Our investment in the energy transition is reaching record levels. A lot of money is needed to build a future-proof energy system. Our spending on energy grid work will reach a record of €1,486 million in 2024.
Year on year, our spending increases to enable the energy transition with our infrastructure. Our ability to make large additional investments is due to our strong financial position. Our work package this year is €1,486 million, which is €272 million more than the €1,214 million in 2023. We know we have to spend our money wisely. This is part of our public responsibility and helps to keep energy affordable for everyone. That is why we are focusing on our core tasks and making cost-effective decisions, for example by applying the Lean methodology and optimising our ICT landscape. We have also been working on innovations to expand the network as cost-effectively as possible in 2024.
Financing the energy transition
In the coming years, Enexis will invest significantly more in expanding and improving the electricity grid. This investment will lead to higher grid management costs and consequently higher tariffs for our customers. While cost savings and efficiency remain our responsibility, it is equally important that we generate sufficient revenue to continue investing in the energy transition. Net profit for 2024 increased by €182 million to €254 million, as the tariffs Enexis is allowed to charge customers are more in line with costs than in 2023.
Enexis is expected to remain structurally cash flow negative and will therefore have to borrow repeatedly, increasing our debt. While Enexis’ revenue is projected to grow in the coming years, it will not be sufficient to finance the significant investment challenge fully. A good credit rating is therefore essential to ensure that we maintain access to capital at an attractive price, even during financial crises.
To remain financially sound, Enexis is pursuing a three-pillar policy:
Encouraging optimal societal choices and improving efficiency and productivity:
By promoting optimal location choices, where production and consumption take place together, we can reduce the need for additional investments.
By working efficiently, we can do more for our customers and contribute to the affordability of energy.
Through standardisation, digitalisation and simple processes, we aim to increase productivity.
Enexis is working with municipalities and provinces to develop clear energy plans, covering topics such as heat networks, green gas, hydrogen and strategic vehicle charging.
Balancing tariffs and revenue:
ACM has increased the allowed revenue for network operators following a decision by the CBb. This will lead to an increase in allowed revenues and tariffs of over €700 million for the years 2024 to 2026.
Strengthening equity:
In 2020, our shareholders provided a convertible hybrid shareholder loan and allocated a significant portion of the proceeds from the sale of Fudura to investments in the energy transition.
There is also a framework agreement with the government that allows the state to become a shareholder if the financial situation requires it.
For the future, Enexis will continue to follow these three paths to ensure financial stability and a good credit rating, thus financing the energy transition.
A sustainable investment
In May 2024, Enexis Holding N.V. issued a €500 million green bond with a 3.50% coupon rate. Enexis now has six bonds in circulation. Four of these are green bonds. Enexis Holding N.V. used the proceeds from this bond issuance to finance the expansions and upgrading of the grid necessary for the integration of renewable energy, distribution automation, smart meters and sustainable buildings. A Green Finance Framework has been developed for the issuance of green bonds. The current Green Finance Framework is fully compliant with the EU Taxonomy. This has been externally validated and confirmed by ISS ESG. This underscores Enexis’ commitment to sustainability and its contribution to a more sustainable society.
By adhering to the EU Taxonomy and the Green Bond Principles and embedding them within the Green Finance Framework, Enexis ensures complete transparency in the process. Along with good ratings from Sustainalytics and ISS-ESG, this provides investors with clarity and confidence when investing in Enexis’ green bonds. All our green bonds are listed on Euronext Amsterdam.
In addition to the green bond issuance, Enexis has secured a €90 million facility from the European Investment Bank (EIB) in 2024. This conditional facility can be used to finance the expansion of Mijnwater Warmte Infra’s district heating and cooling network in the province of Limburg. Enexis has the option to draw on this facility for the next three years with a maximum maturity of 10 years. However, this facility was not used in 2024.
Maintaining the credit rating profile
Maintaining a credit rating profile of at least A/A2 with a five-year horizon is an important pillar of Enexis’ financial policy. It is the basis for a sound capital structure and for maintaining investor confidence. Enexis uses credit ratings from Standard & Poor’s (S&P) and Moody's. S&P’s long-term credit rating for Enexis Holding N.V. and Enexis Netbeheer B.V. changed from A+ with a positive outlook to AA- with a stable outlook in February 2024. At Moody’s, only Enexis Holding N.V. has a long-term rating, which is unchanged (Aa3 with a stable outlook). The short-term credit ratings of Enexis Holding N.V. are unchanged: A-1 (S&P) and P-1 (Moody’s).
One condition for maintaining an A/A2 rating profile is that Enexis has sufficient financial resources to cover cash outflows for at least 12 months in advance. This coverage is partly provided by the €1,000 million committed Revolving Credit Facility (RCF), which was renewed in October 2024 for five years with the same group of 7 banks. In 2024, Enexis Holding N.V. did not draw under this RCF.
For information on financing, liquidity and credit ratings, see note 30 ‘Financial policy and risks associated with financial instruments’ of the consolidated financial statements.
