3i Infrastructure funds Infinis investment in Alkane Energy – 3i Infrastructure intends to increase its investment in Infinis by c. £125 million to fund Infinis’s acquisition of Alkane Energy, an independent power generator from both coal mine methane and reserve power operations and the largest generator from coal mine methane in the UK. Completion is subject to third party approval.
Infinis is the largest generator of electricity from landfill gas in the UK, in which 3i Infrastructure invested in December 2016. The merger of Alkane with Infinis will create a business with significant scale, offer operational improvement opportunities and the potential to further elevate Alkane’s generation performance and growth potential.
Founded in 1994 and headquartered in Edwinstowe, Nottinghamshire, Alkane has approximately 40 employees. The company operates the largest portfolio of coal mine methane sites in the UK, capturing methane from mothballed and closed coal mines and converting it into electricity. As at December 2017, Alkane had 160MW of installed generating capacity operating across 32 sites across the UK.
Alkane performs a vital environmental service, extracting methane from abandoned coal mines that would otherwise be released into the atmosphere. Methane is a potent greenhouse gas. Further, by using the coal mine methane to generate electricity, Alkane supplies distribution networks with a reliable source of baseload power.
Richard Laing, chairman, 3i Infrastructure plc, commented: “We are pleased with today’s investment in Alkane. The investment offers an attractive return with a strong cash yield which will contribute to the company’s dividend. It further demonstrates the investment adviser’s ability to originate bilateral transactions and to build the platform businesses in the company’s existing portfolio.”
Phil White, managing partner and head of infrastructure, 3i Investments plc, investment adviser to the company, commented: “The combination of Alkane with Infinis is compelling, adding an attractive portfolio of generating assets with potential to grow over time, and diversifying Infinis’s revenues.”
3IN : 3i Infrastructure funds Infinis investment in Alkane Energy