AQUILA CAPITAL
Norwegian small hydropower operator Småkraft to double capacity by 2022

The growth will come from building new run-of-river power plants and acquiring existing plants. "Our nimble operating platform, transparent due diligence and track-record in concluding transactions give us a differentiating edge in the market," says Halle Aslaksen, managing director of Småkraft.

Pension delivery organisation APG - on behalf of pension fund ABP and other Dutch pension fund clients - is the majority shareholder in Småkraft. Recently their commitment was extended to EUR 300m and they see this expansion as an interesting opportunity to continue to support the increase of renewables in the European energy mix.

To provide further finance for growth, Småkraft is assessing the launch of a Euro-denominated Green Bond. "We are in talks with advisers and investors to bring a first tranche to the market later this year," says Erik Røysem Sterud, head of finance at Småkraft.

Tor Syverud, head of hydropower at Aquila Capital, comments: "In the next few years, the main drivers of energy prices in Scandinavia will continue to be the EU Commission's CO2 policy, the region's fuel mix and the planned tripling of interconnection capacity. The latter is expected to lead to less price volatility in the Nordic power market."

Småkraft was spun off by Statkraft in 2015 and merged with Norsk Grønnkraft in 2017, creating Europe's largest operator of small hydropower plants. The firm currently operates over 100 power plants across Norway, producing 1 TWh. Småkraft is owned by European pension funds and insurance companies through investment vehicles managed by Aquila Capital, the Hamburg-based firm with EUR 7bn in assets under management.