London, August 25, 2022 – NextEnergy Capital (“NEC”), a global leader in the renewables sector, is pleased to announce the first close for NextPower UK ESG (“NPUK ESG”) at £327 million, which is over 65% of NPUK ESG’s target of £500m. The fund has a hard cap of £1 billion.
Since it officially launched in December 2021, NPUK ESG has enjoyed significant fundraising momentum against a challenging backdrop. The commitments in this first close have been made from investors in the UK and the Middle East including the UK Infrastructure Bank (“UKIB”), LGPS Central Limited, Merseyside Pension Fund and Brunel Pension Partnership. The UKIB is the cornerstone investor for the fund and plans to invest up to £250 million on a match funding basis. The fund is targeting both UK and international institutional investors, with further investors currently in due diligence, and the fundraising period is 2 years from 1st close.
NPUK ESG is a private 10-year solar infrastructure fund focused on investing into new-build utility scale, subsidy-free solar in the UK. It is the first subsidy-free private solar investment fund in the UK and has an expected generation capacity of c. 2 Gigawatt of power at hard cap. It aims to double the amount of subsidy-free solar power in the UK and, at hard cap, it will produce enough clean electricity to power the equivalent of nearly 500,000 households or offset nearly 200,000 carbon-emitting cars on the road each year.
NEC has developed a pipeline of projects for the fund including two seed assets which are now in operation. This creates a significant advantage for investors by largely removing bid and pipeline risk for the fund. NPUK ESG’s two operational seed assets are at sites in Llanwern, South Wales, and Strensham, Worcestershire, which together have an installed capacity of 115MW. The Llanwern plant is the UK’s largest operating solar power plant.
The fund is targeting highly attractive investor returns by creating long-term stable cashflows through a contracted revenue model with robust, credit-worthy Power Purchase Agreements, helping to provide UK off-takers with power price certainty whilst allowing them to achieve and manage their carbon footprint and sustainability goals.
This first close comes at an highly relevant time for the UK, not only in contributing to the UK Government’s net zero goals but providing well needed new-build investment into a sector that delivers new-build lower-price power in contained time frames and increases the country’s energy independence from fossil fuel imports.
Michael Bonte-Friedheim, CEO and Founding Partner of NextEnergy Capital, said:
“I am delighted to announce the first close of NPUK ESG, which comes at a crucial time to help strengthen the UK’s energy independence. NPUK ESG is the first UK fund that targets purely new-build subsidy-free utility scale solar assets, and I am proud that NextEnergy Group is driving this forward, showing how solar assets in the UK can provide investors with a significant return while reducing the carbon footprint of the UK. NPUK ESG marks the Group’s fourth fund, backed by an impressive track record since 2007. We continue to offer investors access to our specialist focus across the solar power spectrum, from construction, investment management and operations.”
Shane Swords, NextEnergy Capital Managing Director and Head of Investor Relations said:
“We are delighted to welcome our new investors into NPUK ESG, and to have cleared over 65% of the fund’s target at the very first close. It demonstrates investors’ demand for new-build subsidy-free, unlevered UK solar, but also highlights NextEnergy Capital as the go-to solar renewables manager. We have onboarded the investors with a very detailed and timely due diligence process, having formally launched NPUK in December 2021. It has been a pleasure to work with them and I look forward to continuing the fundraising momentum and announcing the second close of the fund in the next few months.”
Georgina Whittle, Partner, Camarco
+44 (0)7835 770 967
Owen Roberts, Partner, Camarco
+44 (0)7890 869 288