(Bloomberg) -- Two of Germany’s biggest utilities are putting deals worth billions of euros on hold after the government failed to buy part of Tennet Holding BV, operator of the country’s biggest power-grid network.
EnBW Baden-Württemberg AG and RWE AG have delayed plans to sell their stakes in German transmission grids while they await clarity on Berlin’s next steps, according to people familiar with the matter.
Germany, Europe’s largest economy, is planning to merge the nation’s four high-voltage networks as it seeks to achieve carbon neutrality by 2045. The overhaul could cost as much as €300 billion ($333 billion), but the needs are acute: existing infrastructure is aging and power demand is set to soar as the nation seeks to link its industrial heartland in the south with wind energy in the north.
In June, Chancellor Olaf Scholz’s ruling coalition ditched plans to buy the full German unit of Dutch state-owned Tennet after it proved to be too expensive. Officials are still considering a minority share, but the collapse of the deal — a political setback for the government — is now stalling other negotiations.
EnBW has been looking to sell part or all of its remaining stake in grid operator TransnetBW GmbH, said people who declined to be named as the matter is private. Last year, state-owned bank KfW paid about €3 billion for a 25% share of the network in southwest Germany.
Meanwhile, RWE is exploring “various options” for its 25.1% share in grid operator Amprion GmbH, which covers much of the west, Chief Financial Officer Michael Müller told reporters on an earnings call earlier this month. The stake was valued at around €1.6 billion, Bernstein analysts including Deepa Venkateswaran said in a research note in May.
Both companies have parked their sales efforts due to the deadlock surrounding Tennet in Germany, the people said.
Both RWE and EnBW declined to comment.
The two utilities — which don’t have their own transmission lines — are investors in the grid operators. They have an interest in selling these stakes to help finance hefty investments in their own transformation as part of the energy transition. RWE is planning to spend as much as €55 billion and EnBW up to €40 billion by 2030.
--With assistance from Eva Brendel.
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