Kabelnoord still needs EUR 60 mln for Friesland rural fibre rollout

Wednesday 6 December 2017 | 22:44 CET | News
Dutch operator Kabelnoord is in talks with various banks for the financing of its fibre project, to the amount of EUR 60 million. The operator needs this amount in addition to the subordinated loan of EUR 35 million made available by the province. Kabelnoord announced that it is still in the preparatory phase for the project and that the financing is a process that requires patience.

The Frisian cable company has asked banks for financing quotes. Banks need time to prepare and approve quotations. After the choice of a bank, all discussions must be processed by lawyers into an agreement. This will also apply to an agreement between the bank and the province and the province and Kabelnoord. All agreements must then be approved internally by the parties involved. Without this additional financing, Kabelnoord will not be able to start with the deployment of fibre in the outlying areas of Friesland.

The subsidy scheme of the subordinated loan with the province states that a legally valid agreement must be signed within a maximum of thirteen weeks. Kabelnoord director Niek Geelhoed told Telecompaper that this will probably not be feasible with this financial track. Geelhoed expects he will be able to give more information on the matter over the first quarter of next year.

Preparations still on

Apart from financing, Kabelnoord has started preparations in various areas. In total, the company wants to bring fibre to around 20,000 households in Friesland, if the registration process yields enough interest.

Contractors have been asked to make a final offer for the execution of the work. Kabelnoord would like to make uniform agreements with, among others, municipalities, water boards and the Dutch Ministry of Infrastructure and the Environment (Rijkswaterstaat) so that the construction of fibre can be carried out as efficiently as possible.

In the background, preparatory work is currently being set up in order to soon start rolling out fibre as soon as possible.

Geelhoed explained that almost all of Friesland’s rural areas are eligible for fibre. Only the Wadden Islands and a few groups of houses here and there will not covered by the agreement with the province.

Province and Kabelnoord have been in talks for some time

In July 2016, a first collaboration was announced regarding fibre and the Province’s rural areas. The Province of Friesland had consulted with Kabelnoord for the rollout of broadband connections outside of its service area. In that context, the province and various municipalities intended to purchase shares in Kabelnoord; five municipalities were already stakeholders.

In November of 2016, it became known that audits for this participation showed that legal risks in the field of procurement law and state aid could not be ruled out. The province of Friesland decided to issue a tender and register market parties with the help of a subordinated loan for the construction of the fibre network. Kabelnoord was still the designated party for this assignment.

Municipalities as shareholders

Kabelnoord is a cable company that was originally made up of five Frisian municipalities, all shareholders in the firm. Geelhoed explained the ownership plan: "After negotiations ended in 2016, a share purchase by the province and other Frisian municipalities was not further elaborated. The proposition remains interesting. That is now separate from the plans and the subsidy scheme, but it is in line with the expectation that this will happen, at least as far as the municipalities are concerned. We would like that. That process is going well, but it is a lengthy one. Only in the autumn of 2018 will we know more about.”

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