MEAG, the asset manager of Munich Re and ERGO, has acquired a 49.78 per cent stake in the South East London Combined Heat and Power (SELCHP) energy-from-waste plant in South East London, Great Britain. The seller of this stake was iCON Infrastructure Partners IV, L.P. This acquisition represents a strategic investment in the critical infrastructure sector and aligns with MEAG's established investment strategy.
SELCHP is an essential facility for waste management in the Greater London area and is characterised by a dual function: the lawful disposal of waste materials and the simultaneous generation of energy and heat. The energy-from-waste plant in South East London is classified as core infrastructure, whose importance for local supply security is considerable.
The co-owner and operator of the SELCHP facility is the Veolia Group, a multinational, publicly listed company headquartered in Paris. Veolia focuses on environmental services, including waste disposal, and ensures the operational management of the plant. SELCHP's financial basis relies on long-term, inflation-indexed contracts for waste delivery. These contracts are supported by expected high and stable waste volumes in the facility's catchment area, which secures a reliable source of income. Furthermore, the plant generates additional revenue from the off-take of the electricity produced.
David Pecher, Head of Infrastructure Equity Transactions at MEAG, emphasised that this acquisition complements the company's infrastructure equity strategy very well. He highlighted that the facility offers long-term contractually secured returns, exhibits low correlation to general market cycles, and possesses a defensive risk profile. These characteristics are of great importance for sensibly complementing the existing portfolio.
Tobias Kerschbaumer, Senior Investment Manager at MEAG, also underscored the strategic positioning of waste-to-energy plants. These are located at the interface of essential infrastructure and the energy transition, as they both solve a waste disposal problem and reliably generate energy and heat. According to Mr Kerschbaumer, MEAG explicitly seeks this combination of societal benefit and predictable cash flows in core infrastructure investments, which makes the investment in SELCHP particularly attractive.
- —Transaction Volume: Acquisition of 49.78% of the shares.
- —Asset Object: South East London Combined Heat and Power (SELCHP) facility.
- —Location: South East London, Great Britain.
- —Seller: iCON Infrastructure Partners IV, L.P.
