Energy: German EnBW sells part of its electricity networks for 1 billion euros

The German energy company EnBW concluded on Friday the sale for 1 billion euros of 24.95% of TransnetBW, its electricity network operator subsidiary, to a consortium of German banks and insurance companies, in order to free up funds to invest in the energy transition. “EnBW sells a 24.95% minority stake in its subsidiary TransnetBW to Südwest Konsortium, a consortium of (…) 30 banks, insurance companies and companies from Baden Wurttemberg”, the German region where its networks are installed, he said in a statement. This sale will bring 1 billion euros to EnBW, according to a spokesperson.

EnBW announced in August its intention to sell two minority shares, each 24.95%, of this subsidiary. The second batch should be subject to a right of first refusal from the German public bank KfW. The group, present in several other European countries including France, however ensures that it wants to “remain a majority” in the capital of its subsidiary. TransnetBW is one of the four main electricity transmission system operators in Germany, along with Amprion, 50Hertz and TenneT. This sale "allows EnBW to obtain additional funds for investments in order to accelerate its energy transition", welcomed the group's financial director Thomas Kusterer, in a press release.

EnBW intends to invest by 2025 “4 billion euros in renewable energy and oil exit projects”. The German group also plans to spend “6 billion euros to develop electricity networks”. Germany's ruling coalition, led by Social Democrat Olaf Scholz, has set itself the target of 80% renewable electricity in its energy mix by 2030. The country therefore needs an expansion of its network of high voltage lines, in order to transport these energies, the production of which is much more decentralized than the infrastructures dedicated to fossil fuels. To achieve the government's objectives, more than 600 billion euros of investments are needed by 2030, according to a study by the consultancy firm EY.

Berlin is discussing a takeover of the German operations of TenneT, which is owned by the Dutch government, to speed up this process. According to the press, a total takeover of this unit could cost between "18 and 20 billion euros" to the German state.