Schroders Greencoat has received a £170 million commitment from the Environment Agency Pension (EAPF) to bolster investment in wind, solar, bioenergy, heat pumps and hydrogen.
Greencoat, which is the specialist renewables and energy transition infrastructure manager of Schroders Capital, a UK-headquartered asset management firm with £750 billion assets under management (AUM), will allocate the funds to its UK flagship private markets fund, Greencoat Renewable Income LP (GRI).
GRI was launched in 2020 with £277 million in investment from Brunel and SAUL, as reported by our sister publication Solar Power Portal. With this new commitment, the total now stands at £1.35 billion, and the final close is set for December 2024.
The Fund invests exclusively in UK renewable infrastructure assets, targeting a diversified portfolio of wind, solar and bioenergy. The fund also invests in more nascent technologies such as heat pumps and green hydrogen electrolysis – both key components of a net zero UK.
To date, GRI has deployed over £1 billion across the UK. This includes the UK’s “largest-ever” solar acquisition, in which the firm secured 53 solar farms from Toucan Energy. The Fund is also supporting the development of a 500MW-strong hydrogen portfolio with support from energy infrastructure development company Carlton Power.
It is worth noting that Greencoat launched a new semi-liquid energy transition fund earlier this year ( 18 January) to support renewable technologies such as solar, wind, hydrogen and battery energy storage.
Tatiana Zervos, portfolio manager at Schroders Greencoat, said: “Renewable infrastructure assets are the backbone of the energy transition and, as the largest asset manager of operational wind and solar assets in the UK, Schroders Greencoat is able to offer its clients direct access to these opportunities with long-term reliable, inflation-linked cashflows via a diversified strategy.
“Our track record means we are a trusted partner for influential investors such as the EAPF and we’re delighted to build on our relationship with Brunel which dates back to the fund’s inception in 2019.”
Pension fund mobilisation key for the energy transition
Mass mobilisation of pension fund resources has been touted as a crucial aspect of the UK’s energy transition. Encouragingly, recent research by specialist investment manager AlphaReal revealed that the “vast majority” of UK pension funds and insurers are set to increase their sustainable investment allocations in the next five years.
AlphaReal conducted a survey of the pension funds, which collectively oversee over £350 billion in assets, and found that the funds are expected to shift their vast resources into sustainability measures, potentially opening up new decarbonisation opportunities and drawing in much-needed revenue for the UK’s net zero journey.
According to the survey, 35% of the respondents plan to increase their investments in renewable energy by up to 10%, 44% said they will raise their investments by 10% to 20%, and 16% plan to increase their investments by more than 20%.
Only 3% of the respondents said there will be no change in their investment plans, while 2% plan to decrease their investments in renewable energy over the next five years.
Current±’s publisher Solar Media will host the Renewable Energy Revenues Summit on 21-23 May 2024 in London. The event will explore PPA structuring, revenue risk management strategies, renewable energy certificates, and much more. For more information, go to the website.
