An environmental infrastructure fund has acquired a hydropower company that runs power stations in Cornwall and Yorkshire in a £4.74million deal.
London-based JLEN Environmental Assets Group Limited has splashed out on the holding company of Northern Hydropower Limited which in turn holds the rights to two operational hydro power projects in Yorkshire and Cornwall.
The Cornish station is De Lank hydro, a 99kW hydro project on the De Lank River, on the edge of Bodmin Moor, commissioned in October 2011.
The Yorkshire-based assets are Knottingley hydro, a 500kW dual turbine hydro project on the River Aire, which was commissioned in October 2017, and a 1.2MW battery, also at Knottingley, commissioned in January 2018. Both hydro projects are accredited under the 20-year Feed-in-Tariff scheme.
Northern Hydropower Holdings Limited (NHHL) has been purchased from a group of high-net-worth investors, which provided the original funding under an Enterprise Investment Scheme.
The deal is JLEN’s second investment into run-of-river hydropower and battery storage, further increasing the diversification profile of the company's portfolio of environmental infrastructure projects including, wind, solar, anaerobic digestion, waste and wastewater.
This acquisition increases the total capacity of renewable energy assets in the JLEN investment portfolio to 304.7 MW, and was funded by a draw-down under the company's revolving credit facility.
Richard Morse, chairman of JLEN, said: "We are pleased to make our second investment into run-of-river hydro and battery storage, building upon our existing portfolio in this sector.
“As with our other hydro assets, these projects have a proven operational history, benefit from strong contractual revenues and broaden the diversification within the JLEN portfolio."
Developed and built by Riverpower, De Lank is a small site just off Bodmin Moor, built on top of an older hydropower station that powered a neighbouring granite quarry. It still utilises the draft tube and turbine house.
Northern Hydropower Limited works closely with a partner company, Barn Energy, at the Bodmin site. The De Lank river is a tributary of the River Camel and flows for about nine miles from its source on the moor.
JLEN's investment policy is to invest in environmental infrastructure projects that have the benefit of long-term, predictable, wholly or partially inflation-linked cash flows supported by long-term contracts or stable regulatory frameworks.
Environmental infrastructure is defined by the company as infrastructure projects that utilise natural or waste resources or support more environmentally-friendly approaches to economic activity.
This could involve the generation of renewable energy, including solar, wind, hydropower and biomass technologies, the supply and treatment of water, the treatment and processing of waste, and projects that promote energy efficiency.
JLEN said its aim is to provide investors with a sustainable progressive dividend per share, paid quarterly and to preserve the capital value of the portfolio over the long term on a real basis. The target dividend for the year to March 31, 2021 is 6.76 pence per share.
