Macquarie managed-funds acquire Swedish district heating operations

Macquarie-managed infrastructure funds today announced an agreement to acquire a portfolio of district heating operations from Fortum Corporation of Finland. Macquarie European Infrastructure Fund II (MEIF2) and Macquarie Power & Infrastructure Income Fund (TSX: MPT.UN) will acquire Fortum’s heating operations and heat production facilities in central Sweden (ex-Stockholm) for total consideration of approximately €200 million. Closing of the Transaction is subject to certain conditions, including approval of the Swedish competition authorities.

Sited across 11 different locations, including both municipal district heating and industrial partnerships, the operations include heat production and heat distribution. The 786MW(th) fleet of heat production assets include biomass and oil fired boilers and steam turbines. The portfolio has a strong renewable profile owing to the use of a significant share of renewable fuels in the heat production process and utilisation of recovered waste heat from industrial partners for district heating purposes. The heat distribution part of the business consists of a 317 kilometre network of pipelines, providing district heating primarily to apartment and public buildings and supplying heat to industrial consumers in locations across Sweden.

“Macquarie-managed infrastructure funds have been successfully investing in Sweden since 2004, when our first European Infrastructure Fund acquired the Arlanda Express,” said Martin Stanley, Global Head of Macquarie Infrastructure and Real Assets.

“We are very pleased to be building on our commitments in Sweden with this high quality investment. District heating is core infrastructure and a perfect fit with our Funds’ long-term investment objectives to achieve sustainable, predictable returns to investors through a responsible approach to owning and managing essential service businesses.

“The Macquarie philosophy is to work collaboratively with all stakeholders, including employees, customers, municipalities, governments and the wider community, and we look forward to bringing our long-term investment approach to developing these facilities for the benefit of the customers and communities they serve.“

Per Langer, Executive Vice president, Fortum said: “We are very pleased to have Macquarie-managed funds as the new owner for our heat operations outside Stockholm. Macquarie has the capability and commitment to continue to develop these facilities and meet the high service standards that we have set. In line with our strategy, Fortum will concentrate on combined heat and power production and on further developing district heating in the Stockholm area.”

Infrastructure funds managed by Macquarie have a strong track record of investing in the Nordic region. The portfolio includes the Arlanda Express, the rail link between Arlanda Airport and Stockholm’s city centre, Copenhagen Airport – one of the fastest growing airports in Europe - and a portfolio of Swedish wind farms.

Around the world Macquarie manages over 100 different infrastructure businesses and through this portfolio has deep experience in responsibly owning and managing utilities and district energy enterprises. For example, Macquarie-managed funds hold an investment in Thermal Chicago, the largest district cooling system in the United States of America, and in Europe manage a 350MW portfolio of sustainable energy assets including solar, biomass, landfill gas, wind and refuse-derived fuel energy-producing assets. Our European utility businesses include Thames Water in the UK and Techem GmbH in Germany.

The Macquarie-managed funds are advised on the acquisition by Macquarie Capital.

Macquarie Infrastructure and Real Assets

Macquarie Infrastructure and Real Assets (MIRA), part of Macquarie Funds Group, is a leading global alternative asset manager specialising in infrastructure funds, other real asset funds and customised accounts. Established in 1996, MIRA’s team of approximately 400 experienced professionals located in 16 countries manages 43 funds with €69bn of assets under management, including 100 infrastructure assets. MIRA’s in-depth operational expertise and active asset management, combined with access to deal sourcing capability provide a unique competitive advantage.