The clean energy fund is planning to use the cash raised to capture the most attractive private renewables and energy transition infrastructure investment opportunities globally
NextEnergy Renewables (NREN) has announced its intentions to float an initial £300m ($411m) on the London Stock Exchange.
The clean energy fund is planning to use the cash raised to capture the most attractive private renewables and energy transition infrastructure investment opportunities globally.
NREN is aiming to increase the global renewable energy supply through established clean energies available today, while exposing itself to “key transformative energy transition infrastructure” such as hydrogen and battery storage to help limit the impacts of climate change and reduce the reliance on fossil fuels.
NREN chair Anne Wade believes the company’s initial public offering (IPO) on the stock exchange offers a “truly unique investment opportunity for the renewable and transition energy investment market”.
She added: “The NREN fund will provide the opportunity to immediately invest through our seed funding into the NextPower III ESG fund, which has a significant portfolio of international solar assets, and in time look to further diversify the portfolio through investment into both private platforms and direct investment through co-invested opportunities.”
NextEnergy Renewables aims to capitalise on “strong growth outlook ahead”
NREN investments will be sourced through NextEnergy Capital Group (NEC) – a global specialist investment manager in the renewable energy sector and part of NextEnergy Group.
The company said it intends to provide investors with “attractive long-term regular income and capital appreciation”. It is understood that the fund intends to raise further investment once it’s listed on the stock exchange to aim for a £2bn ($2.7bn) market capitalisation within three to five years.
Wade claims the investment opportunity set will allow NREN to offer diversity in both asset class and jurisdiction, which “truly differentiates this from other offerings”.
She believes the timing of the fund’s launch is also “very favourable” as it seeks to capitalise on the “supportive market backdrop with a large investible universe and strong growth outlook ahead”.
Renewable energy is forecast to account for the majority of electricity generated globally by 2030, with a total of $13.3tn expected to be invested in new power generation capacity from 2019 to 2050 – equivalent to $416bn per year.
Almost 80% of that figure or $10.3tn will go to renewables, according to NREN. It said this transformation is driven both by the “underlying economic rationale for renewables” and a “seismic shift in stakeholder expectations”, underpinned also by projected growth in hydrogen production, energy storage and electrification of transportation.
NREN claims private investment is expected to account for the majority of new investment capital in the global renewable energy sector – an area the company aims to capitalise on in the coming years.