Dutch pension fund ABP, through the €500 million hydropower partnership between its asset manager APG Asset Management and alternative investments manager Aquila Capital, has closed its first investment since the launch of the partnership in July with the acquisition of a 33% stake in Norwegian plant operator Tinfos AS from French mining and metallurgical group ERAMET.
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 said: “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 €250 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 said: “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 said: “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.”
About Tinfos AS
Tinfos is a leading developer of small-scale hydropower plants with 120 years of industry experience. The firm focuses on the construction and operation of small-scale hydro power plants all over Norway and participates in green incentives, such as the Swedish-Norwegian Electricity Certificate (El-Cert) market. The plants are held in special purpose vehicles (SPVs) that are either fully or partially owned by Tinfos.
The General Pension Fund for Public Employees (ABP) is the industry-wide pension fund for employers and employees of government and educational institutions in the Netherlands. ABP has 2.8 million participants and 334 billion euros in available assets (as of 30 September 2014).
About APG Asset Management N.V.
APG, a financial services provider in the collective pensions market, provides pension fund administration, asset management, management support and communication services to pension funds. For these pension funds and their 4.5 million active and retired participants in the public and private sectors, APG manages pension assets totalling about EUR 386 billion (Q3 2014). APG administers over 30% of all collective pension schemes in the Netherlands. On behalf of its clients, APG has been an active infrastructure investor since 2004, investing approximately € 5.5 billion to date.
Further information can be found at www.apg.nl
About Aquila Capital
Established in 2001, Aquila Capital is committed to provide institutional investors worldwide with alternative investment solutions in real assets, financial and private markets. Applying a multi-disciplinary investment approach, Aquila Capital’s range of alternative investments is managed by dedicated specialists in their respective asset classes and underpinned by an infrastructure that combines strong operations, stringent corporate governance and a successful track record. Aquila Capital has been dedicated to develop alternative investment solutions since its establishment. Over 200 professionals across eight offices globally are working across the whole value chain of alternative investments to generate stable, positive returns for investors.
Tel: +44 207 947 4076 / M +44 7701 089 844