U.K.-based NextEnergy Capital (NEC) held the first close of its fifth investment vehicle focused on solar’s potential within the renewables sector totaling $480 million with a target of $1.5 billion.
NextPower V ESG (NPV ESG) is part of a flagship OECD-focused solar strategy targeting a $2 billion hard cap. According to the $3.4 billion NextEnergy Capital, the initial NPV ESG close includes KLP, a German occupational pension fund and a large unnamed Nordic pension fund. Officials expect to welcome additional investors in its second close later this year with several investors currently active in due diligence.
NPV ESG is investing in solar PV and energy storage infrastructure assets across geographies such as Europe, North America and Chile where NextEnergy Capital currently manages an extensive solar PV infrastructure asset portfolio. The team has pinpointed a pipeline of investments spanning over 14 gigawatts.
“NPV ESG’s first close represents an important milestone as the fund secures strong investor support from the get-go,” said Michael Bonte-Friedheim, CEO and founding partner of NextEnergy Group. “Utility-scale solar represents a very large investment opportunity set globally, with total spending in 2023 forecast to reach $382bn, and we aim to continue our leadership role in the sector.”
NextEnergy Group is exclusively 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).
“We leverage our focus, experience and expertise in the solar infrastructure sector to secure and invest in attractive solar projects and portfolios and generate superior investor outcome,” added Bonte-Friedheim.
The latest offering is targeting mid double-digit returns while contributing to the decarbonization of the power generation sector, reducing electricity prices and increasing energy security. The projects will be backed by long-erm stable cash flows and credit-worthy Power Purchasing Agreements (PPAs) leveraging NextEnergy’s OECD-based PPA expertise, as well as regulated revenues.
An Article 9 Fund, NPV ESG is forecast to produce enough clean energy to power the equivalent of up to 750,000 households per year.
The previous fund, NPIII ESG, bought 149 individual assets across 23 solar portfolios and one batter portfolio for an installed capacity of 1.9 gigawatts. Since 2007, NextEnergy has made investments in nearly 400 utility-scale solar assets.
The firm plans to continue its global fundraising efforts and a second close of NPV ESG and initial investments shortly, Bonte-Friedheim said.