SEEIT to invest €22m in Portuguese biomass project

SDCL Energy Efficiency Income Trust (SEEIT) has agreed to acquire an 80% equity interest in a high-efficiency biomass cogeneration plant in Portugal for €22 million.

SEEIT is the first London Stock Exchange-listed investment company of its kind to invest exclusively in the energy efficiency sector. The firm acquired an equity interest in the Sociedade de Iniciativa e Aproveitamentos Florestais – Energia (SAIF) biomass facility in Mangualde from Capwatt – a developer and operator of high-efficiency cogeneration and renewables facilities in Portugal and Spain.

The plant generates heat and power from sustainably sourced biomass and supplies critical on-site heat to an industrial facility manufacturing medium-density fibreboard, owned by Sonae Arauco PT (SAPT). SAPT supplies contracted biomass feedstock to the project, mainly waste wood from its own facility, as well as sustainably sourced wood waste biomass.

The project generates electricity that benefits from the Portuguese feed-in-tariff to the grid. As a result, the project is expected to benefit from at least a further 23 years of stable, inflation-linked, contracted cashflows with no demand risk, providing good visibility of returns for SEEIT.

The project contracts operation and maintenance activities to Capwatt, which will retain a 20% equity interest in the facility. Capwatt is the wholly-owned energy business of Sonae Capital SGPS, a wholly-owned subsidiary of Efanor.

SEEIT’s investment is funded from the company’s existing cash resources. SIAF’s existing project finance green bond facility, equivalent to around €41 million, remains in place.

“SAIF is SEEIT’s first investment in Portugal and demonstrates our commitment to growing our presence in Iberia and supporting our ambition for increasing geographic diversification,” said Jonathan Maxwell, CEO of Sustainable Development Capital.

“Similar to our investment in Oliva Spanish Cogeneration, the SIAF investment provides critical onsite heat generated from waste resources. Both these investments are great examples of the circular economy at work while contributing to meeting SEEIT’s yield and returns targets.”

SEEIT previously acquired the interest of a minority shareholder of the Puente Genil projects in Oliva Spanish Cogeneration for €12 million. Puente Genil comprises three of the nine projects in Oliva Spanish Cogeneration. SEEIT now has sole ownership of eight of the nine projects, with an offtaker retaining a minority interest in the other.

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