Dutch Pension Fund to Invest in Hydroelectric Projects

APG, the asset management arm of the Dutch public sector pension fund, plans to invest $682 million (500 million euros) in hydroelectric power projects over the next five years, a spokesman said on Monday.

Harmen Geers said the fund aimed to take advantage of energy companies' need to raise cash by divesting assets.

"We have a small investment in hydroelectric power already, but as we are expanding the infrastructure portfolio and we prefer sustainable energy generation, then hydropower sticks out as very suitable," Geers added.

APG handles the investments of several Dutch pension funds, including ABP, the Dutch public sector pension fund, the world's third largest, and manages some 370 billion euros in assets.

"The investment coincides with the fact that a number of large energy companies in Europe who are trying to reduce their debt are offloading or looking to sell assets," Geers said.

The fund plans to buy between five and 10 projects over the coming five years, with an average project size of 75 million euros, he said.

He said the fund expected to earn a "high single-digit" yield from the investments, which are likely to made first in Scandinavia and later in Turkey.

APG will directly commit around 250 million euros to the hydro investments, with the remaining 250 million to come from bank loans or from issuing bonds.

($1 = 0.7331 Euros)

(Reporting by Thomas Escritt; Editing by Catherine Evans)