Solar developer NextEnergy Group’s investment management arm NextEnergy Capital (NEC) announced that it has raised $480 million at the first close of NextPower V ESG (NPV ESG), its flagship OECD-focused solar strategy.
The firm said that it is targeting $1.5 billion in capital commitments for the fund, with a hard cap of $2 billion.
NPV ESG is a closed-ended investment vehicle that focuses on solar PV and energy storage infrastructure projects in OECD countries which, aimed at providing investors with attractive risk-adjusted returns while contributing to decarbonization efforts, reducing electricity prices, and enhancing energy security.
According to NEC, investments from the Article 9 fund are forecast to produce enough clean energy to power the equivalent of up to 750,000 households per year, avoiding the equivalent of consuming up to 150 million cubic metres of natural gas per year.
The company said that it has identified a pipeline of investment opportunities for the strategy spanning over 14GW in the fund’s primary geographies including Europe, North America, and Chile.
Michael Bonte-Friedheim, CEO and Founding Partner of NextEnergy Group, said:
“NPV ESG’s first close represents an important milestone as the fund secures strong investor support from the get-go. 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.”
Investors in this close include Norwegian pension company KLP, a German occupational pension fund, and a prominent Nordic pension fund. The fund is expected to attract more investors during its second funding round later this year, with several currently engaged in due diligence.
Shane Swords, NextEnergy Capital Managing Director and Head of Investor Relations, said:
“I think this fund creates a fantastic opportunity for investors looking for strong and stable renewable energy returns. This first close sends a strong signal to the market that, despite the current environment, investors continue to seek a specialist investment manager with a successful track record of delivery, deployment and superior return generation.”