Dutch government seeks to privatize TenneT

In a recent letter to the Dutch parliament, Finance Minister Wopke Hoekstra said he plans to privatize or sell off a stake in TenneT.

Hoekstra said TenneT needs more equity to invest in grid upgrades, as new energy sources such as solar and wind are straining networks.

In TenneT’s $38.7 B (€35 B) investment plan for the 2019-2028 period, around $25 B (€23 B) has been allocated to new investments in Germany, while $13 B (€12 B) will likely be spent in the Netherlands. Hoekstra said Tennet needs about $5 B (€4.75 B) through 2028 to remain creditworthy and financially sound.

“Given the size of the own funds requirement and the type of investments (large onshore projects), such financing does not offer a solution this time,” Hoekstra said, adding that a less favorable regulation scenario in Germany could even increase its capital requirements from $5 B (€4.75 B) at present to $7.4 B (€6.75 B).

In order to raise these funds, the government is planning to sell Tennet to a private party, or it may consider some form of cooperation with the German state. “In this context, discussions are taking place with the German government, among others,” Hoekstra wrote.

Source: PV Magazine