Dutch Prime Minister Mark Rutte has urged German Chancellor Olaf Scholz to come up with a bid for the German unit of grid firm TenneT, according to excerpts of a letter seen by Reuters, airing his frustration about the dragged out process.
Rutte's request is the strongest indication yet of growing tension between the two governments over a landmark energy infrastructure deal that has been in the making for nearly two years without resulting in an agreement.
A deal is expected to value TenneT Germany at somewhere between 20 billion to 25 billion euros ($22-27 billion), according to people familiar with the matter.
"We are disappointed that despite numerous concrete indications and reassurances from various parts of your government that the German state is still planning on purchasing TenneT Germany, we have not received a concrete firm offer that could provide the basis for an agreement," Rutte wrote in the previously unreported letter, dated May 17.
"As we are now in the second year of negotiations, we, together with the Boards of TenneT, urge you to make such (a) convincing offer," he said in the letter.
The German government and the Dutch Economy Ministry both declined to comment.
Rutte's comments suggest that the Dutch government is losing patience with Berlin over the TenneT (IPO-TTH.AS) transaction, and it has also started to explore a sale of the electricity grid operator's German activities to private investors as a plan B.
The Hague and Berlin have repeatedly come close to an agreement over the deal.
The efforts, led by German Economy Minister Robert Habeck, were driven by Berlin's desire to gain greater control over key energy infrastructure in the wake of Europe's energy crisis, as well as hopes a purchase will speed up the energy transition.
Berlin shelled out hundreds of billions of euros as a result of severing energy ties with Russia, bailing out suppliers and protecting industry from collapsing due to high energy costs in the wake of Russia's invasion of Ukraine.
However, differences over price, as well as Germany's budgetary issues and differing views within Berlin's ruling coalition have complicated the sale.
German Finance Minister Christian Lindner is sceptical due to concerns over whether Berlin could sell stakes in TenneT on to private investors further down the line, fearing there might not be enough demand.
Rutte, who is set to leave office this month when a new right-wing government takes power, said the sides need to reach agreement by July 1, before Berlin presents a provisional budget for 2025.
The Dutch parliament is still expected to approve a sale.
If no deal can be reached, the Dutch plan is to sell TenneT in part or whole to private investors, as there is no political support in the Netherlands for continued ownership of Germany's largest electric grid.
Germany, meanwhile, is playing for time, hoping for a lower price tag in the wake of higher interest rates and falling grid returns that are expected make it harder for the Netherlands to find private investors for the assets, the people said.
One alternative deal structure that is being considered is Germany taking a minority stake in TenneT Germany instead of buying the whole asset, the people said, adding Berlin was not under pressure to act.
A spokesperson for TenneT said there were "intensive talks" about alternatives to a full sale of its German unit to Berlin, even though the latter remains the preferred outcome, adding there was hope for progress within the next three weeks.
($1 = 0.9175 euros)
