NextEnergy Solar Fund snaps up twin solar assets with 15-year power purchase agreements

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NextEnergy Solar Fund Ltd (LON:NESF) has acquired a UK based solar photovoltaic (PV) portfolio for GBP64.3mln that once fully up and running will increase its installed capacity by around 13%.


The Camden portfolio is made up of two equal-sized projects totalling 100MWp (megawatt peak) and has a 15-year power purchase agreement (PPA) in place, covering roughly 75% of the electricity to be generated over the life of the agreement. The counterparty of the PPA is brewing giant AB InBev.


One of the two projects, one in Yorkshire is already up and running and the second, in Nottinghamshire, is expected to be energised before the end of June. Together they will produce enough clean energy to power the equivalent of roughly 29,000 UK households per year.


NextEnergy, which is financing the acquisition using its current revolving credit facilities, has with the addition of The Grange, increased its total portfolio to 92 operating solar assets, with a combined installed power capacity of 813MWp.


When South Lowfield is commissioned, this will increase to 93 assets and 863MWp.


The fund said the 15-year PPA in place with AB InBev increases its proportion of revenues secured by long-term contracts and “positions NESF as one of the market leaders in the nascent and growing UK PPA market with a high-quality and high-profile counterparty”.


The 15-year life of the PPA was one of the highlights of the deal, as manager NextEnergy Capital Group said the average period for corporate PPAs currently in the market is around 7-10 years.


“These two assets should to generate stable cash flows over their 40-year lifespan,” the company added, while also seeing opportunities to generate incremental value from the two assets through asset manager NextEnergy Capital Group’s solar site management experience.


Having completed the acquisition using its revolving credit facilities, NESF had outstanding debt of GBP247.4mln but noted that cashflows will be received from The Grange immediately and from South Lowfield as soon as it is energised.


“The Camden portfolio is an excellent fit for NESF and the PPA agreement with AB InBev provides long-term, reliable cashflows to the fund. The board is excited to partner with such a high-profile global company, helping them achieve their renewable energy targets,” said Kevin Lyon, NESF chairman.

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