AMSTERDAM (Reuters) – Dutch state-owned power grid company TenneT will realign its funding structure to facilitate the separation of its Dutch and German activities, with a state guarantee on loans needed for investments in the Netherlands, it said on Thursday.
The corporate reorganisation will enable it to raise debt for the Dutch and German businesses through two different entities, it said. TenneT decided in December to separate the businesses in order to facilitate growth and a potential sale of the German arm.
The Dutch state will provide TenneT Netherlands with a guarantee on the loans for the estimated 90 billion euros ($102 billion) in investments it needs in the next 10 years, Dutch Finance minister Eelco Heinen said.
That will lift TenneT Netherlands’ credit rating to match the triple-A rating of the Dutch state, providing it with cheaper financing options, he added.
“We are confident that the new funding structure, supported by the state guarantee, will provide TenneT Netherlands with a strong financial basis to continue to invest in the Dutch electricity grid, and at the same time enable separate funding of TenneT Germany,” Heinen said.
TenneT last month invited parties interested in taking a stake in its German operations to come forward, as it was raising fresh equity to support an estimated 200 billion euro investment programme through 2034 and has indicated it could sell all of its German operations.
It said it remained open to the German state taking a stake in TenneT, after talks for Berlin to buy the German operations from the Netherlands collapsed last year due to budget constraints.
TenneT expects to effectuate the debt transfer for the new financial structure by October 2025, after having received consent from senior debt holders.
($1 = 0.8803 euros)
(Reporting by Bart Meijer. Editing by Jane Merriman, Kirsten Donovan)
