Government explores financing options for TenneT investment agenda

The investment agenda of TenneT, which operates the electricity grid in the Netherlands and in part of Germany, has grown substantially in recent years due to the energy transition. The Investment agenda amounts to €35 billion for the period 2019-2028. As a result, TenneT needs €4.75 billion to finance investments in the period up to and including 2028. In today’s cabinet meeting the government agreed a number of conditions for this financing. For example, TenneT must safeguard the public interests of Dutch energy consumers – affordability, supply security and sustainability – and the Dutch government must retain control over investments in the Netherlands.

In the months ahead the government will explore the various financing options such as a capital injection by the Dutch state, the sale or part sale of TenneT to a private party, or a form of cooperation with the German state. The House of Representatives will be given an update in mid-2020. The additional equity capital is needed in order to maintain the company’s creditworthiness and hence ensure financial continuity. If TenneT does not receive any additional equity capital, the high-voltage grid operator may eventually be unable to finance the investments it is required to make by law.

TenneT is fully owned by the Dutch state, but since 2010 has also been operating part of the German high-voltage grid. Although TenneT recoups its investments via the Dutch and German energy charges, it is required to prefinance these investments. It therefore needs an additional  €4.75 billion alongside the loan capital it raises.