PRESS RELEASE 12 December 2013 8.20 AM
Suomi Power Networks Oy “Suomi Power Networks”, which is owned by consortium of Finnish pension funds Keva and LocalTapiola Pension together with international infrastructure investors First State Investments and Borealis Infrastructure, has signed an agreement with Fortum Corporation “Fortum” to acquire its electricity distribution networks in Finland.
The consortium comprises long term investors who already have infrastructure investments in Finland (including Fingrid Oyj and Digita Oy), electricity distribution and transmission businesses in North America and the UK, as well as regulated energy networks throughout Europe.
The transaction will have no impact on Fortum's electricity distribution customers and excludes Fortum´s electricity sales business. Fortum will continue to provide services and support to the distribution business, including customer services, to ensure that there are no disruptions during the transition of ownership.
Ari Huotari, CIO of Keva, said: “The Suomi Power Networks consortium is delighted to take on the responsibility of delivering energy as safely and securely as possible to Fortum’s electricity distribution customers. During our long term stewardship, we look forward to working with the management team, investing in and developing the network to deliver the quality and security of supply that our customers and regulators expect.”
Hanna Hiidenpalo, CIO of LocalTapiola Pension, said: “As leading Finnish institutional investors we are pleased to be working with experienced international partners to make significant long term investment into the Finnish economy and strategically important infrastructure through Finland’s largest electricity distribution network.”
Completion of the transaction is expected during the first quarter of 2014 subject to customary regulatory approvals.
For further information please contact:
Markus Pauli, CIO, Alternative Investments, +358 20 614 2473, firstname.lastname@example.org
Esko Raunio, Head of Private Market Investments, LocalTapiola Pension, +358 40 543 9252 email@example.com
For media requests please contact consortium´s Finnish PR representative:
Pekka Timonen, CEO, Kreab Gavin Anderson Oy, +358 50 337 4386, firstname.lastname@example.org
Petra Thorén, Deputy Managing Partner, Kreab Gavin Anderson Oy, +358 40 764 5462, email@example.com
About the consortium
Keva is responsible for funding the earnings-related pension cover of municipal sector employees in Finland serving 1.3 million insured persons and pension recipients. Keva´s contribution income in 2012 amounted to approximately €4.8bn and Keva paid out approximately €3.8bn in municipal sector pensions in 2012. Keva is a long-term investor where investments are targeted to support a stable level of pension contributions. Keva had €34.4bn under assets at 31 December 2012.
LocalTapiola Pension is the third largest provider of earnings-related pension insurance in Finland with the number of insured approximately 260,000. LocalTapiola Pension’s investment assets amounted to €9.9bn as of 31 December 2012. LocalTapiola Pension and Pension Fennia have decided to merge and the merger will come into effect on 1 January 2014. The new business name of the merged companies is Elo Mutual Pension Insurance Company, and it will have close to €20bn of investment assets.
First State Investments
First State Investments is the consolidated asset management division of Commonwealth Bank of Australia, the largest financial institution in Australia and currently manages approximately €124 billion of investments globally. First State is a leading manager of, and investor in, infrastructure assets. With nineteen years’ experience in infrastructure investment, it is one of the longest established managers of infrastructure assets on behalf of institutional investors and currently manages in excess of €2.4 billion of equity invested across assets in the utility, transport and social infrastructure sectors in Australasia and Europe.
Borealis Infrastructure Management Inc
Borealis has 15 years of experience originating, structuring and actively managing infrastructure investments on behalf of the Ontario Municipal Employees Retirement System (“OMERS”). OMERS, which was established in 1962, is a large defined benefit Canadian pension plan with 429,000 members, net assets of more than CAD $60bn and an AAA credit rating from Standard & Poor’s. OMERS was one of the first large Canadian pension plans to invest in private markets, including infrastructure and has earmarked more than 20% of its portfolio to be allocated to infrastructure investments. Borealis has sourced and currently manages over 20 infrastructure investments in Canada, the United States and Europe, representing over C$10 billion of OMERS’ invested equity.
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