TenneT mulls sale of German operations to the State

Dutch-German TSO TenneT is exploring the potential sale of its German activities to the German State, a move they claim will deliver on their ambitious energy transition targets.

According to the TSO, which owns and operates over 24,500km of high-voltage lines and cables in the Netherlands and Germany, TenneT’s equity need for the decade is rising.

Over recent years, TenneT has developed into the largest investor and operator of transmission grids worldwide, and fast acceleration of grid expansion, onshore and offshore, requires immense capital investments by TenneT.

In Germany specifically, their current need is estimated at approximately €15 billion ($16 billion) and the TSO is seeking a structural solution, of which state funding is a prime consideration.

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TenneT currently operates the Dutch high voltage grid as well as part of the German high voltage grid, but has stated that both the Dutch and German governments prefer to fund, control and own their national electricity grid.

Both governments are heavily focussing on infrastructure development for the energy transition and TenneT thus intends to discuss with the German government the possibility of a full sale of TenneT’s German activities.

The Dutch government, currently Tennet’s sole shareholder, is funding approximately €10 billion ($10.7 billion) of their Dutch activities. The Dutch government has not yet taken a final decision on a German sale.

TenneT’s focus in the upcoming discussions will be on ensuring security of supply and the interests of its stakeholders.

TenneT’s capital investments are funded primarily through debt, TenneT being the largest EU Green Debt issuer, and by equity to maintain a strong credit rating.