(Reuters) - British water utility Severn Trent said on Thursday it would buy organic waste recycler Agrivert Holdings for 120 million pounds ($156 million), as it beefs up its renewables business that is largely shielded from rising energy costs.
Agrivert generates renewable energy from food waste and operates food-waste processing plants and waste composting sites in Britain, Severn Trent said.
“Renewable energy is strategically important to Seven Trent and the UK as a whole as we work towards achieving our decarbonization targets,” Severn Trent Chief Executive Officer Liv Garfield said in a statement on Thursday.
The deal will add 106 Gigawatt hours (GWh) per annum of energy generation to the 354 GWh currently produced by Severn Trent’s renewable energy portfolio, the company said.
Severn Trent, which supplies water across the Midlands region, generated 38 percent of its energy needs from renewable energy, it had said in May.
At the time it also said renewable energy sources act as a natural hedge against rising energy costs and it was on track to get roughly half of its gross energy consumption from renewable energy by 2020.
Severn Trent, an FTSE 100 component, will fund the deal with existing cash and bank facilities, it said on Thursday.
($1 = 0.7689 pounds)
Reporting by Muvija M in Bengaluru; Editing by Amrutha Gayathri and David Evans