NextEnergy Capital Group, the leading international solar investment and asset manager with solar assets under management of c.US$2.8bn announces new investor commitments of US$232m into NextPower III ESG international solar fund, taking total funds raised to date to US$530m (including a separately managed account). The new commitments include a German occupational pension fund, Derigo Gmbh&Co.KG and a UK institutional investor.
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 and Italy. The fund has to date acquired 14 projects plus 1 portfolio with a total installed capacity of c.400MW. This ten-year closed-ended fund is targeting a gross IRR of 13-15%.
The above commitments were completed amidst the backdrop of the global COVID-19 pandemic, and follow other recent commitments from investors based in the Americas. NPIII is now close to three quarters of the way to achieving its fund-raising target of US$750m. The Fund has a hard cap of US$1bn.
The Fund continues to enjoy significant fundraising momentum and is due to close at the end of 2021. NPIII has a significant portfolio of further acquisition targets; there are currently five projects under exclusivity for an installed capacity of 453MW and a further 351MW under advanced negotiation. During the third and fourth quarter of 2021 these acquisitions are expected to be completed bringing the Fund’s total installed capacity to c.1,200MW. The Fund also has a significant additional pipeline of investment opportunities it is pursuing.
Investors joining the Fund at this stage benefit from an existing portfolio of high-quality operating assets, alongside an exciting pipeline of in-construction and pre-construction assets internationally, including possible co-investment opportunities. The Fund is looking to start paying sustainable cash distributions to investors from as early as next year.
NEC currently forecasts NextPower III to achieve a portfolio of between 2.5GW and 3.0GW in operating solar projects across its target markets upon full capital deployment.