Creditworthiness for licence application
What are the creditworthiness requirements when applying for a licence?
Your credit rating is adequate for your intended obligations. This means that you have to meet the financial security requirements appropriate for your exposure. The rules are laid down in Appendix 1 of the Transmission Code Gas-TSO. As of gas day 1 January 2019 the changed Transmission Code gas TSO (Annex 1) will apply.
Your credit limit is determined on the basis of your financial data or on the basis of (additional) securities. We set an initial credit limit for each shipper, after performing a financial analysis of your company. The credit limit must always cover your exposure or expected exposure. It is your responsibility to have and maintain a credit limit appropriate to your intended obligations and your exposure. Your credit limit must at least cover your exposure at all times. We recommend to maintain an available amount of 15% of your credit limit. You can increase your credit limit by providing additional financial securities.
We accept the following additional financial securities: parent company guarantee, security deposit agreement and bank guarantee. Financial securities must be valid for at least 4 months longer than the (expected) contract services.
What are the steps in the process for demonstrating creditworthiness when applying for a licence?
- Determining your exposure
Your exposure is determined by taking the sum of the following elements:
- Fixed imbalance reservation of € 100,000.--
- A minimum LDC reservation of €50,000.-- if you want to be active on an DSO exit point. Take 21% VAT into account if your organization is registered with a Dutch VAT code.
- Exposure resulting from your transport bookings: To calculate this exposure, take the highest monthly (intended) transport booking invoice and multiply it by credit factor 3. For a transport booking for one or two months, you can multiply by respectively credit factor 1 or 2. Take 21% VAT into account if your organization is registered with a Dutch VAT code.
- Acutal imbalance. Take 21% VAT into account if your organization is registered with a Dutch VAT code.
- Your calculated exposure for future transport bookings.
- Determining what credit limit and unused credit you need
We recommend to maintain an available amount of 15% of your credit limit. Make sure you arrange additional unused credit when you want to carry out transport bookings in the future. You can increase your credit limit by providing additional securities.
Providing additional financial securities
lf your credit limit is not high enough, you will have to provide additional financial securities. You can use a parent company guarantee, a security deposit and/or a bank guarantee. Click here for the standard agreements. Financial securities must be valid for at least 4 months longer than the (expected) contract services.
Below is an example calculation of the required credit limit:
A party wants to do business on the TTF and transport gas from the TTF to a market adjacent to our grid. The party requires an A licence. The desired exit capacity at the border point with the other market area is 200.000 kWh per hour per year and the exit tariff is €2.50. Party has an imbalance of € 10,000.--. The necessary credit is calculated as follows:
- The fixed imbalance reservation is € 100,000,--
- Actual imbalance € 10,000.--
- The reserve required because of the booked transport contracts: 200,000 kWh * 1/12 * €2.50 * 3 = €125,000.--
In this specific case, at least € 225,000.-- credit will be required. If you take the minimum credit surplus of at least 15% into account this will result in a required credit of at least € 277,300.--
If you are registered in the Netherlands, you have to take 21% VAT into account.
After you have obtained your license, your credit limit must remain adequate for your intended obligations and exposure. You can read more on that under Creditworthiness for active parties (as of gas day 1 January 2019).
Overview of Shipper's creditworthiness and exposure
|Credit limit||-||Exposure||=||Unused credit|
||Amount to spend:
Yes, you can ask us to return all or part of your additional securities if you expect that you will no longer need the additional credit. The financial securities must be valid for at least 2 months after the end date of the longest transmission booking contract. If, for example, a transmission contract has expired, surplus unused credit becomes available. Your credit limit must at least cover your exposure but we advise you to keep a minimum of 15% of your credit limit as surplus unused credit. Remember to allow for extra unused credit you will need if you want to book transmission in the future.
The amended credit worthiness policy affects every customer. A large number of customers has to increase and/or extend their securities, which takes processing time within GTS. Therefore we request our customers to provide us their final additional securities (a final security is a valid security which is accepted by GTS) before 1 November 2018. Securities provided after 1 November 2018 will be processed on a best effort basis.
No, in case your organization features a valid “warehouse arrangement”, VAT can be excluded when calculating your exposure and related credit limit.
If your organization is registered under a Dutch VAT code and does not feature a warehouse arrangement, VAT will be added to your LDC reservation. GTS will adjust the LDC reservation during the second half of September 2018. Tis adjustment will be visible in Gasport immediately, starting January 2019.
During the second half of September, GTS will end your TTF reservation (€ 50.000) per gas day 1 January 2019. The same date, the imbalance reservation (€ 100.000) will start. VAT will be included in the LDC reservation per 1 January (if applicable). These changes will be visible in Gasport by the end of September 2018. Provided additional securities will be visible immediately after processing.
VAT on all services (for e.g. contracted capacities) and the amended daily imbalance will be visible as of 1 January 2019.
Current securities with a written end date will be shortened by GTS with 4 months due to the amended credit worthiness policy instead of the current 2 months. In case the exposure of the last 2 months is not covered by a security anymore, you have to send us an amendment bank guarantee or a new parent company guarantee or surety agreement.
Once a day at 06.00 hour the available credit space per customer is interfaced to PRISMA . During the period that your spent percentage of 100% is exceeded, no capacity can be contracted.