ERG’s 2022 profile supports a moderate but not aggressive role for hybrid bonds.

Key considerations:

- **Leverage and balance sheet capacity:** Total liabilities fell sharply from about €4.44bn to €3.17bn, while equity rose from about €1.57bn to €2.05bn. The equity ratio improved from roughly **26% to 39%**, indicating a much stronger capital base. That reduces the need to use hybrids purely as equity support.

- **Debt burden remains meaningful:** Financial liabilities are still substantial, with noncurrent financial liabilities of about €1.75bn and current financial liabilities of about €0.39bn. Hybrid bonds could help preserve credit metrics because rating agencies often give them partial equity credit.

- **Cash flow quality improved:** Operating cash flow rose to about **€459m** in 2022 from €177m in 2021, and EBITDA increased to about **€499m**. This supports capacity to service fixed charges, including hybrid coupons.

- **But interest-rate conditions deteriorated materially:** EUR swap rates increased sharply in 2022: the 5Y average moved from negative levels to about **1.73%**, the 7Y to **1.81%**, and the 10Y to **1.93%**. Corporate credit spreads also widened. Hybrids are subordinated and typically more expensive than senior debt, so relying heavily on them in this environment would be costly.

- **Strategic fit:** As a renewable infrastructure company with long-duration assets and material investment needs, ERG can benefit from some hybrid capital to support growth while protecting credit metrics. However, the company’s improved equity base and strong disposal-related proceeds mean it does not need a very high hybrid allocation.

Overall, hybrids are useful as a **complement** to senior debt and equity, but not as the dominant financing source. A **25% reliance** is the most balanced choice: enough to gain equity-credit and financial flexibility, while limiting expensive subordinated coupon burden.

<answer>25%</answer>