A solar infrastructure fund, NextPower UK ESG, has raised £327m from investors including Local Government Pension Scheme (LGPS) pools and funds, and the UK Infrastructure Bank (UKIB).
NextPower UK ESG is a private ten-year fund which is focused on investing in new-build, utility-scale and subsidy-free solar. It has a £500m fundraising target and a “hard cap” of £1bn.
The fund aims to double the subsidy-free solar power in the UK, and, at hard cap, will produce enough clean electricity to power the equivalent of nearly 500,000 households.
NextEnergy Capital (NEC), the fund’s investment manager, said NextPower UK ESG had received commitments from two LGPS pools – LGPS Central and Brunel Pension Partnership – and Merseyside Pension Fund. The level of investment was undisclosed.
Michael Bonte-Friedheim, NEC CEO and founding partner, said: “NextPower UK ESG is the first UK fund that targets purely new-build subsidy-free utility-scale solar assets, and I am proud that NextEnergy Group is driving this forward, showing how solar assets in the UK can provide investors with a significant return while reducing the carbon footprint of the UK.”
NextPower UK ESG has two operational seed assets in Llanwern, south Wales, and Strensham, Worcestershire, which together have an installed capacity of 115MW.
UKIB is the cornerstone investor for the fund and has committed to invest £250m on a match funding basis.
John Flint, UKIB CEO, said: “Investment in subsidy-free solar is vital in order to realise our net-zero ambitions and I am pleased that just eight months after we announced finance for Llanwern and Strensham, we’re part of the first close of this fund as a cornerstone investor.
“That means more solar plants will come online across the country, providing greater capacity to power homes and businesses in a sustainable, renewable way.”
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