TenneT Halts German Grid Sale Amid Budgetary Woes

Dutch state-owned grid company TenneT has ended negotiations to sell its German business to the German government due to budgetary challenges. The sale, valued at 20-25 billion euros, was crucial for Germany's green energy transition. TenneT will now explore alternative funding, backed by a 25 billion euro loan from the Dutch state.

Dutch state-owned grid company TenneT said on Thursday it had ended talks to sell its German business to the German government and would now explore alternative funding options for the business. Berlin had asked the Netherlands in 2023 to sell the grid, Germany's largest, in a deal that would have valued it around 20-25 billion euros ($21-27 billion), as it was seen as crucial infrastructure for the country's transition to green energy.

But the sides failed to agree a deal amid Germany's budget crisis, leading Dutch Prime Minister Mark Rutte in May to make a personal plea to German Chancellor Olaf Scholtz to make a bid. "This announcement comes after the Federal Government of Germany informed the Dutch State that it cannot deliver on the planned transaction due to budgetary challenges," TenneT said in a statement.

Germany's Economy Ministry was not immediately available for comment. TenneT has Europe's largest capital spending plan, investing 160 billion euros in the coming decade in grid improvements, including building out the network needed to support wind turbine parks in the North Sea.

TenneT said it remained "fully committed" to its investment plan, backed by the Dutch state, which gave it a 25 billion euro loan for 2024 and 2025. The Dutch government was not immediately available for comment.

In a letter to parliament on May 25, the Dutch finance minister said: "Should the sale of TenneT Germany not proceed, a choice must be made on a solution for the short term financing needs of TenneT ... and a structural solution for its capital needs." ($1 = 0.9317 euros)