Small hydro | Investing in small hydro Investment firms are acquiring small hydro projects to add to growing renewable energy portfolios
INVESTMENT MANAGER DOWNING LLP is expanding its focus on sustainable investing with a recent £3 million acquisition of Norwegian hydro power plant Lauvstad Kraftverk AS. The renewable energy and infrastructure arm of Downing Estate Planning Service has acquired 100% of Lauvstad Kraftverk AS from Fossberg Kraft AS, which has developed the 6GWh hydro power plant in the Drangedal region of southern Norway. Downing had already paid 20% of the purchase
price to the project’s developer to part fund construction and the balance was paid at completion. The latest deal builds on a series of investments made by Downing in the Nordic region, which last year also included its first investment in Finland in a wind farm – in addition to a number of hydropower assets in Norway bought back in 2021 through its partnership with Fossberg Kraft AS. “The Lauvstad hydropower plant acquisition has
represented an excellent opportunity to further expand our investment allocations in hydropower and the Nordic region,” said Tom Williams, Head of Energy & Infrastructure at Downing. “Financing newbuilt hydro in the Nordic region is an important part of our strategy as we look to continuously diversify our portfolio by both geography and technology. By acquiring a hydropower plant that has recently been constructed, we have also diversified our investment portfolio further by project phase. We look forward to continuing our excellent relationship with Fossberg Kraft AS to further expand our Norwegian hydropower portfolio. Downing’s Energy and Infrastructure team has made
more than 175 investments and has c.£785 million of assets under management- consisting of solar, wind, hydro and battery storage technology. In May 2022, Downing Renewables & Infrastructure
Trust plc (DORE), managed by Downing LLP, entered into an agreement to acquire, through Downing Hydro AB (DHAB), a 100% interest in a portfolio of operational run-of-river hydropower plants in Sweden (for a total consideration of approximately EUR 20 million from Batten AB and Daturum AB. The portfolio comprises two hydropower plants
located in Sweden’s southern SE4 pricing region. The plants were comprehensively renovated between May 2014 and September 2019 and have an aggregate forecast annual production of c.18 GWh p.a. The hydropower plants will be fully were integrated
into DORE’s existing hydropower operational, control and dispatch arrangements. This acquisition increased the number of DHAB hydropower plants to 19 and the total forecast annual production of the hydropower portfolio to c.174 GWh, a c.60% increase since 31 December 2021. These are DORE’s first assets to be located in the attractive southern SE4 pricing region, which has the highest wholesale power prices in Sweden, benefitting from export cables to continental Europe. The acquisitions in a new price zone will further support
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DORE’s strategy of focusing on diversification by geography, technology, revenue and project stage, designed to increase the stability of revenues and the consistency of income to shareholders.
Acquisition in Chile Late last year, Glenfarne Energy Transition and
Partners Group Joint Venture EnfraGen announced the acquisition of four run-of-river hydro assets in Southern Chile from Invercap S.A.. The acquired assets – which represent 13.6MW
of renewable, reliable energy capacity – are owned outside of EnfraGen’s existing senior credit group, which was established following a 2020 refinancing. The four plants will be operated by Prime Energía SpA, a subsidiary of EnfraGen, and include La Arena, a 6.8MW plant located near Puerto Montt; Tranquil, a 3MW plant located near Panguipulli; San Victor, a 3MW plant located near Puerto Aysen; and Cuchildeo, a 0.8MW plant located near Hualaihue. “The addition of these hydro plants to EnfraGen’s
diversified energy and power asset portfolio are indicative of the transactions we will continue to pursue to grow EnfraGen into Latin America’s leading energy transition company,” said Brendan Duval, EnfraGen CEO and Founder and CEO and Founder of Glenfarne Energy Transition, LLC. “Like EnfraGen’s existing hydro assets in Panama, Southern Chile sits within a high-growth, emerging market with ample opportunity to utilize its natural, renewable energy sources to reduce carbon emissions and further Chile’s and Latin America’s energy transition.” Ed Diffendal, Managing Director, Private Infrastructure Americas, Partners Group, and EnfraGen Board Member added: “Partners Group is pleased to support the acquisition of these renewable hydropower assets in Chile. These assets are consistent with EnfraGen’s value- added renewable and grid stability business model and Partners Group’s commitment to investing in next-generation infrastructure.”
“With this acquisition, EnfraGen not only reaffirms its commitment to Chile in its strategy to achieve a sustainable energy transition, but also it confirms its intention to continue investing and growing in the country, contributing to grid stability and the development of more renewable energy,” said Jose Arosa, CEO of Prime Energía SpA, EnfraGen’s main Chilean subsidiary.
EnfraGen has operational and in-construction
assets totaling nearly 1.9GW of capacity across Chile, Panama, and Colombia with corporate offices located in Houston and New York in the US.
North America assets Back in January, Charbone Hydrogen Corporation
agreed to buy three operating hydropower plants in Michigan, US, with a combined capacity of 2.76MW in a $3.6 million deal.
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