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The partnership will see both the companies acquire and develop new hydropower projects throughout Europe with APG committing €250m to the joint venture (JV).
Aquila Capital will manage and operate the hydropower assets and offer portfolio management services to the JV.
The installed hydropower capacity in Europe is currently concentrated in Scandinavia, but the companies said Turkey is also having the greatest potential for future electricity generation in the sector.
Hydropower’s energy efficiency ratio is around 95%, compared to ratios of about 50% and 20% for wind power and solar power generation respectively.
APG managing director global real estate & infrastructure 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."
Aquila Capital’s Oldrik Verloop, who is responsible for the partnership, said hydropower is an attractive proposition for investors looking for stable long-term inflation protected yields to match pension liabilities.
"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," Verloop added.
Image: The partnership will see APG and Aquila Capital acquire and develop new hydropower projects throughout Europe. Photo: Courtesy of markuso/FreeDigitalPhotos.net.
