The Nordic countries are among the world’s leaders in renewable energy and infrastructure investment, and their developers, funds and institutional investors deploy capital across Europe on a large scale. Energy and infrastructure carry structuring demands that ordinary corporate holdings do not, project-level financing, minority co-investment, staged construction, long horizons, and a Dutch holding is a common answer to organising that capital across borders.
Why energy and infrastructure structure differently
A renewable or infrastructure investment is rarely a single company held for its dividends. It is a project, or a portfolio of projects, each with its own financing, its own construction risk, its own co-investors, and its own long revenue profile. The ownership structure has to accommodate all of that: holding the projects, taking in partners at project level, and consolidating the returns efficiently. A Dutch holding provides that coordinating layer, with the participation exemption set out in our note on the participation exemption ensuring that gains and distributions from the project companies reach the holding without a second layer of tax.
Co-investment and the fund dimension
Nordic institutional investors frequently co-invest alongside funds and infrastructure partners, and the structure has to work for several investors from several countries at once. A neutral, treaty-rich Dutch holding is well suited to that, and the club-deal and co-investment disciplines we describe in our note on co-investment and club deals apply directly. Where the arrangement crosses into managing money for others, the fund rules we cover in our note on AIFMD come into play.
Energy capital is patient, leveraged and shared. The structure that holds it has to accommodate long horizons, project finance and several investors at once, which is precisely what a holding layer is for.
Financing at the project level
Infrastructure and renewables are financed at the project level, often heavily, and the interaction between project finance and the holding structure has to be coherent, with the Dutch interest deduction rules in mind, set out in our note on interest deduction limits. Intragroup financing between the holding and the projects has to be priced at arm’s length and documented, which for a leveraged infrastructure portfolio is a live and material discipline rather than a formality.
Substance for an active platform
An infrastructure holding that raises finance, takes in co-investors and manages a portfolio of projects has real functions, and the substance requirement set out in our note on Dutch substance requirements is met by the genuine management those functions require. This is not a passive holding company; it is an active platform, and its substance follows from what it actually does. The connection to the wider Nordic pattern is set out in our note on Norwegian investors structuring European energy and real asset portfolios.
The long horizon suits the structure
Energy and infrastructure are long-horizon investments, and a Dutch holding built to hold them for the long term, through construction, operation and eventual sale or refinancing, is a structure whose value accrues over years. Nordic investors, with their institutional patience and long horizons, are well matched to this, and the structure they build is one designed to still make sense a decade after the first project is commissioned.
Montclare runs a dedicated Nordics desk, structuring the corporate, tax and holding architecture for groups and families entering Europe through the Netherlands. Our services are set out on our services page.
This article is informational and does not constitute tax or legal advice. The treatment of any structure depends on its facts and on the law of each jurisdiction involved. Each engagement is subject to scope and applicable regulation.