The alternative investment specialist Aquila Capital has agreed with EDP, Portugal’s biggest energy company, to acquire a portfolio of 21 operational small-scale hydropower plants located in Northern and Central Portugal with a total capacity of approximately 100 MW. The investment marks Aquila Capital’s first step into Portugal’s hydropower market.
Aquila Capital is already active in the Iberian Peninsula’s integrated energy market, operating from its Madrid office. This latest transaction follows Aquila Capital’s first investment in Portugal’s renewable infrastructure, which was the acquisition of a PV portfolio with a capacity of 170 MWp at the end of 2017.
The new hydropower portfolio consists of 14 run-of-river units and seven reservoir plants. It is diversified across 10 river systems and all plants have been in operation for several years. Approximately half of the portfolio’s annual energy production stems from plants with attached reservoirs, whose importance and economic potential is increasing as the share of renewable energy grows steadily. The assets also benefit from attractive feed-in tariffs financed by end-consumers, improving the predictability of investors’ returns.
Roman Rosslenbroich, Co-founder and CEO of Aquila Capital, comments: “Portugal’s renewable energy market is grossly underestimated by general opinion and investors alike. The country is highly attractive to our investors for several reasons, including the predictability provided by feed-in tariffs, the stability of the binational energy market and the absence of currency risks. In particular, Portuguese hydropower is an ideal addition to our institutional investors’ portfolios because it offers diversification both regionally and by asset class.”
Dr. Tor Syverud, Head of Investment Management Hydropower at Aquila Capital, comments: “This new portfolio, representing about 25% of Portuguese small-scale hydropower plants, can benefit from potential savings identified through our in-house expertise. To achieve synergies for our institutional investors, we plan further expansions on the Iberian market while following our active asset management approach.
We are continuing to implement our acquisition strategy and with over 100 plants in Norway, Aquila Capital is the largest independent operator of small-scale hydropower plants in Europe.”