NextEnergy Capital (NEC) has announced that its private fund focused on new-build UK solar, NextPower UK ESG (NPUK) has raised £733 million at its final fundraising close, almost 50% over target.
NPUK provides cash flow for investors through its portfolio of new-build ultility-scale solar PV assets in the UK. The target fundraise was £500 million, and the UK government’s National Wealth Fund (NWF) was the ‘cornerstone’ investor in NPUK, investing £250 million on a match-funding basis.
NEC said the fundraising period saw several new investors including local government pension pools. NPUK was previously backed by the UK Infrastructure Bank, which under the current government was folded into the NWF, and has already received investment from UK public pension pool the Border to Coast Pensions Partnership. UK local government pension schemes, including LGPS Central, the Merseyside Pension Fund and the Brunel Pension Partnership, previously contributed to NPUK ESG’s closes.
NPUK has deployed over 70% of its committed capital to date and recently acquired its 15th asset, bringing its portfolio capacity to 731MW. It has 249MW operating solar assets in the UK.
The investment manager has a further 482MW of solar and energy storage projects in development or ready-to-build and says it is on track to hit over 400MW operating capacity this year. When fully deployed, NPUK says it will exceed 1GW of solar capacity.
Michael Bonte-Friedheim, group CEO and founding partner of NextEnergy Group said NPUK proves the demand from investors for “this type of strategy”.
He continued: “The UK remains an attractive and deep market to deploy utility-scale solar and there is a significant opportunity through the UK’s clean energy ambitions for investors to capture this growth with the right execution partners. In anticipation of this, NextEnergy Capital will be launching a new follow-on strategy, NextEnergy UK II, early this summer.”
Head of portfolio management at the National Wealth Fund, Stuart Nivison, said: “Today’s announcement perfectly demonstrates the impact our investments can have. Catalytic capital deployed by the National Wealth Fund going forward can help mobilise institutional investment into clean energy projects across the UK, driving growth and providing greater capacity to power homes and businesses.”
National Wealth Fund’s solar investment
At the end of January, chancellor of the exchequer Rachel Reeves revealed that the NWF would invest in Cornish Metals, which could mine critical minerals needed for solar panel production, calling net zero the “industrial opportunity of the 21st Century”.
The NWF, a government-backed investment mechanism created, according to Reeves, because the state has a “crucial role to play” in securing the investment necessary for the renewable energy industry’s growth, pledged a £28 million equity investment into Cornish Metals to help the tin mining company reestablish activities in the South West.
NWF has also invested £65 million in EV charging platform Connected Kerb as part of its role in decarbonising UK industry. However, it was recently announced that its remit would be adjusted to enable it to invest in the defence industry. More coverage of this can be found on our sister site, Current±.
