We are pleased to announce that Downing Renewables & Infrastructure Trust (DORE) has acquired a Swedish Electricity Distribution System Operator, Blåsjön Nät AB (“Blåsjön”), for c.£7 million.
The Company has acquired 100% of the share capital in Blåsjön, a regulated electricity distributor, which delivers 16-18 GWh per annum of electricity through medium and low voltage lines to its c.1,500 domestic and business customers in Strömsund, northern Sweden.
This is DORE’s second acquisition in the grid and grid stability services sector, and further supports the Company’s strategy of constructing a diversified portfolio designed to increase the stability of revenues and consistency of income to shareholders. The acquisition will be funded through the Company’s revolving credit facility, under which drawings and commitments are now c.£18 million.
Blåsjön's grid network is 436km in length and comprises overhead lines, three primary and 161 secondary substations. Blåsjön operates a licensed monopoly in a highly regulated environment, generating consistent and predictable cashflows that are correlated to Swedish inflation and interest rates. Grid networks like this are operating businesses with very long life assets that are expected to operate and generate substantial yields for generations.
Tom Williams, Partner, Head of Energy & Infrastructure at Downing LLP, said: “The accretive acquisition of Blåsjön, 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.”