Emmanuel Turpin with Société Générale. Please go ahead.
Good morning. I will try and stick to two questions. And the first question is for Catherine MacGregor. Welcome to the sector, indeed. And I was very pleased to hear that you put simplification at the center of your new vision for the group. It's for sure a large part of the investment case.
Now, simplification is a bit of a general concept, and I was hoping for a bit more color from your part. If we basically look at simplification, we could cut it in two parts, what I would call transactional simplification, disposals, buyout of minorities, or maybe organizational simplification. For the first part, the transactions, you mentioned the first buyout of, or rather the buyout of part of your minorities in Latin America, and I was interested to get your philosophy about minorities. If we look at the long term, we've got an average of 20% of minority as part of group net income with large minority stakes in LatAm, for instance. Do you have a vision about taking this proportion of minorities down for the group? If so, do you have a view to what level?
Is your vision about full ownership versus minorities guiding your capital allocation going forward? Regarding the organizational simplification, you mentioned complexity of the group. You mentioned vast diversity of business line, etc. As you put a fresh perspective into this organization, do you see room for improvement in terms of organization? Are you working on a new organizational format? Is it something that you will tell us more about in May? On a quick one on numbers, on guidance, Judith, you have EUR 1.1 billion of dilution at the COI level putting your guidance for 2021. The EUR 0.1 billion, is this the 2020 contribution of the businesses you're going to sell, or is it your budget of the COI for these businesses in 2021?
It would be helpful if you could highlight for us any meaningful one-offs embedded in the 2020 results, whether positives or negatives, that we should bear in mind as we build our bridge to 2021. Thank you very much.
Yeah, thank you, Emmanuel, for your questions. I'll start just to say that, I mean, you've identified, yes, two important aspects of our simplification efforts. Indeed, we are reviewing in a bit of a systematic manner some of the minorities that we hold. And we've made some moves last year, and we will continue to do that. So, without going into any specific, you're right to say that it does contribute to the simplification efforts. And then your other question was related to the organization.
If you look at what we announced on January 14th, it's indeed a smaller executive team, less members, and also four of them clearly aligned with the business activities that are core and that are very much part of our strategic priorities. So, Paulo, Cécile, Edouard, and Sébastien will be obviously leading this organizational effort, which I very, very much look forward to indeed seeing simplified over the coming months. So, yes. And the answer is yes. And hopefully, we can share more of that in May when we come back to you. Judith, you want to answer the second question?
Yes. Bonjour, Emmanuel. On the EUR 100 million, quite frankly, there isn't anything unusual that you should assume. We're rounding numbers here, as you can see, because, like I said, this is our target. Depending on opportunities, it could be this asset or another one.
So, quite frankly, it is a normal run rate of dilution of EUR 100 million when you look at a EUR 2 billion debt reduction. So, no specific things to be taken into account.
We will now take the next question from Meike Becker with Bernstein. Please go ahead.
Thank you so much, and good morning, everyone. Also, from my side, Catherine, a very warm welcome to the sector and wishing you all the best. I have two questions, and I continue with the trend, one for Catherine and one on the details for Judith, please. Catherine, ENGIE is in a unique position, I think, as a gas network operator with a very attractive Renewables business.
I would like to hear your opinion, how maybe your story might be slightly different from electric renewables players, how we maybe think about the gas networks as a funding option for the Renewables growth. So, here, generally, the question, how do you think about the future of the gas networks? Some of your peers there have convinced the market that they transition to hydrogen. Some others, there is still a good portion of assumption that there might be a stranded asset. So, I'd be very interested sort of to hear your first thoughts after you have looked at the market for gas. Also, on the same point, risking up or risking down in the future strategy, what is your view on how the risk profile for Energy should change going forward? Thank you for that one. The second one is very bad timing.
One second, it will be over soon. Every Friday at 10:15 A.M., the fire alarm. The Renewables COI, could you break that down, if you don't mind, into the change in Hydro versus Wind and Solar in the 2020 numbers? Thank you.
Okay. Yeah, good question. We do think that we have quite a specific signature within ENGIE, and we do like a gas asset. We think, in general, gas is going to be important in this energy transition, again, especially when it replaces coal. We have this €28 billion RAB or regulated asset base in France, which gives us this good visibility and predictability, which is a very nice complement to the renewable. Now, from also power system standpoint, gas today is also a very nice complement to Renewables because it brings the flexibility.
You can store it, and obviously, it mitigates the intermittency, which is still quite an issue with Renewables, as we know. So, again, when you think about the robustness and the need to have a resilient power system, gas has actually a very critical role to play. Now, having said that, we are also very excited about transitioning our gas system into renewable, and by that, I mean renewable gas. So, what is happening here in France on biomethane is actually quite real. And so, we are now looking at potentially having sufficient volume to fully displace what will be needed in gas at the 2050 horizon. And so, the number that I quoted, which was the injection that we did last year, you start to see that it becomes meaningful. It's about 1% of French consumption that was injected. And that's 2021, not 2020, rather.
This is becoming real. Of course, right after that, you have hydrogen. Hydrogen, massive tailwind for ENGIE. It's massive tailwind because it goes hand in hand with Renewables. It will also require some infrastructure. Maybe not with the same density as today's gas network, but when you think about where that green hydrogen will be produced and where it will be consumed, the fact that we have infrastructure to transport this hydrogen, potentially to store this hydrogen, will play to our strength. These are some of the things that we are excited about when we think about our Network assets, and we like it. I'm going to pass it on to Judith now for the COI details on Renewables.
Hi, Meike. On the Renewables COI for 2020 of about EUR 1.1 billion, basically, you can assume that the main contributors were Hydro and Wind.
Hydro, about EUR 700 million of that, and Wind was the rest. Hydro had a strong increase organically but was down from a growth perspective because of the effects, of course, in the Brazilian real. And wind was an increase for the obvious reasons because we have been investing quite significantly in the past few years. I want to take advantage also to clarify on a question that I was asked earlier on the Nuclear impairments and the impact on D&A. So, the 150 I gave is correct. I just wanted to remind that given the absence of the LTO, the amortization is now happening quicker. So, if you add those two effects together, you go from 150 positive to roughly 60 positive in 2021.
And we will now take our next question from Peter Bisztyga with Bank of America. Please go ahead.
Hi, yes.
Good morning and welcome again to Catherine. Two questions from me. So, firstly, very big step up in CapEx in 2021 versus your sort of prior EUR 10 billion three-year plan. Obviously, you did signal that you'd be ramping up CapEx. But can you be a little bit more specific about where the extra CapEx is being spent this year and how you've been able to ramp it up so quickly? And how quickly do you think it can actually contribute to your earnings, please? And then just another one on guidance. Could you clarify how much COVID impact you've included in 2021 relative to the EUR 1.2 billion hit in 2020? And also, is there any possibility to reverse the decision on the Belgian life extensions should the Belgian government change its stance this year?
Yeah.
So, maybe I will start with your last question, which is around the decision on Nuclear. And I just wanted maybe to clarify that the government has not explicitly made the decision. We have made the decision to stop the work to prepare for such an extension. So, it's a little bit of a paucity, but at this stage, that decision from the government has not been explicit. And so, obviously, our decision that we communicated today is based on a scenario where it is unlikely that the lifetime extension happens. So, our main working scenario right now is that it won't happen. And I'm going to pass it on to Judith to comment maybe on the other questions.
Yes. Two topics that you were talking about, Peter. Hello. One was the CapEx. So, indeed, we're going from EUR 4 billion of gross CapEx to EUR 5.5-EUR 6 billion in 2021.
They're going into similar areas. With Networks is an important aspect. The biggest, of course, remains Renewables. One of the things to keep in mind when you say, "How can you speed up?" is also that we have less sell-downs in Renewables in 2021. That is roughly what you have to have in mind. We're confident to be able to invest in lots of opportunities that Catherine talked about. You mentioned the COVID impact and how to think about it in 2021. Again, of course, I mean, you know it, 2020 was heavily impacted. The second quarter was unprecedented and very, very stringent lockdown measures in our main countries. We had EUR 1.2 billion total impact last year. You have to keep in mind about EUR 200 million of that were related to SUEZ, which is now gone, of course.
And so, we have assumed a very strong recovery like we have seen it in the second half. And so, the amount will be much lower than what you have seen in 2020.
Okay. And sorry, just to follow up on the CapEx, how quickly can that new CapEx sort of translate into earnings? I guess what's the kind of your average period of sort of non-productive capital work in progress?
Yeah. It's hard to give any precise guidelines on that because, of course, it depends on the M&A and greenfield mix, and it depends on the type of project that you're after. Offshore wind is typically much longer. A cycle, of course, could be three, four, five years, depending on the country. Onshore wind can be a year and a half.
And Networks, given that we continue to invest here in France into the RAB, you will see a relatively quick turnaround into contribution.
Okay. Thank you. And we will now take our last question from Louis Boujard with ODDO . Please go ahead.
Yes. Hi. Thank you very much. Good morning to everyone and a warm welcome as well to you, Catherine MacGregor. I just had, indeed, I will stick to two questions as well, maybe a strategic one as well and a more detailed one. The first one regarding the network convergence. Do you see eventually opportunities in the future going forward with the convergence between power network and gas network, considering the evolution of the hydrogen, Catherine? And my second question will be more accounting-related regarding EVBox.
Could you just give us an idea on the potential accounting impact of the operation that you are doing on this subsidiary? And maybe more importantly, where do you see this subsidiary in five years and what it could contribute to your P&L, considering the potential growth of this asset?
Judith, you want to start with the EVBox question?
Sure. So, on EVBox, we're very happy to have announced this transaction. It's, quite frankly, one of the big wins, I think, of last year when you think about it because both operationally to take this company to a level and multiply by almost 10x their revenue over the last few years. And then, of course, now this partial sell-down that we're planning into a SPAC transaction. So, there will be a capital gain on this.
Now, of course, it's going to depend on when it's closing, at what price, but it will be a few hundred million, and so we're keeping 40%. This really has two reasons. One is, of course, to participate in the future growth that we're projecting for this company, and second, of course, a close link into this space, which is a very important space for us, and so we're excited about this transaction, so hopefully this helps.
Yeah, I think on the question of networks convergence between gas and power, I think we're a bit obviously different drivers behind this. One, which is the trend towards more electrification, is something to stay. On the other hand, we obviously want stability in a power system. Therefore, we do continue that we do think that gas will continue to play a very key role.
Of course, hydrogen, as it gets developed, indeed, could be very much more linked to power than maybe gas was in the past. In that respect, I think your comment might be valid, but time will tell. I think we are now out of time. I would like to thank you for your attention. Thank everyone for your welcome message. Judith and I very much look forward to meeting you, exchanging with you in the future. Again, very, very excited about turning those tailwinds that ENGIE has had into reality. Thank you very much. And bye-bye. Have a nice day.
Ladies and gentlemen, this concludes this conference call. ENGIE thanks you for your participation. You may now disconnect.