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DIF seals first of three UK PFI streetlighting deal

The milestone comes two months after the Dutch firm reached a €215m first close on its core infrastructure fund.

DIF has acquired 100 percent of the Newcastle & North Tyneside UK PFI streetlighting project from Scottish energy group SSE.

Located in the two metropolitan boroughs of Newcastle and North Tyneside, the scheme is the first of three UK PFI streetlighting projects the Amsterdam-based firm has agreed to acquire from the company. It consists of more than 40,000 street lighting assets in Newcastle and over 30,000 units in North Tyneside.

The other two projects, located in Leeds and Stoke-on-Trent, are expected to close in the coming weeks. DIF had not responded to a request regarding transaction value at press time.

Backed by long-term financing provided by RBS and availability-based payments, the schemes have been operational for more than five years. The day-to-day running of the assets will continue to be assured by an SSE subsidiary under a long-term contract.

“Streetlighting PPP is a sector that DIF understands well and we look forward to working with our operational partner SSE,” said Paul Nash, DIF’s head of infrastructure.

The transaction comes two months after the firm reached a €215 million first close on its Core Infrastructure Fund, which was launched in September last year.

The fund is set to be much smaller than DIF’s flagship infrastructure funds, the latest of which, DIF IV, closed on its €1.15 billion hard-cap in 2015. It will also differ in its remit, since it will move away from the safest areas of the market to cover telecoms, unregulated utilities and energy storage.

The vehicle aims for gross returns of about 15 percent through brownfield and greenfield deals averaging €45 million.