SDCL Energy Efficiency Income Trust (SEIT), which listed on the London Stock Exchange on 11 December 2018 having raised £100m from its IPO, has announced that it has completed the acquisition of its seed portfolio for £87m million. SEIT has that the terms of the acquisition are in accordance with its prospectus that was published on 22 November 2018.
Seed portfolio of Nine energy efficiency projects
SEIT’s seed portfolio comprises nine Energy Efficiency Projects valued at £57m. SEIT says that these are predominately operational; are well diversified across technologies and sectors; and have relatively low credit, technology and regulatory risk. SEIT also has three contracted investment commitments, with identified counterparties, totalling approximately £30m. These commitments are yet to be drawn down.
The projects in the Seed Portfolio include:
- Combined Cooling/Heating and Power Plants (CCHP) at a Citi data centre and St Bartholomew’s Hospital in London
- LED lighting projects for hundreds of Santander properties and over 100 NCP car parks in the UK.
Targeting a dividend yield of 5.0%
SEIT is targeting an annual dividend yield of 5.0% of the initial Issue price (100p per share), rising to 5.5% in the year ending 31 March 2021, and a growing yield thereafter. SEIT intends to pay interim dividends to Ordinary Shareholders on a six-monthly basis. However, the Directors expect to declare an initial interim dividend in relation to the period from Initial Admission to 31 March 2019.
Near term pipeline opportunities
SEIT says that it has identified three pipeline project investment opportunities that it expects to acquire in the near term following Admission, namely:
- a portfolio of CHP assets in Southern Europe;
- a rooftop solar project for a large UK retailer; and
- a portfolio of operational CHP projects in North-East USA.
SEIT says that it has commenced due diligence on each of the projects with a view to progressing them to financial close as soon as practicable in 2019. The acquisitions will be financed through a combination of equity and acquisition debt finance.