JLEN Environmental acquires majority of south London anerobic digestion plant

Environmental infrastructure fund JLEN Environmental Assets Group announced the acquisition of a 70% equity stake in Bio Collectors Holdings (BCH) on Friday.

The London-listed firm said BCH, through its subsidiary companies, holds the rights and operational assets that make up the anaerobic digestion plant and the ‘Bio Collectors’ waste collections business in Merton, south London.

It said consideration for the purchase was made up of an initial upfront payment, including working capital, and additional deferred amounts that would be subject to certain conditions being met.

The group of companies, based in Merton, commissioned the anaerobic digestion plant commissioned in December 2013, and had since expanded it through several phases.

JLEN said the plant had a current thermal capacity of around 10MWth, a waste processing capacity of up to 100,000 tonnes per annum, and predominantly produced biomethane to be injected into the national gas grid.

In addition, the plant has 1.7MWe of capacity through two combined heat and power engines, and was accredited under the Renewable Heat Incentive (RHI) and Feed-in-Tariff (FiT) schemes.

The Bio Collectors waste collections business collected source-separated and packaged food waste for the anerobic digestion plant from a variety of commercial, industrial and local authorities located in and around Greater London, using an increasing biogas-powered fleet.

It said the 70% stake in BCH was acquired from private individuals, with the residual 30% retained by the existing owner, who would remain active in the business going forward.

This acquisition represented JLEN's first acquisition into food waste-fuelled anaerobic digestion, which the board said further diversified its portfolio and increased its total capacity of renewable energy assets in the investment portfolio to 297.9MW.

The acquisition was funded by a draw-down on its revolving credit facility.

“We are pleased with JLEN's latest investment, which presents a diversification within the anaerobic digestion sector,” said chairman Richard Morse.

“This acquisition of a food waste-fed anaerobic digestion plant in London, bridges two sub sectors of JLEN's existing portfolio, leveraging experience of the agricultural anaerobic digestion assets and the waste processing assets.”

Morse said the production of biogas to inject into the national grid, and also to power its own fleet of collection vehicles, underlined the importance that assets such as the acquisition played in the UK's ambition to decarbonise its energy supply.

“We also value the opportunity to continue to work with the existing private shareholder to drive further value in the investment in future years.”

At 1424 GMT, shares in JLEN Environmental Assets Group were up 2.14% at 119.5p.