The German Association of Energy and Water Industries (BDEW) and the German Association of Local Public Utilities (VKU) commissioned a NERA team led by Managing Director Tomas Haug to develop a methodology for determining the cost of equity for German water companies. 

Mr. Haug, Associate Director Lorenz Wieshammer, and Research Officer Daniel Neuhold prepared a report accounting for current capital market conditions and the heterogeneity of German water companies. The report offers a comprehensive overview of various approaches to determine the cost of equity such as the CAPM, multifactor models, and the dividend growth model. 

In light of their analysis, the NERA team recommends a specific methodology and provides guidelines for determining the cost of equity, accounting for firm particularities. The NERA authors presented their findings in a webinar hosted by BDEW and VKU. The NERA report is available on the BDEW website.