Toucan Energy enters administration owing Thurrock Council £655m

Thurrock Council was the major creditor of 53 of Toucan Energy's solar farms

A renewable energy company that owes £655m to a debt-ridden council has entered administration.

Tory-run Thurrock Council, in Essex, helped Toucan Energy Holdings 1 (TEH1) finance 53 of the company's solar farms in the UK - as first reported by the Bureau of Investigative Journalism.

Administrators were appointed for the business on Thursday.

The council's leader called it a "significant step to reducing our overall debt" which had reached £1.5bn.

The local authority's loans to TEH1 have been detailed in a financial statement for Perpetual Power (UK) Holdings Ltd, lodged with Companies House, covering the year to 31 December 2020.

Conservative Thurrock Council leader Mark Coxshall said the appointment of administrators was a "positive move forward".

The government appointed Essex County Council to step in and act as a commissioner for Thurrock earlier this year, taking over all major decisions, because of the "serious financial situation".

The previous Conservative council leader and former cabinet member for finance resigned.

The council ran up debts of £1.5bn, although it was reported at a council meeting last week that it had already paid back £177.5m to other local authorities.

'Positive move'

Current council leader Mark Coxshall said: "This is a positive move forward in enabling Thurrock Council to resolve its financial position and maximise recovery for Thurrock residents."

He said he was "confident" the decision on administration would make for a "significant step to reducing our overall debt".

Thurrock Council in Essex ran up a debt of £1.5bn

Jim Tucker, from Interpath Advisory - the administrators of TEH1, said the 53 solar parks, which have a combined capacity of 513MW, "continue to operate as normal".

He said they would work closely with Thurrock Council, which was the company's "major creditor", and added: "Given their [the solar farms'] significant underlying cash generation, we expect considerable interest in the assets."

The process of administration involves an insolvency practitioner trying to save a business from going bust.