Fiber optic network expansion gives rural municipalities a long-term boost

The Covid-19 pandemic clearly showed just how important fast Internet connections are: Working from home, home schooling, and greater use of the Internet for leisure highlighted existing technological limitations and the urgent need to expand the communications infrastructure. What is more investments in the latter promote economic growth, reduce the gap between cities and the country, and create and preserve jobs. This helps rural municipalities remain attractive for young people, families, and companies alike. At the same time, however, municipalities and local authority utilities are facing a range of investment challenges in various areas of their infrastructure.

In the summer of 2022, Palladio Partners entered into a partnership with local authority utility Stadtwerke Neumünster (SWN) to provide support by investing long-term retirement capital. The goal is to supply the funds to build fiber optic networks in a number of municipalities in Schleswig-Holstein. Premarketing in the first project in the former collective municipality of Molfsee (now collective municipality of Eidertal) was completed successfully and construction has now started (see the picture).

Palladio Partners is focusing on core competency as a financial enterprise here: SWN is the builder-owner and will responsible after completion for running and marketing the center, while Palladio is providing most of the capital.

Palladio’s subsidiary Palladio Kommunal played a crucial role in identifying the investment. Palladio Partners set up this specialized subsidiary back in 2021 to provide municipalities and municipal enterprises with optimized, customized, needs-driven financial support for infrastructure projects.

The first phase of construction in the former collective municipality of Molfsee has now been completed. In addition, the partners developed plans to expand the fiber optic infrastructure in the municipality of Glückstadt. These involve working together with the local authority utilities to market and install fiber optic connections throughout the community on the back of the existing fiber optic network. The municipal government bodies voted in favor of the project in the fourth quarter of 2022. Premarketing in Glückstadt was successful.

The partners are now cooperating closely with decision-makers in other potential rollout areas for the project above and beyond the first two.