Munich Re's asset management division, MEAG, is contemplating the sale of its stake in Amprion, a company managing 11,000km of high-voltage power grids in Germany.

MEAG may seek a co-investor to help address Amprion's capital expenditure requirements, a challenge regularly faced by grid owners, according to a report by Reuters.

MEAG holds an indirect 13.9% stake in Amprion through a holding company that includes Swiss Life and Talanx as investors. The company has not commented on the potential sale.

Higher interest rates have posed challenges to regulated power grid investments which resulted in reduced returns.

This has prompted network owners such as Germany's utility RWE to reconsider their stakes. In early 2024, RWE announced that it would consider selling its 25.1% stake in Amprion.

Analysts estimate RWE's Amprion stake to be worth €1.6bn ($1.68bn), implying a valuation of €886m for MEAG's stake.

The need for substantial investment is reshaping the power grid landscape. Dutch-owned power grid group TenneT recently announced plans to separate its Dutch and German businesses to facilitate growth and potential divestment of its German operations.

Germany's federal network agency estimates that upgrading the country's power networks could cost €450bn ($473bn) by 2045, with Amprion planning to invest €27.5bn up to 2029.

In a separate development, MEAG has agreed to acquire a 75% stake in the 260MW Stor-Skälsjön wind power project in Sweden.

The deal involves purchasing a 51% stake from Eolus Vind for €18.4m and a 24% stake from Hydro REIN for €8.7m.

Hydro REIN will retain its 25% stake in the project, valued at $390m on a 100% basis.

Amprion is also advancing its Windader West energy corridor project in Germany, aiming to deliver 8GW of offshore wind energy to North Rhine-Westphalia.

The project comprises the NOR-15-1, 17-1, 19-1 and 21-1 offshore grid connection points, with the first 2GW of capacity expected in 2032 and subsequent lines operational by 2036.