SDCL Energy Efficiency Income Trust (SEEIT) completed the acquisition of 80% equity interest in Sociedade de Iniciativa e Aproveitamentos Florestais – Energia, S.A. (SIAF) in Mangualde, Portugal from Capwatt for around €22m on Monday.
SEEIT announced in early February, the decision to acquire 80% equity interest in SIAF, the highly efficient operational biomass cogeneration plant, which has been acquired earlier today for €22m.
SEEIT has provided SIAF with an added €15 million to partially repay its existing project finance green bond credit.
SIAF creates heat and electricity from biomass that is sourced sustainably.
On a take-or-pay basis, it provides crucial onsite heat to a Sonae Arauco PT (SAPT) industrial plant that manufactures medium-density fibreboard and it generates energy that benefits from the Portuguese Feed-in-Tariff to the grid.
The project is expected to benefit from at least another 23 years of steady, inflation-linked, contracted cashflows with no risk of demand, giving SEEIT good visibility of returns.
SEEIT’s existing cash reserves were used to support the purchase of SIAF’s equity interest. SIAF’s project finance green bond facility will have a remaining balance of roughly €20m.
SEEIT and Capwatt have signed a Heads of Terms to focus on the collaborative development and purchase of energy efficient projects across Iberia, in addition to the project acquisition.
SDCL Energy Efficiency Income Trust was the first publicly traded firm in the United Kingdom to invest solely in energy efficiency.
Its projects are primarily located in the United Kingdom, Europe, and North America, and include a portfolio of cogeneration assets in Spain, a portfolio of commercial and industrial solar and storage projects in the United States, a regulated gas distribution network in Sweden and a district energy system providing essential and efficient utility services on one of the country’s largest business parks.
SDCL Energy Efficiency Income Trust shares gained 0.5% to 121p on Monday following the announcement of completing the acquisition of 80% equity interest in Sociedade de Iniciativa e Aproveitamentos Florestais.