SDCL Energy Efficiency Income Trust acquires 50% of recycled energy project

SDCL Energy Efficiency Income Trust (LON:SEIT) announced on Wednesday that it had acquired a 50% interest in Primary Energy, a which is a portfolio made up of recycled energy and cogeneration projects.

The projects are located in Indiana, USA, and the 50% stake is being bought from a consortium headed up by Fortistar LLC, for an equity cash sum of around US $110 million.

“The 298MW portfolio consists of five operating projects which generate low-cost, efficient energy, comprising three recycled energy projects, one natural gas combined heat and power project and a 50% interest in an industrial process efficiency project.” The company’s statement said.

The group said it would finance the acquisition through cash reserves. It added that its existing project debt finance facilities remained in place post-acquisition.

SDCL Energy Efficiency Income Trust comments

Jonathan Maxwell, CEO and Founder of Sustainable Development Capital LLP, said:

We are delighted to have completed this acquisition. This opportunity involves a proven operational portfolio of industrial energy efficiency projects with strong environmental benefits.

This investment further diversifies SEEIT’s portfolio, in terms of geography, technology, counterparty and application. We are confident that this acquisition will make a significant contribution to SEEIT’s total returns.”

Investor notes

Following the announcement, the SDCL Energy Efficiency Income Trust shares rallied modestly by 0.91% or 1.00p, to 111.00p per share 05/02/20 16:45 GMT.

The company has a target dividend per share of 5.00p, with this set to increase to 5.50p for the year ended March 31 2021. Its estimated NAV is 99p.

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Jamie Gordon
Senior Journalist at the UK Investor Magazine. Also a contributing writer at the Investment Observer, UK Property Journal and UK Startup Magazine. Postgraduate of King's College London with a specialisation in Business Ethics. Interested in Development Economics and David Hume.