Commerz Real invests in Danish solar parks for institutionals

Financial details were not disclosed.

The deal marks Commerz Real's debut in the Danish photovoltaic market. Together with Hydro Rein, a Norwegian investor in renewable energy sources, Commerz Real has struck a deal for the solar parks that are to be newly constructed on Denmark’s west coast and in south Denmark.

Construction is scheduled to commence in 2024, while completion is expected for 2026. Among other conditions, the transaction is still subject to approval by the Danish Business Authority. Commerz Real plans to place both assets with professional and semi-professional investors.

'The Danish investment market for photovoltaic is still relatively young and is seeing a correspondingly dynamic development. This offers the potential for growth and diversification for our institutional investors in particular,' said Barkha Mehmedagic, global head of institutional sales and group treasury at Commerz Real.

According to statements by the Danish government, all the electricity needed by the country is to originate from renewable sources by 2027. Through to 2030 the capacity of these sources is expected to grow to about eight gigawatts.

In the framework of the newly founded joint venture with Hydro Rein, in the medium term Commerz Real intends to acquire further project developments with an additional solar power capacity of as much as one gigawatt-peak. This corresponds more or less to the installed capacity of a medium-sized nuclear power station.

Hydro Rein is a wholly-owned subsidiary of the aluminium and renewable energy company Norsk Hydro, in which the Norwegian government also holds a stake of about one third. The company has already been active in the field of hydroelectric power for more than one hundred years.

Commerz Real was advised by the Danish law firm Plesner on the legal and tax aspects of the transaction.