Norwegian municipal pensions giant KLP is among investors that have backed NextEnergy Capital (NEC) to raise an initial $480m (€440.8m) for its fifth OECD-focused solar investment fund.
NEC said NextPower V ESG’s (NPV ESG) first close – which also received capital from a German occupational pension fund, and a large Nordic pension fund – raised $330m in direct commitments and $150m in co-investment allocations.
NPV ESG seeks to raise $1.5bn with a $2bn hard cap, and expects to have a second close later this year, NEC said. NEC’s previous OECD solar strategy, NPIII ESG, reached its final close in January 2022, raising $900m in total commitments.
NPV ESG, categorised as an Article 9 product under the EU Sustainable Finance Disclosure Regulation, targets mid-double-digit returns. The ten-year closed-ended vehicle’s primary geographic targets include Europe, North America, and Chile, where NEC manages an extensive solar infrastructure asset portfolio.
NEC said it has identified a pipeline of investment opportunities for NPV ESG spanning over 14GW in these geographies.
Michael Bonte-Friedheim, CEO and founding partner of NextEnergy Group, said: “NPV ESG’s first close represents an important milestone as the fund secures strong investor support from the get-go.
”Utility-scale solar represents a very large investment opportunity set globally, with total spending in 2023 forecast to reach $382bn, and we aim to continue our leadership role in the sector.”
Shane Swords, NextEnergy Capital managing director and head of investor relations, said this first close sends a strong signal to the market that, ”despite the current environment, investors continue to seek a specialist investment manager with a successful track record of delivery, deployment and superior return generation”.
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