Hydro said the transaction does not affect its ownership of 9.4TWh of annual power production in Norway.
Following the transaction, SKS Produksjon will be fully owned by Salten Kraftsamband.
Hydro CFO Jorgen Arentz Rostrup said the stake in SKS has been a minority position and a financial asset for Hydro yielding an annual dividend of approx NOK30m ($5.59m) over the past two years.
"As SKS is located in an area where Hydro has no industrial power consumption and with no synergies to our other power operations, the divestment has no effect on Hydro’s primary aluminium production in Norway," Rostrup said.
"We will continue to develop our captive power assets in Norway over the next years".
SKS Produksjon operates solely as a power production company and distributes dividends to its owners on a regular basis.
Hydro owns 9.4TWh of renewable hydropower capacity in Norway and is currently executing an upgrade and expansion program with a total investment of about NOK1.2bn ( $222.5m) for the period 2011 to 2015.
