KLP Invests in new Solar Energy Fund

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    Stockholm (NordSIP) – Renewable energy-focused private equity manager NextEnergy Capital recently announced the first close of its new fund NextPower III International Solar Fund, the firm’s first private equity fund to focus exclusively on the international solar energy infrastructure sector.

    While the fund raising target is US$750m, the firm has already secured approximately US$160m in initial commitments from a pool of institutional investors which includes Norwegian pension fund KLP as well as a Swedish life insurance.

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    “There is currently strong demand for fund managers offering long-dated cashflows, uncorrelated returns in assets suitable for sustainable investing. NextPower III has been particularly interesting to investors with significant experience in infrastructure, especially for those that are seeking to diversify their exposure to wind power. The investors participating in the first close of the fund also want to capture the enormous growth we are witnessing in global solar pv right now,” says Christian Andersson at Worthwhile Capital Partners, the specialist placement agent in charge of marketing and distribution for NextEnergy Capital in the Nordics.

    Harald Koch-Hagen, Director Strategic Asset Allocation at KLP shares his thoughts in a press release: “This investment is a part of our effort to find attractive investment opportunities that are characterised by stability and predictability for KLPs customers. It also represents a contribution to our portfolio of sustainable investments that we are convinced will provide attractive and stable returns in the years to come,” he says.
    “We are very pleased to have secured such high-quality support for the establishment of our first international solar fund. The environmental, social and governance (“ESG”) benefits of rapidly building out new solar plants on an international basis are particularly important and are further boosted by solar energy’s competitive cost and pricing advantage over more polluting forms of electricity generation without requiring subsidies. The clear necessity to address climate change will further drive incremental solar deployment,” says Michael Bonte-Friedheim, Founding Partner and Group CEO of NextEnergy Capital.
    The new fund’s investment strategy is to invest in the construction phase of solar projects and own them over the long term. The principal target markets include OECD and OECD Key Partner countries, while it also has flexibility to invest in other high-growth markets should attractive opportunities emerge.
    So far, NextEnergy Capital has lead the investment in over 150 individual operating solar projects for an installed capacity of about 800MW, placing it in the top five owners of solar plants in Europe, in addition to about 172MW of subsidy-free development projects in the UK. NextPower III is expected to achieve a portfolio of between 2.5 and 3.0GW in operating solar projects across its target markets upon full capital deployment.
    “Following the successful first close of the fund, NextEnergy Capital is now in progress of raising capital from several Nordic investors and the demand continues to be strong, not the least thanks to the strength and expertise of the investors who have already committed investments before the first close,” concludes Andersson.
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    Aline Reichenberg Gustafsson, CFA
    Aline Reichenberg Gustafsson, CFA
    Aline Reichenberg Gustafsson, CFA is Editor-in-Chief for NordSIP and Managing Director for Big Green Tree Media. She has 18 years of experience in the asset management industry in Stockholm, London and Geneva, including as a long/short equity hedge fund portfolio manager, and buy-side analyst, but also as CFO and COO in several asset management firms. Aline holds an MBA from Harvard Business School and a License in Economic Sciences from the University of Geneva.
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