(Bloomberg) -- German asset manager Prime Capital AG bought a synthetic aviation fuel project in Sweden, in a boost for the nation’s green-tech transition after recent setbacks.
The factory, developed by Renewable Energy Systems Holding Ltd., should cost €1 billion ($1.1 billion) to €2 billion to complete and will be operational late this decade if approvals run smoothly, said Matilda Afzelius, chief executive officer for the Nordic region at RES. Her firm will continue to develop the project.
“It’s further evidence that there isn’t a green bubble,” Afzelius said in an interview Monday.
Sweden’s green-tech ambitions have been roiled in the past few months after battery maker Northvolt AB filed for bankruptcy protection, while Vattenfall AB and Orsted AS pulled out of green fuel projects. Iron-ore giant LKAB is also curtailing plans to produce fossil-free sponge iron at a site in the north.
Both companies declined to provide a value on the deal.
The plant, located in Ange, central Sweden, will make more than 80,000 tons of fuel per year and will be supplied with 500 megawatts of renewable electricity. Through electrolysis, water will be broken into hydrogen and oxygen. The green hydrogen is then combined with captured carbon dioxide and further processed into aviation fuel.
“Due to the abundant supply of green electricity, Sweden is very well positioned for any power-intensive industry,” Mathias Bimberg, head of infrastructure and managing director at Prime Capital, said by email. “It is therefore only logical that Sweden will also serve as a key hub for the production of green e-fuels.”
Prime Capital owns several other energy projects developed by RES, including the nearby Bjornberget wind park. As of September, Prime had about €4.3 billion in assets under management.
(Updates with CEO quote in third paragraph.)
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