Capital Dynamics, the Switzerland-based asset management firm, has acquired a 64-megawatt (MW) portfolio of UK landfill gas assets across 35 sites in England, Scotland and Wales for an undisclosed sum. The assets sell renewable electricity under long-term sales contracts with UK government agencies and major UK energy suppliers.
The deal was struck on behalf of an unnamed UK pension fund, described as “one of our longest-standing clients” by Rory Quinlan, Capital Dynamics managing director.
A press release issued by Capital Dynamics said the deal was originated, negotiated and closed in “under seven weeks” despite being “complex”. The firm’s Clean Energy and Infrastructure (CEI) team acquired syndicated debt facilities, completed sale and purchase agreements, established a sole investor ownership structure and an operating and maintenance company.
The assets and associated rights were acquired from an unnamed consortium of project lenders.
Capital Dynamics says it has established a specialist operations group to oversee the day-to-day management of the landfill gas assets, while the operating and maintenance company will service the assets and a “comprehensive operational improvement program” will seek to optimise gas production. The assets will be managed under a long-term management agreement.
In the press release, Capital Dynamics claims that landfill gas projects are a lower risk clean energy investment due to the maturity and robustness of the energy generation equipment used; and that they produce “steady streams of revenue over the long term via sales contracts with government and public utilities”.
Capital Dynamics’ CEI business was launched in June 2010 to try to combine attractive aspects of infrastructure investing with private equity returns. The CEI team is headed by David Scaysbrook, the founder of UK renewable energy firm Novera Energy.
In April last year, the business acquired 13 US solar energy projects from Pennsylvania-based developer Tangent Energy Solutions.