Cloudberry Annual report 2021 Financial statements 138 Note 20 Investments in associated companies Investments in associated companies are accounted for using the equity method. Odal Vind use EUR as functional and reporting currency. Transactions are translated using the average rate in the respective quarter, while assets and liabilities are translated using the exchange rate at reporting date. Exchange rate differences are recognised in the Group accounts in other comprehensive income. The table shows the summarized investments in associated companies included in the Groups balance sheet as of 31 December 2021 Name of Entity Place of business Consolidated economic interest in 2021 Segment Princippal Activities Forte Energy Norway AS with SPV's. Assosiated company Norway 34.0% Production Hydro power Odal Vind AS Assosiated company Norway 33.4% Production Wind power under construction Forte Energy Norway AS (Forte) Cloudberry acquired 34% of Forte in November 2020. Forte owns 13 producing hydro power assets and one power offtake agreement in Norway, with a combined normalized annual production of 86 GWh net to Cloudberry. The hydro power assets have an average license life of minimum 50 years. Cloudberry Production is the local manager of the Forte portfolio and delivers management services. Cloudberry has secured appropriate and customary governance mechanisms and rights for its 34% minority share interest. The majority owner of Forte is Fontavis Forte HYDRO S.A R.L. Fontavis is a part of the Swiss Life group. Shareholders agreement and daily management of Forte Forte is managed through the Shareholders agreement (SHA) dated 7 July 2020 between Fontavis (66%) and Cloudberry (34%). The SHA’s purpose is to govern the Parties ownership responsibilities. It has the following overall principles: · The parties shall together prepare a business plan which is updated annually and is to be approved by the Board. · Cloudberry shall be the local manager of Forte and have the responsibility for day-to-day operational management and supervision (services defined in “Management Agreement”). · The Board consists of 5 directors, Fontavis shall have the right to appoint three (3), including the chairman, while Cloudberry have the right to appoint two, (2). The SHA’s material substance is that both shareholders must cooperate in decisions about the business activities of Forte, Cloudberry has concluded that it is not joint control, but Cloudberry has significant influence in Forte. Odal Vind AS In December 2020 Cloudberry acquired 15% of the Odal windfarm with an option to increase the ownership up to 33.4% which was exercised on expiration on 30 June 2021. The transaction took place on 6 July. The Odal windfarm is currently under construction in Innlandet, Norway and is expected to be in full production by the end of H1 2022. The windfarm is constructed together with local and well-known partners KLP and Akershus Energi. Due to some covid related delays there has been some minor cost overruns, but less than 5% of CAPEX. The overall economics of the project is unchanged for Cloudberry.
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