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SSE sells £1.5bn stake in power grid

FTSE 100 energy company SSE has sold its 25% stake in Scotland’s transmission network to the Ontario Teachers’ Pension Planning Commission for £1.5bn as it seeks to raise cash to invest in renewable energy .

SSE We sold the business last November, and the process took over a year. Proceeds will be used to pay for the transition to renewable energy such as investments in wind farms.

Listed in London, SSE operates gas-fired power plants, hydroelectric power plants, wind farms and the transmission sector. The business is one of three regional infrastructure monopolies in the UK, with pylons and cables carrying electricity from generators to homes and businesses.

As the network is a local monopoly with no competition, its revenue is set by the regulator Ofgem and funded by a levy on consumers’ energy bills.

SSEN Transmission Managing Director Rob McDonald said:

“Our investment will also be key to ensuring the UK’s future energy independence by enabling the deployment of homegrown, affordable, low-carbon electricity.”

The project will be chaired by Gregor Alexander, SSE’s Treasurer, with the Ontario Teachers’ Pension Planning Commission on the board.

Investor demand for infrastructure assets has remained strong since the start of the pandemic, when other industries such as retail were severely impacted. But rising funding costs have made the deal more difficult to complete, said a person close to the negotiations.

Last year, a consortium backed by Ontario Teachers and Brookfield Super-Core Infrastructure Partners agreed to purchase SSE’s remaining stake in the Scottish natural gas network for £1.2bn.

A consortium led by Macquarie also bought a 60% stake in National Grid’s UK gas transmission business earlier this year.

But in June the UK’s largest distribution company was bought for £15bn. Macquarie Led Consortium The company collapsed after vendor Li Ka-shing’s CK Infrastructure Holdings raised prices two days before closing the deal.

Ontario Teachers is one of Canada’s largest pension funds.He recently lost $95 million on his investment in a failed crypto exchange FTXbut said it had “limited impact”.

https://www.ft.com/content/335a7f69-c51b-4dfd-8b3d-abde88a3b9a4 SSE sells £1.5bn stake in power grid

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