Hydro and Agder Energi have signed a Letter of Intent (LOI) for the possible establishment of a jointly owned company to operate and further develop their combined assets in the Otra River, southern Norway, where Hydro recently acquired the Vigelands Brug hydropower plant.
The LoI is conditional on a proposed adjustment of the Industrial Concession Act to enable private entities the possibility to organize an ownership share in a company with liability (ANS/DA). This will enable private entities to take out profit in the form of power rather than restricting it to financial remuneration, which is important to Hydro as a fully integrated aluminium company active throughout the value chain from bauxite to finished products.
Should it materialize, Hydro would own less than one-third of the envisaged jointly owned company (DA), which would satisfy the legal requirements regarding public control and be comparable to Hydro owning one-third in a private limited company.
Hydro acquired the 180 GWh Vigelands Brug hydropower station on the lower Otra River in June, as part of a broader agreement with Rio Tinto Alcan to take over both the high-purity Vigeland Metal Refinery and the on-site "run-on-the-river" power station. Based in southern Norway, Agder Energi is Norway`s fourth-largest power producer, with 47 fully owned and part-owned production assets - of which 10 are located on the Otra River.
In addition, Hydro and Agder have signed an agreement regarding project management support. Hydro`s Projects unit has provided project management resources and systems to Agder Energi since summer of 2012 to execute the Iveland 2 project. This cooperation has now been extended through a Collaboration Agreement to cover all of Agder Energi`s major hydropower projects, lasting for several years.
Contact Pål Kildemo
Cellular +47 97096711
Contact Halvor Molland
Cellular +47 92979797
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Source: Norsk Hydro via Thomson Reuters ONE