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An experimental setup for hydrokinetic energy conversion comprising a vertical axis turbine, a directly driven permanent magnet generator, and a control system has been designed and constructed for deployment in the river Dalälven in Sweden. This paper is devoted to discussing the mechanical and electrical design of the generator used in the experimental setup. The generator housing is designed to be water tight, and it also acts as a support structure for the turbine shaft. The generator efficiency has been measured in the range of 5–16.7 rpm, showing that operation in the low velocity range up to 1.5 m/s is possible with a directly driven generator.