SSE sells 50% stake in waste-to-energy ventures for £995m

The proceeds will support SSE’s plans to invest £7.5bn in low carbon energy infrastructure over the next five years as well as reduce its net debt

SSE has agreed to sell its 50% stake in waste-to-energy ventures to European Diversified Infrastructure Fund III for a total cost of £995 million.

Multifuel Energy Limited (MEL1) and Multifuel Energy 2 Limited (MEL2) are 50:50 joint ventures between SSE and Wheelabrator Technologies, consisting of the operational Ferrybridge Multifuel 1 and Ferrybridge Multifuel 2 facilities (MEL1) as well as the Skelton Grange Multifuel development project (MEL2), all located in West Yorkshire.

Ferrybridge Multifuel 1 – which entered commercial operation in 2015 – and Ferrybridge Multifuel 2 – which entered commercial operation in 2019 – each have an installed capacity of 75MW.

They are capable of processing around 725,000 tonnes and 675,000 tonnes of waste every year respectively.

The proposed Skelton Grange Multifuel facility, which is due to reach financial close around April 2021 and commence operations in 2015, will have an installed capacity of 45MW and be capable of processing around 400,000 tonnes of waste annually.

The proceeds from these projects will support SSE’s plans to invest £7.5 billion in low carbon energy infrastructure over the next five years as well as reduce its net debt.

Finance Director Gregor Alexander said: “This sale marks a major step in our plans to secure at least £2 billion from disposals by Autumn 2021, with just over £1.4 billion now delivered. While these multi-fuel 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 £7.5 billion 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.”

The announcement follows the sale of SSE’s non-operating stake in Walney Offshore Wind Farm to Greencoat UK Wind for £350 million and the sale of 33% equity interest in meter asset provider MapleCo to Equitix, through which the energy company will receive net proceeds of around £90 million on closing.

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