Aquila Capital has announced its plan to create the largest operator of small hydroelectric power projects in Europe through a merger of Norway's Smakraft and Norsk Gronnkraft.
The merger is expected to become effective next month and "reflects Aquila Capital's active asset management approach and underlines the company's ambition for the expansion of its renewable energy portfolio in Norway," the Hamburg-based financial management group said.
Aquila Capital signed an agreement with four Norwegian utilities -- Statkraft, Agder Energi, BKK and Skagerak -- in November 2015 to acquire all shares of Smakraft AS. Aquila already held 100% of the shares in Norsk Gronnkraft.
"The merger comes at a time when institutional investors' interest in renewable energy is increasing significantly," Aquila Capital Head of Investment Management Real Assets Michaela Eder von Grafenstein said.
The new entity will be known as Smakraft, with a fleet of 90 hydropower plants and an annual production of about 1 TWh.
Meanwhile, a separate company, Smakraft Utbygging, will be created exclusively for the construction and rehabilitation of small hydro projects.
"The merger is the next logical step to further consolidating our existing hydropower operations in Norway," Smakraft board member Oldrik Verloop 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."
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