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RWE secures 3.2 billion Euros in grid financing from Apollo Investor

RWE announced on Monday that Apollo Global Management has agreed to provide 3.2 billion euro ($3.75 billion), resulting from its 25,1% stake in German transmission systems operator Amprion, for future upgrades of the power grid.

In a press release, RWE Power said that partners would create a joint-venture to acquire RWE's Amprion stake to finance future growth.

Apollo will make its equity investment up front and RWE will then reinvest in Amprion via the JV, to support Amprion's grid expansion.

To keep up with renewable energy growth and help the German electricity grid transition from fossil fuels, the German electricity grid requires large investments. Amprion, the Dutch government's subsidiary Tennet Germany, is also looking for investors to help cover its investment needs.

Amprion committed in April to increasing investments in its network to 36.4 billion euro in five years up to 2029. This is a 32.4% rise from the previous five-year rolling plan until 2028.

Amprion, along with three other companies, manages Germany's electricity grids. They rely on the fees charged by private and corporate users of power to generate revenue. The regulatory framework requires upgrades to power lines and equipment.

Apollo and the companies did not reveal what percentage of joint ventures Apollo will take.

Amprion announced in a separate press release that the M31 Investor Group would continue to own the remaining 74.9% of Amprion.

Apollo stated that the JV would provide "reliable and steady dividend returns through Amprion's regulated assets base".

RWE stated that the deal will help them focus on their core activities, which include power generation, renewables and batteries, as well as energy trading.

RWE will still be able to consolidate Amprion's stake into its financial statements. The transaction is expected close in the fourth-quarter of 2025. Reporting by Tom Kaeckenhoff, Ludwig Burger and Friederike Heine. Editing by Kevin Liffey and Friederike Liffey.

(source: Reuters)