Acquisition of On-Site Renewable Portfolio in UKGeneral/ 22 July 2022
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.”