Fearing nationalisation below market rate, utilities are offshoring parts of their business.
SSE has headquartered its transmission and distribution business in Switzerland. It described the move as protective, stating:
“Switzerland is a party to the Energy Charter Treaty, and the incorporation of a Swiss company is also an additional safeguard, which SSE does not believe would be required in practice, should SSE’s electricity networks businesses and interests in SGN become the subject of proposed legislation for nationalisation. In practice, SSE expects that precedent, the principle of fairness and the need to secure future investor confidence in the UK economy means it should be possible to secure fair value from nationalisation for the electricity networks businesses without recourse to treaty protection.”
National Grid has taken similar steps, setting up holding companies in Hong Kong and Luxemburg, with other utilities reported to be offshoring.
The UK’s regulated water and energy companies are owned by a large range of funds and entities.
This article provides an overview of gas and power network ownership.
This article provides a detailed breakdown of water company ownership.