We may use derivative financial instruments to manage interest rate, currency, and price risks arising from ordinary operational activities. We only use derivative financial instruments to hedge risks and not for trading or any other purpose.

On average, between 5% and 10% of our non-current debts (including the current repayment obligation on non-current loans) are current financing arrangements. However, this situation may differ from day to day, including on the balance sheet date, and depends on the exact liquidity situation and the need for liquidity. Although we conclude these current loans with a fixed interest rate for the term, we do run an interest rate risk on any possible refinancing. 

At year-end 2024, we had no outstanding non-current or current loans with a floating rate of interest (year-end 2023: the same). A rise of 100 basis points in interest rates on borrowings will alter the interest expenses by approximately € 1.7 to € 3.4 million (2023: change of around € 1.6 to € 3.1 million). 

The currency risk is limited in the context of regulated business operations in the Netherlands and Germany because virtually all transactions take place in euros. For our participating interest BBL Company transactions take place in pounds sterling. We hedge currency risks if there is sufficient certainty about the amount and timing of the foreign currency cash flows. 

The total value of these liabilities in pounds sterling was £ 5.9 million at year-end 2024 (year-end 2023: £ 4.3 million). At year-end 2024, the currency risk on the liabilities in pounds sterling was not hedged by forward exchange contracts (year-end 2023: the same). Given the limited size of foreign currency positions at the end of the financial year, no sensitivity analysis has been included. 

At the end of 2024, no other foreign currency positions of significant size were held nor were other currency risk hedging instruments used, other than as explained in note ‎24 ‘Derivative financial instruments’. 

We would be exposed to a minor price risk if the variable costs of gas and power were to rise. Based on the current regulations in the Netherlands and Germany, we are allowed, for a large part, to offset increases in energy costs in future regulated tariffs. For our non-regulated and/or activities exempt from regulation, commercial agreements generally allow us to pass on our energy costs to our customers. 

We apply a procurement strategy aimed at achieving a market-competitive price. The basic principle of our policy is that we do not trade in energy supply contracts and do not take speculative positions. We have committed to purchasing the contracted volumes ourselves and using them for our day-to-day operations. 

Our energy supply contracts come with the contractual option to partly fix prices for a certain future supply period. We do this, for example, through forward delivery contracts for the physical supply of energy, in which we take into account the anticipated energy requirements for specific periods, in order to meet the own-use exemption under IFRS 9.2.4. The level of price risk hedging is influenced in part by the predictability of how much energy is consumed and when. For required energy that we have not contracted under forward delivery contracts, we procure this on the spot market as and when the need for energy arises.

At year-end 2024 there were no outstanding forward delivery contracts for our own use of energy (year-end 2023: € 73.5 million). Under IFRS 9.2.4, liabilities from forward delivery contracts are not recognised in the balance sheet.

With regard to gas inventories we hold for balancing the gas transmission network, given the underlying regulated settlement system we do not run a price risk. The value of the stored nitrogen is not significant. 

Lastly, Gasunie has entered into investment obligations in a joint venture, the amount of which may vary depending on gas price developments. To limit the cash flow risk on these expected capital expenditures, we use gas price swaps, this way effectively fixing the future variable investment obligation – in terms of our share in this investment obligation – over the term of the investment obligation (until 31 December 2027). At year-end 2024, the volume of the variable investment obligation was 308,421 MWh (year-end 2023: 408,887 MWh). The price risk on the variable investment obligation was fully hedged at year-end 2024 (year-end 2023: the same). The value of the gas price swap was € 16.3 million negative at year-end 2024 (2023: € 19.2 negative).

At the end of 2024, we had received € 176.2 million (year-end 2023: € 198.6 million) in counter-guarantees from our co-shareholder in EemsEnergyTerminal. These counter-guarantees are not included in the table above. Additional information on these counter-guarantees is given in note ‎29 ‘Off-balance sheet assets and obligations’.

Securities received are primarily guarantees issued as part of our gas transmission and storage activities, as well as guarantees provided by contractors and suppliers involved in major investment projects. We hold the security deposits in cash (recognised under current liabilities). We calculate a market interest charge for the security deposits. 

The term of the guarantees received varies from a few months to indefinite guarantees. The guarantees are not freely assignable.

In making use of financial instruments (such as derivative financial instruments) we apply strict limits for each individual counterparty in keeping with our treasury policy to mitigate the related credit risk. This limits the level of risk we are exposed to from our counterparties. We have drawn up criteria for selecting counterparties in financial transactions. These criteria limit the risk associated with possible credit concentrations and market risks. No collateral has been received nor provided with regard to the derivative financial instruments held at year-end 2024 (year-end 2023: the same). 

Among other things, our financial policy is to reduce our liquidity risk at as low a cost as possible. The options for reducing this risk depend in part on our solvency. We are solvent and can, therefore, attract credit facilities relatively easily. The long and short-term credit ratings by S&P did not change over 2024. On 5 July 2024, Moody’s downgraded its long-term credit rating for Gasunie from A1 to A2 with a stable outlook. The short-term credit rating remains unchanged. Moody’s anticipates that we will no longer be able to stay within its tolerance level for an A1 rating for the long term, specifically in terms of the ratio between operating result and net debt. This is mainly due to the expected increase in long-term debts, related to the forecast investments in the energy transition. The operating result is also temporarily lower, partly as a result of the settlement of the surplus revenue from the 2022 financial year, which in 2024 resulted in lower permitted revenue in the regulated segment, as explained in notes ‎1 ‘Significant matters and events’ and ‎3 ‘Financial information by operating segment’.

At year-end 2024, to hedge our liquidity risk we had an uncommitted current account facility of € 25.0 million (year-end 2023: € 45.0 million), a committed credit facility of € 1,050.0 million (year-end 2023: € 600.0 million), a Euro Commercial Paper (ECP) programme of € 750.0 million (year-end 2023: € 750.0 million) and a European Medium Term Note (EMTN) programme of € 7.5 billion (year-end 2023: € 7.5 billion). The committed credit facility runs until April 2027. 

Under the ECP, we withdrew € 105.0 million last year (2023: withdrawal and repayment of € 40.0 million). No funds were drawn on the committed credit facility over the past year. Additionally, we may also raise other short-term loans on the money market. In 2024 we withdrew € 50.0 million from such credit facilities (2023: withdrawal and repayment of € 395.0 million). Under the EMTN programme, € 3,050.0 million had been issued in loans as at year-end 2024 (year-end 2023: € 2,550.0 million). The EMTN programme was approved on 1 October 2024 and applies for one year from the date of approval. 

Virtually all the lease contracts included in the balance sheet are subject to an annual inflation adjustment based on underlying price indexes. The stated cash flows relating to the leases do not take future increases into account. At year-end 2024, there were no leases with a start date in the future, nor were there any residual value guarantees or material extension or termination options (year-end 2023: the same). 

The way in which fair value is determined is described under ’Determining fair value’ in the accounting policies for the measurement of assets and liabilities and the determination of the results. In 2024 no transfers took place between the various fair value measurement levels (2023: the same). 

Other equity interests

At year-end 2024, the value of other equity interests measured at fair value in the balance sheet was € 7.0 million (year-end 2023: € 7.0 million). This is a level 3 fair value measurement (year-end 2023: level 3). For more information see note 10 ‘Other equity interests’. 

Derivative financial instruments

The derivative financial instruments concern our forward exchange contracts and gas price swaps. 

We determine the fair value of the forward exchange contracts based on the present value of projected future cash flows. For this purpose, we made use of forward exchange rates with a comparable term and a zero-coupon discount rate that matches the currency and the term of the transactions, taking into account Gasunie’s credit risk and that of the relevant counterparties. This is a level 2 fair value measurement (year-end 2023: level 2). At year-end 2024 the contract liabilities totalled on balance € 0.8 million (year-end 2023: € 0). We explain this further in note 24 ‘Derivative financial instruments’. 

We determine the fair value of gas price swaps based on the present value of quoted commodity prices for gas price swaps. For this purpose, we made use of the closing prices for forward supply contracts for natural gas with a comparable term and a zero-coupon discount rate that matches the currency and the term of the transactions, taking into account Gasunie’s credit risk and that of the relevant counterparties. This is a level 2 fair value measurement (year-end 2023: level 2). At year-end 2024, the fair value of the gas price swap was € 16.3 million negative (year-end 2023: € 19.3 million negative).

Interest-bearing loans

The interest-bearing loans comprise bond loans with a listing on the Amsterdam stock exchange, and private loans. 

The fair value of listed bond loans is the same as the year-end exit price. This is a level 1 fair value measurement (year-end 2023: level 1). The fair value of the private loans has been determined by calculating the present value of the expected future cash flows at a discount rate equal to the applicable risk-free market interest for the remaining term, plus credit and liquidity surcharges. We also take our own risk profile and those of the counterparties into account. This is a level 2 fair value measurement (year-end 2023: level 2). 

Other primary financial instruments

Other primary financial instruments comprise trade and other receivables, cash and cash equivalents, current financing liabilities (excluding current repayment obligations on non-current loans), trade and other payables. Given the short term of these instruments, their carrying amount approximates their fair value.