SSE strikes £995m deal with First Sentier Investors

By Dominic Ellis
Agreement sees 50% stake sold in energy-from-waste ventures MEL1 and MEL2 to European Diversified Infrastructure Fund III...

SSE plc is on track to dispose of £2bn in assets by next autumn and embark on a low-carbon future after entering into an agreement to sell its 50 percent share in energy-from-waste ventures Multifuel Energy Limited (MEL1) and Multifuel Energy 2 Limited (MEL2) to European Diversified Infrastructure Fund III, an infrastructure fund managed by First Sentier Investors. The £995m deal is expected to complete by late 2020 subject to antitrust approval by the European Commission.

MEL1 and MEL2 are 50-50 joint ventures between SSE and Wheelabrator Technologies Inc., consisting of the operational Ferrybridge Multifuel 1 and Ferrybridge Multifuel 2 facilities (MEL1), as well as the Skelton Grange Multifuel development project (MEL2), all in West Yorkshire.

Ferrybridge Multifuel 1 (which entered commercial operation in 2015) and Ferrybridge Multifuel 2 (which entered commercial operation in 2019) each have an installed capacity of 75MW and are capable of processing around 725,000 tonnes and 675,000 tonnes of waste every year respectively. The proposed Skelton Grange Multifuel facility (SSE share: 50%), which is due to reach financial close around April 2021 and commence commercial operations in 2025, will have an installed capacity of 45MW and will be capable of processing around 400,000 tonnes of waste annually.

In June 2020, SSE identified its interests in MEL1 and MEL2 as an early priority for sale as part of a strategy to secure at least £2bn from disposals of non-core assets by autumn 2021. Today’s announcement follows the sale of SSE’s 25.1% non-operating stake in Walney Offshore Wind Farm to Greencoat UK Wind for £350m and the agreement to sell its 33% equity interest in meter asset provider MapleCo to Equitix, under which SSE will receive net proceeds of around £90m on closing.

The proceeds of these disposals will support the company’s plans to invest £7.5bn in low-carbon energy infrastructure over the next five years, helping the UK to reach net-zero carbon emissions, as well as reduce SSE’s net debt.

Finance Director Gregor Alexander said: “This sale marks a major step in our plans to secure at least £2bn from disposals by autumn 2021, with just over £1.4bn now delivered. While these multifuel assets have been successful ventures for SSE, they are non-core investments and we are pleased to have agreed a sale that delivers significant value for shareholders while sharpening our strategic focus on our core low-carbon businesses.  

“Our disposal programme demonstrates how the company can create value from our assets and supports our plans to invest £7.5bn over the next five years in the low-carbon infrastructure needed to stimulate a green economic recovery and help the UK transition to a net-zero future.”

Share

Featured Articles

5 minutes with Stuart Broadley, Energy Industries Council

EIC CEO Stuart Broadley reveals the challenges that lie ahead for oil and gas firms now net zero is becoming an increasingly important goal for businesses

SAP: Is 'complex' wind energy supply chain slowing adoption?

SAP digital supply chain and manufacturing expert Darcy MacClaren warns complex logistics and complicated regulations are limiting wind energy adoption

Decentralised energy key to circumventing grid delays

Aggreko is advising the sector to consider short to mid-term decentralised energy solutions as an effective means of maintaining business continuity.

Renewable energy to become top source of electricity by 2025

Renewable Energy

Nuclear energy — the unsung hero of the climate challenge

Renewable Energy

UK and US announce energy partnership

Oil & Gas