The biggest challenge facing foreign companies seeking to expand their operations in the Netherlands is access to electricity, a panel discussion heard at the Provada real estate fair taking place in Amsterdam this week.
Hilde van der Meer, commissioner of the Netherlands Foreign Investment Agency (NFIA), a government body which assists businesses with setting up operations in the Dutch market, said power issues were currently hampering the expansion plans of a number of firms.
‘We currently have a list of 35 companies that want to expand, of which 18 are facing setbacks with gaining access to the grid,’ Van der Meer told the panel on the Dutch investment climate, which was hosted by Buck Consultants International.
While the Netherlands has for years scored well as an investment location in various international benchmarks, that position is now coming under pressure due to factors such as lengthy permitting procedures, tighter environmental regulations, labour shortages – and power constraints.
Surging electricity demand is putting strain on the country’s power system, with existing supply sources unable to keep pace.
Van der Meer said it was currently the single most ‘frustrating’ issue for companies seeking to scale up their operations, with many often having to wait months to be connected to the grid.
Biotech firm Batavia Biosciences, represented on the panel by general manager Eize de Boer, is a case in point. The company, owned by Korean group CJ Cheiljedang, is ‘still waiting’ for electricity at its new 12,000 m2 manufacturing facility currently being built at the Bio Science Park in Leiden, he said. When the power is finally turned on in 2025, ‘that will be nine months too late’, De Boer said. He attributed the delays to ‘operational issues’ at the provider, rather than capacity constraints.
Warehouse and data centre developers have also reported encountering difficulties with grid access when building new projects in the Netherlands.
Van der Meer suggested the private sector could play a role in helping to resolve short-term power supply issues, by providing solutions to fill the gap. ‘This is an issue where the government and the private sector should team up,’ she said.
On the plus side, the Netherlands is still valued by foreign companies as an investment location for a variety of reasons, including a highly qualified workforce, innovative business climate, superior (technology) infrastructure, and economic and political stability. According to the latest EU Regional Competitiveness Index (RCI), four of the top five most competitive regions in Europe are Dutch, with Utrecht claiming the top spot.
The country is currently home to 14,000 foreign companies, which together employ 1.3 million people. Van der Meer said NFIA’s efforts are focused on attracting businesses from what the Dutch government has designated as ‘top sectors’, including life sciences and health, agri-food and energy. Last year, 306 foreign direct investment (FDI) projects were attracted, up 2.7% on the previous year.
