The plan, which also promises an annual increase of 14 per cent in earnings per share, is seen as part of a strategy to defend EdP from a wave of large-scale acquisitions and mergers among big energy groups in neighbouring Spain.

"By seeking to lift its market value and diversifying internationally, EdP appears determined to protect itself against the European trend for energy sector consolidation," said a Lisbon-based analyst.

António Mexia, chief executive, promised shareholders an average increase of 11 per cent a year in dividends between 2005 and 2010.

He said investment in new wind farms totalling €2.91bn over the next three years would be the main driver of growth. This would make EdP one of the world's top five producers of wind energy, he said.

Half of the group's planned investment of €7.6bn over the next three years would be in expansion projects, with wind energy representing 40 per cent of total consolidated capital expenditure, he said.

The company, the fourth-largest energy utility in the Iberian peninsula, has already made big investments in wind farms in Spain, France and Belgium and plans to make similar acquisitions in the US and, possibly, in Italy and the UK.

Mr Mexia said the plan would lift EdP's total wind capacity from 952MW in 2005 to 4,200MW by 2010.

As a result, electricity produced from renewable sources would account fro 46 per of the group's total, up from 35 per cent in 2006.

EdP is finalising an agreement with Sonatrach, the Algerian state energy group, for the supply of natural gas and analysts expect it to acquire a stake of up to 5 per cent in the Portuguese group.

The Lisbon government plans to privatise the state's remaining 25 per cent stake in EdP later this year. But it has made clear any stake Sonatrach acquired in the group would have to be purchased on the open market.

Copyright The Financial Times Limited 2007