Norges, GIC, APG to invest 9.5 billion euros in TenneT’s German grid
[FRANKFURT] A consortium led by Norges Bank Investment Management (NBIM) will invest as much as 9.5 billion euros (S$14.4 billion) during the next four years into TenneT Holding BV’s German power grid in exchange for a 46 per cent stake.
Singapore’s wealth fund GIC and Dutch pension manager APG are also part of the consortium that will subscribe for new shares in TenneT Germany, according to a letter by Dutch Finance Minister Eelco Heinen to the parliament on Wednesday (Sep 24). NBIM aims to invest 4.5 billion euros until 2030, while APG and GIC will invest 2.5 billion euros each.
APG said in a statement it would acquire about an 11 per cent stake in TenneT Germany. Norges said it has a 21.8 per cent stake, leaving GIC with the remaining 13.2 per cent.
The consortium, with its investment, provides TenneT Germany with 8.5 billion euros it needed to sustain its credit rating and an extra buffer to limit risks for the Dutch state.
The deal values the TenneT German grid at 40 billion euros. Bloomberg News reported last week that the government decided to proceed with a private placement instead of an initial public offering.
State-backed TenneT has long sought to divest the German network, but talks on a sale to development bank KfW collapsed in 2024 after the cost proved too much for the government’s stretched finances. The latest deal allows the unit to plan investments, with billions of euros needed to upgrade grid infrastructure that’s vital to its 2045 net zero goals.
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The German government has expressed interest in a potential investment in TenneT Germany, and both TenneT and the Dutch state have indicated they are open to this, according to a separate statement by TenneT on Wednesday.
Heinen said he will resume talks with his German counterparts and aims to provide an update about their participation by the end of this year. “We are now the largest shareholder, even after the Germans come on board, and it is up to the next government to decide what to do with that,” Heinen told reporters in the Hague Wednesday. The Netherlands is heading for elections in October.
Transmission lines, converters and connections all require significant work in Germany as the network expansion hasn’t kept pace with burgeoning growth in renewable-energy output. Cables that transport electricity from the northern part of the country – where many wind farms are located – to industrial areas in the south are often congested, driving up costs as other power plants have to be brought online.
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APG’s chief executive officer Ronald Wuijster cited the agreement as an example of much-needed investments in European infrastructure. The Dutch pension fund manager aims to have a seat on the supervisory board of TenneT Germany, as do the other investors, he said in a phone interview.
This is the second German grid deal in recent weeks. German operator Amprion attracted international attention in early September when private equity giant Apollo Global Management entered a joint venture with RWE to invest in the firm.
Returns on grid assets are regulated, making it a relatively risk-free business. TenneT Germany’s 2025 regulated asset base was pegged at 37.2 billion euros in a July presentation, rising to about 85 billion euros by 2029.
The Dutch company, whose German grid stretches from the northern coast down to the Alps, said earlier this year it aims to invest 200 billion euros in the next 10 years in both countries.
The new shareholders will contribute the capital that is needed for the expansion of the network and TenneT Group will dilute their stake, Wuijster from APG said. But no firm commitments are made beyond 2030, only openness to consider further investment opportunities.
TenneT was advised on the transaction by ABN Amro Bank and Lazard, while Rothschild & Co advised the Dutch government. BLOOMBERG, REUTERS
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