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UK Power Networks' commercial division has strategically expanded its portfolio of green energy projects, acquiring 70 diverse solar, wind, and hydro sites from SDCL Energy Efficiency Income Trust LLP (SEEIT). This significant transaction, valued at £90.8 million, introduces UU Solar into the company's renewable assets, fortifying its capacity by 68.7MW and demonstrating its commitment to a sustainable future.
This acquisition by the electricity distributor serving London, the South East, and the East of England, was revealed today. It features a long-standing Power Purchase Agreement with United Utilities, a utility giant that delivers water to over seven million residents in the North West.
The initiative aligns with United Utilities' ongoing commitment to renewable energy launched in 2014. Noteworthy projects under this program include Europe's pioneering commercial floating solar array atop Godley Reservoir near Manchester, a hydro-turbine in Oswestry generating approximately 2,000,000 kWh annually, and several solar and wind ventures developed over the last decade.
"Our vision is to deliver sustainable, reliable energy, and we see this renewables portfolio as a natural fit," said David Mitchell, director of UK Power Networks Services. "Our long-term objective is to grow our technology and geographic footprint in the renewables sector. We have been building our capacity in this sector in recent years and recently delivered one of the largest solar carports in the UK.
"This acquisition has been carefully negotiated to achieve a good price and is another example of us investing in large portfolios of key renewable UK assets."
SEEIT has indicated that the divestiture of UU Solar will generate liquidity, which will be instrumental in reinforcing its financial standing. This liquidity will support the firm in achieving its investment goals and adjusting its portfolio strategy to suit better the economic conditions characterized by heightened interest rates and inflation that have emerged since its initial investment in UU Solar in mid-2022.
The funds from this transaction are earmarked to reduce short-term debts under SEEIT's revolving credit facility, allowing the firm to reinvest in its current holdings and optimize its financial strategy.
"The sale is positive news for SEEIT as it makes a meaningful contribution to its objectives to reduce short term borrowings, to improve liquidity and to focus on investment in higher yielding assets that support SEEIT's total return objectives," said Jonathan Maxwell, CEO at SDCL CEO.