The UK government’s new national infrastructure bank plans to invest up to £250m (€291m) in NextPower UK ESG (NPUK ESG), a NextEnergy Capital-managed solar infrastructure fund seeking to raise £500m.

The UK Infrastructure Bank (UKIB) is backing NPUK ESG providing financing to the initial seed assets of the fund comprising two solar farms in Llanwern in South Wales and Strensham, Worcestershire. NPUK ESG  target subsidy-free UK solar power plants.

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

Helen Whately exchequer secretary to the treasury, said: “It’s great to see the UK Infrastructure Bank striking another deal, which will help power thousands of homes across the UK with clean energy and create green jobs.

“We are investing billions through the bank in important projects across the UK to drive growth and level up opportunities.”

John Flint, CEO of UKIB, said the deal marks the first private sector transaction for UKIB.

UKIB was announced as part of the government’s national infrastructure strategy in 2020 and was launched in June this year. The bank aims to provide £22bn of infrastructure finance to tackle climate change and support regional and local economic growth across the UK.

Michael Bonte-Friedheim, CEO and founding partner of NextEnergy Capital, said: “The launch of NextPower UK ESG marks an important milestone in bringing together capital from both the private and public sector to fund the next phase of evolution in the UK solar PV sector.

“Unsubsidised new-build solar projects represent an attractive investment opportunity, both in financial investment returns and in the pursuit of societal objectives such as addressing climate change and improving biodiversity in the UK.”

Ross Grier, NextEnergy Capital UK managing director and Shane Swords, NextEnergy Capital managing director and head of investor relations, said: “It is incredibly rewarding to be raising capital to deploy into the UK solar sector that not only provides the institutional investment community with attractive risk-adjusted returns but also plays a meaningful role in supporting the UK’s net zero ambitions.”

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