16 December 2022
The framework of agreements outlines how the State will assess regional grid operators' requests for capital injections and what the State’s requirements are for such requests and for its possible participation as a new shareholder in these grid operators.
The regional grid operators are an essential part of the Dutch energy infrastructure. Supported by their provincial and municipal shareholders, they have long since looked after the public interests of a secure, reliable, accessible and affordable regional energy grid. For this reason, the law provides that grid operators' shares must be directly or indirectly in public hands. These public interests are secured not only by public share ownership but also by the Netherlands Authority for Consumers and Markets (ACM) as independent supervisor, and by laws and regulations.
Regional grid operators will have to invest heavily in the years to come to achieve climate targets and facilitate economic growth. By 2030, the three largest regional grid operators expect to have to invest around EUR 30 billion in total in expanding and reinforcing the regional electricity and gas grid. Regional grid operators have to prefund these investments with a combination of loan capital and equity. A solid credit rating is important in this respect for continued access to loan capital at socially acceptable costs. To keep their solid credit rating, operators have to raise additional equity.
Factors including the energy transition mean that financing requirements are increasing further. A number of regional grid operators will already need equity in the near future. These capital requirements may persist until 2040 or even until 2050 or later. The precise moment that the capital will be needed varies considerably from operator to operator, but there is no doubt that Alliander, Enexis and Stedin are all expecting extensive capital requirements in the short to medium term.
Houthoff advised Alliander N.V.'s shareholders regarding reaching consensus on the 'Framework of Agreements on Capital Requirements of Regional Grid Operators'. The Houthoff team involved was made up of Jacques Kröner, Willem Liedenbaum, Marc van Beuge, Loet Venrooy and Tijn Schellekens.