Cabinet guarantees billions of euros in loans to electricity grid company TenneT

The government guarantees any loans taken out by grid operator TenneT for necessary investments in the Dutch electricity grid. The state company expects to need around 90 billion euros for this over the next 10 years. This guarantee ensures that TenneT can loan money more cheaply on the capital market, and a capital contribution from the State is not necessary.

The Minister of Finance, Eelco Heinen, and the Climate Minister, Sophie Hermans, have reported this to the Tweede Kamer, the lower house of Dutch parliament. The intention to provide this guarantee is included in the spring memorandum, which will be sent to the Tweede Kamer on Friday.

As previously reported, the Cabinet is pushing for an IPO or private sale of TenneT’s German branch. Talks with private investors are underway to gauge their interest. The Cabinet will decide between the two options before the summer.

If the market interest is disappointing, then the Dutch State will provide for TenneT Germany's capital needs. This branch will also need billions of euros in investment over the next few years to strengthen the electricity grid. This part of the business was set to be sold to the German State in the past, but they were unable to complete the necessary financing.