Cloudberry has recently announced two significant transactions – increasing its ownership in Forte Energy Norway AS and selling three hydropower plants to Cadre AS.

The company has acquired an additional 15.99% of shares in Forte Energy Norway AS from a fund managed by Swiss Life Asset Managers. This acquisition raises Cloudberry’s stake in Forte to 49.99%. Forte’s portfolio includes 14 hydropower plants and one power offtake agreement, with an estimated annual production of 254 GWh. The increased ownership boosts Cloudberry’s proportionate power production from Forte by 41 GWh to 127 GWh.

Anders Lenborg, CEO of Cloudberry, commented: “The Forte portfolio is a well-managed hydropower portfolio with a production profile that complements Cloudberry’s existing assets perfectly. Having been a minority shareholder in Forte since 2020, we are well-acquainted with the portfolio’s strengths and potential. We are delighted to extend our relationship with both Forte and Swiss Life Asset Managers through this acquisition.”

The transaction price is undisclosed but represents approximately 1.1 times the Q1 2024 book value for Cloudberry of the Forte shares. The transaction will be financed by Cloudberry’s strong cash position and is expected to close on 28 June 2024.

In a separate deal, Cloudberry has agreed to sell three of its hydropower plants – Usma, Bjørgelva, and Finnesettbekken – to Cadre AS. These plants have a combined annual production of just under 36GWh and are considered the least strategic for Cloudberry. The sale price exceeds 2.3 times the booked equity of the plants, resulting in an internal rate of return of approximately 28% per annum.

The transaction is valued at NOK 320.5 million on a debt and cash-free basis, with the equity value of the shares being NOK 190.6 million. Including the repayment of internal loans, the sale will generate approximately NOK 205 million in free cash for Cloudberry, which will be reinvested to expand its renewables portfolio. This transaction, expected to close on 28 June 2024, is not subject to any conditions.

“We are pleased to once again demonstrate significant value creation and effective capital recycling to our investors, highlighting the attractiveness of our asset portfolio,” said Lenborg.

Cadre, founded in 2023 and majority-owned by Nordkraft and HitecVision, has quickly become a prominent player in the Norwegian small-scale hydropower sector. Carl-Fredrik Lehland, CEO of Cadre, stated: “These assets fit our strategy very well. We will be able to utilize these assets’ full potential as we are structured in a way that reduces our operating expenses with each asset added.”