Dutch power operator TenneT Holding BV said it’s exploring a possible sale of its German business to Berlin, as the government seeks ownership of the national grid to shore up energy security following Russia’s invasion of Ukraine.
(Bloomberg) — Dutch power operator TenneT Holding BV said it’s exploring a possible sale of its German business to Berlin, as the government seeks ownership of the national grid to shore up energy security following Russia’s invasion of Ukraine.
While the Dutch government — TenneT’s sole shareholder — is happy to fund activities in the Netherlands, it’s looking for alternatives to finance the €15 billion ($16.1 billion) of equity required by the German business, the company said in a statement Friday.
Germany is pushing to secure affordable power and curb its dependency on Russian gas, as the worst energy crisis in decades undermines its industrial base. At the same time, it’s looking to wean itself off fossil fuels and transition to clean energy to reach climate neutrality by 2045. That will require a huge expansion of the nation’s power grid.
“Both the Dutch and German government prefer to fund, control and own their national electricity grid,” TenneT said in the statement. “Motivated by their climate ambitions and geopolitical developments, both governments are heavily focusing on infrastructure development for the energy transition.”
The two governments agreed in October 2022 to resume negotiations on a possible German stake in TenneT Deutschland, according to a spokesman at the Economy Ministry in Berlin. The talks were “constructive,” he said, adding that the German side welcomed Tennet’s announcement.
Chancellor Olaf Scholz’s coalition government is ready to invest billions of euros for the operation to push ahead with the extension of renewable energies and the construction of new grids to stabilize the system, two people familiar with the talks said on condition of anonymity.
Talks among the three coalition parties are ongoing about whether the state should buy a minority stake in the German branch of TenneT, or even take over the full entity, the people added. A deal is expected to be sealed by the end of June, they said.
TenneT said the Dutch government hasn’t taken any final decision.
“Final decision on the fulfillment of TenneT Germany’s capital needs will only take place after it is clear whether agreement is possible with the German state, under conditions acceptable to the Netherlands,” the Dutch Finance Ministry said in a paper to the House of Representatives obtained by Bloomberg. “We foresee this at the earliest in mid-March.”
The sale talks are being held on Germany’s initiative because TenneT has “extensive capital needs” and an outright sale is one of the options, according to the paper.
–With assistance from Wout Vergauwen, Kamil Kowalcze and Petra Sorge.
(Updates with Dutch Finance Ministry report in last two paragraphs)
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