Denmark-based Dong Energy has agreed to divest its stake its Swedish hydro power company Kraftgården to Voimapiha, for SEK5.2bn (€605m).

As per the agreed terms, the company will sell its ownership stake of 25.673% to Voimapiha – a consortium consisting of the three Finnish energy companies Kymppivoima, EPV Energy and Helsingin Energia.

Commenting on the transaction, Dong Energy CEO Henrik Poulsen said the sale of stake in the Swedish hydro power company will take the company forward in achieving its financial action plan.

"Together with the announced divestments of our Danish and Polish onshore wind businesses, we have now divested a total of approx. DKK 7 billion of non-core activities, compared to the DKK 10 billion non-core divestment target we have set for 2013-2014," Poulsen added.

According to the company, Kraftgården owns and operates seven hydro power plants along the Swedish river Indalsälven, with a total capacity of 626MW.

Since 1994, Dong Energy has owned Kraftgården as a joint venture together with Vattenfall.

Meanwhile, the company has outlined plans to invest around DKK 30bn (€4.02bn) during 2013 and 2014. These investments will primarily be made in offshore wind farms.