– Have always been open to part ownership – E24

In 2021, Norsk Hydro planned to list the renewable business during the year, but that did not happen.

As recently as May 2022, Hydro maintained that the listing would take place during 2022, but by then Russia’s invasion of Ukraine had made the outlook a little more uncertain. The number of new IPOs also fell sharply throughout last year, and there was no listing last year.

In the autumn of last year, Hydro said that the company was considering alternatives to listing Hydro Rein on the stock market in order to secure the capital needed.

At the start of 2023, there is still no IPO in sight for the renewable company. Instead, Hydro is working to raise money from private investors to secure the billions that Hydro Rein will now invest in solar and wind power.

– Will there be no IPO of Hydro Rein?

– We are looking to raise capital, but the way the markets look now, it is more likely that we will raise private capital than that we go public, if we are successful in this round, says CFO Pål Kildemo in Norsk Hydro to E24.

– But there could be an IPO in the next round. We still have an ambition to go public with Rein, he adds.

Can earn close to half a billion

The projects that Hydro Rein is currently working on are expected to contribute NOK 400-450 million to Norsk Hydro’s adjusted gross operating profit (ebitda) in 2026, the company has enlightened.

Hydro’s overall adjusted gross operating profit was NOK 39.7 billion in 2022.

Hydro Rein invested around 1.5 billion in 2022, and according to the plan will invest around 2.5 billion going forward, most of this in 2023, Hydro states.

– We are running a process now where we are trying to raise capital, says Kildemo.

– How much are you trying to collect?

– That is what will be the discussion in negotiations with a private player, he says.

– It’s not banks you’re going to get money from?

– This will typically involve bringing in a private investor, says Kildemo.

– A partner who injects money and comes in on the owner’s side?

– Yes. We have always been open to part ownership. We want to be in the majority, but whether there are many or a few shareholders is not the most important thing, he says.

– What types of players do you talk to?

– We are in the middle of a process, so we cannot talk about that, says Kildemo.

Target: 3 GW in 2026

The goal for Hydro Rein is to have a renewable production capacity of three gigawatts by 2026. How much electricity production this will give depends on the type of power. Wind power supplies power for more hours per year than solar power, but both of these types of power normally supply less than large hydroelectric and nuclear power plants.

The company has several solar and wind power projects underway in Brazil, in collaboration with companies such as Macquarie, Equinor and Scatec as well as Atlas Renewable Energy and the aluminum producer Albras.

Hydro Rein is also developing wind power projects in the Nordics that will be able to provide 2.8 terawatt hours of annual electricity production, and solar power in the Nordics that can provide 0.4 TWh of electricity production, according to Hydro’s figures from capital market day in December.

On Tuesday, Hydro also presented its own annual report for last year. There, the company discussed the great need for renewable electricity if the world is to achieve its climate goals.

“For Hydro, Hydro Rein’s contribution to generating more renewable power production will be decisive. Hydro Rein has made significant progress over the past year and is now in the implementation phase of four projects that have already secured contracted annual revenues of $2.7 billion when they come into operation,” the company writes in a melding.