TenneT has announced a significant restructuring of its funding to facilitate the separation of its Dutch and German operations into two independently operating and financed entities.
This move is aimed at addressing the equity needs of its German operations and ensuring a robust financial foundation for both companies.
The proposed new funding structure will involve transferring TenneT’s existing senior debt from the holding level to TenneT Netherlands.
This strategic shift is designed to safeguard the interests of senior debt holders and prevent structural subordination due to anticipated new debt at the operational levels of TenneT Netherlands and TenneT Germany.
TenneT CFO Arina Freitag said: “Today is an important step towards the formation of two separately financed national TSOs under the umbrella of TenneT Holding, in line with TenneT’s strategic objectives. With this new financing structure, we can continue to ensure a safe and reliable electricity supply in the Netherlands and Germany.”
To support this transition, TenneT Netherlands is poised to receive a state guarantee from the Netherlands, covering its payment obligations under both current and future debt financing. This includes debt involved in the planned transfer, with certain exceptions.
The guarantee is also expected to include a keep-well obligation, although it is still pending approval from the Dutch parliament.
Once approved, the state guarantee is anticipated to bring TenneT Netherlands’ senior debt credit risk in line with that of the Dutch state itself.
Dutch Minister of Finance Eelco Heinen said: “We are confident that the new funding structure, supported by the state guarantee, will provide TenneT Netherlands with a strong financial basis to continue to invest in the Dutch electricity grid, and at the same time enable separate funding of TenneT Germany.”
In a separate development, TenneT has also launched an initiative to offer over 9GW of capacity on its high-voltage grid to high-energy users during off-peak hours.
