Funding strategy

DONG Energy A/S serves as a holding company, with all primary business activities conducted through our subsidiaries. DONG Energy’s financing strategy is to concentrate group borrowings at the group parent level to simplify our liability profile while avoiding any structural subordination issues.


Long-term assets financing

We expect to finance our long-term assets primarily through operations cash flows and debt issuance, such as bonds, in the Euro markets. We plan to supplement this with other competitive financing arrangements with banks, multilateral institutions, Danish mortgage institutions and other lenders and investors. As part of our funding strategy, and in order to provide flexible and efficient access to funding, we have established a Debt Issuance Program as well as committed credit facilities to provide access to back-up liquidity.
 

Cash position and debt profile management

We manage our cash position and debt profile through a range of policies which focus on minimising refinancing risk by diversifying funding sources over time and securing cash availability and undrawn committed credit lines. In general, we seek to minimise group liquidity and debt by allocating excess liquidity in subsidiaries to group parent, DONG Energy A/S.
 

Risk management

Risks are a natural part of DONG Energy’s business activities and a precondition for being able to generate income and create value. The purpose of the Group’s risk management is to continuously identify, assess and manage financial and non-financial risks and reducing them to an acceptable level.

 

The management of markets risks – primarily prices for oil, gas and electricity as well as currency and interest rate risks – is based on the Group’s desire for stable and robust financial key ratios to ensure a solid foundation for the Group’s growth strategy. To reduce fluctuations in the Group’s cash flow in the short and medium terms, hedging agreements are conducted. Further information about DONG Energy's risk management activities can be found in the Annual Report.