NextEnergy Capital’s (NEC) solar infrastructure fund, backed by the UK government’s national infrastructure bank, has closed its final fundraising round at £733m (€868.8m), exceeding its £500m target.
The UK government-owned National Wealth Fund (NWF) provided match-funding capital of £250m to NextPower UK ESG (NPUK) which was also backed by local government pension schemes including London LGPS CIV, LGPS Central, Border to Coast Pensions Partnership, Merseyside Pension Fund, Brunel Pension Partnership, Strathclyde Pension Fund, as well as investors from the Middle East and Japan.
NEC said NPUK, which invests in new-build utility-scale solar assets and related infrastructure in the UK with long-term contracted revenue streams, has so far deployed over 70% of its committed capital.
NPUK’s portfolio now includes 15 assets, totaling 731MW in capacity. This includes 249MW of operational solar assets in the UK, with the Llanwern solar farm being the largest. NPUK also has 482MW of solar and energy storage projects in construction or ready for construction, and a pipeline of additional near-term acquisitions, the manager added.
Michael Bonte-Friedheim, group CEO and founding partner of NextEnergy Group, said: “The UK remains an attractive and deep market to deploy utility-scale solar and there is a significant opportunity through the UK’s clean energy ambitions for investors to capture this growth with the right execution partners.
“In anticipation of this, NextEnergy Capital will be launching a new follow-on strategy, NextEnergy UK II, early this summer.”
Stuart Nivison, head of portfolio management at the National Wealth Fund, said: “Our cornerstone investment in NextPower UK was our first deal to leverage this scale of additional independent investment, and it is exciting to see their success story play out through this milestone fundraise.
“Today’s announcement perfectly demonstrates the impact our investments can have. Catalytic capital deployed by the National Wealth Fund going forward can help mobilise institutional investment into clean energy projects across the UK, driving growth and providing greater capacity to power homes and businesses.”
Nadeem Hussain, head of private markets and Co-CIO at LGPS Central, said: “We are committed to investing in high-quality infrastructure opportunities that align with both financial objectives and sustainability principles on behalf of our partner funds. NextPower UK offers long-term, stable returns from utility-scale solar farms while driving meaningful environmental impact.”
Imraan Mohammed, portfolio manager at Border to Coast, said: “As long-term institutional investors with a global outlook, we see the UK as an attractive market that punches above its weight for development-stage renewables, given the strong market fundamentals and increasing policy support we are seeing here.
“The NextPower UK fund was one of the earlier infrastructure allocations from our diversified climate opportunities vehicle. We have been encouraged by the quality and scale of capital deployment the NextEnergy team has been able to deliver, and are pleased with the catalytic effect the Fund has had in crowding in funding for critical UK infrastructure.”
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