Triple Point Energy - Investment in portfolio of hydroelectric assets
29/11/2021 06:59
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RNS Number : 8006T Triple Point Energy Efficiency 29 November 2021
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29 November 2021
Triple Point Energy Efficiency Infrastructure Company plc
("TEEC" or the "Company" or together with its subsidiaries, the "Group")
Investment in portfolio of hydroelectric power assets
The Board of Directors of Triple Point Energy Efficiency Infrastructure
Company plc (ticker: TEEC) is pleased to announce that the Group has acquired
a portfolio of operational, Feed in Tariff ("FiT") accredited, "run of the
river" hydroelectric power projects in Scotland (the "Hydro Assets") for an
aggregate consideration of £26.6 million (excluding costs). This investment
was identified in the IPO prospectus and formed part of the original pipeline.
The Company announced on 29 September 2021 that it had secured exclusivity to
acquire a portfolio of Hydro Assets. The portfolio acquired comprises six
Hydro Assets with a total installed capacity of 4.1MW, all of which have five
years or more of operational performance history. The Company continues to
have exclusivity to acquire a further three Hydro Assets, valued up to £19.7
million and it is expected that these additional projects will be acquired in
Q1 2022. The Hydro Assets benefit from the FiT, government supported pricing
that provides a payment for every kWh of electricity produced, and a price
floor (the "Export Tariff"). To the extent the Hydro Assets are able secure
prices higher than the Export Tariff, they are able to enter power purchase
agreements ("PPAs") with commerical offtakers.
The Hydro Assets were owned by entities advised by the Investment Manager and,
as a result, additional measures were implemented and carefully monitored to
manage any potential conflict of interest appropriately, including dedicated
buy and sell side teams within the Investment Manager and obtaining an
independent third-party valuation. In accordance with the IPO Prospectus, the
Board were required to approve the transaction and were satsified by the
conflict management procedures put in place.
The Hydro Assets have a remaining FiT period of c.14 years, and a useful life
beyond the remaining FiT period of a further 20 years, during which the Hydro
Assets would be operated as unsubsidised assets selling power to the grid
through PPAs.
Each of the Hydro Assets is subject to a long-term lease with the local
landowners, the majority of which are with Forestry and Land Scotland, which
cover the expected useful life of the asset, with rent based on a percentage
of gross income of the asset. They are also subject to an operations and
maintenance contract with Green Highland Renewables, one of the UK's leading
developers and services provider for hydropower schemes.
The Investment Manager has identified a number of opportunities to optimise
the efficiency of the Hydro Assets, in particular, to help to regulate the
flow feeding existing intake, protecting against periods of unusually high or
low rainfall, thus increasing overall generation. Such projects will also be
valuable in regulating power generation in the future when the assets are
subject only to PPAs.
The Hydro Assets have been assessed to deliver nearly 4,000 tCO2e of avoided
emissions per annum based on average generation assumptions and modelling
indicates that performance of the assets is relatively robust under climate
change scenarios which see increasing seasonality and extremes of
precipitation and river flows. The Hydro Assets have also been developed in
line with the Scottish Environmental Protection Agency (SEPA) biodiversity
standards for "run of the river" hydropower schemes, for example, with
relevant measures in place to enable the safe passage of fish.
The transaction is aligned with the Company's targeted risk/return profile and
objective of delivering secure investments that generate a total return for
investors comprising sustainable and growing income and capital growth. It
also supports the transition to a low carbon economy in accordance with the UK
government's overall environmental targets.
John Roberts, the Company's Chairman, said:
"I am delighted that TEEC has acquired the portfolio of Hydro Assets which
were first identified ahead of our IPO. Not only does this portfolio deliver
in terms of avoiding carbon emissions, the Investment Manager has identified a
number of opportunities to improve the performance of the assets further. We
look forward to closing the next phase of this investment soon."
For further information, please contact:
Triple Point Investment Management LLP (via FTI below)
Jonathan Parr
Jonathan Hick
Akur Limited (Financial Adviser) 020 7493 3631
Tom Frost
Anthony Richardson
Siobhan Sergeant
RBC Capital Markets (Joint Broker) 020 7653 4000
Matthew Coakes
Jill Li
Kathryn Deegan
Winterflood Securities (Joint broker) 020 3100 0000
Neil Langford
Hande Derinkok
FTI Consulting
Ed Berry 07703 330 199
Mitch Barltrop 07807 296 032
LEI: 213800UDP142E67X9X28
Further information on the Company can be found on its website:
www.tpenergyefficiency.com (http://www.tpenergyefficiency.com) .
NOTES:
The Company is a recently incorporated investment trust which invests
exclusively in a diversified portfolio of Energy Efficiency assets in the UK,
which have a positive environmental impact. The Company's investments will
focus on the core sectors of: low carbon heat distribution; social housing
retrofit and industrial energy efficiency; and distributed generation.
The Investment Manager is Triple Point Investment Management LLP ("Triple
Point") which is authorised and regulated by the Financial Conduct Authority.
Triple Point manages private, institutional and public capital, and has a
proven track record of investment in Energy Efficiency and decentralised
energy generation projects. In 2018, Triple Point was appointed as the
Delivery Partner to BEIS, a department of the UK government, to deliver the
£320 million Heat Networks Investment Project ("HNIP").
The Company was admitted to trading on the Specialist Fund Segment of the Main
Market of the London Stock Exchange on 19 October 2020 and was awarded the
London Stock Exchange's Green Economy Mark.
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