Bankrupt Thurrock Council has sold its solar investments for £700 million, offloading the 513.5 MWp portfolio of collapsed developer Toucan Energy.
In a transaction billed as Britain’s biggest ever relating to solar PV, specialist investors Schroders Greencoat have acquired majority control of Toucan’s 53 operating PV farms.
With a combined capacity of 513.5 MWp across England, Wales & Northern Ireland, the assets acquired amount to the largest British operational solar portfolio transacted to date.
The stricken south Essex authority anticipates the deal, confirmed yesterday, affords it around £500 million towards the £1.4 billion it owes. The council said it was left with £655 million in debts when Toucan collapsed into administration in November 2022.
Six councils’ pensions funds with direct interests in UK solar stand to benefit from the new deal, according to the parties. They are Avon, Cornwall, Devon, Gloucestershire, Oxfordshire and Wiltshire. The authorities’ pension schemes participate in Schroders Greencoat Wessex Gardens LP, a place-based and locally-focused renewable energy infrastructure fund established last year.
The boilerplate total capacity equates to a notional powering of approximately 184,000 homes.
With 1.35 GWp of solar assets already under management, Schroders Greencoat is the largest manager of operating solar farms in the UK.
It agreed to buy Toucan Energy’s portfolio following a competitive bidding process managed by the joint administrators of Toucan Energy Holdings 1 Limited at Interpath Advisory.
Bankrupt Thurrock Council said the sale will allows it to pay down as yet unquantified hundreds of millions of debt.
Toucan Energy went into administration in November 2022, with the south Essex council as its primary creditor.
Cllr Graham Snell, Thurrrock’s finance head said: “This marks an extremely important step in our 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.
“There is much more for Thurrock Council to do as we seek to build on this to ensure we return the council to a financially sustainable position as soon as possible and continue to reduce the council’s overall debt along the way. We are committed to taking this work forward and doing all we can to right the wrongs that have taken place in the past.”
His leader Cllr Andrew Jefferies added: “A great deal of work has taken place behind the scenes to ensure that we could maximise our return on our investment in Toucan Energy. 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.
The majority of Toucan’s portfolio will be acquired by long-standing Schroders Greencoat managed funds, including Greencoat Solar II LP and Greencoat Renewable Income LP, as well as recently launched mandates.
Schroders Greencoat says its track record will benefit the acquired assets. The investment house’s specialist team of asset managers intend to harness the portfolio’s reliable generation of clean electricity and support the long-term financial stability of the assets.
Lee Moscovitch, a 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.”