Mirova’s Fund II teams up with Infranode in Norwegian heating deal

The sale of Oslofjord Varme to a consortium also including Infranode represents the first realisation from iCON’s €500m second fund.

Mirova, the sustainable investment arm of France’s Natixis Investment Managers, has secured the first investment of its second infrastructure fund after it co-led a consortium to buy Norwegiandistrict heating firm Oslofjord Varme.

The French firm and Swedish fund manager Infranode, have each taken a 42.5 percent stake in the company. Norwegian insurance firm Kommunal Landspensjonskasse (KLP) is on board with a 15 percent share.

Founded in 1989, Oslofjord Varme now operates a cooling and heating network covering 119km. Its annual heating and cooling sales total approximately 376GWh and 63GWh, respectively.

Mirova is funding its portion of the acquisition through its Core Infrastructure Fund II, launched towards the end of last year. The vehicle is believed to be targeting in excess of €1 billion and secured a €100 million commitment from Swedish pension scheme AP3. It is targeting returns of at least 8 percent. While Mirova has previously invested in Sweden via its renewable energy vehicles, the latest deal is its first in the country through its core infrastructure strategy.

Oslofjord Varme is Infranode’s fifth investment from its debut infrastructure fund, which closed in December on SKr4.45 billion ($530 million; €446.9 million). All five of Infranode I’s investments have at least partially been active in the Nordic heating sector and the fund is now said to be just under 50 percent invested.

For iCON, which invested in the district heating company through its €500 million iCON Infrastructure Partners II fund in April 2014, the deal represents the first realisation from the vehicle. Other assets owned by the fund include the US-based Mountaineer Gas, Firmus Energy in Northern Ireland and Verbrugge International in the Netherlands.