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Downing Renewables & Infrastructure Trust PLC on Thursday said that it has bought Blasjon Nat AB, a Swedish electricity distribution system operator, for £7 million.
Downing Renewables is a London-based investor in solar parks, wind farms and hydroelectric assets. The purchase is the trusts second in the grid and grid stability services sector.
Blasjon delivers 16 to 18 gigawatt hours per annum of electricity through medium and low voltage lines to around 1,500 domestic and business customers in Stromsund, northern Sweden. Its grid network is 436 kilometres in length and comprises overhead lines, three primary and 161 secondary substations.
According to Downing Renewables, ‘grid networks like this are operating businesses with very long-life assets’, thus furthering its strategy of stabilising revenues and consistency of income to shareholders.
The acquisition will be funded through the investment trust’s revolving credit facility, under which drawings and commitments are now around £18 million.
‘The accretive acquisition of Blasjon highlights our continued ambition to further diversify DORE’s portfolio. By investing in long-life assets like electricity distribution grids, the company can access long term, inflation-linked revenues that are not dependent on the sale of electricity in the wholesale market. We are excited by this and potential future investments that the company can make in this sector,’ said Tom Williams, head of energy and infrastructure at investment manager Downing LLP.
Downing Renewables shares were trading 1.0% lower at 92.06 pence each in London on Thursday morning. It has a market capitalisation of £169.1 million.
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