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Aquila adds further six plants to hydro fund

The projects, all located in Norway, produce about 70GWh of power per year and add to the company’s growing presence in the Nordics.

German investment firm Aquila Capital has acquired six hydropower plants in Norway through its European Hydropower Fund.

The projects, which have an annual power production of about 70GWh, were all bought from local power company BKK. Aquila declined to state the size of the deal.

The run-of-river plants, particularly in the Nordics, have been targeted by Aquila and the fund as a result of local energy suppliers such as BKK employing a strategy of divesting smaller hydropower plants in favour of owning larger projects and Aquila envisages a growing number of opportunities in the region for the fund. Some 98 percent of Norway’s power needs is provided by hydropower.

Upon merging its two Norwegian hydropower businesses in December, Aquila said it aims to become Europe’s largest operator of small-scale hydropower plants. The company has invested about €800 million in hydropower since its formation in 2009 and owns an installed capacity of about 500MW. The hydropower fund, with a targeted IRR of between 7 and 9 percent was the first of its kind when it launched in July 2015 and is open until the end of 2018.

“Run-of-river plants have among the best conversion efficiencies of all energy sources, with an efficiency factor exceeding 90 percent,” said Roman Rosslenbroich, Aquila Capital’s chief executive. “They use proven, mature technology that, if well maintained, can produce energy for many decades. The long-term stable cashflows 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.”