NextEnergy Capital has raised $265m (€274m) at the second close for its fifth strategy, taking the total raised so far to $745m.
NextEnergy said it expects to raise $1.5bn with a $2bn hard cap for NextPower V ESG (NPV ESG), the OECD-focused solar and battery storage strategy.
The new capital includes commitments from a UK local government pension scheme investment pool, a Dutch pension fund, and ‘re-up’ from an existing NextPower III ESG investor. The new investors join Norway’s KLP, which invested in the fund last year.
NPV ESG will continue welcoming further capital, with several investors currently in due diligence, the manager said.
NPV ESG’s investment strategy targets solar and battery storage in “carefully selected OECD markets”, with the objective of building significant portfolios in each target market, establishing an operational track record and divesting the portfolio at the end of the fund’s holding period in 2033.
NPV ESG has started its investment cycle with a 100MW utility-scale solar project under construction in Highland County, Florida, US, and has several other investment opportunities from its 18GW pipeline that are currently under exclusivity and are expected to close shortly, including 118MW of operational projects with CfD contracts.
The fund is expected to pay dividends, even during the investment phase. NPV ESG’s pipeline includes projects in Spain, Poland, Italy, Canada and the US.
NextEnergy said that once it has reached its investment ceiling and is delivering around 4GW of solar power, NPV ESG is forecast to generate enough clean energy to power the equivalent of up to 1.1m households per year and avoid an estimated fossil fuel consumption of up to nearly 220m cubic metres of natural gas annually. This underscores NEC’s commitment to sustainable investing and aligns with its mission of leading the transition to clean energy, while generating attractive financial returns for its investors, the manager said.
Michael Bonte-Friedheim, CEO and founding partner of NextEnergy Group, said: “I am delighted to announce the second close of NextPower V ESG, with commitments from both new and existing institutional investors. Our continued fundraising progress demonstrates that NextEnergy Capital’s strategies continue to offer attractive investment opportunities for investors alongside making a sustainable long-term impactful investment.”
He said NextEnergy Capital “continues to expand its reach as the go-to specialist ’solar-plus’ investment manager focused on OECD markets”.
Shane Swords, NextEnergy Capital managing director and global head of investor relations, said: “We are pleased to announce another strong close for NextPower V ESG, bringing commitments to $745m, and would like to welcome and thank our new and existing investors in the fund. NextPower V ESG is our largest international fund to date that continues to deliver on NextEnergy Capital’s exemplary track record by showcasing positive fundraising momentum and portfolio growth.
“NextPower V ESG provides a real impact and tangible benefits to the communities and countries where its assets are located, whilst also providing an opportunity for investors looking for strong and stable renewable energy returns.
“Investors continue to seek a specialist investment manager with a proven track record of successful delivery, deployment, and superior return generation, and we are thrilled that our experience in solar, and vast opportunities in the solar-plus sector continue to be recognised as the go-to investment manager in this field.”
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