NextEnergy Solar Regulatory News (NESF)

11 May 2020

NextEnergy Solar Fund Limited

("NESF" or "the Company")

Unaudited Net Asset Value Update and Interim Dividend Announcement

NextEnergy Solar Fund announces its unaudited Net Asset Value ("NAV") as at 31 March 2020.

The Company's unaudited NAV as at 31 March 2020 was £579m (31 December 2019: £620m), resulting in an unaudited NAV per ordinary share of 99.0p (31 December 2019: 106.1p per share).

The reduction in the unaudited NAV per ordinary share primarily reflects the adoption of the most recent forward power curves released by the Company's two independent market forecasters. These forward power curves reflect a substantial reduction in power prices in the short- to medium-term, and incorporate an anticipated reduction in demand for electricity and a corresponding decrease in energy-related commodity prices as a result of the effects of the COVID-19 pandemic. 

Compared to December 2019, the blended curve used by the Company has declined on average by 16.9% over the next five years, including a 21.2% reduction over 2020 and 2021 and by 5.0% from 2025 until 2050. The blended curve corresponds to an average solar capture price of c.£39.9 per MWh for the period 2020-2024 and £46.8 per MWh for the period 2025-2050 (in 2020 prices). This downward shift in the blended curve resulted in a negative impact on NAV per ordinary share of approximately 6.5p per share.

NESF has reduced its unlevered discount rate from 6.50% to 6.25% for the first 30 years of operation and increased the unlevered discount rate for the period thereafter to 7.25% for each operating subsidised solar project located in the UK. The change in discount rates is driven by the observed increased market valuations of operating solar plants in the UK as well as the reduction in UK interest rates. The risk premium on Italian operating assets and UK subsidy-free assets remains unchanged.

The above NAV numbers are unaudited and the Company will publish an audited NAV as at 31 March 2020 as part of its final results for the year.

Interim Dividend

The Company is pleased to announce an interim dividend of 1.7175 pence per Ordinary Share for the quarter ending 31 March 2020. The interim dividend of 1.7175 pence will be paid on 30 June 2020 to shareholders on the register as at the close of business on 22 May 2020. The ex-dividend date is 21 May 2020.

The Company will also be offering shareholders a scrip dividend alternative to this interim dividend as detailed in the Scrip Circular dated 8 August 2019, a copy of which can be viewed and / or downloaded from 'Circulars' in the Investor Relations part of the NESF website (nextenergysolarfund.com). The Scrip Share reference price will be announced on 28 May 2020, with elections to be made by 8 June 2020.

For further information:

Notes to Editors[i]:

A constituent of the FTSE 250 Index, NextEnergy Solar Fund ("NESF") is a renewable energy infrastructure investment company that invests primarily in operating solar power plants in the UK (it may invest up to 15% of its gross assets in other OECD countries). The Company is committed to ESG principles and responsible investment and makes a meaningful contribution to reducing CO2 emissions through the generation of clean solar power. NESF has been designated a Guernsey Green Fund by the Guernsey Financial Services Commission and has been awarded the London Stock Exchange's Green Economy Mark.

NESF has a diversified portfolio comprising 90 operating solar assets, primarily on agricultural, industrial and commercial sites, with a combined installed power capacity in excess of 755MW. As at 31 March 2020, the Company has gross assets of £993 million, of which 89% is invested in the UK, and net assets of £579 million. The majority of long-term cash flows from its investments are inflation-linked.

NESF's investment objective is to provide ordinary shareholders with a sustainable and attractive dividend that increases in line with RPI over the long term, while delivering an element of capital growth through reinvesting net cash generated in excess of the target dividend. The dividend is payable quarterly and the Company has announced a total dividend for the year to 31 March 2020 of 6.87p per ordinary share. 

NESF is differentiated by its access to NextEnergy Capital Group ("NEC Group"), its Investment Manager, which has a strong track record in sourcing, acquiring and managing operating solar assets. WiseEnergy is NEC Group's specialist operating asset management division, which since its founding has provided operating asset management, monitoring, technical due diligence and other services to over 1,300 utility-scale solar power plants with an installed capacity in excess of 1.6 GW.

Further information on NESF, NEC Group and WiseEnergy is available at nextenergysolarfund.com, nextenergycapital.com and wise-energy.eu.

[1] Note: All data is unaudited as at 31 March 2020, being the latest date in respect of which NESF has published financial information.