German state takes stake in transmission system operator TenneT

The deal saw TenneT Holding reach agreement with Kreditanstalt für Wiederaufbau (KfW), acting on behalf of the German government, on the sale of a 25.1% stake in TenneT Germany for approximately €3.3Bn.

TenneT said the investment strengthens the financial position of TenneT Germany, as the owner of strategic infrastructure in Germany. The transaction follows on from a previously announced equity commitment of €9.5Bn by three large institutional investors, APG, GIC and NBIM.

TenneT chief executive Manon van Beek said, “We warmly welcome the German state via KfW as a shareholder in TenneT Germany. The German state represents one of the most important stakeholders for TenneT in Germany. 

“This co-shareholding creates valuable additional involvement, with particular attention to the increasing investment agenda and the new geopolitical reality. TenneT remains committed to ensuring a reliable, sustainable and affordable electricity supply.”

The company noted that the involvement of private investors and the German government structurally strengthens TenneT Germany’s capital base. This provides certainty for the funding for grid reinforcement in Germany and contributes to a robust and resilient European electricity system.

TenneT Holding will retain at least 28.9% of the shares in TenneT Germany. This gives TenneT Holding full participation in all important decisions. The company said the ‘synergy benefits’ of the collaboration between TenneT Netherlands and TenneT Germany will largely be retained, as both companies are jointly developing infrastructure that connects offshore windfarms in the North Sea to the electricity grid in Europe.

At closing, KfW will acquire a 25.1% stake for approximately €3.3Bn, using the same equity value following the first capital contribution from the three institutional investors. The acquisition will take place through the sale of shares held by TenneT Holding in TenneT Germany. 

The German state will participate in subsequent capital contributions made by the three institutional investors to fulfil TenneT Germany’s equity need over time and maintain its 25.1% stake. It is envisaged that the institutional investors will obtain a 46% stake in TenneT Germany over time, and TenneT Holding is expected to dilute its stake to 28.9%.