♪ francine: iberdrola is the world's number one player in wind power. the chief executive ignacio galan has brought his own energy to the company. a self-made man, he later liberalized the spanish telecoms sector. since taking the reins in 2001, he's made the transition into renewables and expanded the company's global reach, increasing the company size by four times. today on, "leaders with lacqua," we meet ignacio galan, iberdrola

chairman and chief executive. thank you so much for joining us. do you remember that first day at iberdrola all those years ago? ignacio: of course. francine: what was that like? ignacio: i was coming to the sector after a tremendous fight, i was ready to expand the second spanish license for mobile. coming from the sector was already open to competition to a sector that was traditional. it was a real shock. so, i remember well this date. i think i had the chance to be chairman at the time. i was already chief executive. and president. and they give to me all support to change the company completely. so i think the level of generosity was great. francine: so, what was your first thought, this is an industry i need to liberalize? is this an industry that needs to change dramatically? ignacio: i think the first decision i took is we have to leave this building to move to another premises. we have to go from this traditional building to some building that will represent more that i would like to implement in the company. francine: which is what? ignacio: it was in the center of madrid.

it's a traditional building in the center of town and i moved already the company to more open spaces with not so many closed offices, and more according with the ideas of the new order i would like to implement. francine: at the time, how much time did you give yourself to make changes? ignacio: well, i think i start -- next day. francine: day one? day two? ignacio: day one because they would like to get to me 50 people, an office far away, and my office is, but sorry, that is my office. this another one.

they said that is an office for other people. i said no, this is for a meeting room. no, that is the office for other people. no, that is my meeting room. i think 24 hours later. francine: at the time you had vision of a big company? ignacio: this company was a great company which was 100 years old with great assets, but very focused in spain. and i think i felt we had to open the company to different work. we have to move from the traditional businesses to a different business. so i think i trust that kyoto was a serious thing and we would have to make this, transforming to future, not to burn, in one century, all the energy has been

generated across the millions of years. francine: you were spearheading almost a movement. a lot of people were pushing back against that. what was your most difficult day in the office? ignacio: well, i cannot make this. the most difficult, i think i approved my first business plan was an investment of 16 billion euros. that is -- francine: a lot. ignacio: for the company's traditional business, it's absolutely 10 times more than what we normally invest in. the second thing is to change the color of the company.

traditional color of the company was blue. i think the 16 billion were approved, let's say in half an hour. and to change from blue to green took three board meetings. francine: three board meetings. ignacio: the last one, i said that is going to be green or i am not ignacio galan. they decorate the whole building inside, green, green, green. ok, fine, green. that is another time then i come to green and it is a type of green, but said whatever, but green. francine: was that bold, yes? ignacio: that was september 20, 2001. i joined the company in may. that was in september. francine: oh, yeah, so you moved fast. how would you describe yourself as a leader? ignacio: i think the point is simple. the point is if you trust and

believe something. i believe all my life i do the things because i'm convinced that they had to move in this direction. when you are convinced you are moving in a direction, you have to convince that is the direction to follow. you have to make it be executed. i think to make the people to execute the things and make a follow-up, and that is the history of my life. francine: you have a team to move forward. you also have shareholders. to make sure they're behind. what's more difficult, team, employees, the board, or the

shareholders? ignacio: so, i've been very lucky in my life, very lucky. i have already had splendid bosses. i remember someone to teach to me a lot. i'm talking about an engineer that showed to me a lot about what is the real life. i have already always -- has been absolutely great. i was telling you before a lot of negotiation with trade unions. always, always, always i reach an agreement that has been very, very understanding both positions and reach an agreement. and shareholders always trust in the things i normally send to them. they already fully support what we are doing. francine: what makes you a success? you are a self-made man. have you ever felt like an outsider in spain?

ignacio: i think i am lucky because i have an education. i was lucky because i started working in a company in which is -- as a chairman, which teach to me a lot, and i have been lucky because the life give to me the opportunity to transform things. so i think when i went to the sector, i was not good at the sector. i was transforming the shipyard. this opportunity, i think, there are many, many people which are very capable. they don't have such opportunities. i had this opportunity. francine: up next on "leaders with lacqua," the green revolution. we talk sustainable energy and how iberdrola is positioning itself as a trailblazer in that field. more next. ♪

francine: iberdrola has become a major player in the power industry on both sides of the atlantic. specializing in clean energy, the company has been a heavy investor in wind farms since the start of the renewable boom. it also owns hydroelectric, fossil fuel, and nuclear powered generation facilities from brazil to scotland. as the market continues to adopt cleaner energy, how has iberdrola managed to position itself to take advantage of the

green revolution? well, ignacio galan, the chairman and ceo of iberdrola is still with us. ignacio, we were talking about your leadership style, that from day one you believed in renewables. how will your industry change in the next 10 years? ignacio: so, the world of energy is really changing. i think in the next 25 years, the electricity will increase 60% worldwide, so the economy economy is going to be more and more electrified.

i think we need already, we would like to achieve the target. 185 countries has already signed in paris. so the only solution is to use everyone's sources which are not already contaminated. the electricity today, we have already means for producing without burning fossil fuels. and the electricity today has the means for making ready a network and a grid much more efficient. the electricity means for the storage, the success of energy, to provide to the customer when it is needed, and that is how it is going to change. it requires huge investment in the next 25 years. they are talking in trillions, $20-25 trillion. >>

and that is. francine: are you worried about under investment or over investment? ignacio: i think we need need 60% more energy than produced today. we put the money or the system is going to stop. so i think the money is going to flow. for the business side to put frameworks, we make that attractive. and for instance, we have seen in great many countries, especially emerging countries, which are doing all that is necessary to attracting capital to move in the direction. in other countries, they are doing refurbishing and expanding and extending the grid, which is the case in the united states. so i think the world requires this. and at the end, we as a company in the sector, we are ready and willing to do what is necessary for that to happen. francine: if i speak to you in five years, and i hope to speak to you before, but in five years, how much revenue will come from renewables? ignacio: well, yesterday we presented our strategic plan, which is investment for now to 2022 of 32 billion euros, so a little money. which i think is approximately 50% will be dedicated to networks. i think networks, if we make renewables, we need the grid to get to the customers houses and homes. so approximately 40% is already dedicated to renewables. i think we are already planning to build in the range we are around, 30,000 megawatts of renewables in our portfolio and we are going to reach close to 37-39,000 megawatts. 40% of this is going to be addressed to renewables. 50% addressed to networks. we can already facilitate and to use for bringing this electricity to the homes of our

customers. francine: is this because the private sector wants it or it is pushed by government? ignacio: because the demand is there. so i think the demand is there and what we are requesting is a clear, defined, and established framework of the government. the government, is the best thing is that they make a clear planning and clear regulation for making that happen. that is not made by governments. a long time ago the governments already coming to the private investor to do all this investment. but i think what we request is long-term planning, clear definition, and the framework. again, the money is not in my pocket. i said another day to an interview to one of your colleagues that our sector has two things, money and talent. the only thing now is talent, the money has to arrive from somewhere else. francine: but the money is there.

ignacio: the money is there, but i need already for convincing the money flows into my company to show the framework is clear, transparent, defined, and stable. i think with this framework we get talent, which is in the company in the last 100 years we are able to deliver what the citizens are expecting from us. francine: economies are changing fast. i'm thinking of the future of transportation, driverless cars. how much will that actually change your industry and iberdrola? ignacio: so that i think we are already in five years our total asset in the range of 110 billion euros. i think we are talking in five years, almost 30% more than for the last 100 years, or 120 years.

it is a tremendous opportunity for a company like ours with expertise in renewables, which we are the most efficient company in how to manage grid and networks for providing this electricity, this is a great opportunity. we are trying to use this moment to put up the service for society, the experience and knowledge we have accumulated across the century. and we have for the time being, we have absolute support of investors to give us the money which is necessary for doing so. francine: one of your biggest shareholders is the sovereign wealth funds. are they 100% aligned with your long-term goal? is it almost a perfect fit? ignacio: well, i can tell you that most of our shareholders are already companies which already took publicly the commitment with climate change, with things with trying to make a better life for the citizens. i think recently we signed a green, just a credit line, which is the first credit line that has ever been signed, 5.3 billion euros, signed by 24 banks. we've already put in a target of sustainability. that is how the world is changing. so -- francine: and this is not only talk. because in the past people say

we talk about sustainability. this is real. ignacio: that is a fact. it is real. it is real. i think we are the largest company emitting green bonds. green bonds mean cheaper than the traditional bonds, because they know we are using this money for already promoting green technologies, clean technologies, more efficient networks, storage, etc., etc. i think the largest in green bonds. francine: so you've explained it very simply. we have talent, looking for money, money, talent is how you put it. what is the one thing you will focus on the next five years? is there one big challenge that you absolutely need to deliver on?

ignacio: i think the big challenge is precisely to deliver, but we were committing just today to expand our networks worldwide, our grid worldwide in united states, britain, spain, brazil, and to make already the investment which we are today already in construction, to be ready and production by 2022. francine: do you worry about rivals because a lot of the oil majors are trying to diversify are going after your lunch? ignacio: i think there is room for everybody. i think it should be great. should be great. then everybody use the resources for making a better world. so i'd be delighted. i'm not afraid of competition. so competition is fine.

i think we are one of the few utilities in europe, probably the only one, we've been always had a foundation. we never had the state or the government behind. we had been already earning our money, just competing come in some cases with tremendous difficulties, but we already have the state support, so we are not afraid of competition. competition is fair. so welcome those which is coming to the sector to try to compete with this company, which is already trying to be the cleanest of the clean companies worldwide. francine: an open invitation. up next on "leaders with lacqua," building a world-class business in spain, we talk about the risks of operating in a country where questions of independence are far from settled. more with ignacio galan next. ♪

francine: spain has been one of the biggest beneficiaries of europe's economic recovery. in january 2018, fitch raised the country's credit rating to a negative after a period of buoyant growth. but spain is also playing host to a seemingly never-ending crisis, the catalonian independence movement dominated the headlines last year after an illegal referendum. and it's still unclear how the state government will resolve

the unrest. stalemate has become the watchword in the region, which makes up a fifth of spain's economy. so what does this mean for iberdrola, one of spain's corporate heavyweights? well, we're back with ignacio galan, chairman and chief executive of iberdrola. how concerned are you about politics in spain affecting investor sentiment? ignacio: well, the first thing i have to say that spain is already, as you mentioned, is in a very good shape, already growing at over 3% per annum, generating and creating more than 500,000 jobs, is coming from being one of the countries with problems to be already the start, and that is the consequence of several things. in 2013, i was making already a roadshow to try to defend my country, and i went to london, to new york, boston, to several places to meet investors and show them, look spain is --

because the spanish, we are never warm. we are hot or cold. and i think we've already been in position, but we already have the capability to recover. francine: what did investors misunderstand at the time about spain? ignacio: they thought that this crisis would remain forever, but i will say, no. we have tremendous capability of recovery if we have already as we had already a government which is ready to make already certain reforms. they did. so, in the moment that was done, the country started moving, so i think the country from being an economy, which is moving internally, to become already more than anybody else for any country, fully dependent on the construction for the real estate to be already in service already oriented, so to control the deficit, so all these sort of things, and i think we have already benefited, as you mentioned, the company, the country, which is growing, which is stable, which is predictable, respected, which i think the economy is already with the long-term planning, and that is matter, one, the rules are clear, and this government did

something for making that happen. francine: is there anything you can do? you have a very international company, but are still seen as a spanish conglomerate? you are a spanish company. so how can you protect yourself from the next political crisis? ignacio: the first thing, we are almost not present in catalonia. the second one, i think something which i would like to be positive in all these things. so, something with this company in crisis is that spain is a clear democracy. so i think the rankings, spain, the other day i saw an economist, it's the 17th democracy worldwide. britain is 16th, so we are in the same area, so it's a clear separation of powers. it's a clear law.

we have already constitution. it has already been made. we won the civil war and lost the civil war after having almost one million people die. in 40 years, more people join together and said, let's try to make rules for the spaniards to avoid in that sort of thing happen. i think that has been our framework for 40 years, and now there are some people which are not respecting the law, and what is happening? the justice, which is independent, is not a politician. it's a justice which is taking already control of the situation, saying you are not already respecting the law. we have to be in front of the court for giving an explanation. what they are seeing is those people are leaving the country because they don't like to sit in front of the judges, so that is it. francine: will you ever run for office?

would you ever become a politician? you're very passionate. ignacio: oh, no, no, no. my life as a politician will have already a life of 30 seconds. it's a 30 seconds for saying things which are politically not correct. so i'm clear and straightforward. i like to say to people that things which i trust, to defend those values in which i have all my life defended. sometimes i think you have to be politically correct, to shut down your mouth, and sorry, i would like to be clear. francine: but isn't diplomacy changing? people want something fresher, different. ignacio: so i think, i don't know what it means to be fresh. i know very well what is the business world. i've been all my life in the business world.

i understand with this, the capitalism. i know a lot of responsible capitalist. i know how to deal with trade union. i know how to deal with investors. i know how to deal with my employees. i know how to convince my staff how to move in one direction. i don't know how to move the people to convince how the things like to be done. so, i'm sorry. i have tremendous respect for politicians. i feel this. i thank very much because they have already a difficult life and they are already very sacrificed lives. people are not recognizing the effort they are making in some cases. i recognize and try to do my best to recognize the things i am making, but i am already not the type of person to make that one. so, i'm sorry. i'm catholic, but i can never be

a priest. francine: ignacio galan, thank you so much for joining us. ignacio: thank you. francine: thank you. ♪ retail.

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