TIDMNESF
RNS Number : 9278B
NextEnergy Solar Fund Limited
17 February 2022
LEI: 213800ZPHCBDDSQH5447
17 February 2022
NextEnergy Solar Fund Limited
("NESF" or the "Company")
Quarterly Net Asset Value and Operational Update
NextEnergy Solar Fund, the specialist solar power renewable
energy investment company, announces its unaudited Net Asset Value
("NAV"), and its latest operational update for the quarter ended 31
December 2021.
The Company continues to outperform while expanding and
diversifying into energy storage and international solar assets.
NESF remains well-placed to provide shareholders with an ongoing
attractive risk-adjusted return from a diversified portfolio of
renewable energy assets, while providing a covered dividend and the
opportunity for strong future NAV growth.
Financial highlights
-- +1.3p increase in unaudited NAV per ordinary share to 104.4p (30 Sep 2021: 103.1p)
-- Increase in unaudited Ordinary shareholders' NAV to GBP615m (30 Sep 2021: GBP607m)
-- Interim dividend of 1.79p per ordinary share for the quarter ended 31 December 2021
-- Ordinary shareholders' unaudited Gross Asset Value ("GAV") of
GBP1,094m (30 September 2021: GBP1,087m)
-- Ordinary shareholder cumulative total return since IPO of 50.0% (30 Sep 2021: 46.4%)
-- Gearing (including preference shares) of 44% (30 Sep 2021: 44%)
-- Financial debt gearing (excluding preference shares) of 26% (30 Sep 2021: 26%)
Portfolio highlights
-- NESF's $50m commitment into NextPower III ESG ("NPIII ESG"),
an international private solar fund, is equivalent to a
shareholding of 6.2%. This commitment provides NESF shareholders
with immediate exposure to a growing portfolio of both construction
and operational international solar assets. NPIII ESG currently has
an installed capacity of 742MW spread across 23 projects and 2
portfolios. NPIII ESG also recently announced its final close,
bringing the total capital raised to $896m, including a separately
managed account. The target of the fund was $750m.
-- NESF announced in January 2022 its first co-investment for a
25% stake in a Spanish 50MW utility scale solar project ("Agenor"),
an opportunity unlocked by NESF's commitment to NPIII ESG. The
project remains on track to be energised in the first half of 2022
and benefits from a strong credit worthy counterparty for the
long-term Power Purchase Agreement in place.
-- NESF's maiden 50MW standalone battery project, located in
Fife, Scotland, continues to make good progress and is expected to
be constructed this year with full energisation early in 2023. NESF
continues to benefit from its 250MW joint venture partnership with
Eelpower Limited and is looking forward to announcing additional UK
battery energy storage projects shortly.
Operational highlights
-- Total installed capacity of 865MW(1)
-- 99 fully operating solar assets
-- Portfolio generation outperformance of +0.4% for current year
to date 2021/22, translating into additional revenues of
c.GBP230k
-- NEC's electricity sales desk continues to successfully manage
risk and opportunistically lock in above forecast power prices in
line with NESF's electricity sales strategy; NESF's hedging
positions (covering 716MW UK portfolio) as at 16 February 2022
were:
o 2021/22: 99% of budgeted generation hedged
o 2022/23: 79% of budgeted generation hedged
o 2023/24: 74% of budgeted generation hedged
o 2024/25: 27% of budgeted generation hedged
NAV
The Company's latest unaudited NAV per ordinary share as at 31
December 2021 has increased since 30 September 2021 from 103.1p to
104.4p.
The main contributors to the Company's NAV during the quarter
were changes to inflation assumptions (+0.8p per ordinary share),
power purchase agreements uplift (+0.6p per ordinary share) and an
increase in power price forecast assumptions (+0.2p per ordinary
share).
There has been no change to the discount rate assumptions used
to value the assets.
The latest long-term power price projections from the Company's
three independent consultants have indicated that future power
price estimates are currently marginally lower than the figures
used in September 2021, signalling a slight reduction in the power
price consultant estimates from 2027 onwards.
Electricity sales strategy
Short-term power prices remain high in the UK and NESF has
continued its well-established power sales hedging strategy to
capture some of these higher prices whilst continuing to provide
maximum power price downside protection. The active management by
NEC's Energy Sales Desk continues to demonstrate NESF's ability to
strengthen dividend cover, deliver consistent NAV performance and
ensure stable future cash flows.
Future acquisition pipeline
In line with its investment policy, the Company continues to
advance a significant pipeline with a value in excess of GBP300m of
international solar assets, UK energy storage assets, and possible
further co-investment opportunities through NESF's commitment to
NPIII.
These investment opportunities aim to achieve robust financial
returns in line with our target return profile, increase dividend
cover, and add geographical, technological, and revenue
diversification to the NESF portfolio.
Inflation
There remains continued inflationary pressure throughout the UK
economy and forecasts suggest this will persist over the coming
years. NESF benefits from a high level of inflation linkage via its
government subsidies, making it a strong proposition for investors,
especially given the forward dividend cover, expected NAV growth
and future pipeline.
NESF's long term inflation assumption from 2030 have been
revised downwards from 2.5% to 2.25%.
Dividend
The Company recently announced an interim dividend of 1.79 pence
per Ordinary Share for the quarter ending 31 December 2021. The
interim dividend of 1.79 pence will be paid on 31 March 2022 to
shareholders on the register as at the close of business on 18
February 2022. The ex-dividend date is 17 February 2022.
The Company will also be offering shareholders a scrip dividend
alternative to this interim dividend as detailed in the Scrip
Circular dated 12 July 2021, a copy of which can be viewed and / or
downloaded from 'Circulars' in the Investor Relations part of the
NESF website ( nextenergysolarfund.com ). The Scrip Share reference
price will be announced on 24 February 2022, with elections to be
made by 4 March 2022.
Factsheet
The 31 December 2021 factsheet is now available on the Company's
website.
Kevin Lyon, Chairman of NextEnergy Solar Fund commented:
"Energy is at the forefront of society's minds and agendas, and
this is anticipated to continue. Clean energy, solar in particular,
is a vital component of the UK's energy mix bringing security of
supply, alongside cutting carbon from electricity supplies. NESF
plays an important part in this cycle with its large, and growing,
asset base. It is pleasing, therefore, to see back-to-back
increases in NESF's NAV per ordinary share as NESF continues to
pursue an exciting growth strategy that is being tangibly executed,
providing both short and long term benefits to NESF shareholders.
We believe NESF is well-positioned to take advantage of future
investment and expansion opportunities and look forward to what
this year and beyond will bring"
Michael Bonte-Friedheim, Group CEO of NextEnergy Capital
added:
"It has been a busy quarter for NESF, with its commitment into
NextPower III ESG, its first co-investment for a stake in Agenor in
Spain, as well as advancing its maiden 50MW standalone battery
project in Scotland into the construction phase as part of NESF's
joint venture partnership with Eelpower. These milestones are
indicative of the progress NESF has made, and are making, as a
fund, which make NESF the unique investment proposition it is."
For further information:
NextEnergy Capital Group 020 3746 0700
Michael Bonte-Friedheim ir@nextenergysolarfund.com
Aldo Beolchini
Ross Grier
Peter Hamid (Investor Relations)
RBC Capital Markets 020 7653 4000
Matthew Coakes
Elizabeth Evans
Kathryn Deegan
Cenkos Securities 020 7397 8900
James King
William Talkington
Camarco 020 3781 8334
Owen Roberts
Eddie Livingstone-Learmonth
Apex Fund and Corporate Services (Guernsey)
Limited 01481 735 827
Nick Robilliard
Notes to Editors(2) :
About NextEnergy Solar Fund
NESF is a specialist solar power 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 equity
structures, and 10% in energy storage.
NESF currently has a diversified portfolio comprising of the
following:
-- 99 operating solar assets across the UK and Italy (primarily
on agricultural, industrial, and commercial sites)
-- A $50m commitment into NextPower III ESG (a private solar
infrastructure fund providing exposure to operating and
in-development international solar assets)
-- A 50MW co-investment into a Spanish solar project alongside
NextPower III ESG, currently in construction
-- A 50MW standalone battery storage project in Fife, Scotland,
currently in construction (part of a 250MW joint venture with
Eelpower)
-- Two subsidy free UK solar ready-to-build projects (Hatherden 50MW & Whitecross 35MW)
The NESF portfolio has a combined installed power capacity of
865MW (excluding NextPower III MW on an equivalent look-through
basis).
As at 31 December 2021, the Company had a gross asset value of
GBP1,094 million, 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 a net asset value of
GBP615million.
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
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.
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 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 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 325 individual solar
plants for a capacity in excess of 2.3GW 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, that
is listed on the premium segment of the London Stock Exchange. It
currently owns 865MW spread among 99 individual assets in the UK
and Italy, comprising a gross asset value of GBP1,094m. 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 to its
investors in excess of 25%, versus a 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 ESG is a fund that provides a positive social and environmental impact to the countries it has and will invest into. NPIII has completed its fundraise with a total of $896m, including a SMA raised. The target of the fund was $750m.
-- NextPower UK ESG ("NPUK ESG") is a private unlevered fund
investing in greenfield subsidy-free solar projects, with PPA's, in
the UK. NPUK ESG 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 GBP250m, half of the
fund's total target fund size, on a match-funding basis.
WiseEnergy
WiseEnergy(R) 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 1,300 utility-scale solar power plants with an
installed capacity in excess of 2.2GW. WiseEnergy clients comprise
leading banks and equity financiers in the energy and
infrastructure sector.
www.wise-energy.com
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.2.5GW of both green and brownfield
project developments across global geographies.
Notes:
(1:) Excluding NextPower III MW on an equivalent look-through
basis
(2:) All financial data is unaudited as at 31 December 2021,
being the latest date in respect of which NESF has published
financial information
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