JLEN acquires food waste-to-energy operator Codford Biogas
By Josh White
Date: Thursday 04 Feb 2021
(Sharecast News) - Environmental infrastructure fund JLEN announced the acquisition of a 100% equity stake in Codford Biogas (CBL) on Thursday.
The FTSE 250 company said CBL holds the rights and operational assets that make up the Codford anaerobic digestion plant, which is a 100,000 tonnes per annum food waste permitted plant based in Wiltshire.
It said the acquisition was 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 after completion.
The precise amount of the deferred element would be determined through a valuation exercise, to be undertaken following completion.
It said the Codford anaerobic digestion plant had been operational since 2014, and has a current electrical capacity of 3.8MWe, generated by processing up to 100,000 tonnes per year of both liquid and solid food waste from the commercial and industrial sector.
That segment of the food waste market had proved "resilient" over the last 12 months, JLEN said.
As a result of its electricity generation, the plant was able to supply up to 4,000 homes via the UK power grid.
In addition to the core electricity export, the plant was accredited under the feed-in-tariff and the Renewable Heat Incentive (RHI) schemes.
The plant was described by the board as an "excellent example" of an anaerobic digestion operation that was "well-integrated" into modern farming systems.
It said it supplied around 80,000 tonnes per annum of nutrient-rich 'PAS110' digestate biofertiliser to surrounding farms, and as a result reduced their use of carbon-intensive synthetic fertilisers by between 70% and 80%.
This acquisition represented JLEN's second acquisition into food waste-fuelled anaerobic digestion, further diversifying its portfolio in the waste and wastewater sector and increasing the total capacity of renewable energy assets in the investment portfolio to 308.5MW.
The 100% stake in CBL was acquired from private individuals, who would continue to support the business going forward, JLEN said, adding that the purchase was funded by a drawdown on its revolving credit facility.
"We are pleased with JLEN's latest investment, which is our second food waste processing anaerobic digestion plant and its first fully electrical plant," said chairman Richard Morse.
"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."
At 0856 GMT, shares in JLEN Environmental Assets Group were flat at 116p.
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