NextEnergy Solar Regulatory News (NESF)

LEI: 213800ZPHCBDDSQH5447

12 May 2023

NextEnergy Solar Fund Limited

("NESF" or the "Company")

11% Dividend Target Increase

NextEnergy Solar Fund, the specialist solar+ fund, is pleased to announce its dividend target for the financial year ending 31 March 2024. The Board of NESF has approved a dividend target of 8.35p per ordinary share, representing an 11% increase from the previous year's dividend of 7.52p per ordinary share. 

The Company has declared total dividends since IPO of £305.8m or 55.72p per share. This announcement represents NESF's tenth consecutive dividend target increase, in line with the Company's progressive annual dividend policy. The Company has achieved all of its dividend targets whilst maintaining a covered dividend throughout the nine years since IPO and continues to target a covered dividend beyond the current financial year.

The dividend target is forecasted to be 1.3x-1.5x covered, supported by a high degree of visibility of the Company's revenues. The Company's RPI-linked subsidised revenues represent approximately 50% of total revenues. Remaining revenues are derived from budgeted electricity generation, prices for 88% of which have been fixed through to 31 March 2024 through the Company's active power hedging strategy.

The dividend target increase is not dependent on the completion of the Company's recently announced Capital Recycling Programme and dividend cover forecasts do not assume revenues from, or sale proceeds connected with, the Capital Recycling Programme.

In deciding the target dividend, the Board considers projected future power prices and associated price hedges, inflation in renewable markets, historic and budgeted technical, financial, and operational performance of NESF's portfolio, and the ratio of cash cover to proposed dividend payments.

The Company continues to offer ordinary shareholders a scrip dividend alternative. 

Kevin Lyon, Chairman of NESF, commented:

"We are proud to announce NESF's tenth consecutive year of dividend growth with a target dividend of 8.35p per ordinary share for the financial year ending 31 March 2024. This represents an 11% increase from the previous year's dividend of 7.52p per ordinary share, and we are pleased, given the current macroeconomic environment, to offer shareholders an increase to their dividend. This announcement reflects the strong position of the Company, its secured revenue flows, robust operational asset base and attractive growth prospects. It also demonstrates the resilience of NextEnergy Solar Fund, which continues to offer investors an attractive dividend yield through access to a high-quality portfolio of solar and battery storage assets."

Notes:

The dividend target stated in this announcement is a target only and not a profit forecast. There can be no assurance that this target will be met and should not be taken as an indication of the Company's expected future results. Potential investors should not place any reliance on this target and should decide for themselves whether or not the target dividend is achievable.

Notes to Editors1:

About NextEnergy Solar Fund

NESF is a specialist solar+ fund listed on the premium segment of the London Stock Exchange and is a constituent of the FTSE 250. 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 utility-scale solar energy and energy storage infrastructure assets. The majority of NESF's long-term cash flows are inflation-linked via UK government subsidies. 

The NESF portfolio has a combined installed power capacity of 865MW (excluding NextPower III MW on an equivalent look-through basis). NESF may invest up to 30% of its gross asset value in non-UK OECD countries, 15% in solar-focused private infrastructure funds, and 10% in energy storage assets. As at 31 March 2023, the Company had an unaudited gross asset value of £1,218m. For further information on NESF please visit www.nextenergysolarfund.com

Article 9 Fund

NESF is classified under Article 9 of the EU Sustainable Finance Disclosure Regulation and EU Taxonomy Regulation. 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 & NEC website.

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 multiple jurisdictions. NextEnergy Group operates via its three business units: NextEnergy Capital (Investment Management), WiseEnergy (Operating Asset Management), and Starlight (Asset Development).

· NextEnergy Capital: Has over 16 years specialist solar expertise having invested in over 350 individual solar plants across the world. NextEnergy Capital currently manages four institutional funds with a total capacity in excess of 2.4GW+ and has asset under management of $3.3bn.  www.nextenergycapital.com

· WiseEnergy®:  Provides solar asset management, monitoring and technical due diligence services to over 1,350 utility-scale solar power plants with an installed capacity in excess of 1.8GW. WiseEnergy clients comprise leading banks and equity financiers in the energy and infrastructure sector.  www.wise-energy.com

· Starlight: Has developed over 100 utility-scale projects internationally and continues to progress a large pipeline of c.10GW of both green and brownfield project developments across global geographies.

Notes:

1: All financial data is unaudited at 31 March 2023, being the latest date in respect of which NESF has published financial information