Six UK local authority pension funds (LGPS), all based in the country's South West have joined forces to place a £230m investment in solar energy for the region which is part of the largest operational solar deal in the UK.
The six funds, which include the Avon, Cornwall, Devon, Gloucestershire, Oxfordshire and Wiltshire LGPS, have placed an initial cornerstone investment through Wessex Gardens – a renewables investment wing of Schroders Greencoat. All six funds are part of the LGPS pool Brunel Pension Partnership, but investments have been placed at fund level.
As part of the transaction, Schroders Greencoat has taken a majority stake in Toucan Energy’s £700m solar portfolio which consists of 53 operating solar farms across the UK, the largest operational solar deal across the UK, according to Schroders Greencoat.
Jennifer 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.”
Nick Dixon, head of Avon Pension Fund, added: “We are pleased to see the close of the first investment as part of this ground-breaking collaboration. We are clear that climate change is an existential threat, and we want to drive real change through how we invest. 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.”
In the first stage of the investment, the LGPS fund will be acquiring a stake in the Toucan Energy portfolio, investing approximately £230m in the deal to acquire predominately local solar assets.
Wessex Gardens LP will initially hold a stake in the portfolio of solar assets, which are distributed across the UK. Over time the portfolio will be restructured so the partnership is holding predominantly South West assets consistent with the funds’ ambitions around place-based/local investing.
The final portfolio held by the partner funds will see around £230m invested in 17 assets with a generating capacity of approximately 196MW, equivalent to powering nearly 70,000 homes, Wessex Gardens said.
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