In the UK, Glennmont Partners from Nuveen (Glennmont), one of the world’s leading fund managers focused exclusively on investing in clean energy infrastructure, has announced the successful divestment of its Margam Green Energy Plant (Margam) to Greencoat Capital LLP (Greencoat), one of the UK's largest renewable energy investors.
Margam was originally acquired by Glennmont in 2015 during the construction phase and has been operational since 2019.
MGEP combusts low-quality waste wood, which is contracted to be supplied under a long-term, fixed-price supply agreement with Esken, the largest supplier of waste wood feedstock to the UK biomass sector.
Margam has been an important element of the local community, which is evidenced by the Margam twenty-year development fund for the benefit of the Neath Port Talbot County Borough Council.
Part of Clean Energy platform divestments
In March 2021, Glennmont was acquired by Nuveen, the US$1.3 trillion global asset manager, which will better enable Glennmont to drive its plans to raise further clean energy funds, and to target new investments in all major technologies – offshore wind, onshore wind, and solar PV – in their core European markets as well as across the Asia Pacific and the United States.
The sale of Margam is a continuation of Glennmont’s successful divestments from its second Clean Energy platform, which raised EUR 500 million at inception.
We are delighted to complete the sale of Margam to Greencoat, which represents a long-term investment in Welsh renewable energy infrastructure. We were pleased to work with Greencoat again following their purchase of the Sleaford plant in 2020, Joost Bergsma, CEO and co-founder at Glennmont.
It follows the platform’s divestments of two wind portfolios in Italy and France last year.
This latest transaction brings us a step closer to realizing the full divestment of our second Clean Energy platform and underlines our expertise across the full investment cycle from deal structuring, to asset management and the final sale. As we continue to play a key role in the energy transition, we look forward to leveraging our expertise to identify and secure further value from assets, Joost Bergsma said.
Third large-scale bioenergy investment
For Greencoat, the acquisition is the firm’s third investment in large-scale bioenergy plants, following the acquisition of Templeborough Biomass Power Plant in 2019 and Sleaford Renewable Energy Plant in 2020.
In line with Greencoat Capital’s broader investment strategy, its bioenergy assets provide stable, inflation-linked returns which have a low correlation to the wider economy, and are well insulated from global natural resource supply issues.
We’re excited to announce the acquisition of Margam Green Energy Plant, an almost identical asset to our existing Templeborough facility, with all the benefits of familiarity and previously established operating partners and processes, said Minal Patel, Partner at Greencoat Capital.
According to Greencoat, the UK supply of low-quality waste wood is forecast to increase in line with economic growth and construction and demolition activity, with MGEP placed to benefit from these trends.
The only other viable alternatives for these grades of wood aside from biomass are landfill or export, meaning that MGEP converts what would otherwise be waste into power.
We expect to continue expanding in this important sector, generating stable returns for clients whilst helping to decarbonize the UK’s electricity grid, Minal Patel said.
Evercore and Orrick acted as financial and legal advisors respectively. The technical advisors were Fichtner and KPMG and EY provided tax and accounting advice on the transaction. AFRY provided fuel due diligence.