Energy Efficiency Portfolio Acquisition and Update

10 September 2020

SDCL Energy Efficiency Income Trust plc
("SEEIT" or the "Company")

Acquisition of UK Energy Efficiency Portfolio and Corporate Update

Acquisition of CHP projects from GET Solutions

SDCL Energy Efficiency Income Trust plc, the first UK-listed investment company of its kind to invest exclusively in the energy efficiency sector, today announces the acquisition of a portfolio of energy efficiency projects in the UK from GET Solutions, a leading UK energy solutions provider for businesses. The initial cash consideration is approximately £5 million to be invested over the next four months to acquire an initial portfolio, with an estimated additional £12 million to acquire a follow-on pipeline of projects in the UK over the next year.  

The initial portfolio of 15 projects, comprises four operating projects, two installed projects and nine ready to build projects. The installed and ready to build projects are expected to be operational within 4 months. The projects involve highly efficient combined heat and power ("CHP") systems installed at Holiday Inn and Crowne Plaza hotels, which are both brands of the Intercontinental Hotel Group. The hotels are owned by a leading US private equity group and are managed by Interstate Hotels and Resorts, a leading hotel operator. There is a follow-on pipeline of up to 51 highly efficient CHP projects in the UK hotel sector.

The projects have all been developed by GET Solutions, which has served as a specialist provider of energy services to over 40,000 business clients over the last 20 years. The projects are installed and maintained by 2G Energy, an internationally leading manufacturer of CHP plants. The projects all meet the standards for 'good quality' or high efficiency CHP and help the hotels to reduce carbon emissions as well as energy costs, consistent with SEEIT's objectives to deliver solutions that are cheaper, cleaner and more reliable.

The projects in the initial portfolio have been designed to provide the base-load energy generation to meet the operational needs of the hotels, irrespective of their levels of occupancy. The contractual structure of the projects that has been negotiated with GET Solutions results in predictable revenues with potential for upside for SEEIT in the event that certain levels of consumption are achieved. SEEIT is not taking development or energy price risk and demand risk is substantially mitigated on the downside. SEEIT will own the project assets that provide essential services to the buildings throughout the 15-year life of the project contracts. SEEIT also benefits from a package of performance and revenue guarantees from GET Solutions as well as protective termination provisions. GET Solutions will continue to provide operational management to the projects during the operational phase.

SEEIT will also benefit from additional rights to invest in a substantial pipeline of more than 100 energy efficiency installations with GET Solutions in the UK. This pipeline involves up to £30 million of investment in CHP, solar and storage projects across multiple high-quality commercial and industrial counterparties in the logistics, senior living and infrastructure services sectors.

Increase in Revolving Credit Facility

In July the Company, through its subsidiary SEEIT Holdco Limited, increased its Revolving Credit Facility ("RCF") with Investec Bank plc from £25 million to £40 million on existing terms. The RCF expires in June 2022 and includes an accordion function for a further £25 million increase on an uncommitted basis.

SDCL's CEO, Jonathan Maxwell, said:

"We are very pleased to have the opportunity to invest in a portfolio of well-structured building energy efficiency solutions in the UK that help to reduce greenhouse gas emissions, cut energy costs, and improve the quality of infrastructure. We are particularly pleased to have established a replicable energy services offering, which involves zero up-front investment for clients, with a partner such as GET Solutions and for such prominent clients.

I am also delighted to announce that our Senior Adviser, Michael Liebreich, has been appointed as an Official Adviser to the UK Government Board of Trade. Michael is recognised as one of the leading global experts on clean energy and his involvement with SDCL allows our stakeholders to benefit from his wealth of experience, connections and deep understanding of the sector. Since our £110m fundraise in June, we have now committed £55 million to new investments and are at advanced stages of negotiations on an exciting and substantial pipeline of new investment opportunities in the USA, Continental Europe and the UK. We look forward to providing a further update."

For Further Information

About SEEIT

SDCL Energy Efficiency Income Trust plc is the first UK listed company of its kind to invest exclusively in the energy efficiency sector. Since IPO, SEEIT has made seven investments and commitments in a diversified portfolio of distributed generation and energy efficiency projects totalling c.£375m. The projects are located in the UK, Europe and North America in broadly equal proportions and include, inter alia, a portfolio of cogeneration assets in Spain, a portfolio of recycled energy and cogeneration projects in the United States and, most recently, a commitment to acquire a series of electric vehicle charging stations across the UK.

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 5.5p per share in respect of the financial year to 31 March 2021. SEEIT's last published NAV was 101.0p per share as at 31 March 2020.

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

Investment Manager

SEEIT'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, Madrid, Hong Kong and Singapore. SDCL is authorised and regulated in the UK by the Financial Conduct Authority.