
Dutch pension fund asset manager APG Asset Management has partnered with alternative investments manager Aquila Capital to invest about €500m for the acquisition and development of hydropower plants in Europe.
APG and Aquila Capital will establish an investment vehicle dedicated to hydropower infrastructure, which intends to invest in operational plants and develop new projects across Europe.
Under the terms of the agreement, APG will invest €250m to the venture while Aquila Capital will provide the operational management of the hydropower assets as well as portfolio management services to the partnership.
With the use of debt financing, the total enterprise value of the assets is expected to reach €500m.
APG Global Real Estate & Infrastructure managing director Patrick Kanters said: "Hydropower is the most efficient of all main energy sources and ticks the right boxes for us in terms of the risk-return profile and the high cash flow visibility, as well as its strong sustainability profile."
"There are relatively few companies with the expertise and industry networks to access the best opportunities in the sector, which is why we have teamed up with Aquila Capital," Kanters added.

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By GlobalDataAquila Capital co-founder and CEO Roman Rosslenbroich said Aquila Capital is partnering with APG in this venture, which should give a strong boost to the hydropower renewable energy industry in Europe.
"These investments are supported by macroeconomic fundamentals and offer the potential to generate above average returns on a sustainable basis that are uncorrelated with mainstream financial markets," Rosslenbroich added.
Aquila Capital partnership responsible Oldrik Verloop said: "The key challenge in accessing these types of assets is the ability to bundle enough volume in transactions to create sufficient scale to appeal to institutional investors and that is where Aquila’s experience in the hydropower sector is of prime importance."