FRANKFURT (Reuters) – 50Hertz, the German high-voltage power grid owned by Belgium’s Elia, plans to more than double investment in upgrading its network to 8.7 billion euros ($9.3 billion) over the next five years, it said on Monday.
The investment, to be made over the 2023-2027 period, is more than twice the amount it invested between 2018 and 2022 and up by more than a half from the 5.6 billion euros earmarked for the 2022-2026 period.
More than half of the amount will be financed by debt, 50Hertz finance chief Marco Nix said, adding that this included a 600-million-euro green loan from seven banks as part of a programme by state-lender KfW, which owns 20% of 50Hertz.
“The capital market environment is becoming more and more difficult to navigate. Sufficient profitability is essential to maintain the financing capability and the partial financing of the investments,” Nix said.
“Regulatory adjustments to the return on equity are therefore urgently needed,” he added.
Germany’s power grids need tens of billions of euros in investments over the next few years to make sure they can manage a growing inflow of solar and wind power, as the country tries to wean itself off fossil fuels.
($1 = 0.9398 euros)
(Reporting by Christoph Steitz, Editing by Friederike Heine)
