UK Infrastructure Bank backs GBP-500m subsidy-free solar fund

The UK Infrastructure Bank is supporting the launch of a new fund that seeks to raise GBP 500 million (USD 667m/EUR 587m) to invest in subsidy-free solar farms in the UK.

The fund, NextPower UK ESG (NPUK ESG), is a 10-year closed-ended vehicle launched today by NextEnergy Capital. It has the potential to double subsidy-free solar power in the UK, according to a statement by the bank and the investment management company. The fund is expected to have about 1 GW of capacity from around 30 solar farms in the UK, when fully operational.

The UK Infrastructure Bank is providing financing to the fund’s seed assets, two subsidy-free solar farms in Llanwern in South Wales and Strensham, Worcestershire with a combined capacity of 115 MW. It intends to invest up to GBP 250 million, or half of the fund’s target size.

The UK Infrastructure Bank is the new, government-owned policy bank, launched in June, and this investment represents its first private sector transaction.

The fund will be managed by NextEnergy Capital and can tap into its portfolio of subsidy-free solar projects in the UK. NextEnergy Capital also runs two private funds, NextPower III ESG and NextPower II, and the listed NextEnergy Solar Fund Ltd.

(GBP 1 = USD 1.334/EUR 1.174)

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