NextEnergy Capital Launches $1.5 Billion Solar Fund

NextEnergy Capital, a global solar specialist in the renewables sector, is pleased to announce the launch of its follow-on private OECD international solar strategy, NextPower V ESG. NPV ESG follows the success of its predecessor OECD international solar strategy, NextPower III ESG, launched in 2018 and closed in 2022.  NPV ESG is targeting capital commitments of $1.5 billion with a $2 billion ceiling.

NEC has established itself as a leader in the international solar sector, with a track record of investments spanning some 350 individual utility-scale solar assets across OECD markets since 2008.  NPV ESG is NEC’s fifth investment vehicle focused on the solar sector.  The NextEnergy Group is entirely focused on solar and complementary technologies such as battery storage, providing.  significant synergistic benefits to investors through its expertise across the entire solar value chain, from investment management (NEC), operating asset management (WiseEnergy), and development (Starlight).

NPV ESG offers investors the opportunity to earn attractive risk-adjusted returns from the solar PV infrastructure asset class, targeting mid double-digit returns while contributing to the decarbonisation of the power generation sector, reducing electricity prices and increasing energy security.  NEC will implement the value-add strategy developed and deployed across its previous four solar investment funds and extensive investment and portfolio management experience.  NPV ESG is a 10-year closed ended vehicle that qualifies as an Article 9 Fund under the EU SFDR.

NPV ESG will primarily invest in OECD solar assets and adjacent technologies, such as energy storage, by focusing on geographies in which NEC has already built an investment track record and operating presence and expertise.  NPV ESG will have preferential access to NextEnergy Group’s pipeline of c.13GW, providing investment visibility and sourcing advantage.

NPV ESG is classified as an Article 9 Fund under the EU SFDRs, and at its investment ceiling will produce enough clean energy to power the equivalent of up to 746,124 households per year, and avoid an estimated fossil fuel consumption of up to 145.4 million m3 of natural gas per year.

See related article: Goldman Sachs Raises $1.6 Billion Private Capital for Climate Fund

NPV ESG builds on NEC’s successful, original OECD solar strategy, NPIII ESG, which reached its final close in January 2022, raising $896m in total commitments, including an SMA.  Since its launch, NPIII ESG has acquired 124 individual assets across 23 solar portfolios and one battery portfolio for an installed capacity of c.1.7GW across the USA, India, Chile, Portugal, Spain, Poland, and Greece.  In securing this portfolio, the investment team has assessed over 35GW of potential investment opportunities.

NextEnergy Capital continues to enjoy strong fundraising momentum with the successful progress on its latest private UK strategy, NextPower UK ESG, having achieved 97% of its target at second close in December, raising a total of £487 million to date, only three months into its two-year fundraising period.

Michael Bonte-Friedheim, CEO and Founding Partner of NextEnergy Group, said:

“We are very excited to announce the launch of our Fifth Solar Fund, NextPower V ESG, targeting $1.5 billion for solar investments across OECD countries.  NPV ESG will continue the investment strategy we successfully conceived and implemented in its predecessor fund NextPower III ESG.  At full deployment, we expect the Fund to own an installed capacity of c.3.5GW.

NextEnergy is in a very strong position to attract significant investment into NPV ESG, given the success across its predecessor funds and the additional value we provide through our unique expertise across the entire solar value chain.  We have already identified a pipeline of c.13GW for NPV ESG, and are preparing to deploy the capital raised rapidly among this opportunity set.

There is a continued and clear priority to address climate change through the drive and deployment of international solar and energy storage, reduce power prices and increase energy security and independence, and we intend to continue making a significant contribution to these objectives via NPV ESG. ”

Shane Swords, NextEnergy Capital Managing Director and Head of Investor Relations, said:

“NextPower V ESG provides investors with a highly compelling and attractive OECD market opportunity with a true solar specialist. The strategy follows significant research into investor interest and the market opportunity.  There is significant demand and necessity for further solar deployment globally driven by climate change requirements and individual government targets.  NPV ESG provides investors with a proven platform and pipeline to capture this opportunity, backed by an experienced manager with a unique track record and incredible momentum.  

The Fund will be classified as Article 9 under the EU SFDR and will have a strong focus on ESG additionality.  We are delighted to launch this strategy today.”  

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