Repower : and Reichmuth Infrastruktur Schweiz agree strategic partnership (03 30 16 Morteratsch power plant)

Tough conditions on the energy market are forcing energy companies to come up with new strategies and innovative approaches. After protracted discussions with institutional investors about the possibility of jointly upgrading and operating the Morteratsch power plant, Repower has now signed a long-term cooperation agreement with Reichmuth Infrastruktur Schweiz AG. For the plans to go ahead, the concession will have to be transferred to a newly established joint company.

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Joint news release from Reichmuth Infrastruktur Schweiz and Repower
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The Morteratsch power plant, which dates back to 1890 and was modernised in 1968, is the oldest facility in Repower's portfolio of generation assets. Following expiration of the concession in 2013, in 2014 the municipality of Pontresina granted Repower a new concession subject to the requirement that the plant be fully refurbished and extended. The powerhouse is to be augmented, the water intake renovated and the pressure line enlarged to boost annual energy generation from 3.6 to 7 gigawatt hours. The cost will be around CHF 10 million.

Repower has been discussing financing of the project with interested institutional investors. In the current environment of negative interest rates it is a challenge for pension funds, foundations and insurance companies to find long-term investments that make sense. Thanks to their reasonable, secure returns, power plants such as Morteratsch that benefit from the feed-in remuneration at cost (KEV) scheme are an attractive proposition for institutional investors.

Repower has now found the ideal partner in Reichmuth Infrastruktur Schweiz AG. The innovative, long-term plan for financing and operating the plant involves establishing a joint entity under the name of Kraftwerk Morteratsch AG in Pontresina. Reichmuth Infrastruktur Schweiz KGK, an infrastructure fund managed by Reichmuth Infrastruktur Schweiz AG, will provide a large part of the financing and thus hold a majority interest in the joint venture; for its part Repower will continue to be in charge of construction and the operation of the plant.

Nicolas Wyss, member of the executive board at Reichmuth Infrastruktur Schweiz AG responsible for utilities, has the following to say about collaboration with Repower: 'Hydropower plays an extremely important role in Switzerland, particularly in Graubünden, as well as being an essential component of the federal government's 2050 energy strategy. By investing in the Morteratsch power plant, Reichmuth will be contributing to the 2050 energy strategy by helping boost Swiss hydropower generation. In the current environment of negative interest rates, stable returns and a low correlation with other asset classes make infrastructure investments such as Morteratsch the ideal addition to an institutional investor's portfolio.'

'Reichmuth Infrastruktur Schweiz and Repower have jointly come up with an innovative model that optimally harnesses the core competencies of the two partners,' comments Felix Vontobel, Repower's Head of Generation/Grid and Deputy CEO.

To enable the partnership to go ahead, the concession will have to be transferred to the new company. Repower has informed the municipality of the plans, and will be submitting an application for transfer of the concession to the local officials responsible in Pontresina and the Canton Graubünden authorities.

This will have no influence on the terms of the concession or the associated revenues, and Repower will remain the point of contact for the municipal authority.

­Repower Group
Repower is an international energy company headquartered in Poschiavo (Canton Graubünden, Switzerland). The group operates along the entire electricity value chain from generation and trading to sales and distribution. In Italy it is also involved in the gas business. Repower also develops innovative solutions facilitating the smart integration of energy systems, as well as providing services to other energy utilities.

Reichmuth Infrastruktur Schweiz AG
Reichmuth has a dedicated team for infrastructure investments with strong local roots in Switzerland and many years of experience in investment management (including structuring, project evaluation and deals). Reichmuth Infrastruktur Schweiz AG is the general partner responsible for the management of Reichmuth Infrastruktur Schweiz KGK, an investment vehicle for qualified investors launched in December 2014 that holds interests in transport infrastructure, utilities and social infrastructure. The investors backing Reichmuth Infrastruktur Schweiz KGK are pension funds, foundations and insurance companies.

Contact at Repower:

Felix Vontobel
Head of Generation/Grid
Deputy CEO
CH-7742 Poschiavo
T [phone]
M [phone]
[e-mail]

Werner Steinmann
Head of Media Relations
CH- 742 Poschiavo
T [phone]
M [phone]
[e-mail]

www.repower.com

Contact at Reichmuth Infrastruktur Schweiz AG:

Nicolas Wyss
Member of the Executive Board
CH-6000 Lucerne 7
T [phone]
[e-mail]

www.reichmuthco.ch