NextEnergy Solar Fund Limited has announced that it has raised gross proceeds of £85.6 million in its initial public offering (IPO).

The amount raised falls some way short of the fund’s initial target to raise £150 million.

Commenting on the IPO, Kevin Lyon, non-executive chairman, said: “The company has secured strong support from a number of top-tier institutional investors and private wealth managers. 

“These investors have been attracted by the company’s focus on lower risk operating solar power plants in the UK, the experience and track record of the Investment Adviser and the company’s attractive RPI-linked target dividend. We look forward to updating investors on progress of deployment of the gross proceeds in the very near future and are pleased by the investor support to grow the company’s size significantly in the medium term.”

The funds raised will be used to acquire operational solar PV assets across the UK. NextEnergy Solar Fund is expected to issue shares on 25 April 2014. The fund says that income will be derived from power purchase agreements (PPAs) and renewable obligation certificates (ROCs).

The UK solar sector managed to install 1.1GW of ground-mounted solar ahead of the April ROC deadline, helped in no small part by the growing interest from investors. However, the UK Solar Strategy notes that the Department of Energy and Climate Change has underestimated the level of deployment of solar farms across the UK and that this could have implications on the budget under the levy control framework.