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Aquila Energy Efficiency commitments surpass IPO proceeds

Aquila Energy Efficiency Trust (AEET) has provided an update on its progress in the commitment and deployment of capital since its last trading update, published on 20 December 2022. Investment commitments have increased by £13.4m to £100.7m, which exceeds the £98m net proceeds raised at AEET’s initial public offering (IPO). AEET says that this is possible due to cash inflows from existing investments and the timings of cash outflows on existing commitments. The increase in commitments includes £8.6m to four new investments:

  • A £3.5m investment in ground mounted solar PV plants for self-consumption for four farms operated by a Spanish agricultural company, headquartered in the South-East of Spain with a capacity of  around 4MWp;
  • A £2.2m investment to refinance a portfolio of heat pump service and maintenance contracts for the residential sector in Germany;
  • A £1.7m commitment to finance Solar PV plant and battery projects developed by a major technology manufacturer and to be deployed at sites of the leading owner and operator of wellness centres in Spain; and
  • A £1.2m investment in an additional operational wind farm in the UK, managed by a UK ESCO, adding to the existing portfolio of wind farms, which benefit from feed-in and export tariffs and provide onsite power for self-consumption.

In addition to these new commitments, AEET has negotiated increased commitments of £2.4m to existing Superbonus investments. The balance of the £13.4m increase is a result of a change in the year end Euro: Sterling exchange rate of 1.1295:1 versus the rate of 1.16:1 in its December trading update.

Capital deployed that is already income generating has also increased to £60.4m (20 December 2022: £54.4m). Given the recent progress, AEET’s investment adviser now anticipates deployment at the end of Q1 2023 to exceed the circa 80% of IPO proceeds figure stated in its previous trading update. In addition, AEET’s Board has approved a further £7.2m of commitments which are awaiting financial close. The Company now has total approved commitments of £107.9m.

The Company continues to expect to achieve an average gross unlevered project yield of 8.0% over all investments made to date. AEET expects to publish its next semi-annual NAV, as at 31 December 2022, in February 2023.

Comments from Alex Betts, senior investment manager at Aquila Capital

“We are pleased to note the continuing strong progress in deployment activity as the wide network of established origination partnerships across Europe continues to bear fruit. We are delighted to have committed all the capital raised at IPO with substantially full deployment targeted at the end of March 2023. We believe investors in the Company benefit from a highly differentiated portfolio providing exposure to energy efficiency investments across a wide variety of technologies that enable companies to reach their carbon goals in Spain, Germany, Italy and the UK, and, which are expected to achieve an unlevered yield of 8% p.a.”

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