Investment in On-Site Renewable Portfolio in UK
12 July 2022
SDCL Energy Efficiency Income Trust plc
("SEEIT" or the "Company")
Investment in 69 MW Operational On-Site Renewable Portfolio in the UK
SEEIT is pleased to announce that it has signed an agreement to acquire a portfolio of on-site, predominantly solar PV operational projects from United Utilities Group PLC ("UUG") for a consideration of approximately £100 million. SEEIT will acquire a 100% interest in United Utilities Renewable Energy Ltd ("UURE"), which is a portfolio totalling 69 MW across 70 sites in the Northwest of England.
The assets provide renewable energy generated on-site directly to the end-user, United Utilities Water Limited ("UUW"). UUW is the regulated water and wastewater business of UUG, a listed water and wastewater company in the UK.
The renewable portfolio comprises 90% solar PV, 9% wind and 1% hydro in terms of total generation. The portfolio benefits from long term contracted cashflows and, as the assets are operational, will be immediately cash yielding.
The solar PV and wind assets are all connected to UUW on-site water utility infrastructure via private wire, and provide green electricity under long-term, fixed-price power purchase agreements with UUW, which covers approximately 74% of total revenues. Additionally, a number of assets benefit from 20-year Feed-in-Tariffs, with fixed RPI-linked payments backed by the UK Government, which account for approximately 17% of the total revenues with a remaining weighted average life of 14.5 years.
The transaction fits SEEIT's investment policy as it increases the supply of renewable energy generated on-site and helps to reduce greenhouse gas emissions arising from the supply, distribution and consumption of energy. In particular, these assets supply clean energy to critical water infrastructure sites.
The investment is funded from the Company's existing resources and completion is expected in the coming months subject to customary consents and approvals.
Commenting on the investment, Jonathan Maxwell, CEO of Sustainable Development Capital LLP, said "This project is an opportunity with distinct energy efficiency characteristics, providing essential clean energy services directly to an essential end-user, thereby helping to reduce the carbon emissions associated with supply from the grid. SEEIT is acquiring an operational on-site portfolio of scale with an investment grade counterparty, which will increase its exposure to the UK, enhancing its overall diversification by geography, technology, and counterparty."
For Further Information
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Sustainable Development Capital LLP Jonathan Maxwell Purvi Sapre Eugene Kinghorn Tom Hovanessian
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T: +44 (0) 20 7287 7700
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Jefferies International Limited Tom Yeadon Gaudi le Roux
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T: +44 (0) 20 7029 8000
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TB Cardew Ed Orlebar Henry Crane |
T: +44 (0) 20 7930 0777 M: +44 (0) 7738 724 630 |
About SEEIT
SDCL Energy Efficiency Income Trust plc is a constituent of the FTSE 250 index. It was the first UK listed company of its kind to invest exclusively in the energy efficiency sector. Its projects are primarily located in the UK, Europe and North America and include, inter alia, a portfolio of cogeneration assets in Spain, a portfolio of commercial and industrial solar and storage projects in the United States, a regulated gas distribution network in Sweden and a district energy system providing essential and efficient utility services on one of the largest business parks in the United States.
The Company aims to deliver shareholders value through its investment in a diversified portfolio of energy efficiency projects which are driven by the opportunity to deliver lower cost, cleaner and more reliable energy solutions to end users of energy.
The Company is targeting an attractive total return for shareholders of 7-8 per cent. per annum (net of fees and expenses and by reference to the initial issue price of £1.00 per Ordinary Share), with a stable dividend income, capital preservation and the opportunity for capital growth. The Company is targeting a dividend of 6.00p per share in respect of the financial year to 31 March 2023. SEEIT's last published NAV was 108.4p per share as at 31 March 2022.
Past performance cannot be relied on as a guide to future performance.
Further information can be found on the Company's website at www.seeitplc.com .
Investment Manager
SEEIT's investment manager is Sustainable Development Capital LLP ("SDCL"), an investment firm established in 2007, with a proven track record of investment in energy efficiency and decentralised generation projects in the UK, Continental Europe, North America and Asia.
SDCL is headquartered in London and also operates worldwide from offices in New York, Dublin, Madrid, Hong Kong and Singapore. SDCL is authorised and regulated in the UK by the Financial Conduct Authority.
Further information can be found on at www.sdclgroup.com .
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