Acquisition of Mersey Reactive Power

Downing Renewables & Infrastructure

19 June 2023

 

19 June 2023

Downing Renewables & Infrastructure Trust plc

(the "Company" or "DORE")  

Acquisition of Mersey Reactive Power

DORE is pleased to announce that it has signed an agreement to acquire Mersey Reactive Power, a UK-based, fully operational 200 MVAr shunt reactor for a cash consideration of c.£11.0 million. Completion is subject to Ofgem approval. This investment will be made using the Company's £40 million revolving credit facility and is forecast to be accretive to the Company's returns.

This grid services asset became operational in May 2022 and was the first project to go live as part of the National Grid's Stability Pathfinder initiative. The project, which has an expected asset life of 40 years, supports Great Britain's electricity system in voltage management, providing increased network resilience, reducing costs to consumers and lowering carbon emissions. Mersey Reactive Power has an initial fixed priced, inflation-linked, availability-based contract with National Grid ESO until 2031.

Traditionally, reactive power services have been provided by large fossil fuel plants, but as we transition to low and zero carbon energy sources and large coal and gas generators are wound down, new sources and providers of reactive power are needed. The Mersey Reactive Power solution, based in Frodsham, Merseyside, comprises a shunt reactor which absorbs reactive power to increase the efficiency of the network and manage high voltage levels.

The acquisition will provide a new, long-term, revenue stream for DORE, one that is not derived from the sale of power on the wholesale markets. It demonstrates the Company's continued commitment to pursuing a highly diversified investment strategy. DORE will continue to seek similar opportunities in the grid services sector, constructing a portfolio designed to increase the stability of revenues and consistency of income to shareholders.

Tom Williams, Partner, Head of Energy & Infrastructure at Downing LLP, said: "The opportunity to further diversify DORE's portfolio and provide essential grid services in the UK is one that we could not overlook, and we are excited by our pipeline of potential opportunities in this sector of the energy market. Voltage management and grid stability are critical to the future success of decarbonisation. This attractive acquisition, when taken with other recent acquisitions by the Company, increases the Company's long-term fixed revenues in the UK, helping to provide our investors with diversified and stable returns."

ENDS

Contact details:

Downing LLP - Investment Manager to the Company Tom Williams	[phone]
Singer Capital Markets - Joint Corporate Broker Robert Peel, Alaina Wong, Alex Emslie (Investment Banking) Sam Greatrex, Alan Geeves, James Waterlow, William Gumpel (Sales)	[phone]
Winterflood Securities Limited - Joint Corporate Broker	[phone]
Neil Morgan (Corporate Finance) Darren Willis, Andrew Marshall (Sales)
TB Cardew - Public relations advisor to the Company Ed Orlebar Tania Wild	[phone] [phone] / [phone] [e-mail]

About Downing Renewables & Infrastructure Trust plc (DORE)

DORE is a closed-end investment trust that aims to provide investors with an attractive and sustainable level of income, with an element of capital growth, by investing in a diversified portfolio of renewable energy and infrastructure assets in the UK and Northern Europe. DORE has been awarded the London Stock Exchange's Green Economy Mark in recognition of its contribution to the global 'Green Economy' and also in 2022 DORE won 'Renewables Fund of the Year' at the Sustainable Investment Awards.

The Board classifies DORE as a sustainable fund with a core objective of accelerating the transition to net zero through its investments, compiling and operating a diversified portfolio of renewable energy and infrastructure assets to help facilitate the transition to a more sustainable future. The Company believes that this directly contributes to climate change mitigation.

DORE's strategy, which focuses on diversification by geography, technology, revenue and project stage, is designed to increase the stability of revenues and the consistency of income to shareholders. For further details please visit www.doretrust.com  

LEI: 2138004JHBJ7RHDYDR62

About Downing LLP

Downing is a responsible investment manager established in London in 1986. We currently manage £1.9 billion of assets under a broad range of investment mandates across our funds, investment trusts and tax-efficient products. As a certified B Corporation, we are focussed on creating a sustainable future, our key investment areas are renewable energy, infrastructure, property and healthcare.

Downing has c.60 professionals dedicated to renewable energy and infrastructure and a proven track record in renewables. Since 2010, Downing has made more than 180 investments and has c.£760 million of assets under management in solar, wind, hydro and battery storage technology.

This announcement is not for publication or distribution, directly or indirectly, in or into the United States of America. This announcement is not an offer of securities for sale into the United States. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States, except pursuant to an applicable exemption from registration. No public offering of securities is being made in the United States.

For further details please visit www.downing.co.uk

 

END