TenneT Germany launches €35bn debt issue to upgrade the power grid

TenneT’s German arm has launched a €35 billion ($40.8 billion) Debt Issuance Programme (DIP) to help the TSO modernise and upgrade electricity transmission infrastructure and equipment.

The inaugural programme establishes a framework for future debt issuances in the international capital markets, enabling TenneT Germany to issue senior and hybrid bonds in various currencies and maturities.

The programme follows the release of TenneT Germany’s Green Finance Framework, outlining eligible assets for financing, namely connecting more renewable energy to the electricity transmission network by installing, upgrading and maintaining infrastructure and equipment.

Commenting in a release was Dr Markus Binder, Chief Financial Officer of TenneT Germany: “The Debt Issuance Programme provides a solid foundation for sustainable and flexible funding that will support our strategic goals. 

“Following the successful launch of our Green Finance Framework, this is another significant step in further establishing TenneT Germany’s presence in the European debt capital markets.”

According to a ‘reality check’ monitoring report released earlier this year by the German government, for the country’s energy system to meet the needs of intermittent renewables, significantly more investments are needed in transmission and distribution grids, which were found to be slow.

Investment is also needed in storage, backup capacities, and interconnectors, as well as more measures to incentivise flexible electricity demand. The report suggests that the better coordinated these systems are, the lower the costs can fall.

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TenneT Germany’s financing

TenneT Germany is the largest transmission system operator in Germany based on circuit length, installed capacity and operating zone.

The scale of the expansion needed for Germany’s power grid to integrate renewables has long been a pain point for the operator, who has in the past sought financing options. 

Earlier this year, in September, the company reached an agreement with three large institutional investors in Europe for €9.5 billion ($11.1 billion at the time), coming after TenneT’s Dutch and German operations were split under a new financing structure. 

At the time, the German state also expressed interest in a potential investment, with both TenneT and the Dutch state – TenneT’s parent company – indicating they are open to this. 

In late November, Reuters reported that the German government aims to sign an agreement by early next year to buy a 25.1% stake, citing a letter from the economy ministry. 

According to this letter, Berlin has earmarked €5.8 billion ($6.7 billion) for the purchase as well as further payment obligations as part of capital increases from 2026 to 2029.