Norsk Hydro: Hydro and Macquarie formally begin renewable energy partnership
Norsk Hydro has finalized the sale of a 49.9% stake in Hydro Rein, its renewable energy subsidiary, to Macquarie Asset Management. The transaction, valued at USD 333 million as of June 30, 2023, is pivotal for Hydro’s renewable energy strategy. Macquarie will contribute USD 214 million at closing, with the remainder provided as needed. This partnership aims to fund Hydro Rein’s current and future projects without additional equity calls. Hydro Rein, since its 2021 launch, has developed 8.4 GW of renewable energy capacity, securing 5.3 TWh in annual power purchase agreements. The collaboration includes significant wind projects in the Nordics and Brazil. Hydro Rein will also support Hydro's decarbonization efforts, particularly in aluminum production.
- Completion of the sale of 49.9% stake in Hydro Rein to Macquarie Asset Management.
- Transaction valued at USD 333 million.
- Macquarie to provide USD 214 million at closing, and remaining funds as needed.
- Hydro Rein has developed 8.4 GW of renewable energy capacity.
- Hydro Rein secured 5.3 TWh in annual power purchase agreements.
- Partnership aims to fund all current and future projects without additional equity calls.
- None reported.
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.
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.
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.
Investor contact:
Martine Rambøl Hagen
+47 91708918
Martine.Rambol.Hagen@hydro.com
Media contact:
Halvor Molland
+47 92979797
Halvor.Molland@hydro.com
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