50Hertz is working for a successful energy transition - in other words, for a steadily increasing share of renewable energies to be safely integrated into the electricity system. According to the Federal Government's target, by 2030 65 percent of the electricity consumed should come from renewable sources. For this reason, 50Hertz will invest around 3.4 billion euros over the next five years in the optimisation, reinforcement and expansion of the electricity transmission grid, the construction of an offshore grid and the construction of interconnectors in order to foster the development of the European energy market. The generation landscape in Germany and throughout Europe is changing fundamentally - from large supply centres to decentralised renewable plants. Electricity generated from renewable sources is volatile and subject to fluctuations. Security of supply is thus becoming an increasingly complex task. This is a challenge that 50Hertz is taking up at all Costs.
The ambitious investment programme for the next few years, with which we are providing significant support for the energy transition process, was continued in the 2018 financial year: at Euro 492 million, we exceeded the previous year's investments by Euro 31 million.
„In 2018, we at 50Hertz further improved our company rating in the area of ESG (Environment Social Governance). The change is small, but each of these small steps is reflected in our company valuation and in Elia's share price. Progress is perceived. We are achieving good results and have a solid cash flow that allows us to complete all our challenging projects without having to address the financial markets. All this means that we are professionally positioned and that society can rely on us to do what we promise to do.“
Marco Nix – Chief Financial Officer
50Hertz as the main company of the Eurogrid Group, 80 percent of which is owned by Elia System Operator SA/NV and 20 percent by Kreditanstalt für Wiederaufbau AöR, has already invested around 3.1 billion euros in the expansion of our grid and the construction of grid connections for offshore wind farms (OWP) over the past five years. And we expect to exceed this amount in the coming years.
These investments must be financed. As a result of the long-term planning horizon of our investment measures, a sustainable financing strategy is required, which can be regarded as a reflection of the investments. Within this strategy, we are guided by the following principles:
In 2016, 50Hertz was therefore able to successfully place a EUR 750 million bond on the market at favourable terms. This bond financing was expanded in the same year by an agreement with a consortium of banks to provide a syndicated long-term loan of EUR 150 million. As a result of this favorable financing situation and the cash flow generated in the current year, 50Hertz was again able to dispense with an expansion of external financing in 2018.