Uniper and Talanx Group via Augusta Investment Management have recently reached a agreement for the purchase of 5.3 TWh of Swedish hydro power. The agreement, which spans over a 15-year period, was the result of months of collaborative efforts between the parties involved.
Under the terms of the Power Purchase Agreement (PPA), Sydkraft Hydropower AB, a hydro production unit owned by Uniper SE in Sweden, will sell a portion of the power generated by 15 different hydropower plants located in the Swedish price zones SE2 and SE4. The transaction volume is estimated to reach approximately 5.3 TWh.
This deal is noteworthy as it paves the way for institutional investors to enter the Nordic power market. By securing predictable revenues for Uniper and offering more stable costs for power consumers, it aims to provide stability in an otherwise volatile energy market.
Augusta Investment Management's Nordic reservoir hydropower portfolio will be significantly bolstered by this agreement, increasing its annual generation capacity to over 2TWh. Talanx Group's asset management firm, Ampega Asset Management, has supported Augusta Investment Management in this venture, marking its initial investment in Nordic hydropower.
“Hydropower is an essential backbone of the Swedish and European energy system. Securing long-term competitive conditions and predictable cash flows like these is important for Uniper as the producer, our customers and consumers. We are delighted to have reached this important agreement and milestone in developing the market,” said Mike Lockett, CCO Power Uniper.
“This transaction is particularly important for the Talanx Group: our first investment in hydropower adds a new dimension to our existing extensive portfolio of renewable energy investments,” said Dr Jan Wicke, Talanx AG’s Chief Financial Officer. “As a leading investor in this area, we are helping to continuously expand investments in renewables and increasingly contributing to the transition to sustainable energy. The move also underscores just how important ESG criteria are to our investment strategy and reinforces our wide-ranging sustainability strategy even further.”
“We were particularly impressed with the constructive and commercial approach of both our investors Ampega and the counterparty Uniper and their respective advisers in this complex and lengthy transaction. This is the fourth institutionally backed PPA transaction which we have closed. We developed this strategy for institutional investors to have access to scarce long-term green electricity with storage such as reservoir hydro at competitive returns. We look forward to the follow-on transactions,” added Mortimer Menzel, who leads Augusta Investment Management
