TenneT Establishing New Funding Structure to Separate Dutch, German Ops Into Two Standalone Companies

April 18, 2025, by Adrijana Buljan

TenneT Holding is setting up a new funding structure to facilitate the separation of its Dutch and German operations by establishing two standalone companies, each operating and funded separately, the holding company said on 18 April.

“The new funding structure is part of TenneT’s exploration of structural solutions for the equity needs of its German operations. Currently, TenneT raises all debt financing centrally at the holding level”, TenneT said.

TenneT has established TenneT Netherlands, a wholly-owned subsidiary which will serve as the holding company for the Dutch transmission system operator (TSO) business. With the corporate reorganisation, future senior debt financing for the Dutch TSO business will be raised by TenneT Netherlands and for the German TSO business by TenneT Germany.

Furthermore, TenneT plans to transfer its existing senior debt financing from the TenneT Holding level to the level of TenneT Netherlands and will solicit consent from its eligible noteholders and engage with its other debt financiers to facilitate the envisaged debt transfer. The holding company says the debt would be transferred to protect the interests of TenneT’s senior debt holders and to avoid structural subordination as a result of the anticipated raising of debt at TenneT Netherlands and TenneT Germany.

The government of the Netherlands is expected to give TenneT Netherlands an irrevocable and unconditional institutional guarantee, which will cover the company’s payment obligations under its current and future debt financing, according to TenneT Holding.

The state guarantee remains subject to the approval of the Dutch parliament.

TenneT expects to put the debt transfer into force in October 2025 upon bondholder consent; however, if sufficient consent is not obtained, the debt transfer will not be implemented, the holding company said.

Should the debt transfer not be consented and implemented, TenneT would stop the current preparations for fulfilling TenneT Germany’s equity need through third-party equity investment, and would instead continue to provide all equity to TenneT Germany itself for the coming years, with the support of the Dutch state as its shareholder.

The corporate reorganisation and envisaged debt transfer have the full support of the state of the Netherlands, TenneT’s sole shareholder, said TenneT and the Dutch government.

“As sole shareholder of TenneT, we fully endorse the steps taken to separate the Dutch and German operations. 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”, Eelco Heinen, Dutch Minister of Finance.

TenneT was looking to sell TenneT Germany since 2023, with initial plans for the German state to take over the German TSO business.

TenneT Considering Sale of German Activities to German State

Grid Connection

Since 1 January 2025, TenneT has been operating as two businesses, one in the Netherlands and one in Germany, under a one holding company, TenneT Holding, as part of the plan to bring in private investment into TenneT Germany.

On 2 January, TenneT announced that the negotiations with the German State, via KfW representing the German Federal government, were terminated after the Government of Germany informed the Dutch State that it could not deliver on the planned transaction due to budgetary challenges.

In March, Reuters reported that TenneT said it was still open for the German State to take a stake in TenneT Germany, and that the company was also considering stock exchange listing for the German TSO as an alternative to raise capital.