7th Mar 2019 12:19
LONDON (Alliance News) - SDCL Energy Efficiency Income Trust PLC on Thursday said it acquired a 71% stake in a portfolio of eight operating combined heat & power projects on the east coast of the US for USD5.0 million.
The investment company said six of these projects are being acquired from an undisclosed US manufacturer & installer of combined heat & power units and solutions.
The remaining two projects are being contributed by a fund managed by a US subsidiary of SDCL, which will result in that fund owning the remaining 29% interest in the combined portfolio.
The projects, which comprise of combined heat & power units for a prison, university, multi-family developments and a nursing home, have a total installed capacity of 2.5 megawatts of combined heat & power and 1,250 tonnes of cooling capacity.
Each project is subject to energy purchase agreements, SDCL said, which benefit from long-term contracted cash flows.
Revenue from the sites are generated through electricity sales, the provision of hot and chilled water and from electricity demand reduction.
This acquisition represents SDCL's first new investment since listing on the London Stock Exchange and acquiring the seed portfolio in December 2018.
Looking ahead, the company said it intends to continue to invest the proceeds from its initial public offering to generate return targets of between 7% and 8% per annum and to pay its target dividend of 5 pence for the year.
The trust said it is continuing to review an identified pipeline of new investment opportunities, a number of which are at an advanced stage.
"This acquisition adds to our portfolio of combined heat & power assets, allowing us to deliver cheaper, cleaner and more reliable energy solutions to clients, and importantly diversifying the wider portfolio geographically into the US," explained Chief Executive Jonathan Maxwell.
"We are particularly pleased that SDCL has now entered the US market, which offers opportunity for further investment into high quality combined heat & power as we continue to seek out attractive acquisition opportunities," added Maxwell.
SDCL shares were trading 0.6% higher on Thursday at 102.59 pence each.
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