© BMWE / Holger Vonderlind
German government acquires 25 per cent stake in TenneT Germany
The government is taking a minority stake in the German division of the Dutch state-owned company. Responsible for approximately 14,000 kilometres of electricity grid, TenneT is the largest of Germany’s four transmission system operators, with a total company value of around €40 billion.
This move gives the government greater strategic control over critical infrastructure and ensures the expansion of the grid. With this stake, the government gains the ability to exert influence. In addition to co-determination rights regarding the company’s management and business plans, it can, for example, appoint voting representatives to the shareholder and supervisory bodies.
In times of geopolitical tension, such a state stake is seen as an important security tool to mitigate risks such as energy dependence, since the electricity transmission grid forms part of Germany’s national security.
New transmission lines planned by TenneT in the coming years
By 2030, TenneT plans to build around 30 gigawatts of new subsea cables to connect offshore wind farms in the North Sea (read more about this in the feature article under ‘In the spotlight’). The digitalisation of the transmission network through smart grid projects is also benefitting from government funding and regulatory support. Smart grids are considered a key prerequisite for the transition to renewable energy sources.
The contract for the Federal Government to acquire a 25.1 per cent stake in TenneT Germany was signed on 3 February. Further steps are required to implement the contract, such as the Federal Network Agency’s decision regarding the unbundling requirements under the Energy Industry Act (EnWG). The acquisition will be carried out through the government’s development bank KfW, on market terms (via a KfW mandated transaction [Zuweisungsgeschäft]).
The government is securing the share purchase and the committed capital contributions through KfW by assuming the financing risk, ensuring that no funds are drawn from the federal budget. The refinancing and administrative costs incurred by KfW will be covered by the federal budget, while any future dividends or potential sales proceeds will flow to the state.