Zouk Capital, the London-based growth capital and infrastructure investment firm, has sold a portfolio of residential solar photovoltaic (PV) systems on 3,000 properties to REaLM Infrastructure Fund, which is part of Aviva Investors.
The 8.6-megawatt (MW) portfolio was developed and financed by Zouk between 2011 and this year. The systems were installed at no cost to homeowners and social housing residents, who had access to free electricity generated by the systems.
Each system was eligible for feed-in tariffs put in place by energy regulator Ofgem for a period of 20 to 25 years, with returns linked to the Retail Price Index (RPI).
Zouk used its Zouk Solar Opportunities Fund, which closed on €52 million in 2008, to fund the portfolio. The solar fund is now fully invested and Zouk is in the process of raising a new €200 million fund that signals a shift from pure solar to renewable energy in general. Market sources indicate that the firm is hoping to close the new fund by the end of this year.
Aviva’s REaLM (Returns Enhancing and Liability Matching) strategy comprises five funds investing in infrastructure, energy centres, ground rents, social housing and commercial assets in order to hedge inflation risks and generate returns above liabilities.
The REaLM Infrastructure Fund aims to deliver returns “substantially” in excess of those generated by long-dated index-linked gilts by investing in infrastructure assets offering “secure, long term and inflation-linked income streams”.
In July this year, the REaLM Infrastructure Fund acquired a 12.3MW portfolio of residential solar PV systems from UK renewable energy firm Ecovision Renewable Energy. It now has more than 50MW in installed capacity altogether.