BERLIN: Germany and the Netherlands will sign an agreement on Tuesday to strengthen their cooperation on electricity grids, the German economy ministry said.
The German and Dutch governments have been in talks on the matter for months but officials say Berlin has not decided yet whether to take a stake in Dutch state-owned power transmission grid operator TenneT.
A spokeswoman for the German economy ministry said that senior officials from both governments would sign a Memorandum of Understanding (MoU) later on Tuesday, adding that both sides would provide further details after their video conference.
An official with knowledge of the discussion said the agreement would not necessarily mean Germany ends up buying a stake in the German division of TenneT.
"It's just a first step that formalises the process - nothing more, nothing less," the official said.
German media have reported that Finance Minister Olaf Scholz from the co-governing Social Democrats is backing the purchase of a majority stake in TenneT's German division, while Economy Minister Peter Altmaier from Chancellor Angela Merkel's Christian Democrats favours a stake of roughly 25%.
TenneT has been in talks with its owner for some time over how to plug a 2-3 billion euro ($2.19-3.29 billion) equity funding gap to secure its ambitious 10-year spending plan.
Scholz and his Social Democrats are generally in favour of the state playing a bigger role in Germany's grid operations, especially in light of the massive investment needed to speed up the shift towards renewable energies. Merkel's conservatives would prefer the state to play a less active role.