NextEnergy Solar Fund Ltd (LSE:NESF) has raised its target dividend by 5% for the current financial year ending 31 March 2023, its eighth consecutive dividend increase.
The specialist solar power renewable energy investment company said its board approved a target dividend of 7.52p per share, compared to 7.16p per share in the past year.
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NextEnergy said the increase, which is above the 4.1% calculated retail price index rise for the 2021 calendar year, is supported by the high degree of visibility of the company's revenues for the year.
Its active power price hedging strategy has locked in circa 80% of budgeted generation at a fixed price for the 2023 financial year, with RPI-linked increase in revenues from renewable obligation certificates that cover around 60% of total revenues, and the company’s previous operational track record.
NESF noted that it has declared a total of close to £251mln pre-scrip dividends since its initial public offer in 2017, achieving all its dividend targets and with the dividend covered throughout.
Kevin Lyon, chairman of the company, said: “We are particularly pleased, in the current macroeconomic environment, to announce a dividend increase well in excess of RPI.
“This target dividend reflects the strong position of the company, its secured revenue flows, strong operational asset base and attractive growth prospects. It also demonstrates the resilience of the renewables sector, particularly solar and battery storage, and underlines the fact that NextEnergy Solar Fund offers investors an attractive dividend yield."