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I'm Sophie Burgess, and I'm an investor relations associate in Impacts PE Infrastructure Team. Today we want to walk you through a case study about the small scale hydropower investments we've made in Norway with our development partner, Norsk Van Kraft, also known as N V K.
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Hi, I'm per Walkley and I'm the chief executive of N. D. K. A small scale hydro power developer in Norway,
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was accepted in 2013 and comprises 25 years experience from energy markets and renewables.
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Since the nineties, the team has engaged with wind, solar and hydro acids and specifically the small scale hydro industry in which it has been instrumental.
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Today we have taken a look at three power plants, one where we currently are power plant and two further up north, about a three hours drive and and all three of those power plants we are constructing together with impacts.
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So why was impacts? Looking at projects in Norway? Norway, from a technology standpoint and topography standpoint, is an ideal place for small hydro. As you probably know, they got lots of fjords and the fjords are deep and the hills close to the fjords are tall and so it makes a nice short hydro station cost effective and then with the government's interest and support in it,
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it made it both an economic and technological mix that made a lot of sense. We entered into a partnership with impacts because hydropower assets are very capital intensive and by the end of 2016, our DNC business had grown rapidly.
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We realised that we need a stronger capital partner to maintain this momentum and started approaching relevant candidates, and we already recognised the synergies between impact, financial muscles and system value and our local fast moving organisation.
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The entrepreneurial spirit was strong in both companies. This contributed to common ground and understanding between the parties and we closed the deal with the impact in April 2018.
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What we really really liked about N V. K. Was the management team. They had very good experience and a very deep knowledge and network in the Norwegian market. They had a strong pipeline and we felt that we had skill sets which complemented each other in delivering that pipeline so whereby they had the development experience. We had more of the experience of constructing and financing these investments to bring them to
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the principles of NBK are serial entrepreneurs. They are involved, have been involved in quite a lot of different activities, and so entering into a partnership rather than investing in their company really seemed to make more sense. So impacts with NBK created NOAA, which is the investment vehicle that that impacts controls in the development of these small hydros Norway.
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Small scale hydropower plants utilises small rivers and waterfalls to produce 100% renewable electricity with up to 10 megawatts effects.
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93% of Norwegian electricity is produced by hydropower. It's a proven technology, making it an attractive proposition for renewable investors looking to diversify from wind and solar.
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We were looking at investment in Hydro and Norway because we were looking for entering into a new and stable market and Norway provided that we saw an opportunity in the market because hydro in Norway is also very highly fragmented to come in and consolidate a lot of assets into a scale which is attractive to a large investor
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and this is what we're currently doing. A major concern for us was the ability to bridge the culture and business conduct between local Norwegian landowners and a professional fund manager or institutional investor. So in this respect, we instantly appreciate it impacts, easygoing conduct and truly friendly approach. This is not compromising the required knowledge and professionalism.
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Typically, small scale hydro projects are low polluting once they're operating and have low environmental and visual impact. In particular, we are sensitive to the impact of biodiversity during construction.
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In this case, we considered nesting birds of prey and also the reindeers that move through the areas where our sites are located. The projects are in remote areas of Norway, which reduces their social impact. We work with the landowners. They receive revenues from leasing the land. They typically also offer local services during the operational phase, such as cleaning the leaves out of the intakes or other day to day operational issues that come up. Governance is a key
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consideration during the structuring and on boarding process of all of our transactions here, we considered the alignment of interests between the parties. We've appointed a non executive director with over 20 years experience in the Norwegian banking market. We've implemented HR anti bribery and corruption and modern slavery policies which are consistent with impact standards In our annual e d impact and sustainability report,
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we highlight how the new energy strategy addresses wider environmental and societal concerns. Once all the projects are operating in Norway, we expect them to generate over 175,000 megawatts of renewable electricity. This is equivalent to approximately 1700 tonnes of net C 02 avoided.
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Together with the impacts, we have successfully bridged the cultural gap between local private landowners in Norway and professional institutional capital. We have acquired three add on projects a total of about 18 megawatts, which has been creative to the existing portfolio, a significant step to reach a critical mass.
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We also brought five projects totalling around 35 megawatts into construction. We have bolstered the local development team with engineering and construction hires to allow the platform to operate more independently with support and oversight from impacts In house. Engineer Jim
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Impacts through the years has really broadened its base, particularly now with adding Norway with hydro impacts is now becoming a front line player in the marketplace. So I mean, it's been great to work with the impacts. They have been a great part for us supporting us when we need it. It's been successful and long may that continue
