How finance and sustainability go hand in hand

Thanks to our financial position, we are able to continue to invest in our networks and grow the business. This enables us to pursue our strategy and play a facilitating role in the energy transition. Our financial policy is designed to allow us to maintain a solid A rating. We see that, alongside a sound financial policy, shareholders and other investors are increasingly focusing on sustainability performance. Alliander supports the significance of sustainability and so the company’s sustainability targets play a prominent role in the management of the business and external financing. With this in mind, in 2019 Alliander issued a new green bond loan, our second to date. Our sustainability efforts have been rewarded with a sustainability classification of B by rating agency ISS-oekom.

Financial policy

Financial framework

Alliander’s financial framework is formed by the FFO/net debt, interest cover, net debt/(net debt plus equity) and solvency ratios. These ratios, coupled with the norms against which they are measured, are crucial in obtaining and retaining a solid A rating profile on a standalone basis. In a departure from IFRS, when calculating the ratios, the subordinated perpetual bond loan is treated as 50% equity and 50% debt.

Ratios on the basis of Alliander’s financial policy



31 December 2019

31 December 2018

FFO/net debt1

> 20%



Interest cover2

> 3.5



Net debt/(net debt + equity)

< 60%




> 30%



  1. The funds from operations (FFO)/net debt ratio is the 12-month profit after tax adjusted for deferred tax movements and incidental items and fair value movements plus depreciation of property, plant and equipment and amortisation of intangible assets and accrued income, as a percentage of net debt.

  2. The interest cover ratio concerns the 12-month profit after tax, adjusted for the movements in the deferred tax assets and liabilities, for the incidental items and fair value movements, plus the depreciation and amortisation of property, plant and equipment and intangible assets and the net amount of finance income and expense, divided by net finance income and expense adjusted for incidental items and fair value movements.

  3. The solvency ratio is obtained by dividing equity including the profit for the period less the expected dividend distribution for the current financial year by total assets less deferred income.

As at 31 December 2019, the FFO/net debt ratio amounted to 29.0% (year-end 2018: 32.2%) compared with a required minimum of 20%. The decrease is the result of the increase in net debt with a relatively limited increase in the operating profit adjusted for incidental items.

As at 31 December 2019, the interest cover ratio worked out at 13.3 (year-end 2018: 12.9). This increase is mainly due to a slight increase in the operating profit adjusted for incidental items. Alliander’s financial policy stipulates that this ratio should be a minimum of 3.5.

The ratio of net debt/(sum of net debt and equity) as at 31 December 2019 amounted to 36.5% (year-end 2018: 33.8%). Alliander’s financial policy stipulates that this ratio should not exceed 60%. The increase came mainly from the increase in the net debt. 

The solvency ratio as at 31 December 2019 amounted to 55.6% (year-end 2018: 57.3%) compared with a required minimum of 30%. The decrease compared with 2018 is mainly due to the increase in total assets.

Dividend policy

The dividend policy (as part of the financial policy) provides for distributions of up to 45% of the profit after tax, adjusted for non-cash incidental items, unless the investments required by regulators or financial criteria demand a higher profit retention percentage and unless the solvency ratio falls below 30% after payment of dividend. The proposed profit appropriation for 2019 is shown on page 180 of the financial statements.

Investment policy

The investment policy is consistent with the financial policy and is part of Alliander’s strategy. Elements of investment policy include compliance with regulatory requirements relating to investments in the regulated domain, such as safety and reliability, and the generation of an adequate return on investment. Ordinary investment proposals are tested against minimum return requirements and criteria as set out in the financial policy. Innovative schemes require specific Management Board approval. As well as quantitative standards, investment proposals must also satisfy qualitative requirements. It should also be noted that, in principle, investments in the regulated domain arise from a network operator’s statutory duties.

Economic performance

Alliander makes a major contribution to the prosperity of the Netherlands, indirectly through the considerable impact that the distribution of energy has for the Dutch economy and for the quality of life experienced through the permanent availability of energy. This is further explained in our impact model in the Contribution to Global Goals chapter. The dividend distributed to shareholders and payments to providers of capital and government authorities make an indirect contribution to social goals. The way these items are allocated and used is set out below.

Our financial stakeholders

Alliander pursues an active policy of maintaining an open and constructive dialogue with shareholders, bondholders, financial institutions, credit rating agencies, sustainability rating agencies, analysts, and the media. We try to provide all stakeholders with timely and accurate relevant information on finances, strategy, risks, sustainability and other matters, in reports, in press releases, and in meetings, as well as by other means.


All of Alliander’s shares are held directly by Dutch provinces and municipalities. A full list of the shareholders can be found on The authorised share capital of Alliander N.V. is divided into 350 million shares with a nominal value of €5 each. All the shares are registered shares. As at 31 December 2019, there were 136,794,964 issued and paid-up shares. Contact with shareholders primarily takes place during the shareholders’ meetings. The company and its shareholders also meet outside of the shareholders’ meetings. A summary of the various shareholder dialogue structures can be found on the Alliander website.

Institutional investors

Institutional investors in our bond issues, such as asset managers, insurance companies, pension funds and banks, provide a large part of our financing in the form of debt. These are mostly Europe-based professional players on the international financial markets. We keep existing and potential bondholders informed of the company’s financial position and results, as well as developments in the industry by actively engaging in investor relations activities in addition to complying with ordinary publication requirements. In this context, late in February 2019 we met with investors in Amsterdam, Frankfurt, Paris and London to discuss the 2018 figures. In September 2019, we held a conference call on the half-year figures. Various matters were covered on both occasions, including the issue of the second green bond, the major campaign to install smart meters, and the impacts that the phasing-out of natural gas and the growing number of electric vehicles will have on Alliander.


In July 2018, Alliander renewed its existing committed €600 million back-up credit facility for one year. The facility, which now runs to July 2023, has been entered into with six banks. As in previous years, this facility was not drawn on during the year.

Alliander has a loan from the European Investment Bank totalling €300 (with tranches received in 2017 and 2018). The loan becomes repayable in full in 2031.

Rating agencies

In order to retain ready access to the capital and money markets, it is important for existing and potential financiers to have an accurate picture of Alliander’s creditworthiness. Alliander uses credit ratings for this. Having a credit rating is also an obligation under the terms of the cross-border lease contracts Alliander entered into at the end of the 1990s. Alliander has credit ratings from S&P and Moody’s. These ratings comprise a long-term rating with an outlook, and a short-term rating. The outlook is an indication of the expected change in the long-term rating over the next few years. S&P and Moody’s have kept both ratings and outlook unchanged. The credit ratings as at year-end 2019 were as follows:


long term

short term

Standard & Poor's

AA- (stable outlook)



Aa2 (stable outlook)


During the reporting period, Alliander was in contact with the rating agencies on several occasions. Discussions included the shortage of technical staff, cost savings, the challenges of the climate change targets, and the energy transition. Based on the recent financial performance and forecast figures for Alliander presented on these occasions, S&P and Moody’s reassessed Alliander’s creditworthiness and confirmed the existing ratings and outlook.

We are being rewarded, too, for our sustainability efforts, as shown by the B sustainability classification awarded us by rating agency ISS-oekom; this is the highest rating ISS-oekom awarded to any company operating in the network sector.