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SDCL Energy Efficiency Income makes use of new placing programme in tough year

SDCL Energy Efficiency Income makes use of new placing programme in tough year – SDCL Energy Efficiency Income (SEIT) has announced its annual results for the 12 months to 31 March 2021. For the year, it posted a total NAV return of 8% and an aggregate dividend of 5.5p per share.

In June 2020, SEIT published a new prospectus and a 12-month placing programme was put in place. The company has utilised the share issuance programme three times since, raising a total of £375m. The equity raises in June 2020 (£105m), October 2020 (£110m) and February 2021 (£160m) were strongly supported by existing shareholders and the board was pleased to welcome a significant number of new shareholders.

To maintain capital efficiency and support the current pipeline, the manager increased the revolving credit facility at the level of Holdco, to £115m in June 2021 and anticipates a further increase in the near term.

Statement from the manager:

The sectors in which SEEIT is investing are receiving increasing levels of interest from both policymakers and financial markets. Governments and companies in all of SEEIT’s existing and target markets are continually increasing their carbon reduction commitments and therefore the demand for cost-effective and low carbon energy solutions is increasing. Meanwhile, the costs, inefficiencies and risks of energy systems reliant on centralised generation and the grid continue to be exposed, with the 2021 outages in Texas, USA caused by severe winter storms recalling memories of Superstorm Sandy on the US East Coast in 2012 and highlight the need for greater resilience in the energy system.

COVID-19, in parallel to its far-reaching societal consequences, reduced global economic output, energy demand and energy prices. SEEIT’s portfolio was relatively defensive, given limited exposure to demand or energy prices and the fact that most of its clients were deemed essential and remained operational during national lockdowns. The pandemic led several governments to turn to energy efficiency as a source of post-COVID recovery, economic productivity and growth, as well as a pathway to substantially lower both costs and greenhouse gas emissions. Energy efficiency project investments performed notably strongly and reliably compared to assets linked to economic growth, energy demand or prices.

The EU taxonomy regulation and SFDR, both introduced during the financial year, represented significant developments in the EU’s framework for sustainable energy investment, ESG disclosure and corporate reporting. SEEIT, through its Investment Manager, is adapting quickly to the new disclosure rules, taking steps to categorise and monitor all the Company’s underlying investments in line with the new disclosure standards.  This is part of the Company’s broader strategy for reporting on climate-related and other ESG issues which includes working towards implementing the full scope of the disclosure recommendations of TCFD.

We will continue to seek to build a diversified portfolio for the Company and, particularly, to further diversify in terms of technologies that are compatible with a pathway towards decarbonisation. The sectors in which SEEIT is investing are receiving increasing levels of interest. Governments and companies are continually increasing their carbon reduction commitments and therefore the demand for cost effective and low carbon energy solutions will continue to increase.

SEIT : SDCL Energy Efficiency Income makes use of new placing programme in tough year

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