Aquila Capital has announced a €250 million (US$269.7 million) expansion of its partnership with Dutch pension investor APG in European hydropower, now up to €550 million (US$593.3 million). The investment will facilitate the expansion of Norwegian-based Småkraft AS, the largest operator of small-scale hydropower plants in Europe.
Smakraft has 110 operational plants, producing nearly 1.2 TWh of electricity annually. In late 2018, the company announced plans to expand in order to produce 2 TWh annually through new run-of-river plants and the acquisition of existing plants. The investment will support Småkraft’s aim of building 10 new small hydropower plants each year.
“We are delighted to expand our long-running and successful partnership with APG. As we increase the share of renewables in Europe, Norwegian hydropower will play a vital role,” said Roman Rosslenbroich, co-founder and chief executive officer of Aquila Capital.
In a recent GRESB assessment of Aquila Capital’s assets, Småkraft was awarded the maximum five-star rating. It was ranked second out of 24 in an analysis of the Northern European renewable power maintenance and operation sector.
Aquila Capital said the small hydropower sector is attractive to investors due to the long-term nature of the assets, the technological robustness and its sustainability credentials. Aquila Group is a long-term investor in essential, real assets. The business centers on secular and sustainable trends in renewable energy, social housing, green logistics, infrastructure, timber and agriculture.
“As a pension investor, we are continuously looking for attractive infrastructure investments worldwide that help us realize long-term and responsible returns for ABP and other pension fund clients we work for,” said Patrick Kanters, managing director global real assets at APG. “By increasing our commitment to Småkraft, we are enabling the European energy transition from fossil fuels and contribute to reducing carbon emissions, in line with the ambitions of our pension fund clients.”
APG is the largest pension delivery organization in the Netherlands. APG performs services on behalf of (pension) funds and employers in the sectors of education, government, construction, cleaning and window cleaning, housing associations, energy and utility companies, sheltered employment organizations, and medical specialists.