NextEnergy Solar Regulatory News (NESF)

LEI: 213800ZPHCBDDSQH5447

14 April 2022

NextEnergy Solar Fund Limited

("NESF" or the "Company")

Increased Dividend Target for Eighth Consecutive Year

NextEnergy Solar Fund, the specialist solar power renewable energy investment company, is pleased to announce its target dividend for the financial year ending 31 March 2023.

The Board of NESF has approved a target dividend of 7.52 pence per ordinary share, representing a 5.0% increase from the previous year's dividend of 7.16 pence per ordinary share. This increase is above the 4.1% calculated Retail Price Index ("RPI") rise for the 2021 calendar year.

The target dividend increase is supported by the high degree of visibility of the Company's 2023 revenues, primarily driven by its active power price hedging strategy locking in c.80% of budgeted generation at a fixed price for the 2023 financial year, in addition to its RPI-linked increase in revenues from renewable obligation certificates which cover c.60% of total revenues, and strong operational track record of technical and operational outperformance. 

This announcement represents NESF's eighth consecutive dividend increase, having declared a total c.£251m pre-scrip dividends since IPO. The Company has achieved all its dividend targets whilst maintaining a covered dividend throughout the eight years and continues to target a covered dividend beyond the current financial year.

NESF provides a regular attractive dividend for income seeking investors. The Company has a progressive annual dividend policy, and when appropriate, the Board considers increasing the target dividend paid to shareholders. In deciding the target dividend, the Board considers projected future power prices and associated price hedges, inflation in renewable markets, historic and budgeted technical and operational performance of NESF's portfolio and the ratio of cash cover to proposed dividend payments.

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

Kevin Lyon, Chairman of NextEnergy Solar Fund said:

"We are pleased to announce a dividend target of 7.52 pence per ordinary share, representing a 5.0% increase on the previous year's dividend and, importantly, the eighth consecutive year of dividend growth. We are particularly pleased, in the current macroeconomic environment, to announce a dividend increase well in excess of RPI. This target dividend reflects the strong position of the Company, its secured revenue flows, strong operational asset base and attractive growth prospects. It also demonstrates the resilience of the renewables sector, particularly solar and battery storage, and underlines the fact that NextEnergy Solar Fund offers investors an attractive dividend yield."

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.

For further information:

Notes to Editors1:

About NextEnergy Solar Fund

NESF is a specialist solar power renewable energy investment company listed on the premium segment of the London Stock Exchange that invests in utility-scale solar power plants and energy storage. The Company may invest up to 30% of its gross asset value in non-UK OECD countries, 15% in solar-focused private equity structures, and 10% in energy storage.

NESF currently has a diversified portfolio comprising of the following:

· 99 operating solar assets across the UK and Italy (primarily on agricultural, industrial, and commercial sites)

· A $50m commitment into NextPower III ESG (a private solar infrastructure fund providing exposure to operating and in-development international solar assets)

· A 50MW co-investment into a Spanish solar project alongside NextPower III ESG, currently under construction

· A 50MW standalone battery storage project in Fife, Scotland, currently under construction (part of a 250MW joint venture with Eelpower)

· A subsidy-free UK solar project under construction (Whitecross 36MW)

· A ready-to-build subsidy-free UK solar project (Hatherden 50MW)

The NESF portfolio has a combined installed power capacity of 865MW (excluding NextPower III MW on an equivalent look-through basis).

As at 31 December 2021, the Company had a gross asset value of £1,094 million, being the aggregate of the net asset value of the ordinary shares, the fair value of the preference shares and the amount of NESF Group debt outstanding, and a net asset value of £615million.

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 solar energy and energy storage infrastructure assets. The majority of NESF's long-term cash flows are inflation-linked via UK government subsidies.

For further information on NESF please visit www.nextenergysolarfund.com 

Commitment to ESG

NESF is committed to ESG principles and responsible investment which make a meaningful contribution to reducing CO2 emissions through the generation of clean solar power. NESF will only select investments that meet the requirements of NEC Group's Sustainable Investment Policy. Based on this policy, NESF benefits from NEC's rigorous ESG due diligence on each investment. NESF is committed to reporting on its ESG performance in accordance with the UN Sustainable Development Goals framework and the EU Sustainable Finance Disclosure Regulation.

NESF has been awarded the London Stock Exchange's Green Economy Mark and has been designated a Guernsey Green Fund by the Guernsey Financial Services Commission.

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 website (nextenergysolarfund.com/esg/) & NEC Group website (nextenergycapital.com/sustainability/transparency-and-reporting/).

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

NextEnergy Capital

NextEnergy Capital comprises the Group's investment management activities. To date, NEC has invested in over 325 individual solar plants for a capacity in excess of 2.3GW across it institutional funds. www.nextenergycapital.com

· NextEnergy Solar Fund ("NESF") is a solar infrastructure investment company focused on the UK and other OECD countries, that is listed on the premium segment of the London Stock Exchange. It currently owns 865MW spread among 99 individual assets in the UK and Italy, comprising a gross asset value of £1,094m. NESF is one of the largest listed solar energy investment companies in the world.

· NextPower II ("NPII") a private fund made up of 105 individual operating solar power plants and an installed capacity of 149MW, focused on consolidating the substantial, highly fragmented Italian solar market. NPII was successfully divested in January 2022, a 2016 vintage vehicle that generated net IRRs to its investors in excess of 25%, versus a gross target of 10-12%.

· NextPower III ESG ("NPIII") is a private fund exclusively focused on the international solar infrastructure sector, principally targeting projects in carefully selected OECD countries, including the US, Portugal, Spain, Chile, Poland and Italy. NPIII ESG is a fund that provides a positive social and environmental impact to the countries it has and will invest into. NPIII completed its fundraise with a total of $896m, including a SMA raised. The target of the fund was $750m.

· NextPower UK ESG ("NPUK ESG") is a private unlevered fund investing in greenfield subsidy-free solar projects, with PPA's, in the UK. NPUK ESG was launched in December 2021. The UK Infrastructure Bank is providing financing to the initial seed assets of the fund, and plans to invest up to £250m, half of the fund's total target fund size, on a match-funding basis.

WiseEnergy

WiseEnergy® is NextEnergy Capital Group's operating asset manager. WiseEnergy is a leading specialist operating asset manager in the solar sector. Since its founding, WiseEnergy has provided solar asset management, monitoring and technical due diligence services to over 1,300 utility-scale solar power plants with an installed capacity in excess of 2.2GW. WiseEnergy clients comprise leading banks and equity financiers in the energy and infrastructure sector. 

www.wise-energy.com

Starlight

Starlight is NextEnergy Group's development company that is active in the development phase of solar projects. It has developed over 100 utility-scale projects internationally and continues to progress a large pipeline of c.2.5GW of both green and brownfield project developments across global geographies.

Notes:

1: All financial data is unaudited as at 31 December 2021, being the latest date in respect of which NESF has published financial information