EIB loans €500m to Stedin amidst struggle with Dutch grid connections

Dutch distribution grid operator Stedin has signed a €500 million ($543.7 million) loan agreement with the European Investment Bank (EIB) to invest in security of supply.

The Bank’s loan will support interventions in Stedin’s electricity distribution network over the 2025-2026 period, focusing both on renewing existing assets as well as implementing planned developments.

Grid capacity has long been a pain point for network operators in the Netherlands, and Stedin – which oversees 61 Dutch municipalities – has been looking to modernise and expand its infrastructure, connect new customers, and invest in automation.

Commenting in a release was Koen Bogers, CEO at Stedin: “We are pleased to sign this credit facility with the EIB, which will provide more diversification and flexibility in our financing mix and a robust platform to further expand our relationship with the EIB.”

“We like to thank the EIB for their trust and support for our strategy and ambitious investment plans necessary to facilitate the energy transition in our service area.”

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The EIB’s loan will see investments onto the medium voltage (MV) and low voltage (LV) networks to connect more residential and commercial customers to the network, while opening capacity for the installation of more EV chargers.

Investments in expanding the capacity of the network are expected to alleviate net congestion issues, and by replacing and modernising existing assets Stedin will also ensure the quality of the electricity supply.

Said EIB vice president Robert de Groot: “A stable, reliable and adequate energy supply is crucial for our transition to a more autonomous and resilient economy which fosters green growth.”

“The EIB invests heavily in the energy transition, ranging from wind farms to distribution networks and interconnectors. We support innovation throughout the private and public sector in Europe. We are happy to partner with solid grid managers like Stedin.”

The EIB’s announcement came a week after the release of Stedin’s results for 2024.

According to the DSO, Stedin Group achieved an investment milestone of €1.096 billion ($1.2 billion) in 2024, an increase of 30% compared to the previous year.

The company in 2024 worked on the construction of 854MVA by laying cables and by building and renovating transmission stations. Of this, 344MVA in new power was added to the grid and the grid operator laid 1,013km of new cables and installed 353 new transformer substations, a 33% increase from 2023.

Stedin had to take measures last year in several areas in Utrecht, Zeeland and South Holland to prevent overload and possible grid outages.

In these areas, electricity demand peaks during the winter can be so high that there is a risk of power outages. When this happens, says Stedin, the company deploys reserve capacity to increase the available power, a measure usually reserved for maintenance or major disruptions.

Said Bogers: “We more often increase the load on cables and transformers so we can continue to connect new customers where possible. However, this is the first time we have had to deploy reserve capacity and generator units to make sure that consumers and businesses have power during peak winter hours.

“We are carrying out a major stress test on the electricity grid in a growing number of areas. There is more pressure on reliability, and customers may experience more frequent power outages. Stedin does everything in its capacity to keep everyone supplied with power, even if we need to use diesel generators or gas generators. By temporarily allowing some extra CO2 emissions, we are ensuring that sustainability and expansion plans can still go ahead.”

To ensure that companies do not have a combined negative impact on the grid, for example by using too much power during the evening peak, Stedin has been making flexibility arrangements with them. Agreements were reached with 15 companies in 2024.

These and previous agreements provide 167MW of flexible capacity.

Stedin is also appealing to households to make better use of grid capacity, for example by using less power between the peak periods of 4pm and 9 pm. This will leave enough capacity on the grid and slow down rising expansion costs.

Stedin’s electricity network covers most of the provinces of Zuid-Holland, Utrecht and Zeeland.

In the long-term, the refurbishment of ageing network infrastructure is required to ensure continuity of service and to improve the reliability, quality and safety of the electricity supply.

All financed infrastructure will take climate change adaptation into account, as a standard practice by Stedin to future-proof its assets from water damage and flooding.