Demonstrating robust investor demand for UK renewable energy infrastructure, NextEnergy Capital’s private solar fund, NextPower UK ESG (NPUK ESG), has officially closed its fundraising with £653 million in total commitments. This figure represents a significant oversubscription, surpassing the fund’s original £500 million target by 30% and underscoring the market’s confidence in utility-scale solar and energy storage assets.
Strong Backing as Funds for NPUK Solar Projects Reached £653m
The successful fundraising campaign was anchored by a cornerstone £250 million match-funding commitment from the UK Infrastructure Bank. This foundational investment proved instrumental in attracting a wide array of institutional backers, particularly from the Local Government Pension Scheme (LGPS) community. Prominent investors include London LGPS CIV Limited, LGPS Central Limited, Border to Coast Pensions Partnership, Merseyside Pension Fund, Brunel Pension Partnership, and Strathclyde Pension Fund. The fund also drew capital from international investors in the Middle East and Japan, highlighting its global appeal.
Shane Swords, Managing Director and Head of Investor Relations at NextEnergy Capital, noted the fund’s strategic alignment with the goals of these partners. “NPUK’s success is underpinned by its large pipeline and swift capital deployment which commenced just seven weeks after the fund’s first close,” he said. “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.”
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The fund’s investment strategy centres on acquiring and developing utility-scale solar and battery energy storage system (BESS) assets from the ready-to-build stage through to full operation.
Portfolio Strategy and Performance
NPUK ESG employs a hands-on approach to building its portfolio, focusing on acquiring solar and BESS projects at the ready-to-build phase and overseeing their construction and commissioning. As NextEnergy Capital confirmed, this strategy is already yielding impressive results. By mid-2024, assets that were either operational or under construction accounted for over 75% of NPUK’s total capacity.
The fund’s performance has been strong, having already made two distribution payments to its investors that exceeded initial targets, alongside notable Net Asset Value (NAV) growth. Once fully deployed, the fund’s assets are projected to reach a capacity of approximately 2GW, capable of generating enough clean energy to power around 500,000 UK households annually.
Leadership and Future Outlook
Michael Bonte-Friedheim, CEO and Founder of NextEnergy Group, commented on the achievement: “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.” He added that investors benefit from the company’s “market-leading expertise” and “hands-on approach to value creation and asset optimization.”
With its substantial capital base and a clear strategy for development, NextPower UK ESG is poised to play a pivotal role in expanding the UK’s renewable energy landscape, delivering both financial returns for its investors and significant environmental, social, and governance (ESG) benefits for the nation.
Sources
- [PDF] Agreement To Acquire 248MW Spanish Solar PV Portfolio
- NextEnergy Capital secures LGPS backing for £653m UK solar fund
- NextEnergy’s UK solar fund acquires 50MW Staughton Solar Farm
- UK defined benefit pension scheme backs NextEnergy’s UK solar fund
- NextPower UK ESG Achieves Multiple Milestones in First Half of 2024
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