SDCL Energy Efficiency Income Trust plc, reputedly the first UK-listed investment company of its kind to invest exclusively in the energy efficiency sector, is to acquire a 100% equity interest in a commercial district energy system, RED-Rochester, from a fund managed by an affiliate of Stonepeak Infrastructure Partners for an equity cash consideration of approximately $177 million.
RED is one of North America’s largest district energy systems with 117 MW of steam turbine generators plus boilers, chillers and other equipment that provide exclusive utility services to commercial and industrial customers within the 1200 acre Eastman Business Park, in Rochester, New York.
RED offers 16 on-site services including electricity, steam, chilled water, wastewater, compressed air, nitrogen, lake water treatment, industrial water distribution and high purity water distribution. This set of utility services is a key attraction of the park for new customers.
Since 2016, RED has delivered over 40 energy efficiency projects across its operations that have resulted in annual savings of over $4 million and carbon savings of over 50%. Additionally, the Investment Manager has identified a further pipeline of potentially accretive energy efficiency initiatives that it believes can deliver additional cost and carbon savings.
The acquisition will be funded from existing cash reserves and RCF facilities, which includes the capital raised by SEEIT in the equity fundraising in February. RED’s existing project debt finance facilities, which are equivalent to $83 million, will remain in place. Completion of the acquisition is expected after satisfactory conclusion of customary regulatory conditions and consents.