NextEnergy Capital (NEC) has reached the first close of its fifth investment vehicle, NPV ESG, an OECD-focused solar strategy.
First close commitments to NPV ESG amounted to $480m, comprising $330m in direct commitments and $150m in co-investment allocations.
The fund is targeting capital commitments of $1.5bn with a $2bn hard cap.
Investors in NPV ESG include KLP, a German occupational pension fund, and a large Nordic pension fund.
Looking forward, NPV ESG expects to welcome additional investors in its second close later this year, with several investors currently active in due diligence.
NPV ESG is a 10-year closed-ended vehicle that offers investors the opportunity to earn attractive risk-adjusted returns from investments in solar PV and energy storage infrastructure assets located in OECD geographies, targeting mid double-digit returns while contributing to the decarbonisation of the power generation sector, reducing electricity prices and increasing energy security.
The fund’s projects will be backed by long-term stable cash flows, backed by robust, credit-worthy PPAs leveraging the team’s OECD-based PPA expertise, as well as regulated revenues.
The fund’s primary geographic targets include Europe, North America, and Chile, where NEC currently manages an extensive solar PV infrastructure asset portfolio.
NEC 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.
“We leverage our focus, experience and expertise in the solar infrastructure sector to secure and invest in attractive solar projects and portfolios and generate superior investor outcomes.
“NPV ESG’s launch follows hot on the heels of our successful UK-focused NextPower UK ESG fund, which within six months of launch in August 2022 had secured commitments 20% above its target size of £500m, has committed most of its capital and is currently heading for further investment and fundraising successes.”