SDCL Energy Efficiency Income Trust (SEEIT) will invest around €31 million in a large-scale green gas-to-grid project in Indiana, US.
The investment by SEEIT, the first UK-listed company of its kind to invest exclusively in the energy efficiency sector, involves the acquisition of an operating renewable power facility in Reynolds and the expansion of the facility to enable the project to produce green gas,
The anaerobic digestion (AD) plant has been operating since 2012. It currently converts cow manure and food waste into 6 MW of renewable power and sells this power under an eight-year take-or-pay fixed-price power purchase agreement to NIPSCO, an investment-grade public utility.
Part of the investment will go towards increasing the capacity of the existing AD facility, as well as installing a gas upgrading facility to enable the project to inject green gas into the grid, which is to be sold under long-term offtake agreements. The existing plant will continue to operate during the expansion, providing an underlying cash flow until the project is completed in 2023.
Jonathan Maxwell, CEO of Sustainable Development Capital, SEEIT’s investment manager, said: “We are very pleased to have added a green gas production facility in the US to our portfolio.
“This is a market that we have been watching closely for some time and this acquisition will further diversify SEEIT’s portfolio by technology, counterparty, and project stage, as well as supporting SEEIT’s dividend policy.
“We look forward to the opportunity to expand the facility and increase the supply of green gas within the gas grid, helping to reduce greenhouse gas emissions and enhancing returns for our shareholders.”
The project is operated by Bio Town Ag, an experienced operator with a successful track record in developing, constructing and operating AD and RNG projects. The project is owned by Bio Town Biogas while First Farmers Bank & Trust and Opal Fuels (a Fortistar company) will be co-lenders in the transaction.