NextEnergy Solar Fund sees NAV growth – EQ Mag
The results account for the UK windfall tax on low-carbon energy producers
NextEnergy Solar Fund has seen its NAV per share grow between March and September, driven in part by rising power prices.
According to its interim financial results, the company’s NAV per share increased from 113.5p recorded on 31 March 2022 to 122.9p at 30 September 2022.
The main contributors to the increase were a rise in power price forecast assumptions (+12.0p per ordinary share) driven by an uplift in the short to medium term power forecasts provided by the company’s three independent advisers and PPAs.
Additionally, updated short-term inflation assumptions (+7.5p per ordinary share), operating result net distributions to fund (+3.0p per ordinary share) and the upward revaluation of the NextPower III ESG (“NPIII ESG”) investment (+0.9p per ordinary share) all helped increase its NAV.
The company’s NAV takes account of the potential impact of the proposed UK windfall tax on low-carbon electricity generators in the UK, which will see a surcharge of 45% on in-scope revenues exceeding £75/MWh.
The windfall tax will not be applied to the company’s government subsidised revenues, which makes up around 50% of the company’s total revenue profile, it will also not be applicable to revenues generated from energy storage assets, an area where the company is strategically positioned with a secured pipeline to rapidly expand and diversify its future revenue sources.
Kevin Lyon, chairman of NextEnergy Solar Fund, commented: “Against clear residual headwinds from a volatile domestic energy market, NESF has delivered positive results, generating steady revenue and a reliable and attractive dividend for its shareholders from generation that supports the transition to a low cost, low carbon energy system.
“The company remains supportive of a UK windfall tax on extraordinary and excess profits brought about by external factors including the war in Ukraine. We believe that investment in renewable energy is key to solving our nations’ current cost of living crisis and long-term energy security, decarbonisation and cost challenges.
“We would therefore make the case for a consistent approach to the encouragement of reinvestment of proceeds into new projects through associated tax relief so that equality is created with the oil and gas sector. We believe that our NAV valuation approach largely incorporates the potential impact on the company of the windfall tax that has recently been announced.”
Source: renews
