Inframation: SEEIT FINDING MOST VALUE IN US ENERGY INFRASTRUCTURE DEALS

Posted on: May 25th, 2021 by Keith Driver

SDCL Energy Efficiency Income Trust (SEEIT), a UK-based fund investing in and acquiring energy infrastructure projects in Europe and North America, will continue to be an aggressive acquirer of assets through 2022, said CEO Jonathan Maxwell in an interview with sister publication Mergermarket.

Paywalled story, available here.

Acquisition of a US Commercial District Energy System

Posted on: April 6th, 2021 by Jessica Fontecha-Morgan

SEEIT has agreed to acquire a 100% equity interest in a commercial district energy system, RED-Rochester, LLC, (”RED”) from a fund managed by an affiliate of Stonepeak Infrastructure Partners for an equity cash consideration of approximately $177 million.

RED is one of North America’s largest district energy systems with 117 MW of steam turbine generators plus boilers, chillers and other equipment that provide exclusive utility services to commercial and industrial customers within the 1,200 acre Eastman Business Park, located in Rochester, New York. The park’s origins date back to 1891 when Kodak started manufacturing film and paper in four newly constructed buildings and is now host to a diversified base of commercial and industrial businesses including manufacturing, chemicals, pharmaceuticals and food and beverages.

As the exclusive provider of utility services to the park, RED offers 16 on-site services including electricity, steam, chilled water, wastewater, compressed air, nitrogen, lake water treatment, industrial water distribution and high purity water distribution. This “plug-and-play” set of utility services is a key attraction of the park, providing simple integration for new customers and allowing existing customers to expand their operations.

RED has over 100 commercial and industrial customers, typically contracted on a 20-year fixed-term basis with automatic five or ten year renewals, linked to their tenancy on the Eastman Business Park. The contracts provide stable and predictable cash flows with substantial mitigation against volatility in demand. Some two thirds of the value of RED’s offtake contracts are derived from investment grade or equivalent counterparties(1). RED’s cost base is relatively fixed, providing good visibility of cashflows.

Since 2016, RED has delivered 40+ energy efficiency projects across its operations that have resulted in annual savings of over $4 million and carbon savings of over 50%. Additionally, the Investment Manager has identified a further pipeline of potentially accretive energy efficiency initiatives that it believes can deliver additional cost and carbon savings.

The acquisition will be funded from existing cash reserves and RCF facilities, which includes the capital raised by SEEIT in the equity fundraising in February. RED’s existing project debt finance facilities, which are equivalent to c.$83 million, will remain in place. Completion of the acquisition is expected after satisfactory conclusion of customary regulatory conditions and consents.

The investment is expected to achieve SEEIT’s total returns objectives and to further support its progressive dividend policy.

Commenting on the acquisition, Jonathan Maxwell CEO and Founder of Sustainable Development Capital LLP, said:

“SEEIT is acquiring an operational and established district energy system that provides a range of essential and efficient energy services and utilities to a diversified customer base on one of the largest business parks in the United States of America. We expect the project to make positive contributions to SEEIT’s earnings and cash flow. At the same time, the project offers the potential for growth over the medium to long term through the addition of new customers and the implementation of accretive energy efficiency measures.”

Link to RNS

Agreement Signed with Chargemaster Limited

Posted on: March 30th, 2021 by Jessica Fontecha-Morgan

SEEIT is pleased to announce that it has signed an agreement with , the UK’s largest operator of public electric vehicle charging points.

The agreement represents a significant step forward in the roll out of national EV charging infrastructure, expected to result in the development and construction by The EV Network of a significant number of rapid and ‘ultra-fast’ EV charging locations.

Development and construction is expected to start immediately, with the first sites targeted to be operational by mid to end of 2021.

This national EV station roll out for bp pulse will include state of the art ‘hubs’ of between six to twelve chargers, as well as the next generation of ‘e-forecourts’ with up to 24 ultra-fast charge points (300KW) with on-site solar PV and battery storage systems. The e-forecourts will have both retail and convenience facilities for the drivers while they are waiting for their cars to be charged.

EVN plans to develop a further c.400 EV charging sites, and SEEIT has the right of first refusal to  provide an additional c.£150 million in the next 24-36 months.

Commenting on the investment, Jonathan Maxwell, CEO of SDCL, said: “Electric vehicle sales in the UK are at an inflection point, making the immediate scaling up of high quality, rapid and widely available EV charging infrastructure of critical importance. This investment, in partnership with the Electric Vehicle Network, is a significant commitment to EV charging infrastructure in the UK and we look forward to supporting and enabling the market for sustainable and low carbon transport, helping to reduce pollution and greenhouse gas emissions.”

Link to RNS

Further investment in Primary Energy

Posted on: January 4th, 2021 by Keith Driver

SEEIT is pleased to announce that it has acquired an additional 15% interest in Primary Energy, a portfolio of recycled energy and cogeneration projects located in Indiana, USA, from a consortium led by Fortistar LLC (”Fortistar”) for an equity cash consideration of approximately $36 million. 

SEEIT acquired an initial 50% interest in Primary Energy in February 2020. Following this acquisition, SEEIT’s interest in Primary Energy is now 65%. SEEIT has also agreed terms under which it could increase its stake and further enhance returns for shareholders.

The 298MW portfolio consists of five operating projects which generate low-cost, efficient energy with substantial environmental benefits via three recycled energy projects, one natural gas combined heat and power project and a 50% interest in an industrial process efficiency project.  

The portfolio projects are located within the Indiana Harbor Works and involve two of the most efficient and advanced steel mills in the United States. Four of the five projects relate to steel mills that are now owned by Cleveland-Cliffs Inc. (”Cleveland-Cliffs”) following its acquisition of ArcelorMittal USA, making Cleveland-Cliffs the largest flat-rolled steel producer as well as the largest iron ore pellet producer in North America. One of the five projects services Midwest Steel, a subsidiary of United States Steel Corporation. The projects are fully integrated into the steel mill facilities, including fuel handling and emissions control equipment and systems that are critical for the operations of the facilities.

The acquisition is funded from existing cash reserves. Primary Energy’s existing project debt finance facilities, which are equivalent to c.$186 million, will remain in place.

Commenting on the acquisition, Jonathan Maxwell, CEO of Sustainable Development Capital LLP, said: “We are pleased that SEEIT is increasing its stake in Primary Energy, which provides critical and cost-effective low carbon energy services to key industrial sites. Industrial energy efficiency is a key focus for SEEIT and is a major source of greenhouse gas emission reductions as well as productivity gains. The investment follows a period of substantial growth and diversification in SEEIT’s investment portfolio and is made within the context of an improved market background and outlook”.

Link to RNS

 

SEEIT: ESG Report 2020

Posted on: October 1st, 2020 by Keith Driver