German investment company Aquila Capital has acquired six hydropower plants from BKK, a Norwegian energy company.
Financial details about the acquisition have not been disclosed. The power plants are located near Bergen, a city in Norway and generate about 70GWh of electricity per year, enough to fulfill the needs of about 3500 households.
Småkraft has been appointed by Aquila Capital to operate and manage the six hydropower plants. It is fully financed by investment vehicles managed by Aquila Capital.
According to Aquila Capital, Småkraft is a specialist in providing operations and development of smaller run-of-river power plants in Norway.
The alternative investment company stated that the Nordic region offer an attractive market for hydropower investments with several run-of-river power plants present in the region. It is also a mature renewable energy sector and the region has stable legal framework for businesses to flourish.
There are several opportunities for professional investors to invest in local energy markets as local energy suppliers are divesting their assets to develop increasingly specialized strategies.
BKK Production CEO Wenche Teigland said: “Through Småkraft AS Aquila Capital already has a significant presence in the local area. We have every confidence that these hydropower assets will be managed to the highest possible standard going forward. All agreements and commitments with landowners will continue in their existing form.”
Aquila Capital CEO and co-founder Roman Rosslenbroich said: "Run-of-river plants have among the best conversion efficiencies of all energy sources, with an efficiency factor exceeding 90 percent. They use proven, mature technology that, if well maintained, can poduce energy for many decades.
“The long-term stable cash flows produced by hydropower are uncoupled from volatile carbon energy types as well as other traditional asset classes such as equities and bonds, providing investors with strong diversification benefits.
"By integrating the newly acquired plants into the portfolio managed by Småkraft, we can also ensure very low operating costs.”
Recently, Aquila Capital sold a 38.4MW solar plant in Japan to a local institutional investor for an undisclosed amount. The company has been present in Japan’s renewable sector from 2012 and it is its second project.
Its strategy involves investing in potential solar plants in their early stages of development and selling them to institutional investors, once they are completed.