* To target investments on growth markets
* To cut costs, trim dividend, sell more assets
* Shares up nearly 40 pct in last six months (Adds detail on investments, background)
MILAN, March 12 Enel, Italy's biggest utility, said on Wednesday it will slash costs at home and focus new investments on emerging markets and renewable energy as its earnings are weighed down by ongoing weakness on its core European markets.
In its new 2014-2018 business plan, Enel said it expected core earnings before interest, tax, depreciation and amortisation (EBITDA) to fall to 15.5 billion euros ($21.5 billion) from last year's 17 billion.
It plans investments of 25.7 billion euros in 2014-18, of which 57 percent will go to growth markets. It will also invest six billion to boost the power generating capacity of its Enel Green Power unit by 51 percent to 13.4 gigawatts by the of 2018.
The state-controlled utility - Europe's sixth-biggest by market cap - said it would cut 5.8 billion euros worth of costs in the 2014-2018 period.
It aims to sell about 4.4 billion euros of assets in 2014 to help reduce debt to 37 billion euros in 2014 from almost 40 billion euros at the end of 2013.
One of Europe's most indebted utilities, Enel will pay a dividend of 0.13 euros on 2013 earnings, down from 0.15 euros for 2012 and pay out at least 50 percent of profits in 2015 from the current 40 percent.
State-controlled Enel, which controls Spanish utility Endesa , has been keen to keep a lid on its debt to hold on to its investment grade credit rating.
Deutsche Bank said in a note that while Enel's overall numbers were in line with consensus and last year's guidance, the news on dividend policy and cost cutting was positive.
"Also positive (is the fact) they remain committed to deliver on disposals," the note said.
Facing similar challenges, E.ON, Germany's top utility, on Wednesday proposed almost halving its dividend for 2013 and close more than a quarter of its European power plants.
Enel also said it plans to mothball some 8,000 megawatts of capacity in Italy and Spain.
Some 50,000 megawatts of gas-fired capacity in Europe - equivalent to 50 nuclear plants - have been closed or mothballed by 10 of the continent's biggest utilities amid weak demand and the rise of renewable energy.
Europe's big power producers have been hurt by a fast-growing renewable sector, weakened energy demand and record-low wholesale power prices
Enel shares have performed well in recent months benefiting from the fall in Italy and Spanish bonds compared to their German equivalents. Over the past six months, Enel is the second-best performing stock in the Stoxx Europe Utilities index , with a gain of nearly 40 percent. ($1 = 0.7212 euros) (Reporting by Stephen Jewkes and Geert De Clercq; editing by Jason Neely)