Downing Renewables & Infrastructure Trust PLC (LSE:DORE) has announced its first acquisition of an Icelandic asset, with investment of £5 million for an interest in the Urðarfellsvirkjun hydropower plant.
The 1.1 megawatt (MW) facility boasts an annual average production of around 8 gigawatt hours (GWh), the investment company noted.
Urðarfellsvirkjun has been operational since 2018 and is under a 65-year lease agreement, with provisions for extension, showcasing a long-term commitment to the region.
The Icelandic hydropower sector offers a lucrative investment landscape, Downing highlighted, whilst noting the country’s 100% inflation-linked take-or-pay offtake agreements, which it said ensures stable returns with no exposure to merchant power pricing.
"We are pleased to acquire our first asset in Iceland, which we think is a very attractive market with huge potential for the company,” Tom Williams, head of energy and infrastructure at Downing, said in a statement.
“We remain committed to our investment strategy of diversification across geography, technology, revenue and project stage."
The acquisition was financed from the debt facilities, with the investment company set for a backdated benefit from cashflows started in December 2023.