TenneT Holding has announced an agreement with three institutional investors – APG, Singapore’s sovereign wealth fund GIC, and Norges Bank Investment Management – for their investment in TenneT Germany.
APG is investing on behalf of the Dutch pension fund ABP.
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Through this transaction, TenneT and its only shareholder, the Dutch state, ensure the necessary equity to support the future expansion of TenneT Germany’s high-voltage grid for the coming years.
TenneT Holding CEO Manon van Beek said: “We are truly pleased to have achieved a structural solution for TenneT Germany’s equity need and I eagerly look forward to partnering with these highly reputable investors.
“With this financing solution, TenneT remains Europe’s leading cross-border TSO [transmission system operator], a key player in system integration, offshore wind connections, and market innovation.”
The key terms of the transaction include a primary equity commitment by the incoming investors of up to €9.5bn ($11.15bn) in aggregate, to be contributed partly at initial close and partly in the following years.
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By GlobalDataThe enterprise value of TenneT Germany is approximately €40bn on a cash and debt-free basis. Post-money ownership stakes are expected to be approximately 54% for TenneT Holding and 46% for the investing parties.
TenneT Netherlands and TenneT Germany will maintain their collaboration in key strategic areas, including the 2GW programme aimed at developing the offshore grid, in order to leverage mutually beneficial synergies.
The transaction is the result of a thorough assessment of TenneT and the Dutch state, concluding that a private placement of shares is the best solution.
Completion of the transaction is subject to customary conditions, including regulatory clearances, and is expected in the first half (H1) of next year.
The German government has shown interest in a possible investment in TenneT Germany, and both TenneT and the Dutch government have indicated their willingness to explore this opportunity.
TenneT plans to initiate discussions with Kreditanstalt für Wiederaufbau (KfW), which represents the German state, about the potential for KfW to invest in TenneT Germany, in collaboration with TenneT and institutional investors.
In April, TenneT unveiled a new funding structure that separates the financing for its Dutch and German TSO businesses.
Under this arrangement, TenneT Netherlands will secure the necessary funding for its operations while TenneT Germany will do the same for its business.
A significant milestone in establishing a stand-alone financing framework for TenneT Germany was the signing of a €12bn revolving credit facility (RCF), with BNP Paribas, Deutsche Bank, ING, and UniCredit serving as underwriters.
This RCF has a five-year term, with the option to extend for two additional one-year periods, making it one of the largest corporate RCFs in Europe, according to TenneT.
