SEEIT makes additional USD92m investment in Primary Energy to acquire business
SEEIT, the first UK listed investment company of its kind to invest exclusively in the energy efficiency sector, has acquired the remaining 35 per cent equity interest that it did not already own in Primary Energy, a portfolio of recycled energy and cogeneration projects servicing the steel industry, located in Indiana, USA.
The interest was acquired from a consortium led by Fortistar LLC for a cash consideration of approximately USD92 million. The acquisition was identified as part of SEEIT’s near term pipeline in its recent equity issue.
SEEIT acquired an initial 50 per cent interest in Primary Energy in February 2020 and increased its stake to 65 per cent in December 2020. Both the acquisition in December 2020 and the current acquisition were transacted under pre-agreed terms, ensuring the Company did not have to enter into a competitive auction process and helping to create additional value for SEEIT shareholders. Following the latest acquisition SEEIT is now the 100 per cent owner of Primary Energy.
The 298MW portfolio consists of five individual operating projects which generate low-cost, efficient energy with substantial environmental benefits via three recycled energy projects, one natural gas combined heat and power project and a 50 per cent interest in an industrial process efficiency project. The strong environmental benefits of the assets qualify the projects for Renewable Energy Certificates which are equivalent to those generated by 536 MW of solar or 374 MW of wind projects.
The portfolio of projects is located within the Indiana Harbor Works and involves two of the most efficient and advanced steel mills in the United States. Four of the five projects relate to steel mills that are owned by Cleveland-Cliffs Inc., the largest flat-rolled steel producer as well as the largest iron ore pellet producer in North America. The remaining project services Midwest Steel, a subsidiary of United States Steel Corporation. The projects are fully integrated into the steel mill facilities, including fuel handling and emissions control equipment and systems that are critical for the operation of the facilities.
Jonathan Maxwell, CEO of Sustainable Development Capital LLP, says: "We are pleased that SEEIT has successfully secured a 100 per cent interest in Primary Energy, which plays an important role in SEEIT’s portfolio with robust ESG credentials. It provides critical and cost-effective low carbon energy services to the steel industry, which is one the world’s largest sources of greenhouse gas emissions.
The investment supports SEEIT's total return objectives and its progressive dividend policy. Completion of the acquisition follows a period of strong growth and diversification in SEEIT’s overall portfolio."