Singapore sovereign wealth fund GIC, Norges Bank Investment Management ( NBIM ), and Algemene Pensioen Groep ( APG, investing on behalf of Dutch pension fund ABP ) are acquiring stakes totalling 46% in German high-voltage electricity network TenneT Germany.

The transmission system operator is a 100%-owned subsidiary of Dutch state-owned TenneT Holding, but the German government has been anxious to bring in new equity investors, given the vast investment requirements of upgrading the national grid.

In April, TenneT announced a new funding structure whereby TenneT Netherlands will raise the financing required for the Dutch Transmission System Operator ( TSO ) business, and TenneT Germany for the German TSO business. The first step in a standalone financing structure for TenneT Germany was the signing of a €12 billion ( US$14 billion ) revolving credit facility with BNP Paribas, Deutsche Bank, ING, and UniCredit as underwriters.

Under the terms of the equity sale, TenneT Holding will still have a majority stake, at 54%. NBIM will hold 23%, while GIC and ABP will each own 11.5%.

The deal gives TenneT Germany an enterprise value of €40 billion on a cash and debt-free basis. There will be a primary equity commitment by the incoming investors of up to €9.5 billion in aggregate, to be contributed partly at initial close and partly in the years thereafter.

ABN Amro Bank and Lazard acted as financial advisers to TenneT, with De Brauw Blackstone Westbroek and Hengeler Mueller as legal advisers. For the institutional investors, RBC Capital Markets served as financial adviser and Clifford Chance as legal adviser.

Collaborative approach

"We look forward to partnering with NBIM, APG, TenneT Holding, and TenneT Germany to ensure TenneT Germany remains a leading transmission system operator," says Boon Chin Hau, chief investment officer, infrastructure, at GIC. "As a long-term investor, GIC is confident that with Germany’s collaborative and transparent approach to regulation, TenneT Germany will continue to play an important role in Europe’s continued, strong push towards decarbonization.”

"With this financing solution, TenneT remains Europe's leading cross-border TSO, a key player in system integration, offshore wind connections and market innovation," says TenneT Holding chief executive officer Manon van Beek. "This announcement marks the end of an intense period during which we have separated our Dutch and German operations within the group, implemented a new funding structure for TenneT Netherlands, and secured equity funding for TenneT Germany."

The TenneT transmission network control area includes Bavaria and runs northwards all the way to the North Sea and Baltic coasts,  giving it a critical role connecting offshore wind power in the north to major industrial centres in the south.

The transaction is subject to regulatory clearances, and is expected to be completed by the first half of 2026.