Denmark's state-owned DONG Energy [DONG.UL] has agreed to sell its stakes in two Norwegian hydropower producers to the Norwegian Troms Kraft Group for about 2 billion Danish crowns ($360.6 million), DONG said.
DONG Energy said it would book a pretax gain of about 0.7 billion crowns on the divestment, but the sale would not affect earnings before tax, depreciation and amortisation (EBITDA).
DONG Energy agreed to sell a 33.3 percent stake in Nordkraft for about 1.1 billion Danish crowns and a 23.7 percent stake in Salten Kraftsamband for about 0.9 billion crowns, it said.
The buyer, Troms Kraft, is owned by the region of Troms and the Tromsoe local authority.
DONG added the decision to sell stemmed from difficulties associated with Norway's regulations on hydropower concession ownership.
Under Norwegian rules, public sector owners of hydropower concessions, such as municipalities, hold their assets in perpetuity, but privately owned hydropower assets revert to the state with no compensation once the concession expires.
"Given the current rules and regulations in force in Norway, it is difficult for us to develop our existing hydro assets in Norway," Chief Executive Anders Eldrup said in a statement.
"That is the reason why we have resolved to divest these assets, so that we can devote our efforts to our other green operations," Eldrup said.
DONG Energy, which currently gets much of its electricity from coal-fired plants, has a long-term ambition to transform its generation portfolio so that 85 percent of its power will come from CO2-free sources of energy.
But the focus of DONG's investment is on offshore wind and renewables other than hydropower.
The divestment leaves DONG Energy, which is an oil, gas and electricity producer, with just one hydropower asset — a 25.7 percent stake in Swedish Kraftgarden AB, which has seven hydropower plants along the River Indal in central Sweden.
In Norway, DONG remains a stakeholder in a project building a gas-fired heat and power plant at Statoil's Mongstad refinery on the west coast, north of Bergen, and in a few minor wind power developments in addition to its stakes in Norwegian oil and gas fields.
DONG Energy said it expected to finalise the sale of the Norwegian hydropower assets in the autumn of this year.
