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Asia Connect / Europe
TenneT, Berlin end talks on sale of German transmission network
Dutch grid operator can no longer proceed with deal due to budgetary pressures after court stops reallocation of unused Covid funds
Michael Marray 26 Jun 2024

Dutch grid operator TenneT has ended talks with Berlin on the sale of its German transmission network.

The German government had planned to buy the grid business from TenneT as part of its green energy strategy. But budgetary pressures mean that Berlin can no longer proceed with the deal, which was estimated to be in the range of €20 billion to €25 billion (US$21.45-26.82 billion).     

TenneT is now looking at other options, including a private sale, a partial sale, or an initial public offering of the German business.

Analysts say finding a buyer for such a large company via a trade sale might be difficult, though there could be a partial sale to buyers such as infrastructure funds. The government taking a minority stake remains a possibility.

Negotiations were making progress in 2023. The German government had set aside funding via a special climate and transformation fund. The money had been reallocated from unused emergency funding for the Covid-19 pandemic.

But last November, the constitutional court ruled that reallocating the fund for purposes other than that approved by the parliament was illegal.

Efficient transmission from onshore and offshore plants in the north to the rest of Germany is a priority, but the coalition government is under severe budgetary pressure, and is finding it dfficult to realize its green transformation goals.

TenneT is the only electricity grid operator in the Netherlands, and is the largest of four networks in Germany.

50Hertz Transmission is owned by Eurogrid, majority owned by Elia of Belgium. In 2018 State Grid Corporation of China wanted to buy a 20% stake being sold by Australian infrastructure fund IFM, but the deal was blocked by the German government. The stake was instead acquired by KfW.

The other two transmission companies are Energie Baden Wurttemberg subsidiary TransnetBW, in which KfW acquired a 24.95% stake last year, and Amprion, which is owned by RWE and a group of mainly German institutional investors.

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