Aviva in UK domestic solar deal

The insurer’s investment arm has acquired a portfolio of residential photovoltaic systems built on houses in Britain.

Aviva Investors, the asset management business of insurance firm Aviva, last week acquired a 12.3-megawatt (MW) portfolio of residential solar photovoltaic (PV) systems built on 4,000 houses in the UK.

The portfolio has been purchased from Ecovision Renewable Energy, a Gloucestershire, England-based renewable energy solutions provider.

The acquired systems are expected to deliver predictable, index-linked returns, with each system eligible for OFGEM-regulated feed-in tariffs for every unit of electricity generated over a 25-year period, rising in line with RPI (retail price index).

“As institutions continue to look towards assets that offer secure and long-dated income streams in order to meet their liabilities, we believe infrastructure opportunities such as this offer the potential to meet these needs,” said Ian Berry, fund manager for infrastructure and renewable energy at Aviva Investors, in a statement.

The acquisition was made through the Aviva Investors REaLM (Returns Enhancing and Liability Matching) Infrastructure Fund, which focuses on UK infrastructure projects, including the energy-related sectors of solar photovoltaic and energy centres.

Aviva Investors’ broader REaLM strategy has five funds investing in infrastructure, energy centres, ground rents, social housing and commercial assets. All the funds aim to hedge against inflation risks and generate returns in excess of liabilities.

Aviva was advised on the solar PV deal by financial adviser AgFe and law firm Clifford Chance; Ecovision was advised by financial advisers Rothschild and Opus Corporate Finance and law firm Osborne Clarke.