Schroders Greencoat to buy £700m UK solar farms
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Schroders Greencoat, a specialist manager dedicated to the renewable energy infrastructure sector of Schroders Capital, has agreed to acquire a majority stake of the solar portfolio from collapsed energy operator Toucan Energy for £700m, using private market funds.
The portfolio, claimed by Schroders Greencoat as the “the largest operational solar portfolio transacted in the UK to date”, consists of 53 operating solar farms with a combined capacity of 513.5 MWp across England, Wales and Northern Ireland and powering the equivalent of approximately 184,000 homes.
Lee Moscovitch, partner at Schroders Greencoat, said: “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.”
The majority of the portfolio will be acquired by Schroders Greencoat’s managed funds including Greencoat Solar II LP and Greencoat Renewable Income LP, as well as recently launched mandates.
A significant portion is being acquired by six Local Government Pension Schemes: Avon, Cornwall, Devon, Gloucestershire, Oxfordshire and Wiltshire Funds via Schroders Greencoat Wessex Gardens LP, a renewable energy infrastructure fund established last year. Tokyo Century is acting as a co-investor in the acquisition.
Toucan Energy Holdings went into administration in November 2022, with Thurrock Council as the primary creditor.
Cllr Graham Snell, cabinet member for finance, said the agreement marks “an extremely important step” in the council’s financial recovery: “The sale of these assets, and the income we will receive as a result, will allow us to pay down a significant proportion of our debt.”
Cllr Andrew Jefferies, leader of Thurrock Council, said: "The process has been complex and time consuming, but it was important to do all we could to achieve the best possible outcome under difficult circumstances.”
He continued: “While it is good news that this asset has now been sold, there is no denying the scale of the challenge we face and the ongoing efforts that are required to stabilise the council in the years ahead. We are also still committed to doing everything possible to maximise our recovery."
The bidding process was managed by the joint administrators of Toucan Energy Holdings 1 Limited at Interpath Advisory.
RBC Capital Markets acted as exclusive financial adviser to Schroders Greencoat. Eversheds Sutherland, Evergy and PwC provided advice to Schroders Greencoat.
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