Wednesday, January 27, 2021

Pension pool invests £40m in Sleaford Renewable Energy Plant

Leeds-based Border to Coast Pensions Partnership (Border to Coast), one of the largest UK pension pools, has invested £40m in Sleaford Renewable Energy Plant, a straw-fired biomass plant located in Lincolnshire.

The transaction marks Border to Coast’s first co-investment. The investment has been made with Greencoat Capital LLP (Greencoat), one of the UK’s largest investors in resource efficient and renewable energy, for a minority stake in the 39 MWe renewable combined heat and power plant.

Sleaford Renewable Energy Plant uses a blend of locally sourced straw and sustainable woodchip to generate renewable power and heat, capable of generating electricity for 65,000 homes, saving 50,000 tonnes of CO2 per annum.

Located within the ‘Grain Belt’ in Lincolnshire, the plant provides a reliable route to market for straw, an agricultural by-product which can represent an additional income source for local farmers. The plant also provides free heat to public buildings in Sleaford town centre, including the swimming pool, a primary school and the council offices.

Border to Coast Chief Investment Officer, Daniel Booth, said: “Sleaford Renewable Energy Plant is our first co-investment and marks a significant step forward for Border to Coast as an active alternative investor, reflecting the appetite of Partner Funds seeking predictable, secure income cash flows from renewable infrastructure assets.

“Projects like Sleaford will have a real impact in tackling climate change and underscores our, and our Partner Funds’, commitment to long-term sustainable investment while generating sustainable long-term investment returns.”

Minal Patel, Partner at Greencoat, said: “Sleaford is a high-quality asset delivering predictable cashflows and significant inflation protection over the long term, helping our clients meet their liabilities. It also plays an important role in the local area, supplying sustainable heat to local community facilities and providing arable farmers with a reliable offtake for their excess straw.”

The plant benefits from predictable, contracted revenue streams in the form of the Renewable Obligation Certificate (ROC) support and the sale of the clean electricity that it generates under a long-term Power Purchase Agreement (PPA).

Greencoat Capital acquired Sleaford Renewable Energy Plant in June 2020. The investment was made with funds from Greencoat Renewable Income (GRI), the diversified fund, with commitments from UK Corporate and Local Government Pension Schemes, with co-investments from Border to Coast and RPMI Railpen (Railpen), the investment manager for the £30bn Railways Pension Scheme. The Border to Coast investment in the Sleaford venture was through its £1.4bn Infrastructure sleeve.

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