REG - NextEnergy Solar Fnd - Net Asset Value & Operating Update
21/08/2025 07:00
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RNS Number : 1654W NextEnergy Solar Fund Limited 21 August 2025
LEI: 213800ZPHCBDDSQH5447
21 August 2025
NextEnergy Solar Fund Limited
("NESF" or "the Company")
Unaudited Quarterly Net Asset Value & Operational Update
NextEnergy Solar Fund, a leading specialist investor in solar energy and
energy storage, announces it has today published its Q1 Net Asset Value and
Operational Update for the period ended 30 June 2025.
Key Highlights
Financial:
· Net Asset Value ("NAV") per Ordinary Share of 91.7p (31 March
2025: 95.1p).
· Ordinary Shareholders' NAV of £527.2m (31 March 2025:
£547.4m).
· Gross Asset Value of £1,050m (31 March 2025: £1,062m).
· Financial debt gearing (excluding Preference Shares) of 29.1%
(1) (31 March 2025: 28.1% (1)).
· Total gearing (including Preference Shares) of 48.5% (1) (31
March 2025: 47.3% (1)).
· Weighted average cost of debt (including Preference Shares)
of 4.9% (31 March 2025: 4.9%).
· Weighted average cost of capital of 6.6% (31 March 2025: 6.6%).
· Weighted average discount rate across the portfolio of 8.0% (31
March 2025: 8.0%).
· Reduction in Investment Management fees announced on 19 June
2025, taking effect from the start of the
Company's current financial year (1 April 2025).
Dividend:
· Total dividends declared of 2.10p per Ordinary Share for the Q1 period
ended 30 June 2025 (30 June 2024: 2.10p), in line with full-year dividend
target.
· Full-year dividend target guidance for the year ending 31 March
2026 remains at 8.43p per Ordinary Share (31 March 2025: 8.43p).
· The full year dividend target per Ordinary Share is forecast to be
covered in a range of 1.1x - 1.3x by earnings post-debt amortisation.
· Since inception the Company has declared total Ordinary Share
dividends of £407m.
· As at 20 August 2025, the Company offers an attractive dividend
yield of c.11%.
Portfolio & Generation:
· 101 (2) operating assets (31 March 2025: 101 (2)).
· Total installed capacity of 937MW (3) (31 March 2025: 937MW (3)).
· Remaining weighted asset life of 24.5 years (31 March 2025: 24.8
years).
· During the quarter, the portfolio benefitted from irradiation in
the UK being 18.9% above budget, resulting in electricity generation being
7.6% (4) above budget including DNO outages. This led to an uplift to NAV
per Ordinary share of 0.5p.
Share Buyback Programme:
· As at 30 June 2025, the Company had purchased 15,621,142 Ordinary
Shares for a total consideration of
£11.5m through its up to £20m Share Buyback Programme, producing
a total aggregate NAV uplift of 0.5p per Ordinary Share (0.0p during the
period). All purchased Ordinary Shares are currently being held in the
Company's treasury account.
Capital Recycling Programme:
· The remaining 100MW of the Programme is progressing through a
competitive sales process to third-party buyers. The Company will publish
further updates about Phase IV of the Programme in due course.
· As at 20 August 2025, the Capital Recycling Programme has:
o Sold three assets totalling c.145MW of capacity from the 245MW Programme.
o Raised £72.5m total capital.
o Added a total estimated Net Asset Value uplift of 2.76p per Ordinary
Share.
Capital Structure:
· As at 30 June 2025:
Debt facilities Original size (£m) Amount outstanding (£m)
Long-term amortising debt £212.5m £145.6m
Short-term RCF £205m £152.9m
Total financial debt £298.5m
Preference shares £200m £198.5m
Total debt £497.0m (1)
· Short-term RCF drawn of £152.9m (31 March 2025: £144.9m).
· Long-term amortising debt paid down by £63.9m (31 March 2025:
£62.2m). The remaining outstanding long-term debt of £145.6m is on track
to fully amortise in line with the remaining subsidy life of the portfolio's
government subsidies.
· Of the Company's total debt of £497.0m (1):
o 69% remains at a fixed rate of interest (including the Preference Shares).
o 31% remains at a floating rate of interest via the short-term RCF.
ESG & Sustainability:
· The Company continued to maintain its Article 9 Fund classification
under the EU Sustainable Finance Disclosure Regulation and EU Taxonomy
Regulation.
Paul Le Page, Interim Chairman of NextEnergy Solar Fund Limited, commented:
"NextEnergy Solar Fund's high-quality asset base continued to demonstrate
resilience in the period, despite a challenging macroeconomic backdrop and a
fall in long-term UK power price assumptions that reduced the NAV. This
quarter, the portfolio has delivered above budgeted electricity generation and
benefitted from additional revenues as a result. The Board reaffirms its
target dividend guidance of 8.43p per Ordinary Share for the financial year
ending 31 March 2026 remains fully covered by operational cash flows.
As announced in June and in line with the Company's long-term efforts to
narrow the discount, the investment management fee was reduced, further
aligning interests between the investment manager and shareholders. The
Board is focused on protecting and enhancing shareholder returns, while
reinforcing the strong foundation on which the Company continues to build. The
Board remains committed to reviewing all options available to maximise value
for shareholders."
Ross Grier, Chief Investment Officer of NextEnergy Capital said:
"The primary driver for the reduction in NAV during the period was a material
change to long-term projected UK power price assumptions provided by
NextEnergy Solar Fund's leading independent energy market consultants. This
quarter benefitted from favourable generating conditions, which the NextEnergy
Solar Fund portfolio was able to harness, leading to electricity generation in
the UK at 7.6% (4) above-budget after DNO outages, providing an uplift to NAV
per Ordinary Share of 0.5p.
NextEnergy Solar Fund continues to offer an attractive return for its
shareholders and is proactively managing its portfolio to maximise revenues.
The Board and the Investment Adviser continue to explore opportunities to add
NAV growth to the platform, whilst also prioritising the reduction in both
long-term and short-term debt.(")
Q1 Quarterly NAV Bridge Breakdown:
NAV p/share NAV
At 31 March 2025 95.1p £547.4m
Time value 2.2p £12.6m
Project actuals 0.5p £3.0m
Solar power price forecasts (2.2p) (£12.4m)
BESS revenue forecasts (0.9p) (£5.1m)
Changes in short-term inflation 0.6p £3.2m
Revaluation of NextPower III LP investment + co-investments 0.0p £0.1m
Cash dividends paid (2.1p) (£12.1m)
Share buyback 0.0p (£0.3m)
Capital movements (no net NAV impact)
- New assets at cost 0.5p £2.7m
- RCF drawdown (1.4p) (£8.0m)
- Proceeds from RCF net of cash used 0.9p £5.3m
Other movements in residual value (1.5p) (£9.2m)
At 31 March 2025 91.7p £527.2m
The movement in the NAV over the period was driven primarily by the following
factors.
NAV Accretive:
· Time Value: The time value reflects the change in the valuation as
a result of changing the valuation date, prior to adjusting for any outflows
of the Company. The increase in value is attributable to the unwinding of
the discount applied to cash flows for the period when calculating the
discounted cash flow.
· Project Actuals: The project actuals figure was driven by
generation performance, higher irradiation in the UK led to electricity
generation being 7.6% (4) above budget including DNO outages. This led to an
uplift to NAV per Ordinary share of 0.5p.
· Inflation Forecasts: A slight increase in short-term inflation
assumptions from 2026 to 2029. The Company continues to take a consistent
approach to its inflation assumptions, using external third-party, independent
inflation data from HM Treasury Forecasts and long-term implied rates from the
Bank of England for its UK assets. For international assets, IMF forecasts are
used. Long-term assumptions are aligned with market consensus including
transition to CPI from 2030. See breakdown of UK inflation assumptions
below.
· NextPower III LP Revaluation Including Co-investments: Movements in
the fair value of the holding in NextPower III LP and the two co-investments
reflecting operational and macroeconomic updates.
NAV Deductive:
· Cash Dividends Paid: The dividends paid during the period, including
both Ordinary and Preference Share dividend payments.
· Power Price Forecasts: Driven by a material reduction in power
price forecasts. The power price forecasts are produced externally by four
of the market leading power price consultants.
· Other Residual Value Movements: Includes changes in FX rates, fund
operating expenses, capital expenditure provisions for asset health, such as
repowering inverters and module replacements, and other non-material
movements.
Inflation Rate (UK RPI) Assumptions
Calendar Year 30 June 2025 31 March 2025
2025/26 3.90% 3.80%
2026/27 3.30% 3.10%
2027/28 3.50% 3.30%
2028/29 3.50% 3.40%
2029/30 3.10% 3.00%
2030/31 onwards unchanged 2.25%
Discount Rate Assumptions
30 June 2025 31 March 2025
Solar UK unlevered unchanged 7.50%
UK levered unchanged 8.20% - 8.50%
Italy unlevered (5) unchanged 9.00%
Subsidy-free (uncontracted) (6) unchanged 8.50%
Life extensions (7) unchanged 8.50% - 9.50%
Energy Storage Uncontracted unchanged 10.00%
Contracted unchanged 7.00%
Power Curve Assumptions
30 June 2025: Blended Power Curves (Capture Price)
For the UK portfolio, the Company uses multiple sources for UK power price
forecasts. Where power has been sold at a fixed price under a Power Purchase
Agreement ("PPA") (a hedge), these known prices are used. For periods where no
PPA hedge is in place, short-term market forward prices are used. After two
years, the Company integrates a rolling blended average of four leading
independent energy market consultants' long-term central case projections.
For the Italian portfolio, PPAs are used in the forecast where these have been
secured. In the absence of hedges, a leading independent energy market
consultant's long-term projections are used to derive the power curve adopted
in the valuation.
Power Purchase Agreement Strategy
c.50% of NextEnergy Solar Fund's revenues come from RPI-linked
government-backed subsidies. The remaining c.50% of revenues are secured
through NextEnergy Solar Fund's PPA strategy where the Company secures PPAs
over a rolling 36-month period. This proactive risk mitigation helps secure
and underpin both dividend commitments and dividend cover whilst reducing
volatility and increasing the visibility of cash flows.
Forecasted Total Revenue Breakdown (8):
Available Capital
Out of the total £205m immediate Revolving Credit Facility available to the
Company, c.£52.1m remained undrawn and available for deployment as at 30 June
2025. The Company had c.£5.1m immediate cash balance available at the
Company level as at 30 June 2025 (this is separate from the cash currently
held at Holdco/SPV level).
Future Pipeline
The Company owns the project rights for, or has exclusivity over, a carefully
selected £500m pipeline of development projects in utility-scale solar
(>400MW UK & OECD target markets) and UK energy storage (>250MW UK
BESS). In addition to this proprietary £500m pipeline, the Company benefits
from the right of first offer on relevant assets across both the NextEnergy
Capital and Starlight development pipelines as and when projects in that
pipeline have progressed to the necessary stage. The Company will evaluate
future investments into the pipeline relative to the returns available from
all alternative capital uses, including paying down debt and additional share
buybacks.
Footnotes:
1. Excludes short and long-term debt at NextPower III LP (NPIII), Agenor
and Santarém (in which the Company has co-invested). At 30 June 2025 the
aggregate debt proportionate to the Company's investments in those entities
was £25.4m (31 March 2025: £23.5m).
2. Excluding the $50m investment into private equity vehicle (NPIII).
3. On a look-through MW equivalent basis, this includes investment NPIII,
where it owns 6.21%. Ownership in the international co-investments (13.6% of
Santarém (210MW in Portugal) and 24.5% of Agenor (50MW in Spain)), and 70%
ownership of the Company's standalone energy storage asset Camilla through its
joint venture partnership.
4. UK portfolio includes both ground mount and rooftop assets, and
excludes standalone energy storage asset, co-investments and investment in
NPIII
5. Unlevered discount rate for Italian operating assets implying 1.50%
country risk premium to 7.50%.
6. Unlevered discount rate for subsidy-free uncontracted operating
assets implying 1.0% risk premium to 7.50%.
7. 1.0% risk premium added to UK unlevered (7.50%) and UK levered assets
(8.20% - 8.50%) for cash flows after 30 years where leases have been extended.
8. As at 30 June 2025, fixed revenues include subsidy income, figures are
stated to the nearest 0.1% which may lead to rounding differences. NextEnergy
Solar Fund minimises its merchant exposure through its active rolling PPA
Programme. The Programme locks in PPAs in the liquid market to ensure maximum
contracted revenues are achieved. Fixed prices (£/MWh) covered 83% (776MW) of
the total portfolio as at 30 June 2025. Excludes Solis portfolio.
For further information:
NextEnergy Capital
020 3746 0700
Michael Bonte-Friedheim ir@nextenergysolarfund.com (mailto:ir@nextenergysolarfund.com)
Ross Grier
Stephen Rosser
Peter Hamid (Investor Relations)
020 7653 4000
RBC Capital Markets
Matthew Coakes
Kathryn Deegan
020 7908 6000
Cavendish
Robert Peel
020 7379 5151
H/Advisors Maitland
Neil Bennett
Finlay Donaldson
01481 742642
Ocorian Administration (Guernsey) Limited
Kevin Smith
Notes to Editors (1):
About NextEnergy Solar Fund
NextEnergy Solar Fund is a specialist solar energy and energy storage
investment company that is listed on the Main Market of the London Stock
Exchange.
NextEnergy Solar Fund'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.
As at 30 June 2025, the Company had an unaudited gross asset value of
£1,050m. For further information please visit www.nextenergysolarfund.com
(http://nextenergysolarfund.com/)
Article 9 Fund
NextEnergy Solar Fund is classified under Article 9 of the EU Sustainable
Finance Disclosure Regulation and EU Taxonomy Regulation. NextEnergy Solar
Fund's sustainability-related disclosures in the financial services sector are
in accordance with Regulation (EU) 2019/2088 and can be accessed on the ESG
section of both the NextEnergy Solar Fund and NextEnergy Capital websites.
About NextEnergy Group
NextEnergy Solar Fund 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 which now employs over 400
professionals. Since its inception, NextEnergy Group 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 18 years of specialist solar expertise
having invested in over 530 individual solar plants across the world.
NextEnergy Capital currently manages four institutional funds with a total
capacity in excess of 3GW+ and has assets under management of $4.5bn. More
information is available at www.nextenergycapital.com
(https://www.nextenergycapital.com/)
· 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 1,600
utility-scale solar power plants with an installed capacity in excess of
3.5GW. More information is available at www.wise-energy.com
(https://www.wise-energy.com/)
· Starlight: has developed over 100 utility-scale projects
internationally and continues to progress a large pipeline of c.11.5W of both
green and brownfield project developments across global geographies. More
information is available at www.starlight-energy.com
(https://www.starlight-energy.com/)
Notes:
(1:) All financial data is unaudited at 30 June 2025, being the latest date in
respect of which NextEnergy Solar Fund has published financial information.
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