London, January 31, 2022 – NextEnergy Capital (“NEC”), a leading player in the global solar sector, is delighted to announce its final close for NextPower III ESG (“NPIII ESG”), bringing the total capital raised to $896 million, including an SMA. Including co-investments closed to date, the total capital pool for its investment strategy exceeds $905 million. The capital raised is comfortably above the target of $750m and makes this NEC’s largest private fund to date.
NPIII ESG focuses on the international solar infrastructure sector, principally targeting projects in carefully selected OECD countries, including the US, Portugal, Spain, Chile, and Poland. It is the largest OECD-focused solar infrastructure fund globally. The portfolio currently has an installed capacity of 742MW spread across 23 projects and 2 portfolios, having assessed in excess of 35GW, while the fund has a further 521MW in exclusivity and 3GW under review. NPIII ESG’s progress demonstrates NEC’s ability to identify investment opportunities, generate additional value-add, and selectively acquire attractive assets for the fund.
Capital was committed by a top-tier and diversified investor base, including pension funds, insurance companies, fund-of-funds and family offices, demonstrating the strong demand from investors for solar PV and the endorsement of NEC as a highly specialised and experienced investment manager. NPIII ESG’s investor base comes from 9 countries. Fundraising was largely conducted during the restrictions of the global pandemic, necessitating creative solutions to the due diligence process, including “virtual” site visits and remote meetings with senior management.
NPIII ESG has already won industry awards, ranging from the prestigious Environmental Finance ‘Renewables Fund of the Year’ at the 2020 Sustainable Investment Awards, and NEC’s in-house asset manager, WiseEnergy, winning ‘Best Solar Asset Manager’ at the cfi.co 2021 awards.
NPIII ESG is a fund that provides a positive social and environmental impact to the countries into which it is and will be invested. It is committed to achieving the highest standards of ESG reporting in alignment with both the EU Taxonomy and Sustainable Finance Disclosure Regulation (“SFDR”). NPIII ESG benefits from NEC’s sustainability framework which is integrated into the core structure of the fund forming a crucial part of the investment process. When fully invested across an installed capacity of circa 2.5GW, NPIII ESG can expect to deliver estimated annual avoided emissions of circa 2 million tCO2e each year which, on a conservative basis, is the equivalent to providing energy for more than circa 1.3 million homes per year.
This fundraise represents another milestone in a productive period for NEC, having recently launched a subsidy-free UK-focused solar infrastructure fund, NextPower UK ESG, with the UK Infrastructure Bank planning to invest up to £250m, half of the fund total target size alongside the private sector. Alongside this, NEC has just divested its entire NextPower II solar portfolio in Italy, a 2016 vintage vehicle, was divested in January 2022 and generated net IRRs to its investors in excess of 25%.
Michael Bonte-Friedheim, Group CEO and Founding Partner, added:
“We are thrilled to announce the final close of NPIII ESG, having secured total capital commitments well above our target of $750 million from new and existing investors. There was an enormous amount of investor interest in the fund as investors’ appetite towards solar, ESG and sustainability funds continued to grow. I am looking forward to the continued development of the fund’s portfolio given the depth and quality of its current pipeline.
This is an exciting time for NEC as we continue to demonstrate to investors our strong track record as the preeminent investment manager in the international solar sector and continue to identify attractive investment opportunities in the sector for investors to access.”
Shane Swords, Managing Director and Head of Investor Relations, said:
“We are delighted to announce this record fundraise for the Group and I personally want to extend our gratitude to our investors for their continued support. The fundraising total is made even more momentous given the backdrop of the global pandemic which meant that the majority of our investor due diligence and onboarding was virtual, so it is a real testament to the team that we successfully fundraised and reassured investors during this unprecedented time.
The solar industry continues to show enormous potential and I’m looking forward to announcing further capital commitments for our private funds, notably NextPower UK ESG, in the coming months.”
NextEnergy Group was founded in 2007 to become a leading market participant in the international solar sector. Since its inception, it has been active in the development, construction and ownership of solar assets across jurisdictions. NextEnergy Group operates via its three business units: NextEnergy Capital (Investment Management), WiseEnergy (Operating Asset Management) and Starlight (Asset Development).
NextEnergy Capital comprises the Group’s investment management activities. It currently has solar assets under management of c.US$3.2bn, across three investment vehicles. To date, NEC has invested in over 325 individual solar plants for a capacity in excess of 2.3GW across it institutional funds.
- NextEnergy Solar Fund (“NESF”) is a solar infrastructure investment company focused on the UK and other OECD countries, that is listed on the premium segment of the London Stock Exchange. It currently owns 895MW spread among 99 individual assets in the UK and Italy, comprising a gross asset value of £1,087m. As at 27 January 2022, NESF’s market capitalisation was c.£600m. NESF is one of the largest listed solar energy investment companies in the world.
- NextPower II (“NPII”) a private fund made up of 105 individual operating solar power plants and an installed capacity of 149MW, focused on consolidating the substantial, highly fragmented Italian solar market. NPII, a 2016 vintage vehicle, was divested in January 2022 and generated net IRRs to its investors in excess of 25%.
- NextPower III ESG (“NPIII”) is a private fund exclusively focused on the international solar infrastructure sector, principally targeting projects in carefully selected OECD countries, including the US, Portugal, Spain, Chile, Poland and Italy. NPIII ESG is a fund that provides a positive social and environmental impact to the countries it has and will invest into
- NextPower UK ESG (“NPUK ESG”) is a private unlevered fund investing in the development and operation of subsidy-free solar projects, with PPA’s, in the UK. NPUK ESG was launched in December 2021. NPUK ESG is a 10-year solar infrastructure fund and will have 115MW in two operating seed assets, including the largest solar plant in the UK. The UK Infrastructure Bank is providing financing to the initial seed assets of the fund, and plans to invest up to £250m, half of the fund’s total target fund size, on a match-funding basis.
WiseEnergy® is NextEnergy Capital Group’s operating asset manager. WiseEnergy is a leading specialist operating asset manager in the solar sector. Since its founding, WiseEnergy has provided solar asset management, monitoring and technical due diligence services to over 1,300 utility-scale solar power plants with an installed capacity in excess of 2.2GW. WiseEnergy clients comprise leading banks and equity financiers in the energy and infrastructure sector.
Starlight is NextEnergy Group’s development company that is active in the development phase of solar projects. It has developed over 100 utility-scale projects internationally and continues to progress a large pipeline of c.2.5GW of both green and brownfield project developments across global geographies.
For further information:
Tel: +44 203 746 0700
Email: [email protected]