SDCL Energy Efficiency Income Trust plc, the first UK-listed investment company of its kind to invest exclusively in the energy efficiency sector, 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

The SDCL managed investment company, SEEIT, is pleased to announce that it has signed an agreement with bp pulse, 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

SDCL is pleased to have joined of the Green Finance Institute’s Coalition for the Energy Efficiency of Buildings (“CEEB”). Green Finance Institute (the “Institute”) is an independent, commercially focused organisation supported by HM Treasury, the Department for Business, Energy and Industrial Strategy and the City of London Corporation. The Institute seeks to mobilise capital to accelerate the domestic and international transition to a sustainable, net-zero carbon economy that is also climate resilient. The CEEB convenes global experts from finance, property and energy sectors, and across policy, academia and non-profit organisations, to develop the market for financing a net-zero carbon and climate resilient built environment in the UK and internationally. SDCL are excited to collaborate with CEEB on developing the financial mechanisms needed to accelerate investment into residential energy efficiency.

Link to CEEB Website

SDCL is pleased to have joined the UK Green Building Council (UKGBC). The UK Green Building Council’s mission is to radically improve the sustainability of the built environment, by transforming the way it is planned, designed, constructed, maintained and operated. It promotes improvements to the built environment that help in mitigating and adapting to climate change, eliminating waste and maximising resource efficiency, embracing and restoring nature and promoting biodiversity, optimising the health and wellbeing of people and creating long-term value for society and improving quality of life. SDCL look forward to working together with UKGBC to channel investments towards a cleaner, greener and sustainably improved built environment.

Link to UKBGC Website