NextEnergy Capital achieves US$118m second close for NextPower III fund

NextEnergy Capital Group (NEC) has achieved the second close of NextPower III (Fund), its flagship private ESG infrastructure fund focused on funding the construction and long-term ownership of new-build solar power plants across international markets, with a total commitment of US$118 million. 

NextPower III’s second close commitments have been secured from a pool of institutional investors including Elo Mutual Pension Insurance Company (a large Finnish mutual pension insurance company), CCLA (one of the UK’s largest charity fund managers) and a Swedish institutional investor.

NPIII is the first ESG fund focused exclusively on the high-growth international solar energy infrastructure sector. The fund is targeting a gross IRR of 13% – 15% and its investment strategy are to invest in the construction phase of solar projects and own them over the long term or acquire operating solar projects. NPIII’s principal target markets comprise OECD countries, while it also has the flexibility to invest in other high-growth markets should attractive opportunities emerge.

Since its first close in November 2018, the Fund has acquired three projects with a total installed capacity of c.150 MWp. All three projects are located in the USA. Two of the three projects are under construction, while the third plant was already operating when acquired.

NPIII has a significant portfolio of acquisition targets under exclusivity, totaling seven projects for an installed capacity of 451MWp. During the first quarter of 2020, NEC expects to sign further acquisitions for the Fund in Mexico, India and the USA, bringing the Fund’s total capacity to over 600MWp. NEC expects to acquire further projects in Europe during the course of 2020. The total portfolio of investment opportunities currently being pursued, including transactions under exclusivity, amounts to c.3.9GWp.

NEC forecasts that NextPower III will achieve a portfolio of between 2.5 and 3.0 GWp in operating solar projects across its target markets upon full capital deployment.

NEC was advised on the fundraise by Worthwhile Capital Partners, as placement agent, and by MJ Hudson, as legal counsel.