Macquarie Asset Management has signed an agreement with
Hydro relating to the future acquisition of 49.9 percent of Hydro’s
renewable energy company Hydro Rein.
Through the agreement, Hydro and Macquarie Asset Management will
form a joint venture (JV) where Hydro will own the remaining 50.1
percent of the company. Macquarie Asset Management intends to
invest equity of USD 332 million to obtain a 49.9 percent ownership
of Hydro Rein. The transaction values Hydro Rein at USD 333
million, per June 30, 2023. With the capital provided by Macquarie
Asset Management, Hydro Rein is expected to be fully funded for its
current projects under construction and development cost for
projects in the pipeline in the coming years, with an ambition to
become self-funded.
The transaction is a further demonstration of the successful and
complementary partnership that Hydro Rein and Macquarie Asset
Management have built over many years. The two companies are
currently partners in a large-scale onshore wind farm which is
under construction in the northeast of Brazil. Through Power
Purchase Agreements (PPAs), the project will supply electricity to
Hydro’s bauxite mine, Paragominas, and its alumina refinery,
Alunorte. Hydro and Macquarie have also worked together on wind
farm projects in Sweden in 2017 and 2018, contributing to the
development of the Nordic market for long-term PPAs.
“This transaction marks an important milestone for the execution
of Hydro’s strategy to grow in renewable energy. We launched
Hydro’s renewables ambitions through Hydro Rein less than three
years ago. In a short time, the company has built a solid and
impressive portfolio of renewable energy projects. All of these
will be key contributors to reducing CO2 emissions for Hydro and
other industries,” says President and CEO Hilde Merete
Aasheim.
“We are excited to enter the next chapter of Hydro’s transition
to net-zero together with a solid partner in Macquarie Asset
Management. We believe their commercial strength and leading
expertise in global renewable project development will complement
Hydro Rein and accelerate the company’s ambitions to decarbonize
industries,” says Aasheim.
Three years of renewable growth in Hydro
Rein
Since it launched in 2021, Hydro Rein has built a significant
portfolio of renewable energy projects and contracts with
industrial off-takers.
The current 6.9 GW portfolio pipeline in the joint venture
(gross capacity) consists of renewable energy projects from
projects under construction to projects in early-stage development
in the Nordics and Brazil. Hydro Rein’s captive share in the four
projects under construction will be 1.7 TWh.
Long term PPAs for a total of 5.3 TWh annually have been signed
with Hydro’s alumina refinery Alunorte, the Albras primary aluminum
plant (joint venture between Hydro and Nippon Amazon Aluminium Co.
Ltd.), Hydro’s bauxite mine Paragominas and telecommunications
company Telenor.
Four of Hydro Rein’s projects are expected to be completed
within the end of 2024.
In addition to wind and solar projects, Hydro Rein is working on
energy solutions projects such as battery storage, energy
efficiency, and onsite generation in Europe and North America. A
total of 30 Hydro sites are currently within scope of the pipeline
and leads, and pilot projects have been carried out in Canada,
Germany, Sweden and Norway.
Hydro Rein currently has 75 employees and offices in Oslo, Rio
de Janeiro and The Hague.
Assets included in the joint venture
All of Hydro Rein’s assets in Brazil, Denmark and Sweden, and
all energy solutions projects, will be included in the joint
venture. Hydro Rein’s projects in Norway will also be included in
the joint venture, except for potential onshore wind projects
located in the regions close to Hydro’s smelters, such as Snøheia
Industrikraft. These projects will continue to be developed and
owned by Hydro together with local partners. Hydro Rein’s
organization will support Hydro in developing these projects
through service agreements.
Transaction details
The transaction is subject to standard regulatory approvals and
transaction terms required by both sides. This includes several
conditions precedents (CPs) on both Hydro and Macquarie Asset
Management which need to be satisfied, including related to funding
of the transaction. Subject to satisfaction, closing of the
transaction is expected in second quarter 2024.
Invitation to investor call
Executive Vice President Energy, Arvid Moss will provide further
details on the transaction in the third quarter presentation today
at 08:30 CEST (06:30 GMT). Questions regarding the transaction can
be asked in the Q&A following the presentation. Please refer to
Hydro.com for webcast page.
ABG Sundal Collier ASA and Nordea Bank Abp, filial i Norge are
financial advisors to Hydro, and Advokatfirmaet Haavind AS is legal
advisor to Hydro.
Investor contact:Martine Rambøl Hagen+47
91708918Martine.Rambol.Hagen@hydro.com
Media contact:Anders Vindegg+47 938 64
271Anders.Vindegg@hydro.com
Certain statements included in this announcement contain
forward-looking information, including, without limitation,
information relating to (a) forecasts, projections and estimates,
(b) statements of Hydro management concerning plans, objectives and
strategies, such as planned expansions, investments, divestments,
curtailments or other projects, (c) targeted production volumes and
costs, capacities or rates, start-up costs, cost reductions and
profit objectives, (d) various expectations about future
developments in Hydro's markets, particularly prices, supply and
demand and competition, (e) results of operations, (f) margins, (g)
growth rates, (h) risk management, and (i) qualified statements
such as "expected", "scheduled", "targeted", "planned", "proposed",
"intended" or similar. Although we believe that the expectations
reflected in such forward-looking statements are reasonable, these
forward-looking statements are based on a number of assumptions and
forecasts that, by their nature, involve risk and
uncertainty.
Various factors could cause our actual results to differ
materially from those projected in a forward-looking statement or
affect the extent to which a particular projection is realized.
Factors that could cause these differences include, but are not
limited to: our continued ability to reposition and restructure our
upstream and downstream businesses; changes in availability and
cost of energy and raw materials; global supply and demand for
aluminium and aluminium products; world economic growth, including
rates of inflation and industrial production; changes in the
relative value of currencies and the value of commodity contracts;
trends in Hydro's key markets and competition; and legislative,
regulatory and political factors. No assurance can be given that
such expectations will prove to have been correct. Except where
required by law, Hydro disclaims any obligation to update or revise
any forward-looking statements, whether as a result of new
information, future events or otherwise.
- Presentation - Hydro and Macquarie
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