ABP invests €250m in Norwegian hydropower; eyeing new Dutch investments

Dutch fund ABP has invested €250m in Norwegian hydropower, Småkraft.

The investment will enable Småkraft to build dozens of new small-scale hydroelectric power stations, which will allow the company to generate enough sustainable energy for 570,000 households.

It follows two previous investments by ABP in the company, and brings the fund’s total investment to €540m.

Commenting on the motivations for the investment, ABP’s portfolio manager, APG’s Viktor Filipan, said: "This company has an attractive risk/return profile. We entered at the right time and have since created a strong position in this market. Småkraft is by far the largest player in operation of small-scale hydropower plants in Norway.

“It is a company with a lot of knowledge and experience in this area. Similar installations in other countries are often less efficient. Thanks to ABP's additional investment, the company can grow from around 120 to around 200 small power stations that are located throughout Norway. All those power stations together ensure a good return for ABP.”

He said hydropower is an attractive investment as it is a “completely sustainable energy source” that fits well with ABP’s new sustainable investment policy.

“One of the objectives in that policy is to invest €15bn in clean and affordable energy. In addition, it is an investment for the very long term. Hydroelectric power stations last on average for decades. Technically, there is little chance of defects and it is possible to predict with certainty how much energy the installations will generate every month. "

Filipan said that ABP does also invest in Dutch hydropower, such as its plan to build the Zuid-Hollands Oostflakkee wind farm via the sustainable energy company Kallista Energy, announced at the end of last year.

“ We also keep an eye on the possibilities for Dutch offshore wind farms. We would like to invest in Dutch wind energy, but the range of large-scale projects is limited. We will continue to work hard on that. "

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