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Finance & Investment This week SSE tipped to take up Grid's GDN assets Citigroup analysts say the company is a potential buyer after it 'expressed interest' in the sale SSE has been tipped by investors to take up a majority share in National Grid's gas distribution network (GDN) assets, which are worth an estimated £10 billion. Citigroup analysts said the big six firm, which already owns major electricity distribution assets, is a potential buyer aer the company "expressed interest" in the sale in an inves- tor conference following its latest financial results. SSE also holds a 50 per cent stake in Scottish gas distribution company SGN, which also holds licences in the south of England. "In our view, it is plausible that SSE could look to participate in such a deal (together with a financial buyer), assuming National Grid does not look to retain full operational control of the asset. If this were to be the case, we believe SSE would require a rights issue to fund such a deal," Citi analysts said in a note on Tuesday. A spokesperson for SSE said the company "naturally monitors all developments across the energy sectors in Great Britain and Ireland but won't comment on any speculation relating to them". National Grid confirmed earlier this month that it will move ahead with the sale of a majority stake in its gas distribution businesses within the final months of this financial year, with a close by early 2017. At the same time, finance director Andrew Bonfield told Utility Week that the "usual suspects" are likely to show interest. He said it was "too early to speculate", but acknowledged that infrastructure funds, sovereign wealth funds and existing networks companies are all "a possibility". JA WATER Severn Trent invests £230m in treatment Severn Trent Water will invest £230 million in its water treat- ment works between 2015 and 2020 to improve treatment processes, as part of its plans to adapt to climate change. A new report released by the company details actions it will take over the next five years to adapt to climate change, includ- ing working with landowners to improve water quality in 21 catchments through a £21 mil- lion investment between now and 2020. Severn Trent chief execu- tive Liv Garfield said: "Climate change presents a big challenge to us, yet it is a challenge that we can respond positively to." ENERGY Heat development needs £2bn by 2025 The pipeline of UK heat infra- structure projects currently in development will require up to £2 billion of capital investment over the next ten years, the government has said. The Department of Energy and Climate Change (Decc) said in a report that UK heat infra- structure is a "significant and growing investment opportu- nity" for heat network operators and third-party financiers. There are currently 280 projects in the pipeline, but Decc says "additional opportunities" have been identified by local authorities at the energy master- planning stage and a number of projects are also being devel- oped by wider public bodies and the private sector. Through the report the government hopes to "start a conversation" about how the market might evolve to "deliver the step change in deployment levels" suggested by the size of the current pipeline. RENEWABLES GIB has committed £2.3bn in three years In the past three years, the UK Green Investment Bank (GIB) has committed £2.3 billion to 58 green infrastructure projects with a total value of £10.1 bil- lion, making it the most active investor in the UK's renewable energy and energy-efficiency industries. The bank's chief executive Shaun Kingsbury said since it was opened three years ago, it has worked with almost 100 co-investors to finance more than £10 billion worth of green infrastructure in the UK. "Our focused team of market experts has moulded a flexible and creative investment strategy that has played a major role in establishing a commercial market for green infrastructure investment in the UK," he said. Gas assets: worth an estimated £10 billion UTILITY WEEK | 27TH NOVEMBER - 3RD DECEMBER 2015 | 15 Stock watch 300 280 260 240 220 200 DRAX SHARE PRICE, 27 OCTOBER - 24 NOVEMBER 27 Oct 3 Nov 10 Nov 17 Nov 24 Nov Drax saw its share price tumble following confirmation from energy secretary Amber Rudd on 18 November that all unabated coal will be forced to close by 2025. Aer a slightly weaker opening share price, losses accelerated aer 11.00am to fall over 4.75 per cent below Tuesday's close to 216.35 pence. However, by last Tuesday (24 November) the share price had recovered to 240 pence, although this is still around 16 per cent lower than in the first week of the month. Drax has already converted two of its six coal-fired units to biomass, has plans to convert a third, and recently confirmed that a fourth conversion may follow. But two remaining units still rely on coal as a feedstock and could be impacted by the government policy "reset".