NextEnergy Capital has announced that it has introduced a Green Finance Framework that allows access to capital at a reduction to market margins due to its sustainable business activities.
The Framework, which benefits both existing and new investors across NEC managed funds, is designed to help NEC lead the transition to clean energy while also enabling the company to secure Green Loans at a reduced margin. Under this Framework, loans issued can take various forms, including public transactions or private placements and senior unsecured or subordinated issuances. The proceeds from these loans are allocated to eligible green projects that provide clear environmepntal benefits, such as renewable energy development, and energy storage systems.
The Framework was given a Second Party Opinion (“SPO”) by Standard & Poor’s (“S&P”), which validates the document and approach of Green Loans. The Framework was awarded a Dark Green rating, the best possible rating awarded by S&P’s Shades of Green Analytical Approach. The SPO highlighted NEC’s actions to integrate nature into investment decisions and detailed supply chain management. Moreover, NextEnergy Group was highlighted for its unique ability to reduce environmental risks across all stages of the solar value chain.
The first fund to benefit from the Framework and SPO was NextPower V ESG, an international OECD private solar+ fund targeting $1.5bn, which secured a five-basis point margin reduction on one of its existing debt facilities.
The NextEnergy Group Environmental, Social, and Governance (“ESG”) team will conduct thorough evaluation and selection processes to guarantee that the net proceeds of green instruments issued under the Framework will be utilised to originate loans that fulfil the eligibility criteria.
The additional benefits of this Framework include alignment with ESG goals, increased transparency and accountability, and support for long-term growth. By adhering to global best practices in sustainable finance methodologies, guidelines, and taxonomies, the Framework provides a transparent set of criteria for increasing capital allocation towards a low-carbon economy.
Giulia Guidi Head of ESG at NextEnergy Capital, commented, “We are thrilled to leverage our Green Finance Framework to continue leading the transition to clean energy. This achievement underscores our commitment to sustainability and our dedication to driving positive environmental impact through responsible investment.
NEC’s Green Finance Framework aligns with the Group’s broader sustainability strategy, which focuses on ensuring capital supports goals for nature and communities. By integrating ESG priorities into its development, investment, and asset management activities, NEC continues to set the standard for responsible investment in the solar energy sector.”
