Dutch pension fund invests in hydroelectric power development

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The Dutch General Pension Fund for Public Employees (ABP) has closed an investment that will give it a 33% stake in Norwegian hydropower project operator Tinfos AS from French mining group Eramet.

The US$621.4 million deal is a result of a partnership between ABP with APG Asset Management and Aquila Capital that was announced earlier this year.

Aquila, based in Hamburg, Germany, was commissioned by APG to establish an investment vehicle dedicated to hydropower infrastructure "through which to make investments in operational plants and develop new projects across Europe".

ABP has committed more than $309.5 million to the venture, which is valued at double that through the use of debt financing.

Aquila is providing the operational management of the hydropower assets in addition to portfolio management services.

"We welcome the investment of the APG/Aquila partnership in Tinfos," Tinfos CEO Tor Syverud said. "Their operational expertise in the hydropower market, combined with the long-term commitment of a major institutional investor is a good match for our business philosophy and bodes well for our future growth."

Tinfos operates a total of 11 hydroelectric plants in Norway that have a mean annual production of about 279 HWh.

The APG/Aquila partnership will allow Tinfos to construct additional hydropower projects, doubling its current production to around 600 GWh by 2020, the group said.

"This is a very significant first step in the sustainable investment strategy of the APG/Aquila hydropower partnership as it firmly aligns us with the EU's efforts to achieve its energy and emissions targets by 2020," APG Managing Director of Global Real Estate & Infrastructure Patrick Kanters said. "It demonstrates the increasingly interlinked nature of Europe's fast-growing sustainable energy markets and will contribute to the region's urgent need to ensure the security of future supply."

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