In this article, Drs. Tim Oliver Brandi and Carsten Corino of Gleiss Lutz describe the privatisation of municipal utilities that is currently taking place in Germany following the energy law reform of 1998 and they examine the opportunities and pitfalls that face potential foreign investors in this area. Gleiss Lutz is the German law firm with whom Herbert Smith have a strategic alliance
I. Public utilities as most important local energy-providers in Germany
In Germany, energy supply on a local level takes place primarily through municipal public utilities ("Stadtwerke"). Altogether there are around 950 public utilities in Germany, of which some 350 are still managed as public law institutions and approx. 600 are already managed as private law companies (limited liability companies or stock corporations). To a large extent, these public utilities still have a de facto monopoly so far as providing energy for the local consumer is concerned. That includes private households as well as
