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Rating action

Alliander N.V.

Scope Ratings GmbH (Scope) has today affirmed the existing subscription rating and has for the first time published its A+/Stable issuer rating on Alliander N.V. Scope has also affirmed the senior unsecured debt rating at A+, the subordinated (hybrid) debt rating at A-, and the short-term debt rating at S-1. The ratings were previously only available to investors on a subscription basis.

The affirmation mainly reflects Scope’s largely unchanged view on Alliander’s credit profile after the regulator published its draft decision method for the new regulatory period starting in 2027.

Liander N.V.

Concurrently, Scope has assigned an A+/Stable issuer rating on Alliander’s main subsidiary, Liander N.V.

The issuer rating on Liander is equalised with that of Alliander based on the former’s strategic importance, strong operational and financial integration within the group as well as the parent company guarantee.

Liander is the core of the group, accounting for more than 90% of its revenues and EBITDA. Alliander and Liander are closely integrated with each other, both operationally and financially. The external financing is centralised at Alliander, and Liander's payments are handled through Alliander's current account. The assessment is further supported by the parent company guarantee. Scope also understands that, although this guarantee can in principle be withdrawn, the parent company will remain liable for any debts incurred through legal actions taken before any such withdrawal, under Section 403, Book 2 of the Dutch Civil Code.

The full list of rating actions and rated entities is at the end of this rating action release.

Key rating drivers

Alliander’s A+ issuer rating reflects a standalone credit assessment of A- and a two-notch uplift based on the company’s status as a government-related entity.

Business risk profile: AA- (unchanged). Alliander’s rating is underpinned by its low business risks. The grid operator’s creditworthiness remains strongly supported by its monopoly position in electricity and gas distribution in the northwestern part of the Netherlands and the province of Gelderland, which represent economically strong service territories with about 5.9m connection points. The business risk profile further benefits from a longstanding, reliable and supportive regulatory framework, Alliander’s investment plan focused on enabling the energy transition (ESG factor: credit-positive) as well as on the business outreach in electricity and gas distribution supplemented by other services in heat, telecommunications and metering.

To reduce grid congestion and lost benefits to society, Alliander’s annual gross investments are set to increase to EUR 2bn-3bn in the next couple of years compared with EUR 1.8bn in 2024 and EUR 1.4bn in 2023. Scope also highlights the increase in operating costs, mainly for labour, materials and services, driven by grid expansion and inflation accumulated in recent years. These costs are reflected in tariffs with a two-year lag under the current regulation.

The regulatory framework for the new regulatory period starting in 2027 is under development, with the Dutch regulator ACM publishing draft decisions in September 2025¹. These are intended to stimulate not only the energy transition but also investment to combat grid congestion. Key changes include introducing a cost-plus regulation to speed up the reimbursement of costs, setting a nominal WACC for the electricity grid, and compensating for interest costs based on debt growth. However, the draft decisions do not address the meaningful remuneration of work in progress or working capital.

The company's Scope-adjusted EBITDA margin* deceased to around 30% in 2024, mainly due to increased operating costs and the time lag in tariff recovery. Nevertheless, Scope expects the margin to recover to around 35%-40% in the medium term due to the positive effects of: i) a higher applicable WACC; ii) expected changes in regulation to support investments amid the energy transition; and iii) a steadily growing regulated asset base.

Financial risk profile: BB+ (unchanged). The main rating constraint remains Alliander's financial risk profile, which is burdened by the substantial capital expenditure. It reflects moderate leverage, strong interest cover, weak cash flow cover and adequate liquidity.

The large investment programme, which will continue to put pressure on free operating cash flow and require external funding, will lead to a steady increase in the company's debt. Scope projects that the utility's debt, taking into account a 50% equity credit on hybrid debt (hybrid bonds and the EUR 600m reverse convertible shareholder loan), will increase significantly to around EUR 7.5bn by YE 2027 from EUR 3.7bn at YE 2024, also considering the planned conversion to equity of the convertible shareholder loan.

As a result, the company’s leverage – as measured by debt/EBITDA – is likely to increase above 5.0x already in 2025 from 4.0x at YE 2024. While a higher applicable WACC and expected regulatory changes from 2027 will support EBITDA, Scope expects leverage to remain above 5.0x for a prolonged period. This view also reflects changes in the financial policy announced in March 2025, which includes a reduction in the minimum threshold for fund from operations/net debt (as defined by Alliander) to 11% from 15%, the introduction of a dividend cap, and the removal of the interest coverage ratio and leverage ratio. The company stated that the updated financial framework is focused on maintaining a solid A credit rating profile.

EBITDA interest cover is projected to decrease well below 10x, considering a rising interest burden stemming from external (re)financing at higher borrowing costs and growing debt levels. Free operating cash flow/debt is expected to remain deep in negative territory, weighed down by the heavy investment programme.

Liquidity: adequate (unchanged). Alliander’s liquidity remains adequate. Liquidity metrics are projected at above 110% in 2025-2026 despite the persistent pressure on free operating cash flow and external funding needs. This is supported by Alliander’s cash balance (EUR 431m at end-June 2025) and an aggregated amount of EUR 2,400m of undrawn committed credit facilities (EUR 1,500m expiring in December 2027, assuming the extension option is exercised, and another EUR 900m expiring in December 2028). Alliander has a record of prolonging and increasing the size of committed credit facilities. Scope’s assessment of liquidity is further supported by the company’s solid standing in the capital markets.

Supplementary rating drivers: +2 notches (unchanged). Scope assesses Alliander as a government-related entity, applying the bottom-up approach according to its Government Related Entities Rating Methodology. The company is fully owned by a group of more than 70 sub-sovereign authorities in the Netherlands and full public ownership is required by law (i.e. Section 93 II, Elektriciteitswet and Section 85 III, Gaswet). Moreover, the agreement on a potential equity injection from the Dutch government, which could become a new shareholder should ratings pressure become too strong, shows the high willingness of the Dutch public sponsors to support Alliander’s creditworthiness. While Scope believes that the capacity of the group of public sponsors is ‘medium’, their willingness to provide credit support is ‘high’, which together results in the two-notch rating enhancement to Alliander’s standalone credit assessment.

Other supplementary rating drivers such as Scope’s assessment on financial policy, peer context and governance and structure are credit-neutral.

One or more key drivers of the credit rating action are considered an ESG factor.

Outlook and rating sensitivities

The Stable Outlook reflects Scope’s expectation that Alliander’s leverage as measured by debt/EBITDA will settle between 5.0x and 6.0x in the next few years. The Outlook also assumes a broadly unchanged shareholder structure, with Alliander retaining its status as a government-related entity held by Dutch government authorities.

The upside scenario for the ratings and Outlook is:

1. Debt/EBITDA of around 4.5x on a sustained basis (remote considering the current capex phase).

The downside scenarios for the ratings and Outlook are (individually):

1. Debt/EBITDA of around 6.0x for a prolonged period.
    
2. Reduced ownership by the Dutch government authorities (highly unlikely as this would require a change in the law).

Debt ratings

Alliander N.V. is the sole issuer of public debt.

The senior unsecured debt is rated at A+, in line with the underlying issuer rating.

The subordinated (hybrid) debt is rated at A-, two notches below the underlying issuer rating.

The S-1 short-term debt rating is based on the underlying A+/Stable issuer rating and remains supported by the utility’s sustained overall liquidity profile as well as its diversified funding mix of capital market debt and loans (e.g. EIB and shareholder loans, private placements and credit facilities with multiple banks). Nevertheless, the assessment is constrained by the worse-than-adequate internally provided liquidity cover and the high dependence on external funding.

Environmental, social and governance (ESG) factors

The large investment programme is earmarked mostly for strengthening distribution grids, securing grid quality and stability, debottlenecking in congested areas, and providing a seamless integration/connection of new decentralised power generation capacity. This points to Alliander’s high importance within the Netherlands’ energy transition, which is outlined in the Dutch Climate Agreement.

While the associated capex programme is straining Alliander’s credit profile, Scope regards the investment focus as critical for ESG considerations and sees this as credit-supportive, supporting market position and enhancing operating cash flow in the medium to long run. Firstly, Alliander’s role, like other Dutch grid operators, supports the continuation of a reliable regulatory framework that ensures full cost recovery and the provision of an adequate return on investment, which will materialise in significantly higher earnings in the long run. Secondly, its role within the energy transition provides direct access to green or ESG-linked debt financing. Thirdly, such a role is contributing to continued shareholder support, particularly during the critical investment phase, thereby solidifying Scope’s view on the utility’s status as a government-related entity.

All rating actions and rated entities

Alliander N.V.

Issuer rating: A+/Stable, affirmation

Short-term debt rating: S-1, affirmation

Senior unsecured debt rating: A+, affirmation

Subordinated (hybrid) debt rating: A-, affirmation

Liander N.V.

Issuer rating: A+/Stable, new

*All credit metrics refer to Scope-adjusted figures.

Rating driver references
1. 22 Sep 2025 ACM publishes a new method for setting the tariff revenues of system operators

Stress testing & cash flow analysis
No stress testing was performed. Scope Ratings performed its standard cash flow forecasting for the company.

Methodology
The methodologies used for these Credit Ratings and/or Outlook, (General Corporate Rating Methodology, 14 February 2025; European Utilities Rating Methodology, 17 June 2025; Government Related Entities Rating Methodology, 3 September 2025), are available on scoperatings.com/governance-and-policies/rating-governance/methodologies.
Information on the meaning of each Credit Rating category, including definitions of default, recoveries, Outlooks and Under Review, can be viewed in ‘Rating Definitions – Credit Ratings, Ancillary and Other Services’, published on scoperatings.com/governance-and-policies/rating-governance/definitions-and-scales. Historical default rates of the entities rated by Scope Ratings can be viewed in the Credit Rating performance report at scoperatings.com/governance-and-policies/regulatory/eu-regulation. Also refer to the central platform (CEREP) of the European Securities and Markets Authority (ESMA): registers.esma.europa.eu/cerep-publication. A comprehensive clarification of Scope Ratings’ definitions of default and Credit Rating notations can be found at scoperatings.com/governance-and-policies/rating-governance/definitions-and-scales. Guidance and information on how environmental, social or governance factors (ESG factors) are incorporated into the Credit Rating can be found in the respective sections of the methodologies or guidance documents provided on scoperatings.com/governance-and-policies/rating-governance/methodologies.
The Outlook indicates the most likely direction of the Credit Ratings if the Credit Ratings were to change within the next 12 to 18 months.

Solicitation, key sources and quality of information
The Rated Entity and/or its Related Third Parties participated in the Credit Rating process.
The following substantially material sources of information were used to prepare the Credit Ratings: public domain, the Rated Entity and Scope Ratings’ internal sources.
Scope Ratings considers the quality of information available to Scope Ratings on the Rated Entity or instrument to be satisfactory. The information and data supporting these Credit Ratings originate from sources Scope Ratings considers to be reliable and accurate. Scope Ratings does not, however, independently verify the reliability and accuracy of the information and data.
Prior to the issuance of the Credit Rating action, the Rated Entity was given the opportunity to review the Credit Ratings and/or Outlook and the principal grounds on which the Credit Ratings and/or Outlook are based. Following that review, the Credit Ratings and/or Outlook were not amended before being issued.

Regulatory disclosures
These Credit Ratings and/or Outlook are issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0. The Credit Ratings and/or Outlook are UK-endorsed.
Lead analyst: Marlen Shokhitbayev, Senior Director
Person responsible for approval of the Credit Ratings: Philipp Wass, Managing Director
The ALLIANDER N.V.'s Credit Ratings/Outlook were first released by Scope Ratings on 23 April 2020. The Credit Ratings/Outlook were last updated on 3 April 2025.
The Liander N.V.'s Credit Rating/Outlook was first released by Scope Ratings on 19 December 2025. 

Potential conflicts
See scoperatings.com under Governance & Policies/Regulatory for a list of potential conflicts of interest disclosures related to the issuance of Credit Ratings, as well as a list of Ancillary Services and certain non-Credit Rating Agency services provided to Rated Entities and/or Related Third Parties.

Conditions of use / exclusion of liability
© 2025 Scope SE & Co. KGaA and all its subsidiaries including Scope Ratings GmbH, Scope Ratings UK Limited, Scope Fund Analysis GmbH, Scope Innovation Lab GmbH and Scope ESG Analysis GmbH (collectively, Scope). All rights reserved. The information and data supporting Scope’s ratings, rating reports, rating opinions and related research and credit opinions originate from sources Scope considers to be reliable and accurate. Scope does not, however, independently verify the reliability and accuracy of the information and data. Scope’s ratings, rating reports, rating opinions, or related research and credit opinions are provided ‘as is’ without any representation or warranty of any kind. In no circumstance shall Scope or its directors, officers, employees and other representatives be liable to any party for any direct, indirect, incidental or other damages, expenses of any kind, or losses arising from any use of Scope’s ratings, rating reports, rating opinions, related research or credit opinions. Ratings and other related credit opinions issued by Scope are, and have to be viewed by any party as, opinions on relative credit risk and not a statement of fact or recommendation to purchase, hold or sell securities. Past performance does not necessarily predict future results. Any report issued by Scope is not a prospectus or similar document related to a debt security or issuing entity. Scope issues credit ratings and related research and opinions with the understanding and expectation that parties using them will assess independently the suitability of each security for investment or transaction purposes. Scope’s credit ratings address relative credit risk, they do not address other risks such as market, liquidity, legal, or volatility. The information and data included herein is protected by copyright and other laws. To reproduce, transmit, transfer, disseminate, translate, resell, or store for subsequent use for any such purpose the information and data contained herein, contact Scope Ratings GmbH at Lennéstraße 5, D-10785 Berlin. Public Ratings are generally accessible to the public. Subscription Ratings and Private Ratings are confidential and may not be shared with any unauthorised third party.