SEEIT enters agreement to acquire 125 MW cogeneration portfolio in Spain

SDCL Energy Efficiency Income Trust plc has entered into an agreement to acquire a portfolio of cogeneration assets in Spain for a total cash consideration of approximately EUR64 million (US$70.69 million).

The substantial majority of the portfolio's revenues are investment grade, with nine operational projects providing in aggregate 125 MW of clean and efficient energy generation. The portfolio comprises 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 100 MW 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 25 MW 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.

The portfolio benefits from long-term contracted revenues, which mitigate exposure to any fluctuations in commodity prices. As a result, revenue and costs are relatively stable and predictable over the medium to long term.

Operations and maintenance on the portfolio will continue to be carried out by the vendor, a major industrial group, and benefit from 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.

Completion of the acquisition is expected o be completed once approved to certain customary conditions and consents. Upon completion, SEEIT will control the portfolio of assets through full or majority ownership of the underlying portfolio projects.

Returns from the portfolio are expected to meet SEEIT's total returns targets and further support its progressive dividend policy. The acquisition is to be funded through a combination of existing cash reserves and, if appropriate, available borrowing facilities.

The investment is the Company's fourth acquisition since launch and is consistent with the business plan and investment pipeline outlined in the Prospectus. SEEIT is continuing to review a substantial pipeline of new investment opportunities, a number of which are at an advanced stage.