JLEN: Acquisition

4th February 2021 | ‘JLEN’

Acquisition of an electrical exporting food waste anaerobic digestion plant

JLEN, the listed environmental infrastructure fund, is pleased to announce the acquisition of a 100% equity stake in Codford Biogas Limited (“CBL”). CBL holds the rights and operational assets that make up the Codford anaerobic digestion (“AD”) plant, a 100,000 tonnes per annum food waste permitted plant based in Wiltshire, UK.

The acquisition is structured as an initial upfront payment, including working capital, of £19.8m with a smaller additional amount in deferred consideration relating to a number of expansion opportunities payable post completion. The precise amount of the deferred element will be determined through a valuation exercise to be undertaken following completion.

The Codford AD plant has been operational since 2014. The plant has a current electrical capacity of 3.8MWe which is generated by processing up to 100,000 tonnes per annum of both liquid and solid food waste from the commercial and industrial sector. This segment of the food waste market has proved resilient during the last 12 months. As a result of its electricity generation, the plant is able to supply up to 4,000 homes via the UK power grid. In addition to the core electricity export, the plant is accredited under the Feed-in-Tariff (FiT) and the Renewable Heat Incentive (RHI) schemes. The plant is an excellent example of an AD operation that is well integrated into modern farming systems. It supplies c. 80,000 tonnes per annum of nutrient rich, PAS110 digestate biofertilizer to the surrounding farms and as a result reduces their use of carbon-intensive synthetic fertilisers by 70-80%.

This acquisition represents JLEN’s second acquisition into food waste fuelled anaerobic digestion, further diversifying the Company’s portfolio in the waste and wastewater sector and increasing the total capacity of renewable energy assets in the JLEN investment portfolio to 308.5MW.

The 100% stake in CBL has been acquired from private individuals, who will continue to support the business going forward. It was funded by a draw-down on JLEN’s revolving credit facility.

Richard Morse, Chairman of JLEN, said:

“We are pleased with JLEN’s latest investment, which is our second food waste processing anaerobic digestion plant and its first fully electrical plant. The plant plays an important role in converting waste that would otherwise go to landfill into green electricity to power homes. Specific to the investment, we also value the opportunity to continue to work with some of the founding shareholders in the future years.”

Below is an interview with the investment team, Chris Tanner & Chris Holmes who talk us through the highlights from the recnt interim results

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