Utility Week

Finance & Investment This week Spark buyout 'heralds major growth plans' Four large institutional investors back a deal that will 'increase access to growth capital' Independent supplier Spark Energy has announced that a management buyout of the com- pany by four large institutional investors is close to completion. The firm – which supplies energy to the lettings and social housing sectors – wants to "increase access to growth capi- tal" for "rapid expansion". The directors of the company are recommending the deal to shareholders, and insist they will realise a return on their investments. The support of 75 per cent of share- holders is needed before the offer closes on 14 July. Four large institutional investors – including a major UK pension fund, a European family office and a Middle Eastern investment bank – are backing the deal, which Spark said will increase the financial strength of the business and is expected to deliver turnover of £125 mil- lion in the year to end June 2016. Spark Energy chief executive Chris Gauld, who is lead- ing the buyout, said: "This is the natural next phase in Spark's evolution. Whilst we can be proud of our achieve- ments so far, we have big plans for an exciting future. "The new institutional backers have the extra finan- cial strength and experience to enable us to fund and accelerate the next steps in our ambitious plans, and to realise our full potential. We are confident that this deal will go through and excited about the opportunities ahead of us." The value of the deal has not yet been disclosed, but if approved the transaction is expected to be completed in August. SJ EnErgy Plant to use British steel for turbines Liberty House Group has bought a British plant to make wind turbine towers using local steel. The industrial metal company will use the plant's equipment in a new manufacturing centre to supply the country's offshore wind market and tidal lagoon power industry. Renewable UK has welcomed the announcement and chief executive Hugh McNeal said: "This is great news and shows how the renewable industry can provide a market for steel produced in Britain." Scottish Renewables also praised the move, which could support jobs in the industry. EnErgy Initiative supports small wind projects Sharenergy has launched a com- munity energy initiative focused on farm-scale wind turbines, and will include projects in Scotland and Wales. Small Wind Cooperative is the first to combine projects in dif- ferent UK countries and will let members use energy generated in their homes and businesses as part of a deal with energy sup- plier Co-operative Energy. The project offers people the chance to support three com- munity turbines, one in Wales and two in Scotland, with bonds or shares at a minimum of £100. The bonds offer a return of 4.5 per cent and will be repaid ažer six years, and the shares a pro- jected annual average return of 6.5 per cent over 20 years. Small Wind Co-op director Jon Halle said: "We know that people don't trust the big energy companies, which is why we are a small co-operative, which is owned and run by our members – no 'fat cats' here." EnErgy Renewable costs to 'fall at pace' The cost of renewable power generation will come down "at pace" up to 2025, as technolo- gies continue to improve and supply chains become more competitive, according to the International Renewable Energy Agency (Irena). In a report, it said the average cost of solar photovoltaics will fall by as much as 59 per cent, offshore wind by 35 per cent and onshore wind by 26 per cent by 2025. Irena's director-general Adnan Amin said: "Given that solar and wind are already the cheapest source of new genera- tion capacity in many markets around the world, this further cost reduction will broaden that trend and strengthen the com- pelling business case to switch from fossil fuels to renewables." Gauld: buyout is next phase in Spark's evolution UTILITy WEEK | 24Th - 30Th JUnE 2016 | 15 Stock watch NatioNal Grid share price, 15 - 21 JuNe 980 940 950 960 970 15 Jun 16 Jun 17 Jun 20 Jun 21 Jun National Grid shares dropped slightly last week aer the Energy and Climate Change Committee published a report calling for the company to be stripped of its role as system operator. Aer closing the previous day at 963.3p, they fell to 950.6p in the first hour of trading on Friday morning. They regained lost ground and more this week as a result of reduced expectations of a 'leave' vote in the EU referendum.

• Cover