Target Asset Classes
Three investment pillars
Scirocco will acquire cash generative assets within each of the three target areas to construct a portfolio capable of supporting attractive dividend yield and further growth through re-investment
Assets where the primary function is the generation of energy from renewable or sustainable sources
Assets involved in the recovery of valuable coproducts from waste streams
Assets involved in the storage, transmission and delivery of energy within low carbon systems
Example asset types
•Biogas
•Energy from waste
•Geothermal
•Anaerobic digestion
Market data point
Total annual investments in renewable energy technologies need to increase from around USD 300 billion worldwide in recent years to almost USD 800 billion by 2050
Example asset types
•Wastewater processing
•Agricultural waste remediation
•Recycling processes to capture high value components of waste streams
Market data point
Global Water and Wastewater Market, 2018
Example asset types
•Hydrogen storage & delivery systems
•Grid balancing equipment
•Battery storage systems
•Peaking plants
Market data point
16GW of battery storage capacity is operating, under construction or being planned in the UK across 729 projects
- Buy or invest in asset infrastructure within the relevant space
- Look at ways to improve performance and/or augment asset capability by further investment
- Maintain performance and harvest cash flow
- Target return on equity of c. 10% after leverage
- Delivered to investors through capital growth and growing dividend yield
Positives
•Opportunities available at a number of investment scales allowing a “step by step” approach
•Leverage. Contracted nature of revenue stream and sustainable cashflows support debt capital on reasonable terms
•Reduced risk. Fundamental change to risk profile of investment portfolio with cash flow supportive of future dividend
Criteria
•Proven technical and commercial models within niche or developing markets
•Avoiding mature, established infra like markets where competition erodes long term returns
•Targeting joint ventures in the roll-out of a new but proven technology