*

Buyers are APG, Norges Bank, and Singapore's GIC

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Sale follows failed attempt to sell to Berlin last year

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Berlin considers taking minority stake in TenneT Germany

(Adds deal size benchmark in paragraph 3, German government

comment in paragraph 13, details on talks with Germany in

paragraph 14, advising banks in paragraph 18)

By Bart H. Meijer, Andres Gonzalez and Christoph Steitz

THE HAGUE/LONDON/FRANKFURT, Sept 24 (Reuters) - The

Dutch government is selling 46% of power grid operator TenneT's

German unit to an investor consortium for up to 9.5 billion

euros ($11.3 billion), it said, kicking off the separation from

a business it has long been trying to divest.

The sale to a consortium of Dutch pension fund manager APG,

Singapore's sovereign wealth fund GIC and Norges Bank Investment

Management (NBIM), operator of the world's No. 1

sovereign wealth fund, comes as funding needs for power lines

soar across the continent, forcing owners to seek new capital.

Under the agreement, the consortium will take a stake of

46% in TenneT Germany via a private placement of new shares by

the Dutch government, in what marks Europe's third-largest deal

this year according to LSEG data.

The deal follows an unsuccessful attempt to sell TenneT

Germany to the German government last year.

With more than 14,000 kilometres (8,699 miles) of power

lines, TenneT Germany is the country's biggest operator of

high-voltage transmission grids. Parent TenneT is

also the sole grid operator in the Netherlands.

APG'S STAKE IN TENNET GERMANY TO BE 11%

The consortium's investment will provide TenneT Germany with

8.5 billion euros it needs to sustain its credit rating and an

extra buffer to limit risks for the Dutch state, the Dutch

finance ministry said.

APG said it would acquire about an 11% stake in TenneT

Germany, while NBIM said it has a 21.8% stake, which would leave

GIC with the balance of 46%.

APG CEO Ronald Wuijster told Reuters it had been working on

the deal for more than a year and many investments were needed

in European infrastructure.

"We need to work very hard to make our infrastructure better

and energy transition is a very important element of that," he

said.

"This asset offers us a relatively secure, stable cash flow

that is also of great interest for the members of the pension

fund," he said, adding that APG sees Germany as a stable and

reliable country.

Wuijster said the fund was looking to get a board position.

GERMANY EXPECTED TO BUY MINORITY STAKE

Germany continues to consider a minority stake in TenneT

Germany, Dutch finance minister Eelco Heinen said, after such

plans fell apart last year under the previous government.

A spokesperson for Germany's economy ministry confirmed

this.

TenneT said it intended to enter talks with German

state-owned lender KfW over the matter, with more

clarity on possible German investments expected before the end

of the year.

Germany, which already holds minority participation in

high-voltage power grids TransnetBW and 50Hertz

, has previously expressed interest in buying a 25%

stake in TenneT Germany.

Sources told Reuters in May that a sale of new shares in

TenneT Germany could raise up to 12 billion euros, either via a

private placement or an initial public offering in what could

become one of Europe's biggest deals this year.

In a sign of how big funding needs for grid expansion are,

TenneT Germany's smaller peer Amprion this month secured 3.2

billion euros from Apollo Global Management ( APO ) in a deal

with RWE.

ABN Amro, Lazard ( LAZ ) and Deutsche Bank served as advisors to

TenneT, while the investor consortium was advised by RBC Capital

Markets.

($1 = 0.8494 euros)