Q2 2021 Financial Highlights and Offshore Wind Build-Out Plan
Interest rate and inflation risk management
Assets and debt allocation
Illustrative
100%
Total
Contracts:
Inflation-indexed
UK ROC and CfD,
awarded CfD projects
in Poland
Risk management:
Prioritised for
shareholders
Objectives of interest rate and inflation risk management
1. Protect long-term real value of equity by offsetting interest and
inflation risk exposure embedded in assets by allocating debt with
similar, but opposite risk exposure
2. Cost of funding optimized by actively managing debt portfolio
3. Cost of hedging minimised by using natural portfolio synergies
between assets, allowing matching of up to 100% of asset value
with appropriate debt
Framework for risk management
.
Merchant
Fixed Nominal
•
Bioenergy, Markets,
merchant power
revenue
Open exposure until
hedged
Subsidised or
hedged power,
PPAs in Continental
Europe, United
states and Taiwan
Derisked with fixed
nominal debt and
derivatives.
.
Assets divided into risk categories based on nature of inflation and
interest rate risk exposure
Simple risk metrics are used to match assets with appropriate debt
within each category
Fixed nominal-category has first priority for debt allocation to
protect shareholders against inflation
Inflation-indexed revenues reserved to service equity return for
shareholders thereby to a large extent protecting the real value of
equity against fluctuations in inflation
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