MILAN (Reuters) - Deep experience in renewables and an international focus are two of the must-have credentials investors are demanding for the manager who will lead Enel.

The government led by Giorgia Meloni is determined not to renew the term of Francesco Starace, who has been CEO of the utility since 2014, sources said. The executive considers the manager too independent and wants to see the company's debt go down.

The task for head hunters hired by the Treasury to find a successor is proving complicated, given the characteristics required.

According to sources, candidates in pole position to lead Enel include Stefano Donnarumma, CEO of Terna, and Luigi Ferraris, who worked 16 years at the energy group before becoming CEO of Ferrovie dello Stato.

Flavio Cattaneo, vice president of Italo, and some managers of Enel subsidiaries, including Francesco Venturini, CEO of Enel X, are also mentioned as possible successors.

Enel declined to comment while it was not possible to get comment from Donnarumma, Ferraris, and Venturini. An Italo spokeswoman reported that Cattaneo is not interested.

A decision is expected in mid-April. Meanwhile, several shareholders have signaled to Palazzo Chigi that they oppose an abrupt change in Enel's strategy, particularly a reduction in the group's international exposure. Some investors fear that the Meloni-led government wants the company to focus more on Italy.

"I would advise [the new CEO] not to try to upset everything," said Jean-Hugues de Lamaze, CEO of Ecofin, an alternative energy investment company with $2.2 billion in assets under management, with a small stake in Enel over the past six years.

"Starace has announced a major restructuring program for the group to return to a growth path.... I would like [this program] to be confirmed," he added.

U.S. OPPORTUNITIES

With nearly 60 gigawatts (GW) of installed capacity, Enel is one of the world's largest players in the renewable energy sector.

Starace has earned praise for his commitment to green energy. However, investors and the government are jittery over debt that has grown to about 60 billion euros in 2022 from 45.5 billion in 2020, when the manager was confirmed for a third term.

The company, which has been hit by soaring gas prices and government measures to protect consumers against rising bills, saw net income fall to 5.4 billion euros in the year of Russia's invasion of Ukraine from 5.6 billion in 2021.

In November, Enel unveiled an update to its strategic plan, pledging to reduce net debt by 21 billion euros through asset sales, promising 37 billion euros in investments and an increase in installed renewable capacity by 21 GW by 2025.

The company plans to focus on six key markets-Italy, Spain, the United States, Brazil, Chile, and Colombia.

According to some investors, the new CEO should not sacrifice the group's presence in North America, and should confirm the dividend policy indicated in November.

"Some people in Italy might prefer Enel to focus as much as possible at home and not invest as much abroad, but the company has no choice ... if it wants to attract foreign investors," said Vincent McEntegart, multi-asset manager at Aegon Asset Management, an Enel shareholder managing $311 billion in assets.

For Enel, the green energy subsidy package sought by U.S. President Joe Biden could mean double-digit returns in the U.S. compared to the single-digit returns the group reaps in Europe, McEntegart said, adding that such returns could support the group's attractive dividend policy.

"The future of European utilities is international development in advanced markets. You cannot have an Italian-only Enel, that would definitely be a step backward," de Lamaze pointed out.

FAREWELL TO GAS

Since Starace was appointed CEO in May 2014, Enel has seen its installed renewable energy capacity increase to 59 GW from 36 GW at the end of 2013.

Starace's mantra is the electrification of consumption and the digitization of grids, and last year the manager said he plans to use a renewed focus on energy security to accelerate the group's exit from natural gas. The group currently plans to become carbon-free in 2040.

"My priorities for the new CEO would be to continue to develop renewable energy and accelerate the exit from gas," Simone Siliani, director of Fondazione Finanza Etica, told Reuters.

"Enel can make a difference if Italy wants to achieve its decarbonization goals," he added.

Finanza Etica, active on ESG issues, has held a small stake in Enel since 2008.

For Davide Tabarelli, president of Nomisma Energia, the new CEO will have little leeway to change the current strategy.

"The company is so big and the strategy so well defined that I don't see big changes. Enel is like a big ship ... the new CEO will not be able to suddenly change course."

(Translated by Luca Fratangelo, editing Francesca Piscioneri)