Ancala Partners’ latest core infrastructure fund has bought a 50% stake in Iceland’s largest private electricity generator from a consortium of 14 Icelandic pension funds.

Ancala Infrastructure Fund II has agreed to buy the interest in HS Orka from Jarðvarmi for an undisclosed sum.

The transaction follows Jarðvarmi’s exercise of its right of first refusal to acquire a 53.9% interest in HS Orka from Alterra Power, a subsidiary of Innergex Renewable Energy, for $299.9m (€269m).

Jarðvarmi has also agreed to acquire a 12.7% interest in HS Orka from Fagfjárfestasjóðurinn ORK for an undisclosed amount.

The remaining 33.4% in HS Orka was already owned by Jarðvarmi.

Following the transactions, Ancala and Jarðvarmi will each own 50% of HS Orka.

Ancala said it has agreed with Jarðvarmi to divest HS Orka’s 30% interest in the Blue Lagoon to Blávarmi. The sale transitions HS Orka into a pure play renewable energy platform, it said.

HS Orka has been producing renewable energy for 40 years and operates two geothermal powerplants, Svartsengi and Reykjanes, with a combined installed capacity of 174MW.

The company is also currently constructing a 10 MW hydro powerplant at Bláskógabyggð and is at an advanced stage of development for additional geothermal and hydro capacity.

Lee Mellor, partner, Ancala Partners, said: “Ancala and Jarðvarmi share a common investment philosophy focused on supporting management, providing further capital for growth and adopting a long-term outlook.

“HS Orka represents a compelling growth platform in Iceland’s exciting renewable energy sector. We look forward to working with Jarðvarmi and HS Orka’s management team.”

David Rudolfsson, chairman of the board of Jardvarmi, said: “Ancala’s renewable energy expertise, joint view on HS Orka’s potential combined with our shared long-term investment outlook make us aligned partners.”