AMP plugs €151m into Swedish district heating

The firm has provided mezzanine debt to a portfolio of 43 assets in a sector increasingly favoured by institutional investors.

Australia’s AMP Capital has sealed a Skr1.47 billion ($169 million; €151 million) debt investment in a Swedish district heating portfolio.

The mezzanine debt deal covers local firm Solør Bioenergi’s portfolio of 43 heating assets with a total capacity of 620MW across a varied residential, municipal and industrial network.

The wood-based bioenergy group is also active in Poland and Norway, where last month it completed the acquisition of Nordic Bioenergy Infrastructure.

“Solør Bioenergi is an established business with a highly experienced management team and a quality portfolio of infrastructure assets,” said Emma Haight-Cheng, an AMP Capital infrastructure debt partner. “AMP Capital has worked closely with Solør Bioenergi and SEB to structure a unique and flexible mezzanine solution which meets their requirements.”

Infrastructure Investor understands the investment was made through AMP Capital’s third infrastructure debt fund, which it is currently raising with a $2 billion target. The vehicle’s predecessors raised $500 million and $1.1 billion respectively. AMP declined to comment.

The Swedish district heating market has been attracting attention from investors recently. JPMorgan Asset Management bought Värmevärden from Macquarie Group and Capstone Infrastructure in February for about €350 million, while Infranode last month added to its acquisition of Vasa Varme in October 2014 with an investment in heating company Eneo Solutions.

Infranode is also competing with Infracapital to buy Kemab from the Karlskoga Municipality.