FRANKFURT, April 30 (Reuters) - RWE's

investors will crank up the pressure on Germany's top power

producer on Wednesday, demanding bolder moves to close a

valuation gap with rivals including bigger share buybacks and

even a special dividend.

The German utility, also the world's second-largest

developer of offshore wind farms, has been subject to growing

criticism over its capital allocation strategy, most notably

from activist investor Elliott.

The U.S.-based investor last month disclosed a stake of

close to 5%, currently valued at around 1.28 billion euros

($1.46 billion), urging the group to significantly increase a

standing share buyback programme of up to 1.5 billion euros.

More sobering returns on clean energy projects across the

industry, partly caused by higher interest rates, have forced

RWE to join rivals in paring back ambitious investment

programmes and seek alternatives to increase value.

Several of RWE's peers, including Enel, Iberdrola

and Endesa, have either implemented or

announced buybacks.

Renewable projects have also come under pressure from high

inflation, geopolitical tension and uncertainty over renewable

energy regulation in some markets.

"The tailwind has turned into a strong headwind," Ingo

Speich, head of sustainability and corporate governance at RWE

investor Deka said, according to the manuscript of a speech to

be held at the group's annual general meeting later.

He said the cut in RWE's spending plans freed up cash for

buybacks of 1 billion to 1.5 billion euros per year, adding this

was a safer way to create shareholder value than chasing

projects with uncertain returns.

RWE currently trades at an EV/EBITDA multiple of 7.4,

according to LSEG data, a discount to Iberdrola's 9.6 and SSE's

8.8.

RWE has said buybacks would remain part of its future

strategy, but has so far not amended its current programme.

Henrik Pontzen of Union Investment called for a special

dividend, adding this way shareholders could directly benefit.

"If capital cannot currently be invested profitably, it

should be distributed," he said in prepared remarks.

Elliott declined to comment.

($1 = 0.8790 euros)