NextEnergy Capital's private solar fund, NextPower UK ESG has exceeded its £500 million fundraising target by securing £653 million. This achievement highlights strong investor confidence and the increasing attractiveness of sustainable energy investments.
Surpassing the Target
In a significant boost for the UK's renewable energy sector, NextEnergy Capital has announced that its private solar fund - NextPower UK ESG (NPUK ESG) - has surpassed its fundraising target by an impressive 30%. This brings the total committed funds to £653 million. The original target of £500 million was significantly exceeded, demonstrating strong investor confidence and the growing appeal of sustainable energy investments.
NextEnergy Capital's Solar Fund Exceeds Target by 30%, Driving Renewable Energy Investments in the UK.
The latest infusion of capital comes from London LGPS CIV Limited, joining a robust lineup of investors including: LGPS Central Limited, Border to Coast Pensions Partnership, Merseyside Pension Fund, Brunel Pension Partnership, Strathclyde Pension Fund, and investors from the Middle East and Japan.
Notably, the UK Infrastructure Bank provided cornerstone match-funding of £250 million. This lays a solid foundation for subsequent investments from Local Government Pension Schemes (LGPS). This investment enables LGPS investors to support solar photovoltaic (PV) projects within their jurisdictions, aligning with local levelling-up agendas.
Operational Milestones and Future Potential
The fund's portfolio now boasts operational and construction assets that exceed 75% of NPUK's total capacity, positioning the fund well to surpass its return expectations. Dividends distributed to date have significantly outperformed targets, reflecting the fund's robust financial health. Once fully deployed, NPUK ESG which has an estimated capacity of approximately 2GW is projected to generate enough clean energy to power around 500,000 UK households annually. This marks a significant environmental, social, and governance (ESG) impact in the UK.
NPUK ESG's strategy focuses on acquiring utility-scale solar and battery storage (BESS) assets at the ready-to-build stage, then constructing and operationalizing them. This approach aims to build a large, operational portfolio of solar and BESS assets. The power generated is monetized through a fully contracted strategy, ensuring predictability and visibility on the fund's cash yield.
The investment team employs a hands-on approach to risk mitigation and value creation, optimizing the assets throughout the fund's life before exiting the portfolio. Since its launch in August 2022, NPUK has made two distribution payments to investors. Both payments exceeded their targets and notable Net Asset Value (NAV) growth.
Leadership Perspectives
Michael Bonte-Friedheim, CEO and Founder of NextEnergy Group expressed pride in the fund's achievements: “I am proud that NPUK has total funds committed to date of over £653 million, which is 30% above the target of £500 million. This is a testament to NextEnergy Capital’s leadership in the solar energy sector at a critical time."
As a private new-build solar strategy focusing on acquiring utility-scale solar assets at the ready-to-build stage in the UK, NPUK investors benefit from the market-leading expertise we bring alongside our hands-on approach to value creation and asset optimization.”
Shane Swords, Managing Director and Head of Investor Relations at NextEnergy Capital highlighted the fund's solid progress and its appeal to LGPS investors: “NPUK continues to demonstrate solid progress in addition to already distributing strong dividends to its investors. NPUK’s success is underpinned by its large pipeline and swift capital deployment which commenced just seven weeks after the fund’s first close, with the fund now having nearly 500MW. The Fund’s strategy has aligned really well with that of the LGPS community and it’s great to see so many LGPS investors backing renewable energy assets here in the UK.”
NextPower UK ESG's achievement of exceeding its fundraising target by 30% is a landmark event for NextEnergy Capital and the wider renewable energy sector. With £653 million in committed funds, the fund is well-positioned to continue its mission of advancing solar and battery storage projects across the UK. The support from a diverse range of investors with the fund's strategic approach and robust performance, highlights the growing momentum and potential for sustainable energy investments.