SEEIT invests in Spanish CHP

Energy efficiency investor SDCL Energy Efficiency Income Trust has agreed to acquire a €64 millionportfolio of cogeneration assets in Spain.

Nine operational projects provide in aggregate 125MW, comprising five combined heat and power (CHP) plants, two olive processing plants and two biomass plants.

The CHP plants together meet the high combined electrical and thermal efficiency standards required by SEEIT from natural gas CHP and generate 100MW of electricity and heat. Part of the heat generated is sold within the portfolio to two olive processing plants and the remaining heat is sold to external olive processors. The two olive processing plants within the portfolio provide feedstock in the form of olive cake for two biomass plants that are also part of this portfolio, which in turn generate 25MW of renewable electricity. While heat generated is used by the projects within the portfolio or sold to nearby users, electricity from the projects is sold to the grid in Spain under the regulated energy regime.

Long-term contracted revenues mitigate exposure to any fluctuations in commodity prices. Operations and maintenance on the portfolio will continue to be carried out by the vendor, and have long-term service agreements with the equipment providers Gestamp Biomass, GE, Rolls Royce, Jenbacher, Mitsubishi and Turbomach.

The Company has agreed to acquire the project equity in the portfolio, which has a weighted average remaining term of approximately 14 years. The Company intends to keep in place existing project debt finance facilities associated with the portfolio which are in compliance with its borrowing limits.

The investment is the Company’s fourth acquisition since launch.

Jonathan Maxwell, chief executive and founder of Sustainable Development Capital LLP, said: “We are delighted to be making our first investment in Continental Europe, consistent with the policy and strategy of the Company. This portfolio achieves high levels of combined electrical and thermal efficiency, as well as producing clean and renewable energy. It represents an investment in a highly cash generative and proven operational portfolio and further diversifies SEEIT, in terms of geography, technology and application.’’