SSE will sell a 25% minority stake in its electricity transmission network business, SSEN Transmission, to Ontario Teachers’ Pension Plan Board.
The transaction aims to help unlock growth in both the transmission business and across the wider SSE Group.
The transaction is based on an effective economic date of 31 March 2022, and total cash proceeds of £1.465bn for the 25% stake are expected at completion.
The stake sale process for SSE’s electricity distribution business is expected to commence in early 2023.
SSE will remain as the majority shareholder, retaining control in relation to operating and managing the business, with Ontario Teachers’ to be proportionately represented on SSEN Transmission’s Board of Directors.
SSE’s Finance Director Gregor Alexander will be Chair of this new Board and Rob McDonald will continue in his role as Managing Director for SSEN Transmission, along with other key members of SSEN Transmission’s Leadership Team.
The transaction follows SSE’s previous announcement from 2021 of its intention to extend the partnering approach that has been successful in SSE Renewables to its core electricity distribution and transmission network assets through the sale of minority stakes in both businesses as part of SSE’s fully funded Net Zero Acceleration Programme (NZAP).
SSE’s NZAP creates the platform that could see the group deliver around 20% of the offshore wind generation and electricity networks needed in the UK by 2030, alongside investments in flexible generation technology and the export of SSE’s renewable energy capabilities internationally.
The proceeds released through this stake sale will support the significant growth SSE continues to see in SSEN Transmission and further growth opportunities across SSE’s other core businesses.
Finance Director of SSE Gregor Alexander said: “We are delighted to agree a transaction that will help unlock the full potential of our growing electricity transmission business, which remains core to our strategic direction as a clean energy champion specialising in electricity infrastructure.
“As we set out in our Net Zero Acceleration Programme last year, due to the scale of potential growth and the associated investment required across SSE’s businesses, including in electricity networks, bringing in minority partners will balance capital allocation and support further growth, creating greater long-term value for all our stakeholders.
“In Ontario Teachers’ we have a strong long-term partner who we have worked with successfully over the past 18 years and, whilst we will retain operational control, they will be critical to SSEN Transmission’s ongoing future success.”