The renewables arm of Schroders Capital and six UK local government pension schemes (LGPS) are acquiring a £700m (€820m) UK solar portfolio from Toucan Energy.
Schroders Greencoat said it is buying the majority of the 53 operating solar farms with a combined capacity of 513.5MWp across England, Wales and Northern Ireland in a deal that represents the largest operational solar portfolio transacted in the UK to date.
The portfolio will be acquired by funds managed by Schroders Greencoat, including Greencoat Solar II LP and Greencoat Renewable Income LP, as well as recently launched mandates.
The South West region LGPS funds of Avon, Cornwall, Devon, Gloucestershire, Oxfordshire and Wiltshire said they have jointly committed around £230m, via Schroders Greencoat Wessex Gardens LP, to invest in 17 assets with a generating capacity of approximately 196MW. Wessex Gardens is a place-based and locally-focused renewable energy infrastructure fund established last year.
Tokyo Century is acting as a co-investor in the acquisition.
Administrators Interpath Advisory sold the assets on behalf of Toucan Energy, which entered administration in late 2022.
Nick Dixon, head of Avon Pension Fund, said: “This partnership allows us to make a significant contribution to achieving our climate objectives. It’s been a really positive experience working with other LGPS funds and the team at Schroders Greencoat to achieve this investment.”
Jenny Devine, head of Wiltshire Pension Fund, said: “We’re delighted with this cornerstone investment in Wessex Gardens. Our collaboration with other LGPS funds has enabled us to invest in solar at scale across the South West, earning strong returns for our members while also supporting our goal of net zero by 2050.”
Lee Moscovitch, partner at Schroders Greencoat, said: “We are thrilled to have agreed to acquire the largest operational solar portfolio put to market in the UK. This is a major achievement for Schroders Greencoat, particularly given the size, complexity and number of stakeholders involved in the transaction.
“We will aim to deliver reliable returns for our investors via these assets, as they continue to provide a substantial contribution to the UK’s net-zero strategy.”
Jim Tucker, managing director at Interpath Advisory and joint administrator of Toucan Energy Holdings 1 Limited, said: “We are delighted to have reached this landmark agreement with Schroders Greencoat which will see this excellent solar portfolio move into new ownership, delivering optimum value and generating a significant return for the portfolio’s creditors.
“This was a highly competitive sales process, requiring substantial preparation, due in no small part to the fact that assets of this scale and quality rarely come to market. We look forward to the transaction completing in the coming weeks.”
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