Elliot Gulliver-Needham, Investment Reporter, CityAM, 15 August 2024:
JLEN Environmental Assets Trust has sold off half of its anaerobic digestion portfolio to Future Biogas for £68.1m.
The trust, which invests in environmental infrastructure assets, sold the facilities at their June valuation. After the deal, it will continue to own the other 49 per cent of its anaerobic digestion portfolio.
Future Biogas is a specialist developer backed by 3i Infrastructure and has been the operator of the assets being sold off since JLEN purchased them between 2017 and 2019. £30m of the sale is funded by 3i.
Located in the east of England, the anaerobic digestion facilities have been in operation since 2013-2016 and benefit from the Renewable Heat Initiative and Feed-in Tariff subsidies.
JLEN said the sale created the potential for further asset enhancements and life extensions beyond the current RHI subsidy. Further enhancements are expected to boost the trust’s valuations in the remaining anaerobic digestion portfolio..
“We are definitely in favour of recycling capital into new projects but wish wholeheartedly that share buybacks were not needed,” said head of investment company research at Quoteddata James Carthew.
“JLEN’s discount at 18 per cent is better than many of its peers but is still unjustified. The cost disclosure issue that was one of the principal causes of these discounts emerging needs fixing now.”
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