Infinis Energy has signed an agreement to divest its hydro portfolio for cash consideration of £20.5m.

Under the terms of the agreement, Infinis will sell all of its Welsh hydro sites, totaling 14MW, to Dwr Cymru Welsh Water and the remaining hydro sites, totaling 3MW, to H20 Power.

The transaction proceeds will be used by Infinis Energy to further develop its onshore wind portfolio in line with its existing strategy.

Infinis chief executive Eric Machiels said: "This will enable Infinis to streamline its operational portfolio by focusing on its core landfill gas and onshore wind businesses.

"It also allows us to recycle capital to continue to develop our onshore wind portfolio which remains central to our growth plans."

The Welsh hydro operations disposal is subject to approval from Welsh Water’s lenders whereas divestment of the remaining sites is conditional upon Welsh Water transaction completion.

The transaction is scheduled to be competed in or around February 2015.