Norwegian investment firm sells its entire hydro portfolio for $545M

(Credit: Orkla)

Orkla has entered into agreements to sell its entire hydropower portfolio in two separate transactions valuing the portfolio at NOK 6.1 billion (~$545 million USD) on a cash and debt-free basis.

The hydropower portfolio is held through 100% ownership of three separate holding companies: Sarpsfoss Limited, Orkla Energi AS (85% owner of AS Saudefaldene), and Trælandsfos Holding AS.

Hafslund AS (90%) and Svartisen Holding AS (10%) are acquiring Sarpsfoss Limited. The underlying assets consist of run-of-the-river hydropower production in Sarpefossen and Mossefossen, with a combined average annual production of 536 GWh.

Å Energi acquires Orkla Energi AS and Trælandsfos Holding AS. The Saudefaldene assets are leased until the end of 2030 when Statkraft assumes ownership in exchange for regulated compensation. The assets have an average annual production of 1,860 GWh, of which 1,072 GWh are subject to fixed delivery commitments. The Trælandsfos assets have an average annual production of 61 GWh.

At the Capital Markets Day in November 2023, Orkla communicated that the company was exploring opportunities to “best create value” from the hydropower assets, including a potential sales process.

“Orkla is an industrial investment company with a brands and consumer-oriented scope. By selling the hydropower portfolio, we reduce complexity and deliver on our communicated strategy,” says Orkla’s President and CEO Nils K. Selte.

Orkla’s estimated accounting gain from these transactions is approximately NOK 5 billion (~$447 million USD). The transactions are subject to approval by the relevant competition authorities and the Norwegian Ministry of Energy and are expected to close by the end of the third quarter of 2025.

In connection with the transaction, DNB Markets, a part of DNB Bank ASA, acted as financial adviser, and Wiersholm law firm as legal adviser to Orkla.

Hafslund is an energy and infrastructure group consisting of three business areas. Hafslund owns and operates 81 hydropower plants, amounting to 21 TWh, from four power production areas: Aurland, Hallingdal and Valdres, Innlandet, and Glomma. Hafslund AS is 100% owned by the Oslo municipality.

Svartisen Holding is a Norwegian entity owned by three Finnish utilities; Vantaan Energia Oy, Oy Turku Energia – Åbo Energi Ab, and Keskusosuuskunta Oulun Seudun Sähkö. Svartisen Holding AS owns 55-year off-take rights related to the Svartisen hydropower plant in Meløy and 10% of Hafslund Produksjon Holding AS.

Å Energi is Norway’s largest vertically integrated renewable energy company, with operations across the entire value chain, from power production to end customers. Å Energi operates 73 wholly and partly owned hydropower plants, generating around 11.3 TWh each year, and is the second largest grid operator, supplying power to approximately 432,000 customers in Buskerud and Agder. Å Energi is owned by 30 municipalities in Agder and Buskerud, Vardar, Lier Everk Holding, and Statkraft.

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