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Hg in €185m Swedish infrastructure deal

The European private equity firm has stormed into Sweden’s renewable energy sector with a deal to finance and take an equity stake in the country's largest onshore wind farm development, Havsnas.

HgCapital has acquired a 75 percent stake in Swedish onshore wind farm Havsnas in a deal valued at €185 million ($289 million).

Hg, a European-focussed private equity firm, has formed a partnership with wind farm developer Renewable Energy Systems to provide equity finance to the project. A trio of banks, CommerzBank, ING and NordLB, will provide a 17-year €127 million construction and term project finance loan facility. Renewable Energy Systems is expected to begin work following the deal.

Renewable Energy Systems is retaining the remaining 25 percent stake in Havsnas, which is expected to start commercial operations after November 2009.

The Nordic power sector has traditionally been dominated by utilities with assets mostly financed on balance sheet, according to HG. The private equity firm said Havsnas represented the largest non-recourse project financing in the Nordic power market. Hg added the wind farm was a “merchant” wind farm which would trade power and green certificates in the NordPool power market at fluctuating prices rather than the guaranteed prices given in other markets.  
 
Yesterday, the Canada Pension Plan Investment Board agreed to invest $200 million in Connecticut-based wind park company Noble Environmental Power, which develops, constructs, owns and operates wind parks across the US.

In September 2007, Jean Perarnaud and Jens Thomassen joined Hg as associate directors, bringing the total number of investment professionals in HgCapital’s renewable energy team to five.