UK investor Downing Renewables & Infrastructure Trust has exchanged contracts to acquire its first investment, a portfolio of eight operational hydropower plants in central and southern Sweden from Fortum Sweden.
The portfolio is being acquired for a purchase price of €64.5m on a debt and cash free basis and the transaction is expected to complete in February 2021.
The hydropower plants are located across three different rivers in Sweden, with annual average production of over 100 gigawatt-hours and an operational track record spanning more than five decades.
Hydropower is a key energy source in the drive towards 100% renewable energy in Sweden by 2040 and is a key sector focus for Downing Renewables, the investor said.
The investment amounts to 48% of the £122.5m raised by Downing Renewables through an initial public offering on the London Stock Exchange earlier this month.
Downing Renewables anticipates that the portfolio will take-out leverage during the course of 2021 which will reduce the amount invested in the projects.
Capital released would then be reinvested in the wider pipeline of opportunities available and further diversify its portfolio.
This project forms part of the further renewable energy and infrastructure investments identified by Downing LLP and disclosed in Downing Renewables’ prospectus dated 12 November 2020, it said.
It is targeting investment in a diversified portfolio of renewable energy generating assets and other infrastructure assets in the UK, Ireland and Northern Europe.
Downing Renewables & Infrastructure Trust chair Hugh W M Little said: “This is an exciting first acquisition for DORE with a demonstrable track record in one of our key geographical locations.
“Diversification is the key descriptor for DORE and this portfolio of hydropower plants epitomises what we set out to invest in to be able to offer our shareholders stable and sustainable returns while supporting the global efforts to combat climate change.”