Kyotherm, a European equity investment company based in Paris, who specialise in the development and operation of sustainable heat and energy efficiency projects, are delighted to announce the successful acquisition of Renewable Heat Generation Limited (RHG).
RHG, headquartered in Harrogate, is one of the UK’s largest independent owners of wood pellet fuelled biomass boilers with over 100 installations in 53 care homes across England, Scotland and Northern Ireland. Founded in 2013, RHG’s innovative business model has allowed it’s care home customers to access reliable and affordable heat generated from renewable sources replacing old and inefficient gas or oil facilities. RHG is expected to deliver over 28 GWh of sustainable heat every year.
The acquisition of RHG was part funded through a long-term project finance facility of £5.8m from Clydesdale Bank, plus an undisclosed level of equity from Kyotherm. It is the second heat transaction completed between Clydesdale Bank and Kyotherm in 2019.
The acquisition of RHG compliments Kyotherm’s existing portfolio which represent a total capacity of 70MW, producing over 160 GWh/year in renewable energy or energy efficiency both in the UK and across Europe. Kyotherm has ambitious plans for growth in the UK, which include acquiring and developing both biomass and ground source heat pump-based installations.
Thibault Chevallier, Chief Financial Officer at Kyotherm commented:“The acquisition will strengthen Kyotherm’s presence in the UK with a diversified, well-structured and high-quality portfolio of assets. The strong and ambitious government support in the UK towards renewable heat is key in the promotion of such initiatives by attracting competitive capital, thus enabling the production of clean and affordable energy on the long term.”
Keith Wilson, Head of Renewable Energy at Clydesdale Bank said: “Successful decarbonisation of the heat sector will be essential if the UK is to meet its climate change goals. Notwithstanding existing policy instruments, to date and relative to the electricity sector, the heat sector has struggled to attract low cost debt finance, with the main challenges being complexity and average ticket size.
With a mid-market focus and an entrepreneurial mindset, the heat sector represents an attractive lending opportunity and one where Clydesdale Bank can differentiate. We are delighted to have been chosen by Kyotherm to support their acquisition of RHG and look forward to supporting more acquisitions in future. We also look forward to working with other sponsors willing to take on the challenge of decarbonising heat and who can help the Bank deliver its objective of making a meaningful contribution to dealing with the issue of climate change”.
We are delighted to have been chosen by Kyotherm to support their acquisition of RHG and look forward to supporting more acquisitions in future.Keith Wilson, Head of Renewable Energy at Clydesdale Bank