NextPower UK ESG (NPUK ESG), a solar infrastructure fund backed by the UK government’s new national infrastructure bank, has so far raised £327m (€386m) from investors including local government pension schemes (LGPS).

NPUK ESG’s manager NextEnergy Capital said the fund’s first close was backed by investors the UK and the Middle East including LGPS Central, Merseyside Pension Fund and Brunel Pension Partnership.

NPUK ESG, which was launched in December last year, has a £500m fundraising target and a hard cap of £1bn.

As previously reported, the UK Infrastructure Bank (UKIB) plans to invest up to £250m in NPUK ESG by providing financing to the initial seed assets of the fund comprising two solar farms in Llanwern in South Wales and Strensham, Worcestershire.

UKIB intends to match investments from private institutional investors by investing up to half of the fund’s £500m target.

NextEnergy Capital said 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 the first close. 

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.”

Bonte-Friedheim said NPUK ESG marks the group’s fourth fund 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.”

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