Danish pension fund PKA has made its first investment in the onshore wind space, taking a 30 percent stake in a 353MW project in Sweden.
PKA has partnered with turbine manufacturer Vestas (40 percent) and local utility Vattenfall (30 percent) to invest in the Blakliden/Fäbodberget wind farm, worth about €350 million.
Once operational in 2021, the site will also have a 20-year corporate power-purchase agreement with Norwegian aluminium group Norsk Hydro. The company last year signed a similar agreement for the 650MW Markbygden wind farm in Sweden being developed by the Green Investment Group and GE. Norsk Hydro’s contract covers 0.66 terawatt/hours of the project’s 1.1 TWh estimated annual output, with the remainder believed to be subject to merchant power.
PKA said the combination of the PPA and the mix of the investment trio forms an interesting platform for future onshore wind investments by the pension scheme.
“With this investment we have created a model for rolling out wind turbines in the Nordic region, which can be copied to similar investments, as we have seen with our investments in offshore wind turbines,” said Peter Damgaard Jensen, chief executive of PKA. “With experienced and solid partners – Vattenfall, Vestas and Norsk Hydro – a structure has now been created among major Nordic players in the field of energy, enabling a large wind farm that is profitable for all parties – without subsidies playing any significant role. It’s quite unique.”
Vestas confirmed the move is part of a strategy to go beyond supplying, installing, and servicing turbines to providing financial solutions or equity investments.
The new venture into direct onshore wind investments will complement PKA’s existing portfolio which includes five equity offshore wind deals and one debt offshore wind provision. It also invested in the 299MW Tees biomass plant in 2016 and the Nyhamna gas processing plant earlier this year. PKA’s investments in offshore wind yielded a 16.2 percent return last year, the pension fund said.
PKA confirmed the investment in Blakliden/Fäbodberget has been made under the new AIP Infrastructure platform unveiled by the pension fund last month, a structure held 50:50 by PKA and its partners and which has also been opened up to other institutional investors.