Dutch pension investor APG is leading a group of European institutional investors to buy Fortum’s 50% stake in Stockholm Exergi for €2.9bn.
Fortum said it has agreed to sell its holding in the Swedish district heating and cooling company to the consortium made up of APG, Dutch pension fund asset manager PGGM, Sweden’s biggest pension fund Alecta, Finnish local government and church pension fund Keva and the €162bn alternative investments manager AXA IM Alts.
European energy firm Fortum announced in July last year that it was planning a possible sale of its 50% stake as part of an ongoing business review.
Stockholm Exergi is the owner and operator of the largest district heating and district cooling network in the Nordics.
Carlo Maddalena, a senior portfolio manager at APG, said the investment, which is being made on behalf of APG’s pension fund client ABP, represents a significant milestone of APG’s overall commitment to significantly reduce CO2 emissions worldwide.
Maddalena said: “We intend to grow Exergi by investing significant capital, targeting to enhance the environmental sustainability and efficiency of its heating plants and district heating networks.
“Alongside our consortium partners, we are looking forward to working with management to support them in their ambitious vision, and with the City of Stockholm to develop our future long term partnership.”
Erik van de Brake, the head of infrastructure at PGGM, said the investment expands the PGGM Infrastructure Fund’s footprint in the Nordics and is a second investment in district heating after acquiring a majority stake in the Dutch company.
“Through these investments the beneficiaries of our clients like Pensioenfonds Zorg en Welzijn are supporting the energy transition directly while growing their pensions at the same time.”
Johanna Strömsten Friberg, portfolio manager at Alecta, said, the management team of Stockholm Exergi has made remarkable environmental, social, and governance (ESG) accomplishments during the last couple of years and “we are keen to support the company in pursuing its ambitious goal of becoming climate-positive by 2025 and generating negative emissions”.
Markus Pauli, the head of alternative investments at Keva, said: “Keva is a long-term investor and this type of district heating infrastructure investment fits excellently in our investment portfolio.
“The investment offers a stable, predictable and long-term cash flow. Stockholm Exergi has a high ambition on sustainability and plays an important role in the climate targets of the whole region, which naturally suits Keva well as a responsible investor.”
Mark Gilligan, the head of infrastructure equity at AXA IM Alts, said: “AXA IM Alts, acting for its clients, is thrilled to invest in Stockholm Exergi as it is aligned with our Net-Zero objectives while providing cost-effective essential heating and cooling to the citizens of Stockholm.”
Anders Egelrud, the CEO of Stockholm Exergi: “We want to thank Fortum for their important contribution as co-owners and look forward to the next chapter in our journey towards creating the world’s first climate-positive capital, together with partners, customers and owners.”
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