SDCL buys Portuguese biomass plant – SDCL Energy Efficiency (SEIT) has agreed to acquire 80% equity interest in a high-efficiency and operational biomass cogeneration plant, Sociedade de Iniciativa e Aproveitamentos Florestais – Energia, S.A, in Mangualde, Portugal for approximately €22m.
SIAF generates heat and power from sustainably sourced biomass and supplies critical onsite heat to an industrial facility manufacturing medium-density fibreboard owned by Sonae Arauco PT, a leading global producer of wood-based panels.
The acquired project generates electricity which benefits from the Portuguese Feed-in-Tariff to the grid. As a result, it is expected to benefit from at least a further 23 years of stable, inflation linked, contracted cashflows with no demand risk, providing good visibility of returns for SEIT. It contracts operation and maintenance activities to Capwatt, which will retain a 20% equity interest in the project.
The investment is funded from SEIT’s existing cash resources. In addition to the acquisition of the project, SEIT and Capwatt have signed a Heads of Terms to focus on the joint development and acquisition of energy efficiency projects across Iberia. Meanwhile, SEIT has also acquired the interest of a minority shareholder of the Puente Genil projects in Oliva Spanish Cogeneration for consideration of €12m. Puente Genil comprises three of the nine projects in Oliva Spanish Cogeneration.