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Hydro Completes Strategic Stake Sale of Hydro Rein to Macquarie

Hydro has completed the transaction for the sale of 49.9 percent of renewable energy company Hydro Rein to Macquarie Asset Management. The financial closing of the transaction that was announced in October 2023, is an important accomplishment for the execution of Hydro’s strategy to grow in renewable energy.

von | 26.06.24

Hydro CEO Eivind Kallevik and Mark Dooley, Global Head of Green Investments at Macquarie Asset Management. Photo: Herman Kristoffer Skjølsvik/Hydro
© Herman Kristoffer Skjølsvik/Hydro.
Hydro CEO Eivind Kallevik and Mark Dooley, Global Head of Green Investments at Macquarie Asset Management

June 2024 | Hydro has completed the transaction for the sale of 49.9 percent of renewable energy company Hydro Rein to Macquarie Asset Management. The financial closing of the transaction that was announced in October 2023, is an important accomplishment for the execution of Hydro’s strategy to grow in renewable energy.

“We are excited to conclude the transaction, marking the next chapter in our renewable energy partnership with Macquarie Asset Management. Hydro Rein is well equipped to execute on its ambitious growth agenda, with a strong project pipeline going forward. Industrial decarbonization begins with renewable energy and Hydro Rein will be instrumental in supporting Hydro as well as other industries with the energy we need to reduce our CO2 emissions,” says Hydro’s President and CEO, Eivind Kallevik.

The transaction values Hydro Rein at USD 333 million, per June 30, 2023, subject to closing adjustments. Macquarie contributes USD 214 million of this amount at closing. The funds will be transferred by June 25, 2024. The remaining part of the committed capital will be contributed over time as the need arises.

Investment and Growth

The impact from the transaction will be recognized in Hydro’s income statement for the second quarter and excluded from “Adjusted results.” With the capital provided by Macquarie, 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 that no new equity will be called on from the owners beyond committed capital.

Hydro and Macquarie have a longstanding relationship within renewable energy. The companies have collaborated on several projects since 2017, and have developed 1.3 GW of renewable energy capacity, including several wind projects across the Nordics and a 456 MW onshore wind farm in Brazil. These projects include power purchase agreements with Hydro to help decarbonize its operations.

Energy Ambitions in the Nordics and Brazil

Hydro Rein has 8.4 GW gross capacity in development across its core markets in the Nordics and Brazil. The company has developed strong industrial partnerships since launching in 2021, and the projects Hydro Rein is engaged in have signed long-term power purchase agreements totaling 5.3 TWh annually. This includes offtake agreements with Hydro’s alumina refinery Alunorte, primary aluminium plant Albras and the bauxite mine Paragominas. Hydro Rein also co-developed a wind project that provides clean electricity to power the Norwegian operations of telecommunications company Telenor.

“Decarbonizing vital industrial materials like aluminium is a key challenge of the energy transition. Hydro Rein is helping to pioneer low-carbon aluminium smelting and is playing a leading role in enabling industries like the automotive sector to reach its decarbonization targets. I look forward to joining forces once again with Hydro, combining our capabilities to unlock a greener future for industry, and the communities and markets served by industry,” says Mark Dooley, Global Head of Green Investments at Macquarie Asset Management.

As of today, Hydro Rein is established as a joint venture (JV) where Hydro owns 50.1 percent and Macquarie 49.9 percent of the company. All of Hydro Rein’s assets in Brazil, Denmark, and Sweden, and all Energy Solutions projects, are 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 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.

About Hydro Rein

Hydro Rein is a provider of renewable energy solutions for industry. Created in 2021 as part of the sustainability strategy of aluminium and energy company Hydro, Hydro Rein’s strategy is focused on the industrial need to decarbonize. Hydro Rein has a diversified portfolio with more than 60 renewable energy and energy efficiency projects under development in key markets in the Nordic countries and Brazil. After three years of growth in renewable energy, Hydro Rein has a gross capacity of 8.4 GW in its portfolio and long-term contracts signed for a production of 5.3 TWh per year.

About Macquarie Asset Management

Macquarie Asset Management is a global asset manager, integrated across public and private markets. Managing approximately €567.0 billion in assets, Macquarie Asset Management provides a diverse range of investment solutions including real assets, real estate, credit and equities & multi-asset. Macquarie Asset Management is part of Macquarie Group, a diversified financial group providing clients with asset management, finance, banking, advisory, and risk and capital solutions across debt, equity and commodities. Founded in 1969, Macquarie Group employs approximately 20,600 people in 34 markets and is listed on the Australian Securities Exchange.

 

(Source: Hydro/2024)

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