RAE, the Regulatory Authority for Energy, intends to reach decisions this week on the WACC and allowable income levels for 2020 of distribution network operator DEDDIE/HEDNO, both pending regulatory factors needed ahead of the operator’s privatization.

The authority has already approved a formula determining the required network earnings.

RAE intends to approve the operator’s WACC level for 2021 to 2024 by the end of the year before deciding early in 2021 on the regulated earnings and a network business development plan covering 2021 to 2024.

The distribution network operator’s WACC level for 2021 to 2024 is expected to be set at just below 7 percent, sources informed. Such a level would be seen as highly attractive by investors given the far lower yields offered by respective European distribution network operators.

Decisions on all these regulatory matters will enable prospective buyers to evaluate DEDDIE/HEDNO’s prospects and shape their offers for a 49 percent stake to be offered through the operator’s privatization.

The sale could be completed by the first quarter of 2021. Pundits anticipate the sale price could reach approximately 1.5 billion euros.

In accounting terms, the operator’s fixed assets – networks covering 239,000 kilometers and substations – are worth 3.5 billion euros.