Schroders Greencoat's Monumental £700m Investment to Acquire UK's Largest Solar Portfolio

In a significant move within the renewable energy sector, Schroders Greencoat, a specialist renewables manager under Schroders Capital, is poised to acquire a majority stake in Toucan Energy's extensive solar portfolio. This transaction, managed by the administrators at Interpath Advisory, marks a pivotal moment as the most significant operational solar portfolio deal in the UK, valued at approximately £700 million.

Toucan Energy's impressive collection includes 53 operational solar farms spanning England, Wales, and Northern Ireland, boasting a combined capacity of 513.5MW. This extensive portfolio, expected to power roughly 184,000 homes, will primarily be taken over by Schroders Greencoat managed funds, notably Greencoat Solar II LP and Greencoat Renewable Income LP.

Additionally, a significant part of this portfolio has caught the attention of six local government pension schemes - Avon, Cornwall, Devon, Gloucestershire, Oxfordshire, and Wiltshire Funds. These schemes are investing through Schroders Greencoat Wessex Gardens LP, a renewable energy infrastructure fund established last year.

This deal is not just a business transaction but also a lifeline for Thurrock Council. The council, which had previously invested an estimated £650m in Toucan solar projects, will receive substantial payments. This comes after a period of financial distress leading to a section 114 bankruptcy notice in December 2022, with debts around £1.3bn, and the subsequent administration of Toucan Energy in November 2022.

Schroders Greencoat's acquisition strengthens its position as the UK's leading manager of operating solar farms. Its portfolio now extends to 1.35GW of solar assets. Tokyo Century joins the venture as a co-investor.

Lee Moscovitch, partner at Schroders Greencoat, said he was thrilled to have agreed to acquire the most significant 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," he said. "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.

"I'd like to thank the joint administrators at Interpath Advisory for their management of a thorough due diligence process, which, along with our assessments, demonstrated the high quality of the underlying assets in the portfolio."

Jim Tucker, managing director at Interpath Advisory and joint administrator of Toucan Energy, added: "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."

In a related development, Barking & Dagenham Giving has made a notable £250,000 investment in NextEnergy Solar Fund, part of the UK's first community-led impact investment vehicle. NextEnergy's portfolio encompasses 92 operating solar assets in the UK with a combined installed power capacity of 933MW, powering around 242,000 average UK homes annually.

Peter Hamid, vice president of NextEnergy Capital, said: "We look forward to working closely with the borough to further their ambitions and welcome further educational site visits to our solar farms for the community of Barking & Dagenham soon."