German asset manager Aquila Capital has announced plans to merge its two Norwegian hydropower businesses as it bids to become Europe’s largest operator of small-scale hydropower plants.
The firm owns both Småkraft and Norsk Grønnkraft, two hydropower operators based in Norway. The assets of the latter are set to be incorporated into Småkraft to create a portfolio of about 90 plants with a close to 1TWh annual production capacity.
Both companies are financed by Dutch asset manager APG and Aquila’s own European Hydropower Fund, among other funds. APG and Aquila formed a hydropower platform together in 2014 with the hope of making investments worth up to €500 million.
A separate company called Småkraft Utbygging will be set up and tasked with the construction and rehabilitation of small-scale hydropower plants in Norway.
“The merger is the next logical step to further consolidating our existing hydropower operations in Norway,” Oldrik Verloop, managing director at Aquila Capital, said. “Also, with the formation of a dedicated hydropower construction firm we aim to build five to 10 plants every year and with that contribute to increasing the share of renewables in the European energy mix.
“We are confident that Småkraft will be one of the leading hydropower players in Europe and these developments underline our interest and engagement in the sector.”
Aquila’s move in Norway is its latest in the region after it sealed deals for wind farms in Sweden in October and November.
The merger is slated to take effect from January next year.