NextEnergy Solar Fund narrows in on 170MW portfolio as NAV increases

NextEnergy Solar Fund (NESF) has confirmed it has now entered into letters of intent for 170MW worth of UK solar assets and expects to add more before the end of the year.

Last month NESF revealed plans to raise up to £350 million to help pursue a project portfolio with a generation capacity of 560MW, and today updated the market to reveal it has narrowed in on 170MW of that pipeline, worth an investment value of circa £175 million.

NESF also disclosed that while these letters of intent do not include binding contractual obligations, exclusivity and pricing arrangements have already been agreed.

Discussions are now underway for further assets totalling up to 440MW, with an investment value of around £405 million, and NESF expects to secure further letters of intent before the end of the year.

Of the £350 million the group expects to raise, an initial issue of up to 100 million new ordinary shares is being implemented to realise gross proceeds of £104.5 million. Of that, NESF has received a firm commitment from one institutional investor for £55 million.

A prospectus relating to the remaining share issuance programme is to be published next week.

Meanwhile NESF revealed that its unaudited net asset value (NAV) sharply rose during the three months ended 30 September, increasing by more than 23% to £350.1 million compared to £283.1 million as of 30 June 2016.

This equated to a NAV per share – after adjustments for an interim dividend payment – of 100.4p, up from 98.7p on 30 June 2016.

NESF attributed the increase in NAV per share to a strong operating performance from its portfolio. Energy generation from the group’s assets was 6% above expectations, which has also been aided by an increase in power price forecasts reflected by current trends.