NextEnergy Capital has announced the first close of its NextPower UK ESG fund at £327m, which is focused on investing into new-build utility scale, subsidy-free solar in the UK.
The private 10-year solar infrastructure fund has a hard cap of £1bn that could deliver around 2GW of generating capacity at its limit.
The UK Infrastructure Bank is a cornerstone investor, planning to invest up to £250m on a match funding basis.
Other investors include LGPS Central Limited, Merseyside Pension Fund and Brunel Pension Partnership.
NextEnergy Capital said it aims to double the amount of subsidy-free solar power in the UK and has developed a pipeline of projects including two seed assets which are now in operation.
These are at sites in Llanwern, South Wales, and Strensham, Worcestershire, which together have an installed capacity of 115MW. Llanwern is the UK’s largest operating solar power plant.
The fund is targeting long-term stable cashflows through a contracted revenue model with robust, credit-worthy Power Purchase Agreements, helping to provide UK off-takers with power price certainty whilst allowing them to achieve and manage their carbon footprint and sustainability goals.
NextEnergy Capital CEO Michael Bonte-Friedheim said: “NPUK ESG is the first UK fund that targets purely new-build subsidy-free utility scale solar assets, and I am proud that NextEnergy Group is driving this forward, showing how solar assets in the UK can provide investors with a significant return while reducing the carbon footprint of the UK.
“NPUK ESG marks the group’s fourth fund, backed by an impressive track record since 2007. We continue to offer investors access to our specialist focus across the solar power spectrum, from construction, investment management and operations.”
NextEnergy Capital managing director and head of investor relations Shane Swords added: “We are delighted to welcome our new investors into NPUK ESG, and to have cleared over 65% of the fund’s target at the very first close.
“It demonstrates investors’ demand for new-build subsidy-free, unlevered UK solar, but also highlights NextEnergy Capital as the go-to solar renewables manager.
“We have onboarded the investors with a very detailed and timely due diligence process, having formally launched NPUK in December 2021.
“It has been a pleasure to work with them and I look forward to continuing the fundraising momentum and announcing the second close of the fund in the next few months.”