Eneco future situation unclear

Edition 28 September, by Sagar Harinayan

Eneco is a Dutch company which produces and supplies natural gas to millions of customers, including households and businesses. Headquartered in Rotterdam, Eneco group is owned by 53 municipalities. This deems it as an autonomous and independent energy company, driving sustainable change within the community. However, last month it was revealed that several municipalities wish to withdraw their stakes in the company and hand it over to private firms. Rotterdam, Den Haag, Dordrecht and Leidschendam-Voorburg, the municipalities which own over 60% of Eneco, have all indicated their interest in selling the company. The decision on this is due to be announced on October 31st. However, this initiative has not been very wellreceived by the public.

Greencrowd Foundation has taken the first step to prevent this sale. They have pioneered a crowd-funding campaign to ensure that a green energy company like Eneco remains in public hands. If Eneco is taken over by a private organization, it is inevitable that someday, commercial motives will dwarf sustainable ones, and profiteering will prevail. Hence, Greencrowd has encouraged people and investors to support the cause in whatever way possible. And credit to them, they have managed to raise 9 million euros in just three days, with over 1100 investors rising to the occasion. Eneco is valued at around 2.8 billion euros, and the objective is to raise 250 million euros by March 2018. This value was decided based on inventor books and conversations with banks, and is a lower threshold to have a legitimate chance. However unlikely this may seem at present, a step has undeniably been taken in the right direction. Most of the interested investors are former Eneco employees, local energy cooperatives and an array of wealthy businessmen. Zelfstroom, a solar panel supplier, has alone contributed 1.5 million euros.

Speaking of potential buyers, one wonders if foreign investors would have a shot at taking over Eneco. Back in 2009, the ministry did not oppose sale of Dutch generation companies Nuon and Essent to Sweden’s Vattenfall and Germany’s RWE, respectively. But more recently, the government opposed foreign takeovers of AkzoNobel and PostNL. When asked about this, Adriaan Visser, alderman for the city of Rotterdam, was certain that the government would not block the sale to a qualified foreign buyer, despite opposition by Eneco’s board of managers and labour unions. “I can imagine the government will talk with us about what kind of party is logical”, he said. He also added that it is only a matter of time before the remaining municipalities come on board to sell Eneco. The Economic Affairs Minister agreed with Visser by saying that, “The Netherlands profits from the fact that we have an open economy, an investment climate we want to maintain, Only in extraordinary circumstances is there a duty for the government to get involved.” But this in no way will dissuage Jan Willem Zwang of Greencrowd, who intends to approach ten of largest pension funds to participate, as he believes that supporting a sustainable energy company could be part of their ambitions.

“They must only accept that they have the same voting rights as any other investor”, he insisted. Gijsbert Koren of crowdfunding agency Douw & Koren is impressed by the effective action as well as the amount of funds generated in a short span of time. But he correctly pointed out that the investors have only promised the amounts, without digging in their wallets as yet. He agrees that 250m is an incredulous sum of money, but doesn’t want to lose hope. “It’s a real challenge, but if you know enough people to convince, it can work”, he concluded.