APG-led consortium acquires 50% stake in Stockholm Exergi

A consortium led by Dutch pension fund APG has acquired a 50 per cent co-controlling stake in Stockholm Exergi from Fortum.

The consortium comprises APG, PPGM, Alecta, Keva and AXA Investment Managers Alts.

Stockholm Exergi is the owner and operator of the largest district heating and district cooling network in the Nordics.

The firm aims to provide environmentally sustainable district heating for both corporate and residential customers across seven municipalities in Stockholm County, and electricity capacity to the Stockholm electricity grid.

Advisers to the consortium were DC Advisory and Rothschild & Co (M&A and debt), White & Case (legal – M&A), Latham & Watkins (legal – financing), AFRY (commercial, technical & EHS), PwC (financial, tax, carve out, IT and operations), and Hallvarsson & Halvarsson (public relations).

The acquisition was supported with a financing package provided by Intesa Sanpaolo, Mediobanca – Banca di Credito Finanziario S.p.A., Natixis and Société Générale. Lenders were advised by Weil, Gotshal & Manges.

The completion of the deal remains subject to regulatory approval and is expected to take place before the end of 2021.

Stockholm Exergi CEO, Anders Egelrud, commented: “For the world to meet the climate change, both renewable energy and negative emissions are needed.

“Our goal is a climate-positive business in 2025 and to succeed in this, strong, committed, and long-term owners are required who share our view of sustainability - properties such as the city of Stockholm, Fortum and the investor consortium led by APG all share.

“We want to thank Fortum for their important contribution as co-owners and look forward to the next chapter in our journey towards creating the world's first climate-positive capital, together with partners, customers and owners.”

APG senior portfolio manager, Carlo Maddalena, added: “The investment in Stockholm Exergi, on behalf of our pension fund client ABP, represents a significant milestone of APG’s overall commitment to significantly reduce CO2 emissions worldwide.

“Stockholm Exergi has a fantastic track record of growth, leadership in ESG and delivering and developing customer centric solutions, all of which are driving the long-term sustainable energy transition of Stockholm and the region.

“We intend to grow Exergi by investing significant capital, targeting to enhance the environmental sustainability and efficiency of its heating plants and district heating networks. Alongside our consortium partners, we are looking forward to working with management to support them in their ambitious vision, and with the city of Stockholm to develop our future long-term partnership.”

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