Grid firm TenneT open to German state involvement with $216 billion spending plan

By Toby Sterling and Christoph Steitz

AMSTERDAM (Reuters) -The door remains open for the German state to take a stake in Netherlands-owned grid firm TenneT, company executives said on Thursday, as it seeks fresh equity to support an estimated 200 billion euro ($216 billion) investment program through 2034.

Talks for the German state to buy TenneT's German operations from the Netherlands fell apart last year due to budget constraints, but this week Berlin began weighing spending 500 billion euros on infrastructure projects.

Germany, which already holds minority participations in high-voltage power grids TransnetBW and 50Hertz, has in the past expressed interest in buying a 25% stake in TenneT Germany if there is an official sales process.

However, given the country is currently in the process of forming a new government, its position could change.

"We would welcome the German state being involved in a future financing solution," CFO Anna Freitag told reporters.

She said the company is meanwhile continuing to pursue plans to sell a stake in TenneT Germany to private investors or in an IPO.

"We would rather cater to a group of investors given the sheer size" of the company, she added.

TenneT's 2024 investments exceeded 10 billion euros as it worked to expand grids to accommodate the massive amounts of solar and offshore wind power needed to shift away from fossil fuels. 

The company's owner, the Dutch state, wants to sell its German operations - 60% of the company - to reduce its debt load and relieve Dutch taxpayers from financing German infrastructure.

CEO Manon van Beek said she was concerned that popular support for building grid infrastructure is waning due to high energy costs, of which grid costs make up 25% and rising.

Some energy firms have bowed out of auctions for additional North Sea wind farms, citing rising costs and declining profitability.

However Van Beek said she does not believe TenneT's funding plans are in doubt through 2034.

Last year the company and the Netherlands agreed on two loan facilities totalling 44 billion euros to meet capital needs through 2026. 

($1 = 0.9255 euros)

(Reporting by Bart Meijer, Toby Sterling, Christoph Steitz; Editing by David Goodman and Jan Harvey)