Hydro and Lyse plan to merge part of their respective hydropower production to create a stronger joint hydropower company. The agreement secures long-term access to renewable power for Hydro’s industrial operations in Norway. The new company will be called Lyse Kraft DA and have a normal annual power production capacity of 9.5 TWh, of which Hydro will own 25.6% and Lyse 74.4%.
The agreement is expected to bring synergies of approximately NOK 500 million in net present value.

As a consequence of the transaction, the RSK assets will not revert to state ownership at the end of 2022, meaning Hydro can use its share of the power produced by the new company for aluminum production in Norway.

Based on the agreement, Hydro will remain the operator of the RSK assets and assume operatorship for Lyse’s fully owned hydropower plants. Consequently, Hydro will become a larger power operator and remain the Norway’s third-largest provider of renewable power, with a combined renewables production of 13.6 TWh in a normal year. Hydro’s annual production, based on equity shares, will be 9.4 TWh in a normal year.

RSK was established in 1963 to supply power to Hydro’s aluminum plant at Karmøy. In line with the Norwegian rules on license reversion of waterfalls and hydropower installations, private entities can normally only own up to one-third of the shares of a company that owns larger waterfalls. In 2016, the Norwegian government opened for private entities to extract physical power from power companies to ensure predictability for industrial operations.