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Tuesday, September 28, 2021

SDCL Energy Efficiency Income Trust plc – Investment Update

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Following its acquisition of the IPO seed portfolio in December 2018, SEEIT has made five further portfolio acquisitions including the latest $110m investment in a portfolio of assets in the United States, the completion of which was announced on 5th February. The portfolio is now diversified by asset type, counterparty and geography across the UK, Europe and North America. The Investment Manager continues to evaluate a healthy and diverse pipeline of energy efficiency investment opportunities.

The Board and the Investment Manager expect that the Company will continue to retain significant exposure to UK based investment assets over the medium to long term. However, taking account of the quality of the acquisition pipeline in North America and Continental Europe in particular, the Board is minded to seek shareholder approval to remove the 25% minimum exposure limit to UK based investment assets which was adopted at the time of the Company’s IPO (as set out in the Company’s Investment Policy).  The removal of the limit would ensure that the Company can benefit from additional flexibility when sourcing and investing in assets with attractive risk-adjusted returns across multiple jurisdictions. The Company’s exposure to UK based investment assets may increase or decrease from time to time.

Notwithstanding any change to the exposure limits, the Company remains focussed on its sterling based dividend targets and NAV and is therefore committed to having appropriate hedging arrangements in place for its portfolio. The objective of SEEIT’s hedging strategy is to protect the value of both income and capital elements of the portfolio from a material impact on NAV arising from movements in foreign exchange rates, and to provide stability and predictability of sterling cash flows.

This is typically achieved through prudent levels of forward sales of foreign currency and/or utilising corporate debt facilities in the local currency. The Company expects to continue to implement this currency hedging strategy and to date, the impact of movements in foreign exchange rates on the Company has been negligible.

The Investment Manager continues to evaluate investment opportunities for SEEIT and, together with the Board, will provide further market updates as and when appropriate.

For Further Information

Sustainable Development Capital LLP

Jonathan Maxwell

Eugene Kinghorn

Keith Driver

 

T: +44 (0) 20 7287 7700

 

Jefferies International Limited

Gary Gould

Tom Hovanessian

Alex Harris

 

T: +44 (0) 20 7029 8000

 

TB Cardew

Ed Orlebar

Joe McGregor

T: +44 (0) 20 7930 0777

M: +44 (0) 7738 724 630

E: seeit@tbcardew.com

 

About the Company

SDCL Energy Efficiency Income Trust plc is the first listed company of its kind to invest exclusively in the energy efficiency sector. Examples of the projects in the portfolio include combined cooling/heating and power plants, as well as energy efficiency projects in the UK and the US. Since acquisition of its seed portfolio at IPO, the Company has announced investment in a diversified portfolio of energy efficiency assets, including a portfolio of rooftop solar photovoltaic projects for Tesco in the UK and a portfolio of cogeneration assets in north east United States, which were identified as pipeline projects in its IPO prospectus, as well as an additional investment in a portfolio of energy efficiency loans in the United States, a portfolio of cogeneration assets in Spain and a portfolio of recycled energy and cogeneration projects in the United States.

The Company’s total assets are currently allocated across the UK, Europe and North America in broadly equal proportions.

The Company aims to deliver shareholders value through its investment in a diversified portfolio of energy efficiency projects which are driven by the opportunity to deliver lower cost, cleaner and more reliable energy solutions to end users of energy.

The Company is targeting an attractive total return for shareholders of 7-8 per cent. per annum (net of fees and expenses and by reference to the initial issue price of £1.00 per Ordinary Share), with a stable dividend income, capital preservation and the opportunity for capital growth. The Company is targeting a dividend of 5.0p per share in respect of the current financial year to 31 March 2020 and 5.5p per share in respect of the next financial year to 31 March 2021. SEEIT’s last published NAV was 99.0p per share as at 30 September 2019.

Further information can be found on the Company’s website at www.sdcleeit.com.

Investment Manager

The Company’s investment manager is Sustainable Development Capital LLP (“SDCL”), an investment firm established in 2007, with a proven track record of investment in energy efficiency and decentralised generation projects in the UK, Continental Europe, North America and Asia.

SDCL is headquartered in London and the group also operates worldwide from offices in New York, Dublin and Singapore. SDCL is authorised and regulated in the UK by the Financial Conduct Authority.

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