NextEnergy Solar Fund has signed its first co-investment transaction in connection with NextPower III ESG. It is buying a 25% stake in a Spanish 50MW utility scale solar project currently under construction in Cádiz, Spain – called Agenor. Energisation of the project is expected to take place in the first half of 2022.
In June 2021, the company committed $50m to NextPower III ESG, a private ESG solar fund focused on utility scale solar assets in OECD markets. The aim was to secure access to an established portfolio of operational and in-construction international solar assets. This commitment also unlocked attractive co-investment opportunities on a direct investment basis alongside NPIII ESG and other investors in the fund, on a no-fee, no carry (performance fee) basis.
NextEnergy Solar Fund’s 25% stake in Agenor benefits from attractive terms and represents a total investment by the company of €10.6m. This will be funded from available revolving credit facilities. The remaining 75% stake in Agenor is being funded directly by NPIII ESG and another investor in the fund.
Once energised later in the first half of 2022, Agenor will benefit from a Power Purchase Agreement (PPA) for the sale of electricity with a high-credit counterparty. The PPA will cover about 70% of contracted volumes for an initial five-year period.
Kevin Lyon, chairman of NextEnergy Solar Fund commented: “We expect 2022 to be a very exciting year of growth for NESF. Through NESF’s commitment into NPIII ESG, we were able to harness and benefit from NextEnergy Capital’s international experience and expertise in the Spanish solar PV market. Co-investment opportunities can offer a unique, return-enhancing portfolio benefit and Agenor marks NESF’s first co-investment with NPIII ESG and its first international investment outside of Italy. This is a very attractive co-investment opportunity for NESF whilst further diversifying the growing NESF portfolio.”
NESF : NextEnergy Solar invests in Cadiz solar plant