Energy company, SSE, is selling its 50% share in multiple energy-from-waste ventures in West Yorkshire for almost £1 billion.
The stake is being sold to European Diversified Infrastructure Fund III, an infrastructure fund managed by First Sentier Investors, for £995 million.
MEL1 and MEL2 are 50-50 joint ventures between SSE and Wheelabrator Technologies, consisting of the operational Ferrybridge Multifuel 1 and Ferrybridge Multifuel 2 facilities (MEL1), as well as the Skelton Grange Multifuel development project (MEL2).
Ferrybridge Multifuel 1 (which entered commercial operation in 2015) and Ferrybridge Multifuel 2 (which entered commercial operation in 2019) each have an installed capacity of 75MW and are capable of processing around 725,000 tonnes and 675,000 tonnes of waste every year respectively.
The proposed Skelton Grange Multifuel facility, which is due to reach financial close around April 2021 and commence commercial operations in 2025, will have an installed capacity of 45MW and will be capable of processing around 400,000 tonnes of waste annually.
In June 2020, SSE identified its interests in MEL1 and MEL2 as an early priority for sale as part of a strategy to secure at least £2 billion from disposals of non-core assets by autumn 2021.
This announcement follows the sale of SSE’s 25.1% non-operating stake in Walney Offshore Wind Farm to Greencoat UK Wind for £350 million and the agreement to sell its 33% equity interest in meter asset provider MapleCo to Equitix, under which SSE will receive net proceeds of around £90 million on closing.
The proceeds of these disposals will support the company’s plans to invest £7.5 billion in low-carbon energy infrastructure over the next five years, helping the UK to reach net-zero carbon emissions, as well as reduce SSE’s net debt.
The transaction is expected to complete by late 2020 subject to antitrust approval by the European Commission.