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Capital Dynamics adds 64MW landfill gas portfolio

19 Jan 2012

Private equity investor Capital Dynamics has acquired a 64MW portfolio of UK landfill gas assets.

The portfolio consists of 35 operating sites spread across England, Scotland and Wales that sell renewable electricity under long-term sales contracts with both UK government agencies and major UK energy suppliers.

The transaction was originated, negotiated and closed by the firm’s clean energy and infrastructure and required the acquisition of syndicated debt facilities, completion of sale and purchase agreements, establishment of a sole-investor ownership structure and a fully fledged operating and maintenance company. The assets and associated rights were acquired from a consortium of project lenders, according to the firm. It will manage these assets under a long-term management agreement.

The investment is a good illustration of the diversification benefits available for client portfolios from risk-adjusted clean energy assets that are not correlated to the standard investments typically found in pension fund portfolios, Capital Dynamics said. Landfill gas projects are a lower-risk clean energy investment due to the maturity and robustness of the energy generation equipment employed.

The assets are also capable of producing steady streams of revenue over the long term via sales contracts with government and public utilities.

“We are pleased to have completed what promises to be a strong cash-yielding investment for one of our longest-standing clients. It demonstrates the CEI team’s industry experience, transactional capabilities and most importantly, our operational know-how,” said Rory Quinlan, managing director on Capital Dynamics’ CEI team.

Capital Dynamics’ CEI business was established in 2010 to address investment opportunities in this new class of real assets.

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