Norsk Hydro: Hydro notified about company reorganization of Markbygden Ett AB
Hydro has been informed Markbygden Ett AB has entered a company reorganization process in accordance with the Swedish Reorganization Act. The process may affect deliveries under the long-term power contract between Markbygden Ett AB and Hydro Energi AS, but it will not affect the security of supply to Hydro’s Norwegian smelters.
Hydro Energi AS signed a long-term power purchase agreement (PPA) with Markbygden Ett AB in 2017, for annual baseload supply of 1.65 TWh in the period 2021-2039. The contract was a key enabler for financing and developing the onshore wind park Markbygden, located west of Piteå, in northern Sweden. The park’s annual production was estimated to be 2.2 TWh.
Due to significantly lower-than-expected production levels and subsequent financial challenges, Markbygden Ett AB has not been able to deliver power to Hydro in accordance with the PPA since February 6, 2023. Today, November 14, an application by Markbygden Ett AB to enter into a company reorganization has been granted by the district court of Umeå in Sweden.
Markbygden Ett AB is owned by China General Nuclear Power Group Europe Energy (CGNEE) and BNR Infrastructure, owned by GE Capital and Silk Road Fund China.
As of Q3 2023, Hydro’s claims against Markbygden Ett AB for non-delivered power of 0.9 TWh since February 2023 amounts to approximately EUR 12 million. Hydro will seek compensation for the non-delivered volumes.
Hydro is in dialogue with the local court administration and awaiting information about further process and timeline.
Hydro has a robust sourcing strategy and portfolio. The power consumption at our Norwegian smelters is close to fully covered through 2030, based on an average annual equity hydropower production of 9.4 TWh and a long-term contract portfolio of around 10 TWh per year.
Investor contact:
Martine Rambøl Hagen
+47 91708918
Media contact:
Anders Vindegg
+47 93864271
This information is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act
