Prudential joins investors in backing NextEnergy's solar IPO

Jessica Shankleman

NextEnergy confirms it has raised £85.5m, as Macquarie and Forrest offer free solar installations to businesses

A host of blue chip investors have helped to raise £85.5m for NextEnergy to invest in eight UK solar projects through an initial public offering (IPO) on the London Stock Exchange.

The newly formed company had originally hoped to raise £150m from the IPO to service growing investor demand for solar PV projects, particularly from pension funds and insurance companies.

But the IPO clashed with two other major clean energy fundraising efforts from John Laing and The Renewables Infrastructure Group Limited (TRIG), in a week that saw more than £300m raised for the solar sector. As a result, NextEnergy raised just over half the funds it had hoped to.

NextEnergy chief executive Michael Bonte-Friedheim told BusinessGreen that he was nevertheless "extremely pleased" with the results given the busy fundraising schedule within which the IPO took place.

The fund attracted a wide range of blue chip institutional investors and wealth management firms, including Prudential. The full list of investors is due to be released when NextEnergy starts full trading on 25 April.

Bonte-Friedheim said the funds raised will be used to acquire eight operational solar power projects, which it has already secured rights to over the next four months.

"What's particularly interesting is that they are looking and have agreed to back us to fund further fundraisers as well, so not only have they agreed to fund this IPO but the principal shareholders are very keen to back us for further growth," he said.

NextEnergy plans to issue a first-year dividend of 5.25p per share and a 6.25p dividend the year after, which Bonte-Friedheim claimed was higher than those offered by its competitors, despite having a lower risk portfolio.

In related news, businesses and the public sector have been offered the chance to install solar panels for free under a new scheme run by Forrest and Macquarie Lending.

As part of Macquarie Lending's £50m commercial solar power programme the company will finance installations and then recoup the costs through power purchase agreements and feed-in tariff payments.

Ted Macdougal, development director of Forrest, which will install the schemes, said the programme aimed to help businesses reduce their energy bills and carbon emissions.

"Businesses are expected to play an active role in minimising their environmental impact," he said. "The installation of free solar power generation technology will help them achieve this while also reducing energy bills. In partnering with Macquarie Lending, we have a long-term investment pipeline that will help us deliver thousands of installations as we extend into the commercial sector and strengthen our position as a leader in the field."

The surge in solar investment that characterised the first quarter of the year looks set to continue.

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