August 13, 2012 / 6:50 AM / in 5 years

RPT-Insurers eye TenneT's German power grid-report

FRANKFURT, Aug 13 (Reuters) - German insurers Allianz and Munich Re are interested in buying the German business of Dutch grid operator TenneT and stand ready to fund much needed upgrades in power transmission, a German newspaper reported on Monday.

TenneT’s financing problems have been a major obstacle in Germany’s offshore wind expansion and the German government is urging the company to sell the German unit, daily Handelsblatt reported, citing people familiar with the negotiations.

Two sources familiar with the matter had told Reuters on Friday that Germany’s Economy Minister Philipp Roesler will discuss TenneT’s financing woes when he meets with the Dutch government this week.

TenneT is responsible for connecting offshore wind plants in the North Sea with the German electricity grid but has said it cannot afford the necessary investment, which Handelsblatt put at 15 billion euros ($18.5 billion).

Allianz declined to comment. A Munich Re spokeswoman said she could not confirm any interest in the TenneT assets.

Like many other insurers, Allianz and Munich Re are looking for long-term infrastructure investments with stable income -akin to bonds - that they can use to match against their long-term obligations to policy holders.

Officials at TenneT were not immediately available for comment.

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