Germany’s acquisition of its largest power grid from Dutch state-owned TenneT Holding BV will be delayed until after the summer as government officials hammer out a deal.
(Bloomberg) — Germany’s acquisition of its largest power grid from Dutch state-owned TenneT Holding BV will be delayed until after the summer as government officials hammer out a deal.
The purchase worth as much as €30 billion ($33 billion) is spilling into the second half of the year as negotiators struggle to agree on the price and how much investment the German unit will need to improve the network, according to people familiar with the matter who asked not to be identified because the information is private. An agreement was expected as early as the end of this month.
The acquisition is part of Germany’s efforts to consolidate the country’s power grids and bolster energy security as the network needs investment that the current Dutch owners are seen as unlikely to provide. More control will also help Germany reach its goal of climate neutrality by 2045, an undertaking that requires a massive overhaul of the nation’s grid to link its industrial heartland in the south with clean energy sources elsewhere.
TenneT initially wanted the Dutch parliament to sign off on the foundation of the deal at the last pre-summer parliament session on Wednesday, but the discussions are not on the lawmakers’ agenda. Spokespeople for the Dutch and German governments declined to comment.
Complex Process
For its part, TenneT said it wants the agreement to meet three conditions: continuity of operations in Germany and the Netherlands, keeping German-Dutch cooperation for grid expansion — especially in the offshore sector — and a fair, market-based price.
“It is obvious that such a complex process takes time to find solutions that satisfy all parties involved,” Manuela Wolter, a TenneT spokesperson, said by email.
The financing structure of the company is also still under negotiation, one of the people said. While the German government is considering selling a majority stake in the unit soon after purchasing it, TenneT signed last week an €8 billion credit facility with banks to fund its capital expenditure program.
The deal is likely to become Germany’s second-largest state takeover after the €33 billion bailout of Uniper SE last year, the utility that was on the brink of collapse amid surging natural gas prices. Previously, Germany also spent €5.8 billion to support airline Deutsche Lufthansa AG during the pandemic.
–With assistance from Cagan Koc.
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