The EV charging sites will be developed and funded by EVN to the point at which they are contracted and construction ready, at which stage they will be acquired by SEEIT. The commitment of up to £50 million will be drawn down in tranches to fund the implementation of projects, with the first draw down of capital expected to take place later this year with the full balance of up to £50 million expected to be deployed over the next 12-18 months.
The construction period for each project is expected to be around 6 -12 weeks, at which point projects become operational and are expected to generate availability-based revenues.
Once operational, the EV charging sites will be contracted through 20-year, fixed price, CPI inflated Energy Service Agreements (‘’ESAs’’) to Charge Point Operators (‘’CPOs’’), which are typically investment grade utility companies. The EV Charging sites will also enter into long-term land-lease agreements with the site-owners, which are large, established forecourt or car park operators on the same basis. EVN, through its subsidiaries, will also manage the construction and operation of the assets, via asset management and maintenance contracts in accordance with the period and terms of the ESAs.
This project was identified as a target investment in the SEEIT Prospectus in June 2020 and represents the Company’s first project in EV charging infrastructure. The project is consistent with SEEIT’s investment policy by bringing competitively priced, cleaner and more efficient energy directly to the point of use and making efficient electric vehicle charging equipment more widely available.
Having followed the EV charging infrastructure business for several years, SDCL believes that this project represents the first opportunity to invest in EV charging assets under a framework similar to availability style infrastructure projects, with long-term pre-determined service fee revenues. In addition to the initial 112 sites, EVN has plans to develop a further c.380 EV charging sites, requiring an additional c.£150 million in the next 36 months, for which SEEIT has a right of first negotiation.
SEEIT is delighted to be partnering with EVN, which was founded in 2017 and is a dedicated EV charging infrastructure development company that seeks to address the challenges faced by both landlords and charge point operators in rolling out a network of EV charging infrastructure in the UK.
Commenting on the project, Jonathan Maxwell, CEO of SDCL, said: “There is a growing need for charging infrastructure in the UK as we transition towards more efficient fuel choices that reduce harm to our environment. We identified EV charging infrastructure as a target area in our June 2020 Prospectus and are pleased to have this opportunity to invest. EVN’s unique business model offers CPOs charging infrastructure as a service. This fits our model of investing in availability-based services with strong counterparties. Project revenues will be generated from energy services agreements with predictable costs, presenting the opportunity for a stable and predictable investment for SEEIT and one we are delighted to add to our portfolio. This will also provide further diversification in terms of technology, counterparty and application.”