NESF agrees double solar deal in £26.4m outlay

The move comes days after proposals to allow the fund to invest up to 15% of its gross asset value in OECD countries outside the UK were approved at its AGM.

The UK’s NextEnergy Solar Fund has added a further 21.7MW to its portfolio following a deal worth £26.4 million ($34.2 million; €28.4 million).

The listed vehicle bought the 8.1MW Bay Farm project and the 13.6MW Honnington site, both from developer Switch2Renewable. The assets were connected to the grid in 2014, ensuring they are eligible for the 1.6 Renewables Obligation certificates.

The latest acquisitions by the fund increase its operating portfolio to 505MW across 50 assets and with an investment value of £581 million. The figures do not take into account some 59.8MW of capacity secured by NESF in June, encompassing four projects yet to begin construction and which will be the fund’s first unsubsidised site. NESF said at the time these will become “financially viable” to be built between the next 12 and 24 months.

NESF’s move for the Bay Farm and Honnington sites comes despite concerns voiced by the vehicle two months ago that “increased interest by new market entrants and existing financial investors” is contributing to price pressures on operational sites in the UK. A call to shareholders to allow NESF to invest up to 15 percent of its gross asset value in solar projects in OECD countries outside the UK was approved last week.

This strategy mirrors the strategy undertaken by Foresight Solar Fund, one of NESF’s competitors and the owner of 470MW of solar in the UK. The fund reported in its interim results two weeks ago it is “actively looking” for investments outside the UK, highlighting locations such as Australia and the US as countries offering “considerable scope for value-accretive growth”.