SSE has entered into an agreement to sell its 50% share in two energy-from-waste ventures in northern England to European Diversified Infrastructure Fund 3, a fund managed by First Sentier Investors, for £995m.
The proceeds will support the company’s plans to invest £7.5bn in low-carbon energy infrastructure over the next five years.
Under the terms of the deal, SSE will sell its interests in Multifuel Energy Limited (MEL1) and Multifuel Energy 2 Limited (MEL2) which are 50-50 joint ventures with Wheelabrator Technologies.
MEL1 comprises the operational Ferrybridge Multifuel 1 and 2 facilities, while MEL2 is the Skelton Grange Multifuel development, all in West Yorkshire.
The Ferrybridge plants each have capacity of 75MW and have been operating since 2015 and 2019, respectively.
They are capable of processing around 725,000 tonnes and 675,000 tonnes of waste every year.
The proposed Skelton Grange facility, which is due to reach financial close around April 2021 and commence commercial operations in 2025, will have an installed capacity of 45MW and will be capable of processing around 400,000 tonnes of waste a year.
The transaction is expected to complete by late 2020 subject to antitrust approval by the European Commission.
SSE finance director Gregor Alexander said: “This sale marks a major step in our plans to secure at least £2bn from disposals by autumn 2021, with just over £1.4bn now delivered.
“While these multifuel assets have been successful ventures for SSE, they are non-core investments and we are pleased to have agreed a sale that delivers significant value for shareholders while sharpening our strategic focus on our core low-carbon businesses.
“Our disposal programme demonstrates how the company can create value from our assets and supports our plans to invest £7.5bn over the next five years in the low-carbon infrastructure needed to stimulate a green economic recovery and help the UK transition to a net-zero future.”