TenneT to woo retail investors with power line offer

FRANKFURT Wed Jan 30, 2013 4:28am EST

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FRANKFURT Jan 30 (Reuters) - Power grid operator TenneT hopes to answer its own Schleswig-Holstein question - How to lessen local opposition to a planned electricity transmission line? - by selling a stake in the project to retail investors.

The attraction? - TenneT said on Wednesday returns of 4.5-5.0 percent could probably be achieved under current capital market conditions.

Individuals will have to invest a minimum 1,000 euros ($1,350) in the 150-kilometre line along the North Sea coast between Niebuell and Brunsbuettel in Schleswig-Holstein state, which borders Denmark. Chancellor Angela Merkel's cabinet agreed a nation-wide grid plan last month.

The line will be part of 2,800 kilometres of high-voltage power lines being built as Germany switches from nuclear and fossil fuels to more renewable energy, such as wind power from offshore and near the coast.

"Through this measure (stake sale) and ... dialogue to identify the layout of the line, we want to promote acceptance to ensure one of the most important projects of the energy switch succeeds," TenneT board member Lex Hartmann said.

Schleswig-Holstein Prime Minister Torsten Albig said: "The network expansion will only work if we bring on board the people in the region".

The switch to renewables - the result of a policy reversal after the Fukushima disaster in Japan in 2011 - has to include more grid capacity, new routing and an overhaul of grids.

The new national grid plan sets limits on legal options that opponents can pursue and put national coordination of the necessary grid work at the energy regulator.

TenneT said its "citizen bond" hinged on approval of the relevant finance authorities, which it hoped to obtain for an envisaged start in the second quarter.

The citizens' shares would not exceed 40 million euros or 15 percent of the total investment budget for the line, which is key for the sparsely populated Schleswig-Holstein's goal of supplying 8-10 percent of all Germany's power by 2020.

TenneT TSO GmbH is the German arm of Dutch TenneT BV. It bought the strategically crucial north-south power grid formerly owned by utility E.ON in 2009. ($1 = 0.7420 euro) (Reporting by Vera Eckert; Editing by Dan Lalor)

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