Acquisition

RNS Number : 6408H

Jlen Environmental Assets Grp

04 December 2020

 

4 December 2020

JLEN Environmental Assets Group Limited

("JLEN" or the "Company")

Acquisition of a portfolio of biomethane refuelling stations for Compressed Natural Gas vehicles

JLEN, the listed environmental infrastructure fund, is pleased to announce that it has acquired a minority stake in a portfolio of five Compressed Natural Gas ("CNG") refuelling stations for heavy goods vehicles ("HGVs"), located in the UK.  The investment has been made alongside other Foresight funds and the developer and operator of the stations, CNG Fuels Limited ("CNG Fuels").  JLEN will also contribute to a funding line to fund the construction of a further pipeline of CNG refuelling stations as part of a national network. JLEN's total investment, including the initial acquisition, is expected to be up to approximately £20m over the next two to five years.

The transport sector is the largest source of carbon dioxide emissions in the UK, accounting for 34 per cent in 2019[1]. Within the transport sector HGVs produce 17% of road transport emissions and 4.5% of total UK greenhouse gases ("GHGs").

Therefore, HGVs fuelled by biomethane (as generated by anaerobic digestion plants) are the only commercially available, at-scale solution to substantially reduce these emissions. HGVs fuelled with 100% biomethane offer a saving in GHG emissions of over 80% on a "well-to-wheel" basis when compared to a similar diesel vehicle. They also offer further environmental benefits such as lower noise and lower particulate emissions[2].

The take-up of CNG HGVs fuelled by biomethane, therefore offers fleet operators the opportunity to lower their emissions substantially.  CNG HGVs are also cheaper to run over a typical 5-7 year duty cycle, due in part to a favourable fuel duty position compared to comparable diesel vehicles. The government has committed to maintaining a clear advantage for gas powered vehicles until 2032, as part of measures supporting the UK's target of net zero emissions by 2050.   

Revenues are earned from sales of biomethane fuel to customers under contract, which include several of the largest fleet operators in the UK. The commodity price of gas is passed through to the customer, meaning that JLEN has no exposure to underlying merchant gas prices.

The initial acquisition was funded by a draw-down under the Company's revolving credit facility.

  Richard Morse, Chairman of JLEN, said:

"We are pleased to make this investment into biomethane refuelling infrastructure, helping to decarbonise one of the most emission-intensive parts of the transport sector. We consider that this investment combines the two pillars of delivering better environmental performance and lower cost operations for customers, thereby supporting our investment case and we look forward to supporting the growth of a national biomethane refuelling network."

This announcement is released by JLEN Environmental Assets Group Limited and contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 (MAR), and is disclosed in accordance with the Company's obligations under Article 17 of MAR.

For further details contact:

Foresight Group  [phone]

Chris Tanner

Chris Holmes

Winterflood Investment Trusts [phone]

Neil Langford

Chris Mills

Newgate Communications      [phone]

Elisabeth Cowell

Ian Silvera

Praxis Fund Services        [phone]

Matt Falla

For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, the person responsible for releasing this announcement is Matt Falla, Company Secretary.

About JLEN

JLEN's investment policy is to invest in environmental infrastructure projects that have the benefit of long-term, predictable, wholly or partially inflation-linked cash flows supported by long-term contracts or stable regulatory frameworks.

Environmental Infrastructure is defined by the Company as infrastructure projects that utilise natural or waste resources or support more environmentally-friendly approaches to economic activity. This could involve the generation of renewable energy (including solar, wind, hydropower and biomass technologies), the supply and treatment of water, the treatment and processing of waste, and projects that promote energy efficiency.

JLEN's aim is to provide investors with a sustainable, progressive dividend per share, paid quarterly and to preserve the capital value of the portfolio over the long term on a real basis. The target dividend for the year to 31 March 2021 is 6.76 pence per share.

Further details of the Company can be found on its website www.jlen.com

 

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[1]BEIS "2019 UK greenhouse gas emissions, provisional figures" (26 March 2020)

[2]Source: CNG Fuels, Element Energy

 

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