New £200m Battery Storage JV Partnership
LEI: 213800ZPHCBDDSQH5447
12 September 2022
NextEnergy Solar Fund Limited
("NESF" or the "Company")
New £200m Battery Storage Joint Venture Partnership
NextEnergy Solar Fund, the specialist solar and energy storage climate impact fund, with a combined installed power capacity of 865MW, is pleased to announce that it has advanced its position in the energy storage sector through a new £200m Joint Venture Partnership ("JVP2") with Eelpower Limited ("Eelpower").
JVP2 reflects the successful relationship built with Eelpower, offering enhanced terms by increasing NESF ownership to 75%, with Eelpower holding the remaining 25%. JVP2 is separate to the existing £100m Joint Venture Partnership ("JVP1") announced last year. The Company's first 50MW battery storage project through JVP1 is currently under construction in Fife, Scotland, and is expected to be energised and grid-connected in the first half of 2023.
Energy storage remains a key strategic priority to the Company and forms part of its long-term equity growth story. JVP2 significantly increases the Company's position in the UK battery storage sector and provides a unique opportunity through both JVP1 and JVP2, to actively pursue a high-quality pipeline of over 500MW (£300m) battery energy storage opportunities, which are already under exclusivity.
Utilisation of full capacity of both JVP1 and JVP2 remains subject to shareholder and FCA approval due to the Company's existing investment policy being limited to 10% of Gross Asset Value into energy storage. The Company's investment manager and advisor, NextEnergy Capital, will be consulting investors over the coming months to seek support to increase this limit to allow the Company to fully capture the energy storage growth opportunities available to the fund.
The Company continues to benefit from the unique skillset offered by Eelpower, the leading specialist in the UK battery market with a strong track record and extensive experience in the delivery, management, and optimisation of battery storage assets in the UK. Eelpower will provide EPC and ongoing specialist asset management services to the storage assets.
Kevin Lyon, Chairman of NextEnergy Solar Fund commented:
"Battery storage is a vital technology in increasing the penetration of renewables in the UK. NESF has made excellent progress expanding and diversifying into this technology through its relationship with Eelpower. NESF has created a unique opportunity to become a key player in this space, whilst enhancing the existing portfolio of solar assets. Pending shareholder and FCA approval, NESF can further diversify and offer investors continued exciting growth prospects."
Michael Bonte-Friedheim, CEO of NextEnergy Group said:
"The new joint venture partnership builds on the successful relationship with the Eelpower team and enhances NESF's position as a key player in the battery storage sector. The partnership also secures NESF an exclusive pipeline of over 500MW of battery storage opportunities which is incredibly exciting, and will further enhance the UK's energy independence once energised and grid-connected."
For further information:
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NextEnergy Capital |
020 3746 0700 |
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Michael Bonte-Friedheim |
ir@nextenergysolarfund.com |
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Aldo Beolchini |
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Ross Grier |
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Peter Hamid (Investor Relations) |
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RBC Capital Markets |
020 7653 4000 |
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Matthew Coakes |
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Kathryn Deegan |
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Cenkos Securities |
020 7397 8900 |
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James King |
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William Talkington |
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Camarco |
020 3781 8334 |
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Owen Roberts |
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Eddie Livingstone-Learmonth |
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Ocorian Administration (Guernsey) Limited |
014 8174 2642 |
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Kevin Smith |
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Notes to Editors1:
About NextEnergy Solar Fund
NESF is a specialist solar and energy storage climate impact fund. The Company is structured as a renewable energy investment company listed on the premium segment of the London Stock Exchange that invests in utility-scale solar power plants and energy storage. The Company may invest up to 30% of its gross asset value in non-UK OECD countries, 15% in solar-focused private infrastructure funds, and 10% in energy storage.
NESF currently has a diversified portfolio comprising of the following:
Solar PV:
· 100 operating solar assets across the UK and Italy (primarily on agricultural, industrial, and commercial sites)
· A 50MW co-investment into a Spanish solar project alongside NextPower III ESG, currently under construction
· A 210MW co-investment into a Portuguese solar project alongside NextPower III ESG, currently under construction
· A UK solar project under construction (Whitecross 36MW)
· A ready-to-build UK solar project (Hatherden 50MW)
· A $50m commitment into NextPower III ESG (a private solar infrastructure fund providing exposure to both operating and under construction, international solar assets)
Energy Storage:
· A 50MW standalone battery storage project in Fife, Scotland, currently under construction (part of a 500MW/£300m joint venture partnership with Eelpower)
· A 6MW co-located battery storage project at North Norfolk Solar Farm
The NESF portfolio has a combined installed power capacity of 865MW (excluding NextPower III MW on an equivalent look-through basis).
As at 30 June 2022, the Company had a unaudited gross asset value of £1,198m, being the aggregate of the net asset value of the ordinary shares, the fair value of the preference shares and the amount of NESF Group debt outstanding, and an unaudited net asset value of £717.2m.
NESF's investment objective is to provide ordinary shareholders with attractive risk-adjusted returns, principally in the form of regular dividends, by investing in a diversified portfolio of solar energy and energy storage infrastructure assets. The majority of NESF's long-term cash flows are inflation-linked via UK government subsidies.
For further information on NESF please visit www. nextenergysolarfund.com
Commitment to ESG
NESF is committed to ESG principles and responsible investment which make a meaningful contribution to reducing CO2 emissions through the generation of clean solar power. NESF will only select investments that meet the requirements of NEC Group's Sustainable Investment Policy. Based on this policy, NESF benefits from NEC's rigorous ESG due diligence on each investment. NESF is committed to reporting on its ESG performance in accordance with the UN Sustainable Development Goals framework and the EU Sustainable Finance Disclosure Regulation.
NESF has been awarded the London Stock Exchange's Green Economy Mark and has been designated a Guernsey Green Fund by the Guernsey Financial Services Commission.
Article 9
NESF is classified under Article 9 of the EU Sustainable Finance Disclosure Regulation and EU Taxonomy Regulation.
NESF's sustainability-related disclosures in the financial services sector in accordance with Regulation (EU) 2019/2088 can be accessed on the ESG section of both the NESF website ( nextenergysolarfund.com/esg/ ) & NEC Group website ( nextenergycapital.com/sustainability/transparency-and-reporting/ ).
About Eelpower
Eelpower Limited ("Eelpower") is a well-established privately held constructor-owner-operator in the new and rapidly growing electricity storage market. Eelpower's management team and investors previously built the largest hydropower sites in England this century where they pioneered behind-the-meter battery storage integrated with hydro generation and industrial consumers. Since its launch in 2017, Eelpower has delivered, owned, and managed some of the highest-earning storage assets in the UK.
For further information on Eelpower please visit eelpower.co.uk.
About NextEnergy Group
NESF is managed by NextEnergy Capital, part of the NextEnergy Group. NextEnergy Group was founded in 2007 to become a leading market participant in the international solar sector. Since its inception, it has been active in the development, construction, and ownership of solar assets across multiple jurisdictions. NextEnergy Group operates via its three business units: NextEnergy Capital (Investment Management), WiseEnergy (Operating Asset Management) and Starlight (Asset Development).
NextEnergy Capital
NextEnergy Capital comprises the Group's investment management activities. To date, NEC has invested in over 350 individual solar plants for a capacity in excess of 2.4GW across it institutional funds.
www.nextenergycapital.com
· NextEnergy Solar Fund ("NESF") is a solar infrastructure investment company focused on the UK and other OECD countries, which is listed on the premium segment of the London Stock Exchange. It currently owns 865MW spread among 100 individual operating assets in the UK and Italy, comprising an unaudited gross asset value of £1,198m. NESF is one of the largest listed solar energy investment companies in the world.
· NextPower II ("NPII") a private fund made up of 105 individual operating solar power plants and an installed capacity of 149MW, focused on consolidating the substantial, highly fragmented Italian solar market. NPII was successfully divested in January 2022, a 2016 vintage vehicle that generated net IRRs in excess of its gross target of 10-12%.
· NextPower III ESG ("NPIII") is a private fund exclusively focused on the international solar infrastructure sector, principally targeting projects in carefully selected OECD countries, including the US, Portugal, Spain, Chile, Poland and Italy. NPIII is a fund that provides a positive social and environmental impact to the countries it has and will invest into. NPIII completed its fundraise with a total of $896m, including a SMA raised. The target of the fund was $750m.
· NextPower UK ESG ("NPUK") is a private unlevered fund investing in greenfield subsidy-free solar projects, with PPA's, in the UK. NPUK was launched in December 2021. The UK Infrastructure Bank is providing financing to the initial seed assets of the fund, and plans to invest up to £250m, half of the fund's total target fund size, on a match-funding basis.
WiseEnergy
WiseEnergy® is NextEnergy Capital Group's operating asset manager. WiseEnergy is a leading specialist operating asset manager in the solar sector. Since its founding, WiseEnergy has provided solar asset management, monitoring and technical due diligence services to over 1,400 utility-scale solar power plants with an installed capacity in excess of 1.8GW. WiseEnergy clients comprise leading banks and equity financiers in the energy and infrastructure sector.
Starlight
Starlight is NextEnergy Group's development company that is active in the development phase of solar projects. It has developed over 100 utility-scale projects internationally and continues to progress a large pipeline of c.5GW of both green and brownfield project developments across global geographies.
Notes:
1: All financial data is unaudited at 30 June 2022, being the latest date in respect of which NESF has published financial information
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