Uniper and Talanx Group via Augusta Investment Management have entered into a 15-year Power Purchase Agreement (PPA), after working on the agreement over the last several months. Sydkraft Hydropower AB, Uniper SE’s hydro production unit in Sweden, is selling a percentage of the actual power production from 15 of its different hydropower plants. These power plants are in the Swedish price zones SE2 and SE4. The total volume of the transaction is expected to be around 5.3 TWh.
Such a structure opens the door to the Nordic power market for institutional investors. This creates predictable revenues for Uniper, while also enabling more predictable costs for power consumers in a volatile energy market.
The recently concluded agreement increases Augusta Investment Management’s Nordic reservoir hydropower portfolio to more than 2 TWh of annual generation. Ampega Asset Management, which is responsible for the Talanx Group ‘s asset management, backed Augusta Investment Management in this transaction, making its first investment in Nordic hydropower, adding to its substantial portfolio of renewable energy investments.
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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.
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. Dr. Jan Wicke, Chief Financial Officer of Talanx AG
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. Mortimer Menzel, who leads Augusta Investment Management
