First State Investments has agreed to acquire Swedish gas transmission system operator, Swedegas, from the Spanish and Belgian utilities Enagás and Fluxys through its fund, The European Diversified Infrastructure Fund II. The transaction is the fund’s second acquisition in the Swedish gas network sector, having acquired the country’s largest gas distribution system operator in April 2018.
Swedegas is the owner and operator of the sole gas transmission network in Sweden. Through a 600-kilometer pipeline network, the firm supplies 33 municipalities, several combined heat and power plants, and industrial customers with gas. Swedegas is currently developing a facility in the Port of Gothenburg, which will allow vessels to refuel using Liquefied Natural Gas (LNG) and Liquefied Biogas (LBG), providing the marine transport sector with more sustainable options.
Marcus Ayre, partner of Infrastructure Investments at First State, said, “We have significant experience in the European energy transmission and distribution market and it was natural for us to look for further investments in the Swedish gas network sector. The energy market is one which meets our investment criteria as we seek to create long-term, sustainable value for our investors.”
Swedegas aims to ensure that 30 percent of the gas in its network is renewable by 2030, and 100 percent by 2050.
In 2007, First State signed the Principles of Responsible Investment and has embedded environmental, social and governance values across all of its investment strategies.
Marcus Ayre continued, “We are committed to working closely with the management team at Swedegas to meet its sustainability goals. The availability of well-developed gas networks in Europe and the complementary function of renewable gases and natural gas vis-à-vis other energy forms, make gas and gas infrastructure well positioned to help in the transition to a greener energy environment.”
The European Diversified Infrastructure Fund II is the successor fund to EDIF I and pursues an investment strategy of constructing a core and core-plus infrastructure portfolio of assets primarily targeting energy, utility and transportation investments across Europe. In June 2018, the fund successfully completed its second fundraising series, taking EDIF II’s total commitments to €2.1 billion ($2.44 billion), from global institutional investors.
The closing of the transaction is subject to approval from the Swedish Competition Authority.