Downing Renewables & Infrastructure Trust PLC (LSE:DORE) (DORE) has announced the acquisition of Swedish electricity network firm Blåsjön Nät AB.
Unveiling the £7mln takeover on Thursday, DORE said the move would help stabilise income and ensure a more diversified portfolio of renewable and infrastructure assets.
“By investing in long-life assets like electricity distribution grids, the company can access long-term, inflation-linked revenues,” partner Tom Williams commented.
Moreover, “these are not dependent on the sale of electricity in the wholesale market”, he added, after recent years of volatile prices due to the pandemic and Ukraine war.
AIM listed-DORE has wholly acquired Blåsjön under the deal, taking ownsership of the distributor's 436km grid network which is capable of delivering 16-18GWh of electricity per year – enough to power around 1,500 homes and businesses.
“Blåsjön operates a licensed monopoly in a highly regulated environment,” DORE said in a statement, “generating consistent and predictable cash flows.
“Grid networks like this are operating businesses with very long-life assets that are expected to operate and generate substantial yields for generations.”
The acquisition will be funded through DORE’s revolving credit facility, which now represents roughly £18mln, the investment trust added.