Germany in talks to buy Tennet stake

The Dutch finance ministry, which owns Tennet, is looking to share the load of the capital investment required to improve the Netherlands' and Germany's grid infrastructure over the next decade.

Tennet operates the grid in the Netherlands and much of Germany
Tennet operates the grid in the Netherlands and much of Germany

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The transmission system operator (TSO), which manages the grid in the Netherlands and parts of Germany, supports the proposal as part of a wider cross-border collaboration.

All three parties have agreed to hold exclusive talks in the coming months to iron out the details of a possible deal.

They will also explore further possibilities to expand collaboration on energy, including grid development, system integration, and innovation, the German and Dutch governments said in a joint statement.

It will also be determined whether German government would invest in the Tennet Holding parent company, or just the local subsidiary Tennet Germany. They aim to reach an outline agreement before the end of the year.

In a letter to the Dutch parliament, finance minister Wopke Hoekstra said supporting Tennet’s €35 billion investment plans for 2019-2028 had required capital investment of €4.75 billion.

Meanwhile, he expects supporting the TSO’s €40-50 billion investment plans for 2020-2029 would require a further €5.3 billion from the Dutch government.

This investment could instead be split roughly 70:30 between the Netherlands and Germany, Hoesktra added.

Divesting a minority stake to Germany would lower the financial risks for the Dutch state while allowing Tennet to remain a cross-border entity, Hoekstra explained.

Other options considered to reduce the financial strain on the Dutch government include selling a minority interest in Tennet to a private party, holding an initial public offering for a minority stake, selling Tennet Germany, or the Dutch state increasing its capital contributions.

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