Scirocco Energy to Invest in Energy Acquisitions Group Vehicle as it Moves Into Biogas

Scirocco Energy to invest in Energy Acquisitions group vehicle as it moves into biogas.

EAG has an agreement to acquire Greenan Generation Limited, which has a 0.5 megawatt AD plant, which creates biogas, and a new joint venture is expected to pursue a series of identified acquisition opportunities in the AD sector.

Scirocco highlighted that it is a value accretive investment funded by existing cash resources, in line with its new strategy to deliver shareholder value through acquisitions in the European energy market.

Tom Reynolds, Scirocco chief executive.

The biogas market is growing rapidly and will be key for the UK’s delivery of its decarbonization strategy.

“The investment into EAG will provide a platform for further attractive investments in the biogas sector, enabling us to focus on growing a cash generative asset base within a sustainable investment mandate.”

“While the initial investment and acquisition is relatively small, it meets all our investment criteria in terms of cash generation, upside potential and ability to deliver sustainable returns. More importantly it provides us with an initial platform from which to pursue our ambitious growth strategy.”

“Going forward, we intend to capitalize on the significant pipeline of opportunities in this sector working with the EAG team.”

“We also believe that the addition of activities which benefit the UK’s net zero target will make Scirocco’s investment proposition more attractive for investors due to the growing importance of ESG considerations.”

Chris Kerr, EAG managing director, meanwhile, added:

The joint venture with Scirocco Energy will provide us with the platform to access that investment to ensure that all of our projects achieve best in class status over the next 20 years, and help all stakeholders achieve their goals.

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Our specific sector experience means we are uniquely placed to ensure acquisitions are completed on compelling valuation metrics, and will be able to realise the upside value associated with these assets through optimisation and innovative operating techniques.

“What is really exciting about the AD market is its unique ability to de-carbonise the challenging sectors in industry such as heating, transport and agriculture.

“We are seeing this already with John Lewis, ASDA and Royal Mail adopting the use of biomethane in their transport fleets, but many of the existing projects that will service this growing demand for corporate decarbonisation require investment and optimisation.”

In a separate statement, the company released financial results for 2020 in which Tom Reynolds highlighted the relaunch and progress made by the company.

“Over the past year we have progressed our transition as a company as we formally became Scirocco Energy,” he said.

“While we continue to look at value realisation options for our Tanzanian assets and benefitted from enhanced value from our shareholding in Helium One, it is the recent post-year highlights that reflect our strategic direction of travel.”

“Through our investment in EAG and subsequent transaction in the Anaerobic Digestion space, we are now well positioned to take advantage of the growing opportunity in the sustainable energy sector.”

“This initial investment, while relatively small, provides a springboard for further near-term growth in the broader renewables environment.”

It reported a £3.32mln loss for the year and said it ended the year with £1.16mln of cash and equivalents.

Scirocco Energy to invest in EAG vehicle as it moves into biogas, June 14, 2021