London-based solar investment and asset manager NextEnergy Capital (NEC) announced it has launched a new fund that aims to raise £500m to invest into subsidy-free solar power plants in the UK.
The private 10-year solar infrastructure NextPower UK ESG (NPUK ESG) fund, managed by NextEnergy Capital, will have an expected generation capacity of c.1 GW of power from around 30 solar farms across the UK and will produce enough clean electricity to power the equivalent of 136,000 households or offset 263,000 carbon-emitting cars on the road each year, once fully operational.
The UK Infrastructure Bank (UKIB) is providing financing to the initial seed assets of the fund comprising two major subsidy-free solar farms in the UK, and plans to invest up to £250m, half of the fund’s total target fund size, on a match-funding basis with the private sector. It is hoped that this support will lead to significant investment into the UK subsidy-free solar sector.
The Bank was launched in June to support infrastructure investment to help tackle climate change and boost regional and local economic growth across the UK. The investment marks the first private sector transaction for the Bank and a significant step in helping the UK government meet its net-zero goals. The seed assets which are supported by the Bank are built and operational at sites in Llanwern in South Wales and Strensham, Worcestershire which together will have an installed capacity of 115MW.
John Flint, CEO of UKIB, said:
“As this is the first deal for the UK Infrastructure Bank to leverage private sector investment, it is an important milestone for us. I am delighted that the Bank is able to play a role in the development of subsidy-free solar energy for the UK.”
Michael Bonte-Friedheim, CEO and Founding Partner of NextEnergy Capital, said:
“The launch of NextPower UK ESG marks an important milestone in bringing together capital from both the private and public sector to fund the next phase of evolution in the UK solar PV sector. Unsubsidised new-build solar projects represent an attractive investment opportunity, both in financial investment returns and in the pursuit of societal objectives such as addressing climate change and improving biodiversity in the UK.”