Liberum: SDCL Energy Efficiency Income Trust

General/ 06 August 2020

Acquisition of electric vehicle charging sites

Mkt Cap £475m | Prem/(disc) 13.2% | Div yield 4.9%


SDCL Energy Efficiency Income Trust has entered into an agreement with Electric Vehicle Network (EVN) to acquire an initial 112 rapid and ultra-fast EV charging stations across the UK for a total consideration of up to £50m.

The EV charging sites will be developed and funded by EVN to the point at which they are contracted and construction ready, at which stage they will be acquired by SEIT. The commitment of up to £50m will be drawn down in tranches, with the first draw down expected to take place later this year and the full balance deployed over the next 12-18 months.

The construction period for each project is expected to be around 6 -12 weeks, at which point projects become operational and are expected to generate availability-based revenues. Once operational, the EV charging sites will be contracted through 20-year, fixed price, CPI inflated Energy Service Agreements to Charge Point Operators, which are typically investment grade utility companies. The EV Charging sites will also enter into long-term land-lease agreements with the site-owners. EVN will also manage the construction and operation of the assets.

In addition to the initial 112 sites, EVN has plans to develop a further c.380 EV charging sites, requiring an additional c.£150m in the next 36 months, for which SEEIT has a right of first negotiation.