SWEDEN Trends and Developments Contributed by: Manne Bergnéhr, Ingela Sundelin and Arvid Sundelin, Hellström Law Firm
While new nuclear remains policy-led and grid anchored, there have been significant activities and international interest in upstream consortium build- ing, site control strategies and early-stage platform investments. Offshore wind reforms After a stop on the majority of offshore wind projects due to security concerns, Sweden is now reshaping how sites are allocated and connect to the main grid. Activity in the sector will remain in waiting mode until the change from an open-door policy to a system where locations are auctioned out is established. Hydropower modernisation The 20-year programme to align hydropower with modern environmental conditions (and the hydro- power environmental fund) continues to drive capex cycles, carve-outs, portfolio optimisation and continu- ous small-scale M&A. Onshore Wind Market character Onshore wind is still Sweden’s most liquid renewables M&A subsector. Deal flow is a mix of: • platform and portfolio exits by international devel- opers recycling capital; • repower/repurpose plays where 10–15-year fleets contemplate life extension, larger rotors or partial hybridisation with batteries; • local political veto on greenfield projects late in the permitting process still adding political uncertainty and a limitation on investments; and • late-stage processes where grid and permit cer- tainty price at a premium. Typical structures Share deals dominate for operating parks; asset deals for construction portfolios. Earn-outs are used where grid delivery or turbine upgrades are uncertain. For minority and co-investment structures, governance centres on capex approvals, PPA strategy and refi-
lease perpetuity and indexation; wake/terrain effects from neighbouring build-outs; and warranty coverage. The need for local government approval constitutes a significant political risk in greenfield investments. Offshore Wind Market character Sweden’s offshore wind pipeline is sizeable but clus- tered in overlapping Baltic and North Sea zones. Gov- ernmental decision to halt almost all offshore develop- ment projects due to military security concerns has largely affected the sector, which remains on hold, waiting for expected policy changes. Commercial themes These include the following. • Site allocation and seabed overlap – Reforms mov- ing away from an open-door system to a system where the state advertises completes areas and conducts an auction. Legacy overlaps are or will be rationalised via swaps and area rationalisation agreements. • Grid connection and island hubs – Clarifying who builds and pays for offshore connections is pivotal. Typical structures Typical structures include: early-stage stake sales with milestone call/put mechanics; shareholder loans for development costs; and change in law sharing. Diligence issues Issues include: maritime spatial plans; defence and radar constraints; Natura 2000 and shipping lanes; fishing and harbour interactions; and coexistence with offshore hydrogen pilots. Careful alignment with Svenska kraftnät’s connection studies and auction sequencing is essential. Nuclear Market character A comprehensive support package including gov- ernment loans and two-way Contracts for Difference (CfD) has been introduced. With the legal pathway reopened for new nuclear at additional coastal sites, and the government signalling openness to SMRs, new nuclear has entered strategic energy planning. While full-scale project finance for SMRs is unlike-
nancing triggers. Diligence issues
Issues include: permitting conditions (noise, shadow flicker, species protection, reindeer herding); land
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