Dutch pension fund ABP has acquired a 33% stake in Norwegian plant operator Tinfos AS from French mining and metallurgical group ERAMET.
The transactions was completed via the EUR500 million hydropower partnership between ABP’s asset manager APG Asset Management and alternative investments manager Aquila Capital.
Tinfos operates two large-scale and nine small-scale run of river hydropower production facilities in Norway producing a mean annual production of about 279 GWh. Through Tinfos the APG/Aquila partnership will invest in the construction of additional Norwegian hydropower plants to more than double the company’s annual production to around 600 GWh by 2020. The majority shareholder in Tinfos remains a Norwegian industrial family through Monial AS.
The investment in Tinfos allows the APG/Aquila partnership to plug into Norway’s blue-green hydropower battery network, which is emerging as a potential key element in the success of the massive investment being made in on-and offshore wind power around the Baltic and North Seas. Hydropower plants can provide a stable and predictable renewable energy source balancing supply to the electricity grid to offset the variable output inherent in wind power generation. These two renewable energy sources, combined with the intermittent power supply generated by solar power, will play a vital role in allowing the EU to achieve its “20-20-20” targets by 2020, namely:
• A 20% reduction in EU greenhouse gas emission from 1990 levels;
• Raising the share of EU energy consumption produced from renewable resources to 20%;
• A 20% improvement in the EU’s energy efficiency.
Patrick Kanters, Managing Director Global Real Estate & Infrastructure at APG, says: “This is a very significant first step in the sustainable investment strategy of the APG/Aquila hydropower partnership as it firmly aligns us with the EU’s efforts to achieve its energy and emissions targets by 2020. It demonstrates the increasingly interlinked nature of Europe’s fast-growing sustainable energy markets and will contribute to the region’s urgent need to ensure the security of future supply.”
APG commissioned Hamburg-based Aquila Capital to establish an investment vehicle dedicated to hydropower infrastructure through which to make investments in operational plants and develop new projects across Europe. Through APG, ABP has committed EUR250 million to the venture. When the capability to make use of debt financing is taken into consideration, the total enterprise value of the investments is projected to amount to as much as €500 million. Aquila Capital is providing the operational management of the hydropower assets as well as portfolio management services to the partnership.
Oldrik Verloop, Co-Head of Hydropower at Aquila Capital, says: “The investment in Tinfos is a large boost to the capabilities of our partnership with APG in the hydropower market and allows us to take greater advantage of new opportunities as they arise. Renewable energy is a sector in which Aquila specialises and we expect the integration of European markets to increase the potential number and complexity of these opportunities.”
Tor Syverud, CEO of Tinfos says: “We welcome the investment of the APG/Aquila partnership in Tinfos. Their operational expertise in the hydropower market, combined with the long-term commitment of a major institutional investor is a good match for our business philosophy and bodes well for our future growth.”
