Watson Farley & Williams (“WFW”) has advised Enervie Group (“Enervie”) on its outsourcing agreement with the German municipalities of Plettenberg and Werdohl in the North-Rhine Westphalia region to manage their gas and water supply for an initial term of 10 years on a fixed lease income basis. Structured as an operating lease model the agreement was signed in November. Enervie is expected to take charge of operations in early 2023.

Enervie subsidiaries Mark-E (supply) and Enervie vernetzt (distribution grid operator) will work directly with local utility companies Stadtwerke Plettenberg and Stadtwerke Werdohl on a long-term basis as part of the agreement, with ownership remaining with the latter who will continue to finance all relevant physical assets which will be managed by Enervie vernetzt as grid operator. Existing customer relationships and most employees will be transferred to Enervie vernetzt in relation to the grid operation and to Mark-E regarding the supply activities.

The new operating lease model maximises efficiency, especially as regards sustainable and reliable grid operations, and ensures consumers will benefit both from Enervie’s extensive experience in ensuring fair prices for their customers and the wide range of services they offer. Given its size and extensive experience in sector, Enervie is also well placed to manage crises and respond promptly to the ever-changing conditions in the energy markets.

Founded in 2006 and headquartered in Hagen, North-Rhine Westphalia, Enervie is an energy supplier specialising in energy production, distribution, trading and sales services.

The multidisciplinary WFW Germany team that advised Enervie was led by Dusseldorf Energy Partner and Office Head Thorsten Volz and Managing Associate Britta Wißmann. Tax expertise was provided by Partner Verena Scheibe and Managing Associate Verena Weider and employment law expertise by Partner Andreas Wiegreffe and Managing Associate Nora Fleischauer, all in Hamburg. Munich Partner Felix Siebler and Hamburg Associate Jonathan Möller advised on the public law aspects of these agreements.

Thorsten commented: “This new lease model, which is currently unique in the German energy markets, contributes significantly to securing reliable affordable energy and water supplies for Plettenberg and Werdohl. We are delighted to have been able assist our long-standing client Enervie in structuring and implementing this innovative new model that could serve as a template for other agreements with municipalities across Germany going forward”.