Hydro and Macquarie Asset Management are expanding their collaboration to further advance the availability and utilisation of renewable energy in the industry. Under the terms of the agreement, Macquarie Asset Management will acquire 49.9 per cent of Hydro's renewable energy company Hydro Rein. Macquarie Asset Management is investing equity totalling USD 332 million for the acquisition. With this capital, Hydro Rein expects to be able to fully fund the costs of projects currently under construction and the development costs for projects planned in the coming years.
Hydro Rein: Renewable energy for the industry
Joint Venture of Hydro and Macquarie Asset Management
United power for renewable energies
The agreement underlines the successful and complementary partnership that Hydro Rein and Macquarie Asset Management have built up over the last few years. The two companies are already partners in a large-scale onshore wind farm being built in north-east Brazil. Under Power Purchase Agreements (PPAs), the project will supply power to the Paragominas bauxite mine and the Alunorte alumina refinery. Hydro and Macquarie have also worked together on wind farm projects in Sweden in 2017 and 2018, contributing to the development of the Nordic market for long-term PPAs.
All Hydro Rein's assets in Brazil, Denmark and Sweden as well as all energy solution projects will be included in the joint venture. Hydro Rein's projects in Norway are also included, with the exception of potential onshore wind projects close to Hydro's smelters, such as Snøheia Industrikraft. These projects will continue to be developed and operated by Hydro together with local partners. Hydro Rein's organisation will support Hydro in the development of these projects through service contracts.
The continued collaboration with Macquarie is an important milestone in the realisation of Hydro's strategy to grow in renewable energy: "We are pleased to have found a solid partner in Macquarie Asset Management with whom we can begin the next chapter of Hydro's transition to net zero energy. We are convinced that Macquarie's commercial strength and leading expertise in developing renewable energy projects will complement Hydro Rein and accelerate the company's ambitions to decarbonise the industry," explains Hilde Merete Aasheim, President and CEO of Hydro.
Hydro Rein records three years of growth
The founding of Hydro Rein paved the way for Hydro to realise its strong ambitions in the field of renewable energy. Since its foundation in 2021, Hydro Rein has built up a significant portfolio of renewable energy projects and contracts with industrial customers.
The joint venture's current 6.9 GW portfolio (gross capacity) consists of renewable energy projects ranging from projects under construction to projects in the early stages of development in the Nordics and Brazil. Hydro Rein's own consumption share of the four projects under construction will amount to 1.7 TWh. All of these projects are expected to make an important contribution to reducing Hydro's and other companies' CO2 emissions.
Long-term PPAs totalling 5.3 TWh per year have been signed with Hydro's Alunorte alumina refinery, the Albras primary aluminium plant (joint venture between Hydro and Nippon Amazon Aluminium Co. Ltd.), Hydro's Paragominas bauxite mine and the telecommunications company Telenor. Four of Hydro Rein's projects are expected to be completed by the end of 2024.
In addition to wind and solar projects, Hydro Rein is working on projects for energy solutions such as battery storage, energy efficiency and on-site generation in Europe and North America. A total of 30 Hydro sites are currently in the pipeline and under management, and pilot projects have already been carried out in Canada, Germany, Sweden and Norway.