Bluefield Solar Inc. - Interim Results to 31 December 2023
28/02/2024 07:00
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RNS Number : 6932E Bluefield Solar Income Fund Limited 28 February 2024
28 February 2024
Bluefield Solar Income Fund Limited
('Bluefield Solar' or the 'Company')
Interim Report and Unaudited Condensed Interim Financial Statements
for the six months ended 31 December 2023
Bluefield Solar (LON: BSIF), the London listed UK income fund focused
primarily on acquiring and managing solar energy assets, is pleased to
announce its Interim Report for the six months ended 31 December 2023.
The Interim Report has been submitted to the National Storage Mechanism and
will shortly be available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism)
Highlights
As at 31 December 2023/ 30 June 2023
Net Asset Value (NAV) Dividend Target per Share
£831.3m £854.2m 8.80pps 8.60pps (actual)
NAV per share
135.95p 139.70p
Six month period to 31 December 2023 / 31 December 2022
Underlying Earnings(1) Total Shareholder Return(2)
(pre amortisation of debt) 2.50% 6.98%
£43.9m £51.4m
Total Return in year(3)
Underlying Earnings per share(1) 0.47% 4.38%
(pre amortisation of debt)
7.19p 8.41p Total return to Shareholders since IPO
110.14% 101.59%
Underlying Earnings per share available for distribution(1)
(post amortisation of debt)
3.57p 6.26p
Environmental, Social and Governance (ESG)
ESG KPIs
Ø Forecast estimated annual CO2e savings of 176,000 tonnes (June 2023:
173,000 tonnes)
Ø Approximately 315,000 homes to be powered with renewable energy ⁴ (June
2023: 288,000)
Ø Payments of approximately £290,000 to community benefit schemes⁵ (June
2023: £287,000)⁶
Construction and Development Pipeline
· 93 MW under construction
· 778 MW approved 1.53 GW
· 305 MW in planning (968 MW Solar, 563 MW battery)
· 355 MW potential capacity
1. Underlying earnings is an alternative performance measure employed by the
Company to provide insight to the Shareholders by linking the underlying
financial performance of the operational projects to the dividends declared
and paid by the Company. Further detail is provided below.
2. Total Shareholder Return is based on share price movement and dividends
paid in the period. It is defined in the Alternative Performance Measure
appendix.
3. Total Return is based on the NAV movement and dividends paid in the period.
It is defined in the Alternative Performance Measure appendix.
4. For a year, based on forecasted annual generation.
5. During the 2023/24 financial year.
6. Total community benefit payments relating to the FY 22-23 were
approximately £287,000, updated from £253,000 (as presented in the 2023
Annual Report & Financial Statements).
Results Summary:
Six months ended Six months ended 31 December 2022
31 December 2023
Total operating income £5,077,465 £38,845,159
Total comprehensive income before tax £3,991,019 £37,642,084
Total underlying earnings(1) £43,936,028 £51,438,238
Earnings per share (per below) 0.65p 6.16p
Underlying EPS available for distribution(2) 3.57p 6.26p
Underlying EPS brought forward(3) 9.53p 3.39p
Total underlying EPS available for distribution(4) 11.46p 9.65p
1(st) interim dividend 2.20p 2.10p
NAV per share 135.95p 142.40p
Share Price as at 31 December 118.6p 136.0p
Total Return(5) 0.47% 4.38%
Total Shareholder Return(6) 2.50% 6.98%
Total Shareholder Return since inception(7) 110.14% 101.59%
Dividends per share paid since inception 74.19p 65.59p
1. Underlying earnings is an alternative performance measure employed by the
Company to provide insight to the Shareholders by linking the underlying
financial performance of the operational projects to the dividends declared
and paid by the Company. Further detail is provided below.
2. Underlying EPS is calculated using underlying earnings available for
distribution divided by the weighted average number of shares in issue through
the period.
3. Underlying EPS brought forward is calculated using the number of shares
in issue.
4. Total underlying EPS available for distribution includes £10m of RCF
repaid in the period to 31 December 2023.
5. Total Return is based on NAV per share movement and dividends paid in the
period.
6. Total Shareholder Return is based on share price movement and dividends
paid in the period.
7. Total Shareholder Return since inception is based on share price movement
and dividends paid since the IPO.
John Scott, Chair of Bluefield Solar, said:
"I am pleased to present another robust set of results which reflect continued
operational progress across the Company's portfolio. I reiterate our full year
guidance of dividend distributions for the financial year of not less than
8.8pps (2022/23: 8.6pps), which we expect to be covered approximately two
times by earnings, net of debt amortisation and the EGL. Based on yesterday's
closing share price, this provides shareholders with a yield of over 8.5%. The
position of the Company today is further enhanced by its high levels of
regulated indexed revenues, complemented by high fixed power sales contracts,
a large development pipeline, a defensive capital structure and a robust NAV.
"In the meantime, the Company is delighted to have formed a Strategic
Partnership with GLIL, providing a partner with whom we can co-invest for the
long term, spreading our capital resources over a greater range of investors.
"Despite these compelling attributes, it has been disappointing to note the
Company's share price discount to NAV widen, at times exceeding 25%. Meanwhile
ample transactional evidence adds further weight to the credibility of the
Company's valuation, which is in stark contrast to the share price. We remain
entirely confident that Bluefield Solar is well placed to perform the task it
has executed so well for over a decade, playing a significant role in the
continuing development programme that is so clearly required to expand the
UK's supplies of indigenously produced green electricity, while creating
compelling growth and income for shareholders, with a total return of 110.14%
since IPO."
Analyst presentation
A virtual meeting for analysts will be hosted by James Armstrong and Neil Wood
of Bluefield Partners LLP at 09:30am today, 28 February 2024. For details,
please contact Buchanan on BSIF@buchanan.uk.com.
A copy of the presentation is available via the Company's website at
https://bluefieldsif.com/ and an audio webcast of the presentation will also
be made available after 9.30am today.
For further information:
Bluefield Partners LLP (Company Investment Adviser) Tel: +44 (0) 20 7078 0020
James Armstrong / Neil Wood / Giovanni Terranova www.bluefieldllp.com (http://www.bluefieldllp.com/)
Deutsche Numis (Company Broker) Tel: +44 (0) 20 7260 1000
Tod Davis / David Benda / Matt Goss www.dbnumis.com (http://www.numis.com/)
Ocorian Tel: +44 (0) 1481 742 742
(Company Secretary & Administrator) www.ocorian.com (http://www.ocorian.com)
Chezi Hanford
Media enquiries: Tel: +44 (0) 20 7466 5000
Buchanan (PR Adviser) www.buchanancomms.co.uk
Henry Harrison-Topham / Henry Wilson BSIF@buchanan.uk.com (mailto:BSIF@buchanan.uk.com)
Notes to Editors
About Bluefield Solar
Bluefield Solar is a London listed income fund focused primarily on acquiring
and managing solar energy assets. Not less than 75% of the Company's gross
assets will be invested into UK solar assets. The Company can also invest up
to 25% of its gross assets into other technologies, such as wind and storage.
Bluefield Solar owns and operates a UK portfolio of 834MW, comprising 776MW of
solar and 58MW of onshore wind.
Further information can be viewed at www.bluefieldsif.com
About Bluefield Partners
Bluefield Partners LLP was established in 2009 and is an investment adviser to
companies and funds investing in renewable energy infrastructure. It has a
proven record in the selection, acquisition and supervision of large-scale
energy assets in the UK and Europe. The team has been involved in over £6.5
billion renewable funds and/or transactions in both the UK and Europe,
including over £1 billion in the UK since December 2011.
Bluefield Partners LLP has led the acquisitions of, and currently advises on,
over 100 UK based solar PV assets that are agriculturally, commercially or
industrially situated. Based in its London office, it is supported by a
dedicated and experienced team of investment, legal and portfolio
executives. Bluefield Partners LLP was appointed Investment Adviser to
Bluefield Solar in June 2013.
Corporate Summary
Investment objective
The investment objective of the Company is to provide Shareholders with an
attractive return, principally in the form of quarterly income distributions,
by being invested primarily in solar energy assets located in the UK. The
Company also has the ability to invest a minority of its share capital into
wind, hydro and energy storage assets.
Structure
The Company is a non-cellular company limited by shares incorporated in
Guernsey under the Law on 29 May 2013. The Company's registration number is
56708, and it is regulated by the GFSC as a registered closed-ended collective
investment scheme and it is accredited as a Green Fund after successful
application to the GFSC under the Guernsey Green Fund Rules on 16 April 2019.
The Company's Ordinary Shares were admitted to the Premium Segment of the
Official List and to trading on the Main Market of the LSE following its IPO
on 12 July 2013. The issued capital during the year comprises the Company's
Ordinary Shares denominated in Sterling.
The Company makes its investments via its wholly owned subsidiary Bluefield
Renewables 1 Limited (BR1) and has the ability to use long term and short term
debt at the holding company level, as well as having long term, non-recourse
debt at the SPV level.
Investment Adviser
The Investment Adviser to the Company during the period was Bluefield Partners
LLP which is authorised and regulated by the UK FCA under the number 507508.
In May 2015 Bluefield Services Limited (BSL), a company with the same
ownership as the Investment Adviser, commenced providing asset management
services to the investment SPVs held by the UK limited company parent, which
changed from Bluefield SIF Investments Limited (BSIFIL) to Bluefield
Renewables 1 Limited (BR1) in May 2022 to facilitate arrangement of the new
Revolving Credit Facility ("RCF"). In August 2017 Bluefield Operations Limited
(BOL), a company with the same ownership as the Investment Adviser, commenced
providing operation and maintenance services to the Company and provides
services to approximately 80% of the capacity of the investment portfolio held
by the Company as at period end.
In December 2020, Bluefield Renewables Development Limited (BRD), a company
with the same ownership as the Investment Adviser, commenced providing BSIF
with new build development opportunities in addition to arrangements in place
with the Company's other development partners.
In October 2023, Bluefield Construction Management Limited (BCM), a company
with the same ownership as the investment adviser, commenced providing BSIF
with construction management services on the new build portfolio.
Please refer below for the details of Company's corporate structure.
Chair's Statement
Introduction
The six months to 31 December 2023 ("H1 23/24", or the "Period") have seen a
further half year of strong results for your Company. Although spot power
prices have softened recently, BSIF was the beneficiary of our Investment
Adviser's strategy of fixing prices up to 36 months in advance, with the
result that, despite irradiation levels some 13% below those experienced in
the second half of calendar 2022, our revenues for the Period grew as compared
with the previous year. West Raynham (at 50MW our second largest generating
asset) was unavailable for the first three months of the Period, resulting in
an additional constraint on power production.
The Company continues to work on its extensive development programme; as at 31
December 2023 we had 660MW under active development and 778MW in
pre-construction, comprising a mixture of solar PV and battery storage
projects, as well as some wind projects. Our ability to convert this pipeline
into electricity generating assets is significantly restricted by current
conditions in the capital markets, which make it difficult for us - and most
participants in the renewable energy sector - to raise additional equity. In
response to this constraint, the Company has entered into a Strategic
Partnership with GLIL Infrastructure ("GLIL"), covered in more detail below.
After the Period end, we saw a significant widening in the discount to Net
Asset Value ("NAV") at which BSIF's shares trade and this prompted the Board
to announce a share buyback programme, to which an initial £20 million has
been allocated. This will commence once the Company is outside the current
closed period, which ends with the publication of this Interim Report.
The main features of the Period under review are:
· The Company announced signing a Memorandum of Understanding
('MOU') with GLIL Infrastructure;
· Work on the Company's development pipeline continued apace, with
planning consents being secured on 137MW of solar projects and 90MW of battery
projects, while the wider pipeline grew to approximately 968MW of solar and
563MW of battery storage;
· The Group reduced the outstanding balance on its revolving credit
facility (RCF) by £10 million, resulting in a loan balance of £167 million
as at 31 December 2023;
· At the November AGM, BSIF's shareholders voted overwhelmingly in
favour of the continuation of the Company for a further five years;
· The NAV per share decreased modestly, to 135.95pps as at 31
December 2023 (30 June 2023: 139.70pps);
· BSIF's closing share price on 31 December 2023 was 13% below the
Directors' Valuation, resulting in a discount to NAV consistent with FY22/23.
(30 June 2023: 14%);
· The dividend target for FY23/24 has been set at not less than
8.80pps, up from the 8.60pps dividends paid in respect of FY 22/23;
· Consistent with that target, a first interim dividend for FY23/24
of 2.20pps was declared on 26 January 2024;
· Following the end of the Period, the first phase of the GLIL
Strategic Partnership was successfully completed, with an equity investment by
BSIF of £20 million and £200 million from GLIL to fund the acquisition of a
247MW portfolio from Lightsource bp;
· Post Period end one solar project of 50MW received planning
permission.
At the end of 2023, the Group's total outstanding debt stood at £577 million,
and its leverage was 41% (31 December 2022: £531.1 million and leverage was
38%).
GLIL Infrastructure ("GLIL")
GLIL, a partnership of UK pension funds, invests into core UK infrastructure.
It invests on behalf of Local Pensions Partnership Investments, Greater
Manchester Pension Fund, Merseyside Pension Fund, West Yorkshire Pension Fund
and Nest, and has a £3 billion portfolio of infrastructure assets.
In December 2023, BSIF and GLIL announced a Strategic Partnership, consisting
of three phases. The first of these saw GLIL and BSIF acquire together a 247MW
UK solar portfolio of Lightsource bp, with the transaction completing in
January 2024. Phase 2 comprises a provisional agreement for GLIL to acquire a
50% stake in a portfolio of more than 100MW of BSIF's existing solar assets at
a price which is in line with the Company's existing valuation. The proceeds
of this partial sale will be used, in part, to fund BSIF's participation in
the rollout of its development pipeline and, as appropriate, to reduce debt.
In phase 3, Bluefield Solar and GLIL intend via the Strategic Partnership to
commit capital jointly to a selection of the Company's development pipeline,
assuming market conditions are supportive. The identified development assets
are expected to be grid connected over the next two to three years.
Underlying Earnings and Dividend Income
The Underlying Earnings for the Period, before amortisation of long-term
finance, were £43.9m, or 7.19pps, and underlying earnings for distribution,
post debt repayments of £22.1m (3.61pps), were £21.8m (3.57pps) (December
2022: £38.2m). Including carried forward earnings from June 2023 of 9.53pps,
and the £10m of RCF repaid in the Period (-1.64pps), the total funds
available for distribution as at 31 December 2023 were 11.46pps (December
2022: 9.65pps).
From an operational perspective, the Company's portfolio had a more difficult
half year, with solar generation c.10% lower than in the second half of 2022,
caused by a combination of significantly lower irradiation and shortages of
key components, which reduced plant availability. The Company's strong
financial performance reflected the favourable power sales contracts struck at
a time of elevated UK wholesale power prices.
Valuation and Discount Rate
The political turmoil seen in the United Kingdom which came to a head in 2022
eased with the appointment of Rishi Sunak as Prime Minister at the end of the
year and a more coherent series of measures relating to energy policy emerged.
Inflation eased, but sterling interest rates remained at levels which seemed
very high by comparison with the near zero environment of the previous decade;
Base Rate stood at 5.25% at year end and the fifteen year Gilt rate was
approximately 4%.
The Investment Adviser continues to see strong demand in the secondary market
for operating solar portfolios. Recent prices seen in the market range between
£1.20m and £1.45m/MW. The first weeks of 2024 have seen close to 1GW of UK
solar capacity change hands at prices which imply valuation metrics comparable
to or higher than those currently employed by BSIF.
Higher interest rates and the inclusion of onshore wind within BSIF's
portfolio caused the Board to increase the portfolio discount rate from the
7.25% used in the December 2022 Directors' Valuation; this was raised to 8%
for the valuations at the end of June, September and December 2023. As at 31
December 2023, the enterprise value of the Company's operational portfolio is
£1,149m (c.£ 1.28m/MW for the solar assets vs. £1.35m/MW in June 2023).
Inflation
In late 2023, inflation in the UK started to ease, though staying stubbornly
at levels well above the UK's inflation target of 2%, with December 2023's
number standing at 5.3%. At the first Monetary Policy Committee meeting of
2024 the Bank of England opted to maintain Base Rate at 5.25%, suggesting that
the fight to tame price rises is not yet over. Since a large part of our
income grows with inflation, resulting from the indexation provisions in our
regulated revenues, increases in RPI have the effect of boosting both our
earnings and the valuation of our assets.
Reflecting the latest economic forecasts, as well as the transition from RPI
to CPIH post 2030, inflation assumptions supporting the Directors' Valuation
are 3.5% in 2024 (unchanged from June 2023) and thereafter 3.0% until 2029,
before dropping to 2.25%.
Power Prices
Russia's war in Ukraine continues to affect energy markets, but as this
conflict continues the world adapts, seeking fresh sources of energy, new
methods and routes for its transportation, as well as alternative suppliers.
Israel's war in Gaza, which commenced on 7 October 2023, initially had limited
direct effect on energy markets, but of late that conflict has led to the
effective closure of the Suez Canal as Houthi rebels in Yemen demonstrate
their Palestinian solidarity by attacking maritime traffic in the Red Sea,
necessitating many lengthy detours via the Cape of Good Hope. All of this
results in extra costs, longer journeys, pressure on shipping capacity and
renewed uncertainty concerning energy supplies.
The company's PPA sales strategy is largely unchanged: approximately 90% of
power sales prices are fixed for between 12 and 36 months ahead, and BSIF went
into 2024 with more than 78% of its merchant revenue sold forward to March
2025. The Board is confident that, post debt amortisation, it will achieve a
high level of dividend cover for the present and the 2025 financial years,
taking into account both current and carried forward earnings.
The Board and its Committees
The process of refreshing the BSIF Board continues. Following an exercise
conducted by a Guernsey-based executive search firm, I am delighted to welcome
Chris Waldron as a non-executive Director; he joined the BSIF Board on 1
December 2023. Chris is a Guernsey resident and has extensive experience of
financial markets and closed ended investment vehicles in particular. With
effect from 1 January 2024, Chris chairs the Management Engagement and Service
Providers Committee.
Paul le Page retired on 30 September 2023 and Libby Burne assumed his former
role of chairing the Audit and Risk Committee from 1 October 2023. During the
Period, a Remuneration Committee was established, chaired by Michael Gibbons.
Share Buyback Programme
Post Period end, on 15 February 2024 the Company announced its intention to
commence a share buyback programme in response to the recent weakness in the
Company's share price and the excessive discount that the share price
represents to the value of the Company's assets. The Company has made an
initial allocation of £2o million for buybacks and purchases will be
accretive to NAV for continuing shareholders. It is intended that shares
repurchased will be held in treasury.
The capital allocation policy of the Company undergoes regular review,
evaluating the relative merits of further investment (into both new and
existing assets), the management of debt and returning value to shareholders.
Conclusion
The Board is encouraged by the continued progress made by your Company in the
past six months. From an operational perspective, most aspects of our core
business - namely the generation and sale of solar and wind power - performed
well, but it seems that for the moment no matter how brightly the sun shines
nor however hard the wind blows, our share price is becalmed at levels which
are significantly below net asset value. While this has little if any effect
on the dividends we can pay, it constrains our ability to raise the new equity
capital needed to fund our further development. It also acts to the detriment
of shareholders who wish to exit and who have been facing a discount of more
than 25% to the underlying value of their investment. There is ample
transactional evidence of asset values consistent with our latest Directors'
Valuation of nearly 136pps, so to see the Company's shares trading at close to
£1 per share suggests a serious disconnect between how BSIF is valued by
public markets and the prices being paid by institutional investors for
portfolios of solar PV and wind assets.
Your Board is delighted to have formed its Strategic Partnership with GLIL,
for whom the arrangement provides access to an industry whose financial
characteristics meet many of the criteria sought by pension providers, namely
predictable long term cash flows with a high degree of indexation and
government support. For BSIF, we see in GLIL a partner with whom we can
co-invest for the long term, giving us the ability to spread our capital
resources over a greater range of investments.
I remain confident that BSIF is as well placed as any market participant to
play a significant role in the continuing development programme that is so
clearly required to expand the UK's supplies of indigenously produced green
electricity. For our shareholders, this offers the prospect of both capital
growth and rising dividends. We have already declared our first quarterly
dividend for the 2023/24 financial year, increasing this to 2.20pps (2022/23:
2.10pps) and reiterating our guidance of a full year dividend of not less than
8.80pps (2022/23: 8.60pps). At the share price on 26 February 2024, this
equates to a yield of just under 9%.
John Scott
Chair
27 February 2024
The Company's Investment Portfolio
chart
Analysis of the Company's Investment Portfolio
chart
Report of the Investment Adviser
Introduction from the Managing Partner of the Investment Adviser
Bluefield Solar, and the listed renewables sector more generally, have
experienced share prices remaining materially below NAV during this period
under review and into 2024. The irony for the Company is that its numbers are
as strong, on a range of measures, as they have been in its ten years'
history. It has circa two times dividend cover, high levels of regulated
indexed revenues, complemented by very high fixed power sales contracts, a
large development pipeline, a defensive capital structure and a robust NAV.
However, whilst the high performance of the Company remains the same, the
prolonged discount to NAV posed a number of issues that have needed to be
addressed by the Company.
The discount in the share price poses a multi-layered challenge to the
Company. We need to keep progressing the extensive pipeline of development
opportunities, otherwise there is the risk of a loss of value; we need to
create liquidity to reduce our RCF; and we need to address the discount to
NAV. Each of these challenges required a different strategy and as such our
response has been multi-layered. In December we announced a Strategic
Partnership with GLIL, the large infrastructure investor, which addressed
liquidity, the potential of debt repayment and of progressing the development
pipeline. The agreement announced the following:
a. Phase 1 of the partnership enabled Bluefield Solar to acquire a
minority stake in a highly attractive operational portfolio at an investment
level that used only retained earnings and did not increase the debt in the
Company. The agreement also has the option for Bluefield to increase its
stake, assuming there are available funds.
b. Phase 2 of the partnership is a provisional agreement for GLIL to
acquire a 50% stake in an operational portfolio currently owned by Bluefield
Solar, the proceeds of which we expect to use for paying down part of the RCF
and increasing our stake in the Phase 1 acquisition with GLIL.
c. Phase 3 of the partnership is a commitment for GLIL and Bluefield
Solar to commit capital to a select group of development assets that are
expected to be funded and built over the next two to three years.
In mid-February the Board announced a share buyback programme to commence on
the release of the Interim Results in order to manage the discount to NAV.
This announcement delivers the third targeted strategy designed to manage the
short and long term challenges facing the Company. The long term is so
important as the Company has spent a decade building a highly robust and
durable financial model that has the ability to deliver outperformance over
the next decade as we have delivered over the first ten years of the Company's
life. The Company's five core strengths are summarised below:
1. Capital Structure: since its 2013 IPO the Company has focused on a
simple and deliberate strategy of ensuring, outside of the Company's Revolving
Credit Facility, all debt within the structure is secured at portfolio level
with fixed interest rates on fully amortising terms. With a current average
cost of debt of c.3.5% on £410m of long-term borrowings, the Company
continues to be well insulated from today's higher interest rate
environment.
2. Power Sales Strategy: Bluefield Solar focuses on fixing Power Price
Agreements contracts at the short end of the power curve (6-30 months),
through competitive tender processes, enabling it to maximise value for
shareholders from the most liquid part of the power market. The result
delivered record full year earnings to 30 June 2023 and continues to support
expectations of a c.2x covered dividend (net of debt amortisation and the EGL)
for the year to 30 June 2024.
3. Active Management: In the context of Bluefield Solar's portfolio this
means a dedicated workforce of 130 within Bluefield Partners and Bluefield
Services, split across specialist teams covering investment, ESG, development,
engineering, construction management, technical asset management, operation
and maintenance and commercial with over 82 different core responsibilities.
These specialist units have been established across a decade of operation to
deliver an aligned, dedicated and diversely skilled workforce to an
increasingly complex business.
4. Proprietary Pipeline: Since listing in 2013, Bluefield has been able
to establish the DNA of the business around accessing primary opportunities
and no better highlight of this is the 1.5GW solar and storage proprietary
pipeline the Investment Adviser has built up exclusively for BSIF. This
presents a highly attractive level of optionality for the Company, as it can
either build out these projects (funding permitting) or crystallise value
through strategic sales.
5. Capital Discipline: Since listing in 2013, a judicious approach to
deployment of capital has been paramount as periods of significant investment
activity have been combined with periods of restraint. This approach was at
the forefront of the structuring of the Strategic Partnership with GLIL, which
demonstrates the strength of Bluefield's reputation in the sector and provides
an alternative source of capital to allow BSIF to continue delivering on its
investment objectives.
A lot has been achieved in a challenging market and we believe that the
actions taken can address the issues at hand whilst allowing the Company's
long term ambitions to remain undimmed.
James Armstrong
Managing Partner, Bluefield Partners LLP
1. About Bluefield Partners LLP
Bluefield was established in 2009 and is an investment adviser to companies
and funds investing in renewable energy infrastructure. Our team has a proven
record in the selection, acquisition and supervision of large scale energy and
infrastructure assets in both the UK and Europe. The Bluefield team has been
involved in over £6.7 billion of renewable funds and/or transactions in both
the UK and Europe, including over £1.3 billion for BSIF in the UK since
December 2011.
Bluefield was appointed Investment Adviser to the Company in June 2013. Based
in its London office, Bluefield's partners are supported by a dedicated and
highly experienced team of investment, legal and portfolio executives. As
Investment Adviser, Bluefield is responsible for the origination and selection
of investment opportunities, which are then proposed to the Board of BSIF.
Bluefield has executed over 200 individual SPV acquisitions on behalf of BSIF
and other European vehicles through geographically dedicated teams.
2. Structure
The Company's corporate structure is summarised below:
chart
3. Portfolio: Acquisitions, Performance and Value Enhancement
Portfolio Overview
As at 31 December 2023, the Company held an operational solar portfolio of 129
PV plants (consisting of 87 large scale sites, 39 micro sites and 3 roof top
sites), 6 wind farms and 109 small scale UK onshore wind turbines with a total
capacity of 812.6MW.
During the period to 31 December 2023, the combined solar and wind portfolio
generated an aggregated total of 376.05GWh (31 December 2022: 391.8GWh),
representing a Generation Yield of 462.8 MWh/MW (31 December 2022:
511.4MWh/MW).
Investment Approach and Acquisitions in the period
The Company has taken a disciplined approach to the deployment of capital
since listing, investing only when there are projects of suitable quality at
attractive returns to complement the existing portfolio. Rigorous adherence to
restrained capital deployment inevitably means there can be periods where
acquisition activity falls, even when sector activity appears in contrast, but
this controlled approach is beneficial in driving long term, sustainable
growth for Shareholders, as evidenced by Bluefield Solar's record of sector
leading returns since listing over a decade ago.
chart
Note: the chart shows the position as at period end, prior to investment into
the Lightsource bp portfolio with GLIL
In December 2023, the Company announced a three phase strategic partnership
with GLIL Infrastructure, which envisages both parties investing together into
UK focused solar assets, from development through to operational plants. The
partnership will also facilitate de-leveraging of the Company. Post period
end, the Company announced the successful completion of the first phase of the
partnership, with BSIF investing £20 million alongside £200 million from
GLIL to acquire a 247MW portfolio of UK solar assets from Lightsource bp.
BSIF's ownership stake in the portfolio is 9%.
The Company continues to progress phase 2 of the Strategic Partnership, where
GLIL has provisionally agreed to acquire a 50% stake in a portfolio of more
than 100MW of operational UK solar assets currently owned by the Company.
The provisional acquisition price is in line with the Company's current
valuation and completion of the sale is expected in the coming months.
Portfolio Performance and Optimisation
Solar PV Performance
In the six months to 31 December 2023, irradiation levels were 3.9% lower than
the Company's forecasts and 13% lower than those recorded in the previous
year. The lower levels of irradiation contributed to generation for the
6-month period being proportionately lower than expected, at 294.05GWh,
equivalent to 390MWh for each MW of installed capacity.
The solar portfolio achieved a Net PR of 74.17% (FY 2022/23: 76.96%) against a
forecast of 78.92%. This was caused by short-term availability issues,
primarily ongoing supply chain challenges as seen across the industry. The
Investment Adviser is undertaking a comprehensive programme to reduce reliance
on certain supply chains through key inverter repowering projects and the
purchase of strategic HV spares, more information on which can be found later
in this report.
Table 1. Summary of Solar Portfolio Performance for H1 2023/24:
H1 H1 Delta to H1 Delta H1 23/24 to
2023/24 2023/24 Forecast (% 2022/23 H1 22/23 Actual (%
Actual Forecast change) Actual change)
Solar Portfolio Total Installed 754.2 - - 707.76 +6.56%
Capacity (MW)(1)
Weighted Average 522.79 543.97 -3.89% 601.03 -13.02%
Irradiation (Hrs)(1,2)
Total Generation (MWh) 294,048 323,769 -9.18% 327,377 -10.18%
Generation Yield 389.90 429.31 -9.18% 462.56 -15.71%
(MWh/MW)
Average Revenue 261.47 259.70 +0.68% 180.96 +44.49%
(£/MWh)(3)
Notes to Table 1.
1. Periods of irradiation where irradiance exceeds the minimum level
required for generation to occur (50W/m(2))
2. Excluding grid outages and significant periods of constraint or
curtailment that were outside the Company's control (for example, DNO-led
outages and curtailments)
3. Average Revenue includes all income associated with the sale of power,
all subsidy payments, liquidated damages and insurance claims amounts. ROC
recycle revenue is included assuming a 10% recycle rate for both Actual and
Forecast Revenue
chart
Total Revenue for the Period was £76.92m, representing a 29.8% increase
compared to the same period in FY 22/23 (£59.24m), largely due to the
acquisition of a 46.4MW operational solar portfolio from Fengate Asset
Management in December 2022, and PPAs with higher prices being secured in the
intervening period. The Average Revenue received per MWh generated was
£261.47, marginally above expectations, and 44.5% higher than that recorded
for FY 2022/23.
Operational costs for the Period (incorporating all fixed, contracted costs
such as lease payments, and O&M fees) totalled c.£14.3m, 2.9% lower than
forecasted. Costs have increased from the same period in FY 2022/23 due to
increased capital deployment for repowering and enhancement projects.
Solar PV Optimisation & Enhancement Activity
A core focus of the Investment Adviser's activities is protecting, optimising,
and enhancing the value of the Company's operational portfolio.
Principally this is done through in-depth performance monitoring and carefully
tailored preventative maintenance programmes, ensuring that improvement or
repowering works requiring full or partial outages are completed during the
months of low irradiation (being October to March).
A rolling capital investment programme is essential for optimising the
long-term operational performance of the portfolio. The Investment Adviser,
working in conjunction with the Asset Manager, has identified that one of the
key causes of lower than expected availability is a long lead time for spare
parts for major components, notably central inverters, due to industry demand
from construction projects and other operators' repowering works. To rectify
this impact on availability, the Investment Adviser has instigated multiple
inverter repowering projects and accelerated the purchase of strategic spares
for the entire portfolio.
Two significant string-inverter repowering projects and the replacement of
three transformers at Hall Farm were completed during the period to improve
both the current and future performance of the assets. Further inverter
repowering and optimisation projects are planned for FY 23/24.
As at 31 December 2023, 494.6MW (being 65.6% of the solar PV portfolio), have
leases that allow for remaining terms beyond 30 years, with 338.2MW
benefitting from planning terms in excess of 30 years, with the Investment
Adviser continuing to pursue lease extensions on the remaining assets in the
portfolio.
Onshore Wind Performance
As at 31 December 2023, the Company held an operational onshore wind portfolio
of 135 installations, comprising 109 small scale turbines (55-250kW) and 26
wind farm turbines (850kW-2.3MW), with an aggregated capacity 58.4MW.
The onshore wind portfolio generated 82.0GWh during the reporting period, in
line with the forecast. The fleet recorded a generation yield of 1,405MWh per
MW of installed capacity, equivalent to a 27.4% increase from FY 2022/23. This
was due to the Company's continued programme of improvement and re-powering
works supporting greater availability, alongside slightly higher-than-expected
wind resource.
Table 2. Aggregated Wind Portfolio Performance, H1 2023/24
H1 H1 Delta to H1 Delta 23/24 to
2023/24 2023/24 Forecast (% 2022/23 22/23 Actual (%
Actual Forecast Change Actual change)
Portfolio Total Installed 58.36 N/A N/A 58.36 0.00%
Capacity (MW)
Total Generation (MWh) 82,008 82,629 -0.75% 64,392 27.36%
Generation Yield 1405.21 1415.85 -0.75% 1,103.36 27.36%
(MWh/MW)
Average Revenue £184.40 £186.28 -1.01% £203.59 -9.43%
(£/MWh)
Notes to Table 2.
Average Revenue includes all income associated with the sale of power, all
subsidy payments, liquidated damages and insurance claims amounts. ROC recycle
revenue is included assuming a 10% recycle rate for both Actual and Forecast
Revenue
During the Period the fleet achieved a total revenue of £15.1m, -1.75% below
forecast, largely due to those plants with PPAs which track the day-ahead
market prices achieving slightly lower-than-expected floating power prices.
Onshore Wind Optimisation & Enhancement Activity
In Northern Ireland, 17 of the 29 small-scale turbines have been identified
for repowering with replacement EWT 250kW turbines. These assets are being
repowered to increase efficiency and output, whilst maintaining their
respective NIRO accreditation status.
As at 31 December 2023, 11 turbines have been repowered and returned to
operation, with a further three projects undergoing construction, with
commissioning expected during H2, FY 2023/24. Planning applications for the
remaining projects have been submitted to the relevant Local Planning
Authorities.
A technical adviser has now completed a feasibility study for similar
repowering opportunities across the GB portion of the fleet, which the
Investment Adviser is currently assessing.
General Portfolio
Ofgem Audits
As part of the industry-wide audits of FiT and RO-accredited generating
assets, the Investment Adviser and Asset Manager have been working closely
with the regulator on those assets (randomly) selected for audit. All of the
Company's assets that have completed Ofgem audits to date have been classified
as 'satisfactory' and so are deemed by Ofgem as being compliant.
Health and Safety Activities
The Investment Adviser continues to ensure that health and safety awareness,
policies, processes and procedures remain at the forefront of every activity
around the portfolio. Health and safety policies and logs are reviewed at
least annually. All main contractors (including asset management and O&M
providers) are audited annually by a qualified third-party specialist
consultant, with new retained contractors (associated with operational
projects acquired by BSIF, for example) audited immediately following
acquisition.
Cyber Security
The Investment Adviser arranged penetration testing as part of a periodic
cyber security review by a specialist external consultant. The testing covered
approximately 50% of the solar portfolio, with all results satisfactory.
Whilst cyber security across the portfolio is appropriate, the Investment
Adviser has arranged for all the recommendations to further enhance cyber
security to be undertaken, including both hardware and software upgrades, with
works to commence shortly. The remainder of the PV portfolio and all wind
farms are now undergoing penetration testing, expected to be complete by the
end of the FY 23/24.
4. Power Purchase Agreements
The Investment Adviser continues to employ its strategy of fixing short-term
power price agreements for periods of between 12 and 36 months. As at 31
December 2023, the average term of the fixed-price PPAs across the portfolio
is 27.8 months (FY 22/23: 28.4 months).
The Investment Adviser actively monitors power market conditions, ensuring
contract renewals are spread evenly throughout any 12-month period, with
competitive tender processes involving several offtakers running for each PPA
renewal in the 3-month period prior to the commencement of a new fixing
period. This method acts as a natural hedging strategy against wholesale
market fluctuations. The predominantly fixed price approach allows for high
levels of confidence in the Company's revenue forecasting and limits exposure
to market volatility, but the short-term nature of the contracts also allows
for some flexibility to 'pull forward' batches to fix, should market dynamics
present a compelling case.
In addition, up to 10% of PPAs (of the aggregated portfolio capacity) are
executed on a 'floating' mechanism, whereby prices move in line with the
day-ahead (N2EX) market. This allows a portion of the portfolio to capture
short-term volatile price spikes in the wholesale market. PPA counterparties
are selected on a competitive basis, but with a clear focus on achieving value
and diversification of counterparty risk. Flexibility within the Company's
capital structure enables PPA counterparties to be selected on a competitive
basis and not be influenced by lenders requiring long term contracts with one
offtaker. Evidence of this is reflected in the BSIF's fixed average seasonal
weighted power price, which for the 12 months ended 31 December 2023 increased
by 97.2% compared to the same period in FY 22/23, rising to £169.2/MWh from
£85.8/MWh in the previous calendar year.
As at 31 December 2023, the Company has a price confidence level of 90%,
reducing to 78% to June 2024 (including subsidy revenues), representing the
percentage of the portfolio that already has a fixed price in place for the
sale of power, and thus no exposure to power market uncertainty. Looking
ahead, the strategy has secured power price fixes at levels that are
materially in excess of the latest industry forecaster expectations as
highlighted in the chart below:
Chart 1. PPA Fixed Power Prices (Average for Fixes completed during period)
Price as at: Jan 24 Jul 24 Jan 25 Jul 25
BSIF Portfolio Weighted Averaged Fixed Contract Price (£/MWh) 170.98 (707.03MW) 147.13 (496.83MW) 158.41 (466.03MW) 136.81 (308.51MW)
BSIF Blended Curve (nominal terms) as at Dec 23 104.97 104.97 98.06 98.06
Footnote: MW stated in the BSIF Portfolio Weighted Average Contract price
refers to the total amount of the portfolio fixed for that period.
Power Market Summary
Despite the Company's average weighted fixed price remaining strong, wholesale
power prices continued to fall from the levels of H1 2023 and the spikes seen
during 2022 (as demonstrated in Chart 2 below).
However, despite the general decline, October and November 2023 saw the
day-ahead (N2EX) prices increase to £86.2/MWh and £91.3MWh respectively from
September's average of £82.4/MWh due to low renewable generation during these
months. The average power price in December was £66.6/MWh, a 27% decrease
from November and a 72.6% decrease compared to December 2022. The fall in the
average N2EX price during December was largely due to lower gas and carbon
prices, as well as significantly higher-than-expected onshore and offshore
wind generation.
Chart 2. UK Natural Gas & Wholesale Day-ahead (N2EX) Power Prices (1 June
2021 - December 2023)
chart
Source data: Bloomberg
5. Proprietary Pipeline
Over the Company's ten year history, building a proprietary development
pipeline and then funding the construction of new projects has been at the
heart of its success. Entering earlier in the value chain brings some
additional risk but, if managed appropriately, we believe it also allows us to
control the quality of projects far better, which ultimately brings enhanced
risk-adjusted returns to Shareholders.
Over the past four years, the Company has continued to implement its new build
strategy across the solar value chain to ensure that BSIF continues to build
its market share amongst UK solar power producers. We have also expanded our
strategy to battery storage, which in time will provide some diversification
of BSIF's revenues by enabling it to benefit from the expected increase in
power price volatility as the capacity of renewables increases.
This focus on development activities has enabled the Company to accumulate a
significant pipeline of assets which can be built over the next five years. As
our projects progress, we are working with selected construction contractors
to ensure that projects are designed and built to a high specification for
long term performance.
We are pleased to report that the new build strategy has delivered well on its
objectives thus far: the development pipeline now stands at over 1.5 GW and
the first development to be funded, Yelvertoft, is progressing well through
construction. This 49MW project is set to be connected to the grid in the
first quarter of 2024 and it has entered into a Contract for Difference
("CfD") for its output.
The following sections provide a more detailed update on both our construction
and development programmes.
Construction Programme
As at the end of the Period, BSIF had 93 MW of solar assets under
construction. These are Yelvertoft Solar Farm, a 49MW solar PV park in
Northamptonshire, and Mauxhall Farm Energy Park, a 44MW solar PV project in
North East Lincolnshire. Yelvertoft signed a fixed price EPC contract with
Bouygues in September 2022 and is targeting connection to the grid in Q1 2024,
while Mauxhall Farm signed a fixed price EPC contract with EQUANS in March
2023 and is expected to be operational in Q2 2024. Mauxhall Farm is planned to
be a co-located project and construction of a 25MW battery energy storage
scheme is expected to commence shortly after the solar plant has been
commissioned.
As the EPC agreements require contractors to provide full procurement activity
and to supply all materials, the Investment Adviser completes a full
assessment of each contractor's procurement and supply chain management
processes to ensure compliance with the Company's ESG policies and standards.
In addition to projects in construction, BSIF had solar assets with a capacity
of 545MW and battery storage assets with 233MW capacity that are fully
consented and are in the pre-construction phase. The projects have expected
connection dates between 2024 and 2030.
Projects with CfDs
In July 2022, the Investment Adviser successfully secured CfDs on 65MW of
ready to build PV plants (Yelvertoft 49MW, Romsey 8MW and Oulton 8MW). By
securing a CfD contract, the plants will benefit from CPI-linked revenues for
15 years at the AR4 solar PV strike price of £45.99/MWh (in 2012 equivalent
prices), equating to £61.51 /MWh in today's prices. The contracts commence
from 31 March 2025 and the strike prices will be adjusted appropriately for
CPI.
In September 2023, BSIF achieved allocations of CfDs on all four of its
projects submitted to AR5. The combined capacity of these sites is expected to
be c.212MW. The projects received a strike price of £47.00/MWh (in 2012
prices), or £62.86/MWh in today's equivalent prices.
Development Programme - Outline of developments and valuation approach
The Investment Adviser has been pursuing its development strategy since 2019
to enable BSIF to continue to be a key player in the UK renewable energy
market. Since that time, a portfolio of approximately 960MW of solar and over
560MW of batteries has been built up across 28 projects (in the Period,
consent was received for three projects, totalling 147MW solar and 90MW
battery, while post Period end one project of 50MW solar received consent).
BSIF has a 5% investment limit in pre-construction development stage
activities, of which less than 1% is currently committed.
Currently, no value is attributed to projects without planning consent. Once
developments receive planning consent and move from the development stage to
pre-construction, the Investment Adviser believes it is appropriate to reflect
this change in the Company valuation. At this point in their lifecycle the
projects will have received all the necessary planning consents, land rights
and valid grid connection offers and so have discernible value beyond the
direct costs of development.
The current pipeline status and valuation is summarised in the graphic below.
Current pipeline status and valuation
chart
6. Analysis of underlying earnings
The total generation and revenue earned in the period by the Company's
portfolio, split by subsidy regime, is outlined below:
Subsidy Regime Generation (MWh) PPA Revenue (£m) Regulated Revenue (£m)
FiT 28,743 2.4 5.9
4.0 ROC 8,134 0.6 2.0
2.0 ROC 8,696 0.7 1.1
1.6 ROC 48,766 6.4 5.0
1.4 ROC 126,553 24.5 11.2
1.3 ROC 30,185 3.9 2.5
1.2 ROC 59,005 11.1 4.9
1.0 ROC 23,388 2.0 1.4
0.9 ROC 42,584 3.7 2.3
Total 376,054 55.3 36.3
The Company includes ROC Recycle assumptions within its long term forecasts
and applies a market based approach on recognition within any current
financial period, including prudent estimates within its accounts where there
is clear evidence that participants are attaching value to ROC Recycle for the
current accounting period.
In November 2023, Ofgem announced the value for ROC Recycle for the period
April 2022 to March 2023 (CP21) was £6.81/ROC (equivalent to 12.9% of CP21
ROC buyout prices). This was slightly ahead of the 12.5% ROC Recycle estimate
the Company had recognised in its 30 June 2023 Financial Statements.
The key drivers behind the changes in underlying earnings between H1 2022/23
and H1 2023/24 are the combined effects of the Dec 2022 acquisition, PPA fixes
and increased REGO pricing from a revenue perspective, and the addition of the
Electricity Generator Levy (EGL) increasing group operating costs.
Underlying Portfolio Earnings
Half year period to Half year period to Full year to Full year to
31 Dec 23 31 Dec 22 30 June 23 30 June 22
(£m) (£m) (£m) (£m)
Portfolio Revenue 91.6 78.6 184.4 111.4
Liquidated damages and Other Revenue* 3.7 0.8 5.4 1.6
Portfolio Income 95.3 79.4 189.8 113.0
Portfolio Costs -21.2 -16.1 -36.3 -27.8
Project Finance Interest Costs -6.4 -5.5 -13.6 -4.7
Total Portfolio Income Earned 67.7 57.8 139.9 80.5
Group Operating Costs(#)** -17.7 -4.6 -25.4 -8.3
Group Debt Costs -6.1 -1.8 -6.1 -5.4
Underlying Earnings 43.9 51.4 108.4 66.8
Group Debt Repayments -22.1 -13.2 -18.3 -13.8
Underlying Earnings available for distribution 21.8 38.2 90.1 53.0
Brought forward reserves*** 48.4 20.9 20.9 13.4
Total funds available for distribution 70.2 59.1 111.0 66.4
Target distribution**** N/A N/A 51.4 45.2
Actual Distribution 13.5 12.8 52.6 45.5
Underlying Earnings carried forward
N/A N/A 58.4 20.9
*Other Revenue includes insurance proceeds, ROC Recycle late payment and
Mutualisation, REGOs, O&M settlement agreements and rebates received.
#Includes the Company, BR1 and any tax charges, including EGL.
**Excludes one-off transaction costs and the release of up-front fees related
to the Company's debt facilities.
***FY23 carried forward reserves of £58.4m less RCF Repayment of £10m in the
Period.
****Target distribution is based on funds required for total target dividend
for each financial period.
The table below presents the underlying earnings on a per share basis.
Half year to Half year to Full year to Full year to
31 Dec 23 31 Dec 22 30 June 23 30 June 22
(£m) (£m) (£m) (£m)
Target Distribution - £m N/A N/A 52.6 45.2
Total funds available for distribution (inc. reserves) - £m 111.0 66.4
70.2 59.1
Average number of shares in the period* 611,452,217 611,452,217 611,452,217 554,042,715
Target Dividend (pps) N/A N/A 8.40 8.16
Total funds available for distribution (pps) 11.46 9.65 18.13 12.22
Total Dividend Declared for the period (pps)** 2.20 2.10 8.60 8.20
Reserves carried forward (pps) *** N/A N/A 9.53 3.39
*Average number of shares is calculated based on shares in issue at the time
each dividend was declared.
**First interim dividend for FY 23/24 of 2.20pps declared 26 January 2024,
with a payment date on or around 9 March 2024.
***Reserves carried forward are based on the shares in issue at the point of
Annual Accounts publication (being c.611m shares for both 30 June 2023 and 30
June 2022).
7. NAV and Valuation of the Portfolio
The Investment Adviser is responsible for advising the Board in determining
the Directors' Valuation and, when required, carrying out the fair market
valuation of the Company's investments.
Valuations are carried out on a quarterly basis at 30 September, 31 December,
31 March and 30 June each year, with the Company committed to conducting
independent reviews as and when the Board believes it benefits Shareholders.
As the portfolio comprises only non-market traded investments, the Investment
Adviser has adopted valuation guidelines based upon the IPEV Valuation
Guidelines published by the BVCA (the British Venture Capital Association).
The application of these guidelines is considered consistent with the
requirements of compliance with IFRS 9 and IFRS 13.
Following consultation with the Investment Adviser, the Directors' Valuation
adopted for the portfolio as at 31 December 2023 was £1,001.1m (30 June 2023,
£1,018.4m).
The table below shows a breakdown of the Directors' Valuations over the last
four interim and annual reporting periods:
Valuation Component (£m) Dec 2023 June 2023 Dec 2022 June 2022
Enterprise Portfolio DCF value (EV) 1,149.1 1,195.2 1,222.2 1,180.6
Construction and Consented Solar and Battery Storage Development rights* 103.7 67.5 30.4 13.8
Deduction of Project Co debt -410.1 -430.8 -410.1 -390.3
Project Net Current Assets 158.4 186.5 145.1 135.8
Directors' Valuation 1,001.1 1,018.4 987.6 939.9
Portfolio Size (MW) 812.6 812.6 812.6 766.2
*Includes £64.4m in construction, £31.3m consented and £8.0m of Gladiator
repowering awaiting accreditation
Discounting Methodology
The Directors' Valuation is based on the discounting of post-tax, projected
cash flows of each investment, based on the Company's current capital
structure, with the result then benchmarked against comparable market
multiples, if relevant. The discount rate applied on the project cash flows is
the weighted average discount rate. In addition, the Board continues to adopt
the approach under the 'willing buyer/willing seller' methodology, that the
valuation of the Company's portfolio be appropriately benchmarked to pricing
against comparable portfolio transactions.
Key factors behind the Directors' Valuation
There have been a number of key factors that have been considered in the
Investment Adviser's recommendation to the Directors' Valuation (and which are
quantified in the Directors' Valuation and NAV movement chart below):
(i) RPI inflation assumptions for 2024 onwards have
remained in line with those used in June 2023 (3.5% in 2024, 3.0% to 2029,
2.25% post 2030) reflecting expectations that UK inflation has peaked and is
on the path to more normalised long term levels;
(ii) The portfolio discount rate remains unchanged at 8.00%
(8.00% in June 2023 and 7.25% in December 2022) as base rate increases slowed
(rising from 5.0% in June 23 to 5.25% as at 31 December 2023) and 15 year gilt
yields contracted from highs of c.5.0% in June 2023 to c.4.0% as at 31
December 2023;
(iii) The value attributed to BSIF's development and
construction portfolio has risen during the period, reflecting sites receiving
planning permission and further progress and investment into construction
projects;
(iv) Review of fixed costs and first time inclusion of revenue
for REGOs (Renewable Energy Guarantees of Origin) for the period 2026 to 2030.
This adoption follows evidence that value is now being attributed to REGOs
beyond the period of PPA fixes currently in place.
By reflecting the core factors above within the Directors' Valuation for 31
December 2023, the EV of the portfolio is £1,149m (June 2023: £1,195.2m)
with the effective price for the solar component being c.£1.28m/MW (June
2023: £1.35m/MW).
These metrics sit within the pricing range of precedent market transactions
and the 'willing buyer-willing seller' methodology upon which the Directors'
Valuation is based.
Valuation Assumptions - Further detail
Power Price
The blended forecast of three leading consultants used within the latest
Directors' Valuation, as shown in the graph below, is based on forecasts
released in the quarter to December 2023. For illustration purposes, the graph
below also includes the blended curve used in the Company's June 2023 Annual
accounts.
The curves used in the 31 December 2023 Directors' Valuation reflect the
following key updates:
1. Short-term European gas prices have fallen, driven in part by high
gas storage levels, with a similar trend reflected in the wholesale power
price curve;
2. Higher renewable generation capacity deployment levels in the medium
term (with ambitions for up to 50GW offshore wind by 2030) as the UK strives
to meet its net zero targets and fully decarbonise its power system by 2035;
and
3. Annual demand for power in Great Britain, driven principally by
electrification of heat and transport, is expected to rise from 296TWh in 2024
to 439TWh by 2035.
chart
Please note, the blended forecast varies depending on whether the asset is a
solar or a wind project, reflecting different forecasts for technology
specific capture rates. The solar forecast is shown in the chart. BSIF
consistently outperforms these figures so the Company considers them
conservative.
Directors' Valuation and NAV Movement (£m)
chart
Directors' Valuation movement
(£million) As % of valuation
30 June 2023 Valuation 1,018.4
New investments acquired 0
Rebased Valuation 1,018.4
Development uplift 36.2 3.6%
Cash receipts from portfolio (27.7) (2.7)%
Date change and degradation (62.0) (6.1)%
Power curve updates (incl. PPAs) 2.3 0.2%
ROC inflation 12.0 1.2%
Operational cost update (6.4) (0.6)%
Include REGOs 5.6 0.5%
Balance of portfolio return 22.7 2.2%
31 December 2023 Valuation 1,001.1 (1.7)%
There have been no material changes to assumptions regarding the future
performance or cost optimisation of the portfolio when compared to the
Directors' Valuation of 30 June 2023.
The assumptions set out in this section remain subject to continuous review by
the Investment Adviser and the Board.
Reconciliation of Directors' Valuation to Balance sheet
Balance at Period End
Category 31 December 2023 (£m) 30 June 2023 (£m) 31 December 2022 (£m) 30 June 2022 (£m)
Directors' Valuation 1,001.1 1,018.4 987.6 939.9
Portfolio Holding Company Working Capital (3.3) (12.5) 2.9 (13.6)
Portfolio Holding Company Debt (167.0) (153.0) (121.0) (70.0)
Financial Assets at Fair Value per Balance sheet 830.3 852.9 869.5 856.3
Gross Asset Value 1,407.3 1,438.0 1,400.6 1,316.7
Gearing (% GAV*) 41% 41% 38% 35%
*GAV is the Financial Assets, as at 31 December 2023, at Fair Value of
£830.3m plus RCF of £167m and third party portfolio debt of £410m (giving
total debt of £577m).
Directors' Valuation sensitivities
Valuation sensitivities are set out in tabular form in note 7 of the financial
statements. The following diagram reviews the sensitivity of the EV of the
portfolio to the key underlying assumptions within the discounted cash flow
valuation.
chart
8. Financing
Debt Strategy
Since its IPO the Company has focused on a simple and defensive approach to
debt. This means having debt agreements that have, primarily, fixed interest
rates and are amortising. Debt split into (1) long-term asset-level debt, and
(2) revolving credit facility at fund-level for short-term funding. Debt in
the portfolio is generally not subject to stringent lender requirements on
PPAs, allowing BSIF to take advantage of more competitive PPA pricing.
The Company's weighted average cost of long-term debt is 3.5% and is largely
locked-in via fixed interest rates. Whilst BSIF has a modest amount of
index-linked debt, it also has significant levels of RPI linked revenues,
leaving the Company a net beneficiary of inflation.
The fund's revolving credit facility (RCF) is the only non amortising debt
instrument in the portfolio and represents 29% of the total debt balance. 70%
of asset-level debt has a fixed interest rate. 30% of principal for long-term
debt is inflation-linked.
Revolving Credit Facility
On 22 June 2023, the Group agreed a £110 million increase to its existing
committed £100 million revolving credit facility ('RCF'), bringing the total
committed amount to £210 million. The facility also has an uncommitted
accordion feature allowing it to be increased by up to a further £30 million.
As part of the increase, the Group has sought to broaden the lender group
through the introduction of Lloyds Bank Plc, alongside the existing lenders
RBS International and Santander UK. The term of the facility has been extended
to May 2025 and the facility's margin remains unchanged at 1.9%.
As at 31 December 2023, the Company's subsidiary BR1 had drawn £167m from its
RCF.
External Debt
Excluding the Group's RCF, total outstanding loans to third party lenders as
at 31 December is £410m, with each loan secured against a portfolio of assets
and fully amortising within the life of the respective assets' subsidies.
The average interest cost, excluding the Group's RCF, across the external debt
facilities in the table below is 3.55%.
Debt Principal Outstanding (£m) Maturity % of Interest Fixed((1)) All-in Interest Rate
Syndicate - Fund RCF 167 May-25 0% 6.34%
Bayern LB - Project Finance 7 Sep-29 100% 5.50%
Syndicate - Project Finance 68 Dec-33 100% 3.50%
Aviva (fixed) Project Finance 83 Sep-34 100% 2.88%
Aviva (index-linked) Project Finance 64 Sep-34 100% 3.70%
Macquarie (fixed) Project Finance 7 Mar-35 100% 4.60%
Macquarie (indexed-linked) Project Finance 20 Mar-35 100% 4.70%
Gravis (index-linked) Project Finance 37 Jun-35 100% 6.48%
NatWest - Project Finance 123 Dec-39 85% 2.70%
Total/Wtd Avg 577 68% 4.36%
Total/Wtd Avg excl. RCF 410 96% 3.55%
Note: Index-linked debt treated as fixed for the purposes of this table as
proportion fixed represents interest rate risk only
NatWest 3 year term loan maturity and refinancing
On 2 May 2023, the Group announced the re-financing of its £110 million
three-year term loan with NatWest.
The original loan, with minimum 75% hedged with a swap at circa 0.35% over a
notional 18-year period, had a maturity of September 2023 and has been
increased to £130 million and extended in maturity to December 2039.
Hedging has been put in place for the tenor of the loan on £110 million, at
an effective all-in cost of c.2.7% (being margin and swap rate).
The financing is secured against the UK-based portfolio of 31 operational PV
plants with a total installed capacity of 139MW and benefitting from
attractive subsidies; 29 of the assets are accredited under the ROC regime
with tariffs ranging from 1.2 - 2.0 ROCs, while two are accredited under the
FiT scheme.
The additional debt of £20 million is being used to provide financing for the
construction of Yelvertoft, the Company's 49MW CfD-backed solar PV project in
Northamptonshire. Once construction is complete, expected in Q2 2024, the
Company will review whether to enter hedging arrangements on this tranche.
GAV Leverage
The Group's total outstanding debt, as at 31 December 2023, was c.£577
million and its leverage stands at c.41% of GAV (41% as at 30 June 2023)
within the 35% - 45% range the Directors have previously outlined as desirable
for the Group.
9. Market Developments
UK renewable generation capacity and deployment
Latest Government data shows that UK solar photovoltaic (PV) capacity stands
at over 15.5GW, across c.1.4 million installations. Of this amount, around
7.3GW (c.48% of the total solar capacity in the UK) and 5.1GW (33%) is
accredited under the RO and FiT schemes respectively, and c.3GW (19%) is
unaccredited. Onshore and offshore wind installed capacity stands at around
15.5GW and 14.8GW, respectively. The UK has 3.5GW of operational battery
storage capacity, according to data from energy association, Renewable UK.
The UK's total renewable generation capacity is projected to continue to grow
over the coming years as the Government strives to meet its net zero targets
and meet power demand from the electrification of the domestic heat, transport
and industrial sectors. Deployment is expected to be supported by policies
such as the CfD scheme, which is described in more detail in the next section
of this report.
The UK Government aims to increase solar capacity to 70GW by 2035 and has
signalled its support for ground and rooftop solar technologies on brownfield,
industrial and low/medium grade agricultural land. The Government also aims to
develop up to 50GW of offshore wind by 2030.
The chart below illustrates the distribution of total installed capacity
across different renewable generation technologies at the end of the third
quarter of 2023 (the latest data available at the time of this report),
compared with a year earlier.
chart
Source: UK government Department for Business, Energy & Industrial
Strategy *Anaerobic Digestion includes sewage sludge digestion, animal
biomass
Secondary market transactions, development and construction activity
Transactional activity in the UK renewables market has eased to some extent,
as inflation and higher interest rates have kept investor uncertainty
elevated.
Acquisitions of new build and operational renewable energy projects across
established technologies have totalled c.190MW in solar, c.660MW in offshore
wind (across several shares of sites) and c.45MW onshore wind in the
period 1 .
Activity in the UK development market has continued to be driven by factors
such as ambitious decarbonisation targets, increasing preferences by customers
for clean energy, demand for ESG investments and the inclusion of solar PV in
upcoming CfD auction rounds. Development activity has been particularly
noticeable in the battery storage area as developers seek to provide solutions
to help manage the grid as larger quantities of intermittent renewables are
added to the system. Solar development activity has, however, slowed recently,
primarily due to grid constraints.
Moderate construction activity has also been observed in the UK solar and
battery storage area, although this is against a backdrop of challenges with
equipment lead times and relatively high interest rates. Converting the UK's
significant development pipeline into operational solar projects over the next
five years will require developers to adopt an innovative approach to overcome
current macroeconomic challenges, as well as challenges surrounding higher
construction costs and grid connection lead times.
10. Regulatory Environment
The regulatory environment remains under the spotlight as the Government seeks
to support renewable energy deployment under particularly tough macroeconomic
conditions. Key themes are outlined below.
Update on Contracts for Differences (CfD)
In September 2023, the UK Government announced support for c.3.7GW of new
build renewable generation capacity through its CfD scheme, allocation round 5
(AR5) with expected deliveries in 2025-28 and with strike prices at or close
to the administrative strike price (ASP) caps set by the Government. Around
1.9GW was awarded for solar projects, c.1.5MW for onshore wind and c. 289MW
across the less established remote island wind, tidal stream and geothermal
projects. The overall budget for AR5 - across pot 1 and 2 technologies - was
£227 million per year (£68m lower than AR4's budget).
In November 2023, the UK Government published the draft Allocation Framework
for AR6. The ASPs for all technologies were raised from AR5 levels following
extensive lobbying from industry participants for more competitive strike
prices given the current high inflationary and cost of capital environment.
AR6 application window is due to open on 27 March 2024 and the accompanying
Budget notice is scheduled to be released on 13 March, according to the latest
Government timeline. The upcoming auction will have a three-technology pot
structure, with offshore wind returning to its own pot, having been included
in pot 1, alongside solar PV and onshore wind in AR5.
The Government is exploring new ways to ensure the CfD scheme remains fit for
purpose, especially as the electricity system evolves overtime. A consultation
on scheme changes applicable to AR7 (scheduled to open in 2025) as well as
longer-term schemes considerations, such as changes to the inflation
indexation methodology, is underway and scheduled to close on 7 March 2024.
Autumn Statement
In November's Autumn Statement 2023, the Chancellor of the Exchequer Jeremy
Hunt announced several energy focused measures to incentivise public and
private sector investment. These included a commitment to improving grid
connection queue times, reforming the UK's planning system process, developing
supply chains and manufacturing in low-carbon industries, indefinitely
extending the 100% full expensing of capital investment in plant and
machinery, as well the introduction of a new investment exemption for the
Electricity Generator Levy (EGL). The EGL is scheduled to end on 31 March
2028.
Review of Electricity Market Arrangements
The Government's second planned consultation on the UK's Review of Electricity
Market Arrangements (REMA) is expected to open shortly. REMA aims to identify
necessary reforms needed to transition to a cost effective, lower carbon and
secure electricity system. Several wholesale energy market reforms are still
under consideration, including zonal and nodal market pricing.
Bluefield Partners LLP
27 February 2024
Environmental, Social and Governance Report
1. Introduction from the Chair
An introduction from the Chair
Decarbonisation remains at the forefront of the political and economic agenda.
Climate finance was a key focus at COP28; commitments were made totalling $57
billion, including private and blended climate-related funds, climate finance
pledges, and climate adaptation packages(( 2 )). COP28 also saw the UAE
Consensus advocate for a tripling of global renewable energy capacity by
2030(( 3 )); an ambition that the Company is well positioned to support.
In addition to climate finance, the ESG regulatory and reporting landscape has
also continued to evolve, with the FCA publishing its Sustainability
Disclosure Requirements (SDR) and investment labels policy statement(( 4 )),
launch of the UK's Transition Plan Taskforce (TPT) disclosure
framework(( 5 )), and the recent consultation from the European Supervisory
Authorities (ESAs) on the Sustainable Finance Disclosure Regulation(( 6 )).
The Company will continue to review the applicability of emerging ESG
regulation and reporting frameworks to maintain compliance and ensure its ESG
achievements and challenges are reported transparently to stakeholders.
The Company plays a key role in providing low carbon energy to a decarbonising
UK economy. Through the continued integration of sustainability considerations
into its investment approach, the Company aims to achieve its purpose of
delivering renewable energy, responsibly.
John Scott,
Chair
2. ESG Highlights
Estimated annual figures based on actual and forecasted generation data for
the period 1 July 2023 - 30 June 2024:(( 7 ))
· Over 850 GWh of renewable energy generation
· Estimated annual CO2e savings of 176,000 tonnes(( 8 ))
· Approximately 315,000 houses to be powered with renewable
energy(( 9 ))
· Payments of approximately £290,000 to community benefit schemes
In recognition of its positive environmental contribution, the Company has
been awarded the following accreditations:
- Guernsey Green Fund(( 10 ))
- TISE Sustainable(( 11 ))
- LSE Green Economy Mark(( 12 ))
3. ESG Regulation & Framework Alignment
SFDR & EU Taxonomy
The Company is an Article 8 classified fund under the Sustainable Finance
Disclosure Regulation (SFDR) and as at 30 June 2023, had a proportion of
97.39% sustainable investments. Please refer to the Company's Periodic Annex
IV, appended to its 2023 Annual Report and Financial Statements, and the
Company's website for further information regarding its ongoing compliance
with the SFDR and EU Taxonomy.
The Company is currently preparing its annual Principal Adverse Impact (PAI)
statement relating to the 2023 calendar year, which will be available on its
website before 30 June 2024.
UK Sustainability Disclosure Requirements & UK Green Taxonomy
The FCA's Sustainability Disclosure Requirements (SDR) aim to promote
transparency and accountability within financial markets regarding a product's
sustainability-related characteristics, ensuring that products are marketed
correctly and have an evidence-base to their sustainability claims(( 13 )).
As a non-UK AIF, the Company is not currently in scope of this regime.
However, the applicability of the framework to overseas funds is currently
pending, and it is likely that it will be expanded to cover overseas funds in
some capacity in due course. As such, the Company is currently reviewing its
alignment with the SDR framework.
As a UK authorised firm, the Company's Investment Adviser is within scope of
the SDR's anti-greenwashing rule and is currently reviewing the implications
of this new rule to ensure the firm's compliance. The Investment Adviser is
continuing to follow progress of the UK Green Taxonomy.
Sustainability Disclosure Standards
In June 2023 the ISSB published two IFRS sustainability disclosure standards,
IFRS S1 and S2, which will form the basis of the UK's Sustainability
Disclosure Standards (SDS), expected to be finalised later this year(( 14 )).
During the interim period, the Company has undertaken a review of its
alignment with the requirements of the IFRS sustainability disclosure
standards, which will help to inform the Company's sustainability reporting
approach moving forward.
Task Force on Climate-related Financial Disclosures
The Company has aligned on a voluntary basis with the recommendations of the
Task Force on Climate-related Financial Disclosures (TCFD), and its second
TCFD report was presented within the Company's 2023 Annual Report and
Financial Statements.
Task Force on Nature-related Financial Disclosures
The Company is currently developing a Nature Strategy, aligned with the
recommendations of the Task Force on Nature-related Financial Disclosures
(TNFD) to build a framework through which the Company can manage its material
nature-related risks and opportunities.
4. The Company's ESG Strategy
ESG Strategy
The Company's ESG strategy reflects stakeholder expectations and has been
developed to deliver positive value across the Company's portfolio of
investments. Material ESG topics are defined within each of the Company's key
pillars:
chart
ESG Risk Management
The Board of the Company has ultimate responsibility and oversight of ESG
risks and opportunities, and ESG is considered by the Directors as part of
every Board meeting, as well as investment decisions and risk management.
Daily management of ESG is outsourced to the Investment Adviser, with the
Board regularly updated on ESG activity through investment committee papers,
Board meetings, ESG Committee meetings, ad hoc calls, and written updates.
ESG risks are considered as part of the Company's risk management processes,
and are identified, assessed, and discussed by the Audit and Risk Committee
and included as part of the Company's risk matrix. The Company also discloses
potential impacts relating to physical and transitional climate-related risks
within its TCFD reports, which are included within the Company's Annual Report
and Financial Statements.
Commitments & KPIs
Please refer to the Company's 2023 Annual Report and Financial Statements for
its ESG commitments and KPIs for the current financial year.
5. Key Activity Update
Key progress during the interim period includes:
Greenhouse Gas (GHG) Accounting & Net Zero
The Company is currently finalising its GHG inventory relating to the 2023
calendar year, calculated in line with the GHG Protocol Corporate Accounting
Standard, which will be disclosed as part of the Company's upcoming SFDR PAI
report.
The Company is also in the process of modelling potential Net Zero targets to
serve as the foundation of its decarbonisation pathway, which is currently in
development. As part of this process, the Company will assess the feasibility
of validating its chosen targets and will develop roadmaps to help ensure
delivery of its decarbonisation goals.
Given the Company's role in the Net Zero transition, it is cognisant of the
need to select a Net Zero target which both supports its ambition to grow the
portfolio and build out its development pipeline, while also ensuring it is
being transparent and taking accountability for emissions both within its
operations and supply chain.
Climate Scenario Analysis
The Company is finalising its second physical scenario analysis, following the
"extreme heat" scenario analysis published within the Company's 2023 Annual
Report and Financial Statements, which focused on its solar PV portfolio. The
purpose of the current assessment is to investigate the potential impact of
changing wind patterns, associated with different climate scenarios, upon the
Company's wind portfolio.
Results of both physical scenario analyses will be consolidated and used to
inform the development of a climate change adaptation plan for the Company's
portfolio, and to enrich the Company's risk management processes, strategic
and investment-related decision-making, and financial planning. Findings will
be presented within the Company's 2024 TCFD disclosure.
Bluefield Partners LLP
27 February 2024
Statement of Principal and Emerging Risks and Uncertainties for the Remaining Six Months of the year to 30 June 2024
As described in the Company's annual financial statements as at 30 June 2023,
the Company's principal and emerging risks and uncertainties include the
following:
· Portfolio acquisition risk;
· Portfolio operational risk;
· Supply chain risks;
· Valuation error;
· Physical and transitional climate-related risks;
· Changing electricity market conditions;
· Changes in tax regime;
· Changes to Government plans;
· Cyber risk;
· Reputational risk;
· Access to capital, and
· Evolving ESG reporting
The Board believes that these risks are unchanged in respect of the remaining
six months of the year to 30 June 2024.
Further information in relation to these principal risks and uncertainties may
be found on pages 55 to 58 of the Company's annual financial statements as at
30 June 2023.
These inherent risks associated with investments in the renewable energy
sector could result in a material adverse effect on the Company's performance
and value of Ordinary Shares.
Risks including emerging risks are mitigated and managed by the Board through
continual review, policy setting and regular reviews of the Company's risk
matrix by the Audit and Risk Committee to ensure that procedures are in place
with the intention of minimising the impact of the above mentioned risks. The
Board carried out a formal review of the risk matrix at the Audit and Risk
Committee meeting held on 27 November 2023. The Board relies on periodic
reports provided by the Investment Adviser and Administrator regarding risks
that the Company faces. When required, experts will be employed to gather
information, including tax advisers, legal advisers, and environmental
advisers.
Directors' Statement of Responsibilities
The Directors are responsible for preparing the Interim Report and Unaudited
Condensed Interim Financial Statements in accordance with applicable
regulations. The Directors confirm that to the best of their knowledge:
§ the Unaudited Condensed Interim Financial Statements have been prepared
in accordance with IAS 34 'Interim Financial Reporting' as adopted by the
European Union; and
§ the interim management report which includes the Chair's Statement,
Report of the Investment Adviser and Statement of Principal and Emerging Risks
and Uncertainties for the remaining six months of the year to 30 June 2024
includes a fair review of the information required by:
a. DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an
indication of important events that have occurred during the first six months
of the financial year and their impact on the Unaudited Condensed Interim
Financial Statements; and a description of the principal risks and
uncertainties for the remaining six months of the financial year; and
b. DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being
related party transactions that have taken place during the first six months
of the financial year and that have materially affected the financial position
or performance of the Company during that period; and any changes in the
related party transactions described in the last annual report that could do
so.
The Board is responsible for the maintenance and integrity of the corporate
and financial information included on the Company's website, and for the
preparation and dissemination of financial statements. Legislation in Guernsey
governing the preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
On behalf of the Board
Elizabeth Burne Chris Waldron
Director Director
27 February 2024 27 February 2024
Independent Review Report to Bluefield Solar Income Fund Limited
Conclusion
We have been engaged by Bluefield Solar Income Fund Limited (the "Company") to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 December 2023 of the Company, which comprises the unaudited condensed statement of financial position, the unaudited condensed statement of comprehensive income, the unaudited condensed statement of changes in equity, the unaudited condensed statement of cash flows and the related explanatory notes.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 31 December 2023 is not prepared, in
all material respects, in accordance with IAS 34 Interim Financial Reporting
as adopted by the EU and the Disclosure Guidance and Transparency Rules ("the
DTR") of the UK's Financial Conduct Authority ("the UK FCA").
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity ("ISRE (UK) 2410") issued by the Financial Reporting Council for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. We read the other information contained in the half-yearly financial report and consider whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and consequently does not enable
us to obtain assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not express an audit
opinion.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed in an audit as described in the Scope of review section of this report, nothing has come to our attention to suggest that the directors have inappropriately adopted the going concern basis of accounting or that the directors have identified material uncertainties relating to going concern that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410. However future events or conditions may cause the Company to
cease to continue as a going concern, and the above conclusions are not a
guarantee that the Company will continue in operation.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim financial report in accordance with the DTR of the UK FCA.
As disclosed in note 2, the annual financial statements of the Company are prepared in accordance with International Financial Reporting Standards as adopted by the EU. The directors are responsible for preparing the condensed set of financial statements included in the half-yearly financial report in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.
In preparing the half-yearly financial report, the directors are responsible
for assessing the Company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless they either intend to liquidate the
Company or to cease operations, or have no realistic alternative but to do so.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review. Our conclusion, including our conclusions relating to going concern,
are based on procedures that are less extensive than audit procedures, as
described in the scope of review paragraph of this report.
The purpose of our review work and to whom we owe our responsibilities
This report is made solely to the Company in accordance with the terms of our
engagement letter to assist the Company in meeting the requirements of the DTR
of the UK FCA. Our review has been undertaken so that we might state to the
Company those matters we are required to state to it in this report and for no
other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company for our review work,
for this report, or for the conclusions we have reached.
Barry Ryan
for and on behalf of KPMG Channel Islands Limited
Chartered Accountants, Guernsey
27 February 2024
Unaudited Condensed Statement of Financial Position
As at 31 December 2023
31 December 2023 30 June 2023
Unaudited Audited
Note £'000 £'000
ASSETS
Non-current assets
Financial assets held at fair value through profit or loss 7 830,253 852,844
Total non-current assets 830,253 852,844
Current assets
Trade and other receivables 8 467 910
Cash and cash equivalents 9 1,033 969
Total current assets 1,500 1,879
TOTAL ASSETS 831,753 854,723
LIABILITIES
Current liabilities
Other payables and accrued expenses 10 477 534
Total current liabilities 477 534
TOTAL LIABILITIES 477 534
NET ASSETS 831,276 854,189
EQUITY
Share capital 663,809 663,809
Retained earnings 167,467 190,380
TOTAL EQUITY 12 831,276 854,189
Number of Ordinary Shares in issue 12 611,452,217 611,452,217
at period/year end
Net Asset Value per Ordinary Share (pence) 6 135.95 139.70
These unaudited condensed interim financial statements were approved and
authorised for issue by the Board of Directors on 27 February 2024 and signed
on their behalf by:
Elizabeth Burne Chris Waldron
Director Director
27 February 2024 27 February 2024
The accompanying notes form an integral part of these unaudited condensed
interim financial statements.
Unaudited Condensed Statement of Comprehensive Income
For the six months ended 31 December 2023
Six months ended Six months ended
31 December 2023 31 December 2022
Unaudited Unaudited
Note £'000 £'000
Income
Income from investments 4 450 437
Bank interest 13 -
463 437
Net gains on financial assets held at fair value through profit or loss 7 4,614 38,408
Operating income 5,077 38,845
Expenses
Administrative expenses 5 1,086 1,203
Operating expenses 1,086 1,203
Operating profit 3,991 37,642
Total comprehensive income 3,991 37,642
for the period
Attributable to:
Owners of the Company 3,991 37,642
Earnings per share:
Basic and diluted (pence) 11 0.65 6.16
All items within the above statement have been derived from continuing
activities.
The accompanying notes form an integral part of these unaudited condensed
interim financial statements.
Unaudited Condensed Statement of Changes in Equity
For the six months ended 31 December 2023
Number of Share capital Retained earnings Total equity
Ordinary Shares
Note
£'000 £'000 £'000
Shareholders' equity at 1 July 2023 611,452,217 663,809 190,380 854,189
Dividends paid 12,13 - - (26,904) (26,904)
Total comprehensive income for the period - - 3,991 3,991
Shareholders' equity at 31 December 2023 611,452,217 663,809 167,467 831,276
For the six months ended 31 December 2022
Number of Share capital Retained earnings Total equity
Ordinary Shares
Note
£'000 £'000 £'000
Shareholders' equity at 1 July 2022 611,452,217 663,809 194,582 858,391
Dividends paid 12,13 - - (25,314) (25,314)
Total comprehensive income for the period - - 37,642 37,642
Shareholders' equity at 31 December 2022 611,452,217 663,809 206,910 870,719
The accompanying notes form an integral part of these unaudited condensed
interim financial statements.
Unaudited Condensed Statement of Cash Flows
For the six months ended 31 December 2023
Six months ended Six months ended
31 December 2023 31 December 2022
Unaudited Unaudited
Note £'000 £'000
Cash flows from operating activities
Total comprehensive income for the period 3,991 37,642
Adjustments:
Decrease/(increase) in trade and other receivables 443 (393)
(Decrease)/increase in other payables and accrued expenses (57) 185
Net gains on financial assets held at fair value through profit or loss 7 (4,614) (38,408)
Net cash used in operating activities* (237) (974)
Cash flows from investing activities
Receipts from unconsolidated subsidiary** 7 27,205 25,300
Net cash generated from investing activities 27,205 25,300
Cash flows from financing activities
Dividends paid 12,13 (26,904) (25,314)
Net cash used in financing activities (26,904) (25,314)
Net increase/(decrease) in cash and cash equivalents 64 (988)
Cash and cash equivalents at the start of the period 969 1,619
Cash and cash equivalents at the end of the period 9 1,033 631
The accompanying notes form an integral part of these unaudited condensed
interim financial statements.
*Net cash used in operating activities includes £450,000 (31 December 2022:
£437,500) of investment income.
**Receipts from unconsolidated subsidiary includes £14.1 million (31 December
2022: £6.2 million) of interest.
Notes to the Unaudited Condensed Interim Financial Statements
For the six months ended 31 December 2023
1. General information
The Company is a non-cellular company limited by shares, incorporated in
Guernsey under the Law on 29 May 2013. The Company's registration number is
56708, and it is regulated by the GFSC as a registered closed-ended collective
investment scheme.
The investment objective of the Company is to provide Shareholders with an
attractive return, principally in the form of quarterly income distributions,
by being invested primarily in solar energy assets located in the UK. The
Company also has the ability to invest a minority of its share capital into
wind, hydro and energy storage assets.
The Company has appointed Bluefield Partners LLP as its Investment Adviser.
2. Accounting policies
a) Basis of preparation
The financial statements, included in this interim report, have been prepared
in accordance with IAS 34 'Interim Financial Reporting', as adopted by the EU
and the DTR. These financial statements comprise only the results of the
Company as all of its subsidiaries are measured at fair value as explained in
Note 2.c. The financial statements have been prepared on a basis that is
consistent with accounting policies applied in the preparation of the
Company's annual financial statements for the year ended 30 June 2023,
approved for issue on 27 September 2023.
These financial statements have been prepared under the historical cost
convention with the exception of financial assets held at fair value through
profit or loss and in accordance with the provisions of the DTR.
These financial statements do not include all information and disclosures
required in the annual financial statements and should be read in conjunction
with the Company's audited financial statements for the year ended 30 June
2023, which were prepared under full IFRS requirements and the DTRs of the UK
FCA.
Seasonal and cyclical variations
Although the bulk of the Company's electricity generation occurs during the
summer months when the days are longer, the Company's results do not vary
significantly during reporting periods as a result of seasonal activity.
b) Going concern
The Directors, in their consideration of going concern, have reviewed cash
flow forecasts prepared by the Investment Adviser, future projects in the
pipeline and the performances of the current solar and wind plants in
operation.
The Board has considered the Directors' Valuation, which uses a blend of power
price forecasts from leading industry consultants. These forecasts are based
on updated analysis on European fuels and carbon forward prices as well as the
expected evolution of the UK's overall power supply and demand position in the
longer term. Electricity prices continued to fall during the Period, with UK
day-ahead base load priced pricing falling to £85.92/MWh on average in the
six months to 31 December 2023, down from £110.75/MWh the previous six-month
period to 30 June 2023.
The Company's PPA sales strategy is largely unchanged: power sales prices are
fixed for between 12 and 36 months ahead and went into 2024 with more than 78%
of its merchant revenue sold forward to March 2025, and is therefore not
impacted by the current fall in power prices. The Group continues to generate
a significant cash surplus and has been able to move cash up the structure to
comfortably meet the dividend requirements of its parent. The Board is
confident that, post debt amortisation, it will achieve a high level of
dividend cover for the present and the 2025 financial years, taking into
account both current and carried forward earnings.
On 22 June 2023, the Group agreed a £110 million increase to its existing
committed £100 million RCF, bringing the total committed amount to £210
million. The facility also has an uncommitted accordion feature allowing it to
be increased by up to a further £30 million. As at 31 December 2023, the
Group had drawn £167 million from its RCF and has £410 million of project
level debt. Discussions are constantly held with lenders to ensure extensions
are secured comfortably ahead of maturity. Given the strong cash generation,
the Board is satisfied that debt repayments will be met and confirms that no
covenant breaches have occurred in the period.
At the AGM held on 28 November 2023, BSIF's shareholders voted overwhelmingly
in favour of the continuation of the Company for a further five years. Whilst
there has been volatility in the share price of the Company recently, this is
consistent with other funds in the sector. The portfolio continues to benefit
from high energy prices and strong cash generation even when the impact of the
Electricity Generator Levy is considered.
On 15 February 2024 BSIF announced its intention to commence a share buyback
programme in response to the recent weakness in BSIF's share price and the
significant discount that the share price represents to the value of BSIF's
assets. The capital allocation policy of BSIF undergoes regular review,
evaluating the relative merits of further investment (into both new and
existing assets), the management of debt and returning value to shareholders.
This review, and in the context of addressing what the Board views as the
excessive discount at which BSIF's shares currently trade relative to the
underlying NAV, led to the Board's announcement of the share buyback
programme. The initial cash allocation has been set at £20 million for the
purchase of its own shares from existing cash reserves.
The Directors have concluded that it is appropriate to adopt the going concern
basis of accounting in preparing these financial statements.
c) Accounting for subsidiaries
The Board considers that the Company is an investment entity. In accordance
with IFRS 10, all subsidiaries are recognised at fair value through profit and
loss.
d) Segmental reporting
IFRS 8 'Operating Segments' requires a 'management approach', under which
segment information is presented on the same basis as that used for internal
reporting purposes.
The Board, as a whole, has been determined as constituting the chief operating
decision maker of the Company. One of the key measures of performance used by
the Board to assess the Company's performance and to allocate resources is the
total return on the Company's NAV, as calculated under IFRS, and therefore no
reconciliation is required between the measure of profit or loss used by the
Board and that contained in these financial statements.
For management purposes, the Company is engaged in a single segment of
business, being investment in renewable energy infrastructure assets via SPVs,
and in one geographical area, the UK.
e) Fair value of subsidiary
The Company holds all of the shares in the subsidiary, BR1, which is a holding
vehicle used to hold the Company's investments. The Directors believe it is
appropriate to value this entity based on the fair value of its portfolio of
SPV investment assets held plus its other assets and liabilities. The SPV
investment assets held by the subsidiary, inclusive of their intermediary
holding companies, are valued semi-annually as described in Note 7 based on
referencing comparable transactions supported by discounted cash flow analysis
and are referred to as the Directors' Valuation.
3. Critical accounting judgements, estimates and assumptions in applying
the Company's accounting policies
The preparation of these financial statements under IFRS requires management
to make judgements, estimates and assumptions that affect the application of
policies and reported amounts of assets and liabilities, income and expenses.
The estimates and associated assumptions are based on historical experience
and other factors that are believed to be reasonable under the circumstances,
the results of which form the basis of making judgements about carrying values
of assets and liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates.
The area involving a high degree of judgement or complexity or area where
assumptions and estimates are significant to the financial statements has been
identified as the valuation of the portfolio of investments held by BR1 (see
Note 7).
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period or in the period
of the revision and future period if the revision affects both current and
future periods.
As disclosed in Note 7, the Board believes it is appropriate for the Company's
portfolio to be benchmarked on a £m / MW basis against comparable portfolio
transactions and on this basis the weighted average discount rate remains
8.00% (8.00% in June 2023), which reflects the return hurdles in the market
for lowly levered assets with high levels of regulated income.
4. Income from investments
Six months ended Six months ended
31 December 2023 31 December 2022
£'000 £'000
Monitoring fee in relation to loans supplied (note 14) 450 437
450 437
The Company provides monitoring and loan administration services to BR1 for
which an annual fee is charged and is payable in arrears.
5. Administrative expenses
Six months ended Six months ended
31 December 2023
31 December 2022
£'000 £'000
Investment advisory base fee (see Note 14) 335 397
Administration fees 252 289
Legal and professional fees 152 140
Directors' remuneration (see Note 14) 120 137
Audit fees 59 53
Regulatory Fees 58 50
Non-audit fees (interim review) 48 45
Broker fees 25 25
Registrar fees 12 35
Insurance 7 12
Listing fees 3 3
Other expenses 15 17
1,086 1,203
6. Net Asset Value per Ordinary Share
The calculation of NAV per Ordinary Share is arrived at by dividing the total
net assets of the Company as at the unaudited condensed statement of financial
position date by the number of Ordinary Shares of the Company at that date.
7. Financial assets held at fair value through profit or loss
Six months ended Twelve months ended
31 December 2023 30 June 2023
Total Total
£'000 £'000
Opening balance (Level 3) 852,844 856,380
Change in fair value (22,591) (3,536)
Closing balance (Level 3) 830,253 852,844
Investments at fair value through profit or loss comprise the fair value of
the investment portfolio, which the Investment Adviser recommends on a
quarterly basis, including a complete review of all valuation assumptions on a
semi-annual basis, subject to the Board's approval, and the fair value of BR1,
the Company's single, direct subsidiary being its cash, working capital and
debt balances. A reconciliation of the investment portfolio value to financial
assets at fair value through profit and loss in the Unaudited Condensed
Statement of Financial Position is shown below.
31 December 2023 30 June 2023
Total Total
£'000 £'000
Investment portfolio, Directors' Valuation 1,001,053 1,018,350
Immediate Holding Company
Cash 24,952 26,407
Working capital (28,752) (38,913)
Debt (167,000) (153,000)
(170,800) (165,506)
Financial assets at fair value through profit or loss 830,253 852,844
Analysis of net gains on financial assets held at fair value through profit or
loss (per unaudited condensed statement of comprehensive income)
Six months ended Six months ended
31 December 2023 31 December 2022
£'000 £'000
Unrealised change in fair value of financial assets held at fair value through (22,591) 13,108
profit or loss
Cash receipts from unconsolidated subsidiary* 27,205 25,300
Net gains on financial assets held at fair value through profit and loss 4,614 38,408
*Comprising of repayment of loans and Eurobond interest
Fair value measurements
Financial assets and financial liabilities are classified in their entirety
into only one of the following three levels:
· Level 1 - quoted prices (unadjusted) in
active markets for identical assets or liabilities;
· Level 2 - inputs other than quoted prices
included within Level 1 that are observable for the assets or liabilities,
either directly (i.e. as prices) or indirectly (i.e. derived from prices);
· Level 3 - inputs for assets or liabilities
that are not based on observable market data (unobservable inputs).
The determination of what constitutes 'observable' requires significant
judgement by the Company. The Company considers observable data to be market
data that is readily available, regularly distributed or updated, reliable and
verifiable, not proprietary, and provided by independent sources that are
actively involved in the relevant market.
The only financial instruments carried at fair value are the investments held
by the Company, through BR1, which are fair valued at each reporting date. The
Company's investments have been classified within Level 3 as BR1's investments
are not traded and are valued using unobservable inputs.
Transfers during the period
There have been no transfers between levels during the six month period ended
31 December 2023. Any transfers between the levels will be accounted for on
the last day of each financial period. Due to the nature of investments, these
are always expected to be classified as Level 3.
Directors' Valuation methodology and process
The same valuation methodology and process for operational assets is followed
in these financial statements as was applied in the preparation of the
Company's financial statements for the year ended 30 June 2023.
Before planning has been achieved, no value is attributed to the Company's
development pipeline.
However, once the projects receive planning permission they are then valued
according to the following criteria:
· Projects purchased by the Company from developers are valued at
investment cost (deemed to be approximate fair value).
· Other projects in the Company's pipeline are valued on an
asset-by-asset basis and benchmarked against values from wider market
processes.
During the construction stages assets continue to be valued at investment cost
(deemed to be approximate fair value). The Investment Adviser intends for
newly built projects to be valued on a DCF basis shortly after they become
operational.
Investments that are operational are valued on a DCF basis over the life of
the asset (typically more than 25 years) and, under the 'willing buyer-willing
seller' methodology, prudently benchmarked on a £/MW basis against comparable
transactions for large scale portfolios.
Each investment is subject to full UK corporate taxation at the prevailing
rate with the tax shield being limited to the applicable capital allowances
from the Company's SPV investments.
The Investment Adviser recommends the fair value on a quarterly basis, which
includes a complete review of all valuation assumptions on a semi-annual
basis, subject to the Board's approval. The key inputs, as listed below, are
derived from various internal and external sources. The key inputs to a DCF
based approach are: the equity discount rate, the cost of debt (influenced by
interest rates, gearing level and length of debt), power price forecasts, long
term inflation rates, irradiation forecasts, average wind speeds, operational
costs, asset life and taxation. Given discount rates are a product of not only
the factors listed previously but also regulatory support, perceived sector
risk and competitive tensions, it is not unusual for discount rates to change
over time. Evidence of this is shown by way of the revisions to the original
discount rates applied between the first renewable acquisitions and those
witnessed in the past twelve months.
The Electricity Generator Levy ("EGL") on excess profits produced by
electricity generators was announced by the Chancellor of the Exchequer in the
Autumn Statement in November 2022 is a temporary 45% tax on the extraordinary
returns made by electricity generators last year while European energy prices
soared in the wake of Russia's 2022 invasion of Ukraine. The EGL will be in
place from 1 January 2023 until 31 March 2028, with the benchmark price linked
to UK Consumer Price Inflation. The Investment Adviser previously sought
external advice from its legal and tax advisers on how to model the EGL within
the valuation methodology.
Given the fact discount rates are subjective, there is sensitivity within
these to the interpretation of factors outlined above.
Judgement is used by the Board in determining the weighted average discount
rate of 8.00% (8.00% as at 30 June 2023), with four key factors that have
impacted the adoption of this rate outlined below:
a. Transaction values have remained broadly
consistent at c.£1.20m-1.45m/MW for large scale solar portfolios and which
the Board have used to determine that an effective price of £1.28m/MW is an
appropriate basis for the valuation of the BSIF solar portfolio as at 31
December 2023;
b. Inclusion of the latest blended long term power
forecasts from the Company's three providers;
c. Inclusion of inflation assumptions;
d. Decrease in the cost of debt.
In order to smooth the sensitivity of the valuation to forecast timing or the
opinion taken by a single forecast, the Board continues to adopt the
application of a blended power curve from three leading forecasters.
The fair value of operational SPVs is calculated on a discounted cash flow
basis in accordance with the IPEV Valuation Guidelines. The Investment Adviser
recommends the fair value on a quarterly basis, which includes a complete
review of all valuation assumptions on a semi-annual basis, subject to the
Board's approval as at 30 June and 31 December each year.
Sensitivity analysis
The table below analyses the sensitivity of the fair value of the Directors'
Valuation to an individual input, while all other variables remain constant.
The Board considers the changes in inputs to be within a reasonable expected
range based on its understanding of market transactions. This is not intended
to imply that the likelihood of change or that possible changes in value would
be restricted to this range.
31 December 2023 30 June 2023
Input Change in input Change in fair value Change in NAV per share Change in fair value Change in NAV
of Directors' Valuation (pence) of Directors' Valuation per share
£m £m (pence)
Discount rate + 0.5% (18.5) (3.03) (18.8) (3.07)
- 0.5% 19.1 3.12 19.4 3.17
Power prices +10% 58.2 9.52 54.2 8.86
-10% (59.9) (9.80) (56.9) (9.31)
Inflation rate + 0.5% 42.7 6.98 31.7 5.19
- 0.5% (40.4) (6.61) (30.2) (4.94)
Energy yield 10 year P90 (101.7) (16.63) (105.0) (17.17)
10 year P10 108.4 17.73 111.9 18.30
Operational costs +10% (9.2) (1.50) (9.1) (1.49)
-10% 9.2 1.50 9.1 1.49
Subsidiaries and Associates
The Company holds investments through subsidiary companies which have not been
consolidated as a result of the adoption of IFRS 10: Investment entities
exemption to consolidation. Below is the legal entity name and ownership
percentage for the SPVs which are all incorporated in the UK except for
Bluefield Durrants GmBH which is incorporated in Germany.
Name Ownership percentage Name Ownership percentage
Bluefield Renewables 1 Limited 100 Holly Farm Solar Park Limited 100
Bluefield Renewables 2 Limited 100 Kellingley Solar Farm Limited 100
Bluefield SIF Investments Limited 100 Little Bear Solar Limited 100
Bunns Hill Solar Limited 100 Place Barton Farm Solar Park Limited 100
HF Solar Limited 100 Willows Farm Solar Limited 100
Hoback Solar Limited 100 Southwick Solar Farm Limited 100
Littlebourne Solar Farm Limited 100 Butteriss Down Solar Farm Limited 100
Molehill PV Farm Limited 100 Goshawk Solar Limited 100
Pashley Solar Farm Limited 100 Kite Solar Limited 100
ISP (UK) 1 Limited 100 Peregrine Solar Limited 100
Solar Power Surge Limited 100 Promothames 1 Limited 100
West Raynham Solar Limited 100 Rookery Solar Limited 100
Sheppey Solar Limited 100 Mikado Solar Projects (2) Limited 100
Capelands Solar Farm Limited 100 Mikado Solar Projects (1) Limited 100
North Beer Solar Limited 100 KS SPV 5 Limited 100
WEL Solar Park 2 Limited 100 Eagle Solar Limited 100
Hardingham Solar Limited 100 Kislingbury M1 Solar Limited 100
Redlands Solar Farm Limited 100 Thornton Lane Solar Farm Limited 100
WEL Solar Park 1 Limited 100 Gretton Solar Farm Limited 100
Saxley Solar Limited 100 Wormit Solar Farm Limited 100
Frogs Lake Solar Limited 100 Langlands Solar Limited 100
Old Stone Farm Solar Park Limited 100 Bluefield Merlin Limited 100
Bradenstoke Solar Park Limited 100 Harrier Solar Limited 100
GPP Langstone LLP 100 Rhydy Pandy Solar Limited 100
Ashlawn Solar Limited 100 New Energy Business Solar Limited 100
Betingau Solar Limited 100 Corby Solar Limited 100
Grange Solar Limited 100 Falcon Solar Farm Limited 100
Hall Solar Limited 100 Folly Lane Solar Limited 100
Oulton Solar Limited 100 New Road Solar Limited 100
Romsey Solar Limited 100 Blossom 1 Solar Limited 100
Salhouse Solar Limited 100 Blossom 2 Solar Limited 100
Tollgate Solar Limited 100 New Road 2 Solar Limited 100
Trethosa Solar Limited 100 GPP Eastcott LLP 100
Welborne Energy LLP 100 GPP Blackbush LLP 100
Barvills Solar Limited 100 GPP Big Field LLP 100
Clapton Farm Solar Park Limited 100 Oak Renewables 2 Limited 100
Court Farm Solar Park Limited 100 Oak Renewables Limited 100
East Farm Solar Park Limited 100 Creathorne Farm Solar Park Limited (formerly Good Energy Creathorne Farm Solar 100
Park (003) Limited)
Gypsum Solar Farm Limited 100 Lower End Farm Solar Park Limited (formerly Good Energy Lower End Farm Solar 100
Park (026) Limited)
Woolbridge Solar Park Limited (formerly Good Energy Woolbridge Solar Park 100 Wind Energy Holdings Limited 100
(010) Limited)
Rook Wood Solar Park Limited (formerly Good Energy Rook Wood Solar Park (057) 100 Wind Energy 1 Hold Co Limited 100
Limited)
Carloggas Solar Park Limited (formerly Good Energy Carloggas Solar Park (009) 100 Crockbaravally Wind Holdco Limited 100
Limited)
Cross Road Plantation Solar Park Limited (formerly Good Energy Cross Road 100 Crockbaravally Wind Farm Limited 100
Plantation Solar Park Limited)
Delabole Windfarm Limited (formerly Good Energy Delabole Windfarm Limited) 100 Dayfields Solar Limited 100
Hampole Windfarm Limited (formerly Good Energy Hampole Windfarm Limited) 100 Farm Power Apollo Limited 100
Renewable Energy Assets Limited (formerly Good Energy Generation Assets No. 1 100 Freathy Solar Park Limited 100
Limited)
Aisling Renewables Limited 100 IREEL FIT TopCo Limited 100
Wind Energy 3 Hold Co Limited 100 IREEL FIT HoldCo Limited 100
Wind Energy (NI) Limited 100 IREEL Wind TopCo Limited 100
Ash Renewables No 3 Limited 100 IREEL Solar HoldCo Limited 100
Ash Renewables No 4 Limited 100 IREL Solar HoldCo Limited 100
Ash Renewables No 5 Limited 100 Ladyhole Solar Limited 100
Ash Renewables No 6 Limited 100 Morton Wood Solar Limited 100
Wind Beragh Limited 100 Nanteague Solar Limited 100
Wind Camlough Limited 100 Newton Down Wind HoldCo Limited 100
Wind Cullybackey Limited 100 Newton Down Windfarm Limited 100
Wind Dungorman Limited 100 Padley Wood Solar Limited 100
Wind Killeenan Limited 100 Peel Wind Farm (Sheerness) Limited 100
Wind Mowhan Limited 100 Port of Sheerness Wind Farm Limited 100
Wind Mullanmore Limited 100 Sandys Moor Solar Limited 100
Carmoney Energy Limited 100 St Johns Hill Wind Holdco Limited 100
Errigal Energy Limited 100 St Johns Hill Wind Limited 100
Galley Energy Limited 100 Trickey Warren Solar Limited 100
S&E Wind Energy Limited 100 Whitton Solar Limited 100
Wind Energy 2 Hold Co Limited 100 LPF UK Equityco Limited 100
Boston RE Limited 100 LPF UK Solar Limited 100
DC21 Earth SPV Limited 100 LPF Kinetica UK Limited 100
E5 Energy Limited 100 Wind Energy Scotland (Fourteen Arce Fields) Limited 100
E6 Energy Limited 100 Wind Energy Scotland (Birkwood Mains) Limited 100
E7 Energy Limited 100 Wind Energy Scotland (Holmhead) Limited 100
Hallmark Powergen 3 Limited 100 Mosscliff Power 5 Limited 100
Warren Wind Limited 100 Mosscliff Power 10 Limited 100
Wind Energy Three Limited 100 Mosscliff Power 2 Limited 100
Mosscliff Power 3 Limited 100 BF33C LHF Solar Limited 60
Mosscliff Power 4 Limited 100 AR006 GF Solar Limited 100
Mosscliff Power 6 Limited 100 Mauxhall Farm Energy Park Limited 100
Mosscliff Power 7 Limited 100 BF16D BHF Solar Limited 100
Mosscliff Power Limited 100 BF33E BHF Solar Limited 60
E2 Energy PLC 100 WSE Hartford Wood Limited 60
Wind Energy One Limited 100 BF58 Hunts Airfield Solar Limited 60
Wind Energy Two Limited 100 Twineham Energy Limited 60
New Road Wind Limited 100 Sheepwash Lane Energy Barn Limited 100
Yelvertoft Solar Farm Limited 100 Whitehouse Farm Energy Barn Limited 100
Peradon Solar Farm Limited 100 Bluefield Durrants GmBH 100
Lower Tean Leys Solar Farm Limited 60 Lightning 1 Energy Park Limited 100
Lower Mays Solar Farm Limited 100 Abbots Ann Farm Solar Park Limited 100
Longpasture Solar Farm Limited 60 Canada Farm Solar Park Limited 100
Leeming Solar Farm Limited 60 Kinetica 846 Limited 100
Wallace Wood Solar Farm Limited 60 Kinetica 868 Limited 100
LEO1B Energy Park Limited 60 New Road Solar 3 Limited 100
LH DNO Grid Services Limited 60 New Road Solar 4 Limited 100
Sweet Briar Solar Farm Limited 60 Galton Manor Solar Park Limited 100
BF31 WHF Solar Farm Limited 60 Renewable Energy Hold Co Limited' 100
BF27 BF Solar Limited 60 Westover Gridco Limited 50
BF13A TF Solar Limited 60 Lyceum Solar Limited 9
HW Solar Farm Limited 100
AR108 Bolt Solar Farm Limited 100
8. Trade and other receivables
31 December 2023 30 June 2023
£'000 £'000
Current assets
Monitoring fees receivable 450 900
Other receivables 17 10
467 910
There are no material past due or impaired receivable balances outstanding at
the period end. The probability of default of BSIFIL and BR1 was considered
low and so no allowance has been recognised based on 12-month expected credit
loss as any impairment would be insignificant.
The Board considers that the carrying amount of all receivables approximates
to their fair value.
9. Cash and cash equivalents
Cash and cash equivalents comprise cash held by the Company and short term
bank deposits held with maturities of up to three months. The carrying amounts
of these assets approximate their fair value.
10. Other payables and accrued expenses
31 December 2023 30 June 2023
£'000 £'000
Current liabilities
Investment advisory fees (see Note 14) 163 164
Administration fees 134 136
Directors' Fees (see Note 14) 61 72
Audit fees 55 109
Other payables 64 53
477 534
The Company has financial risk management policies in place to ensure that all
payables are paid within the agreed credit period. The Directors consider that
the carrying amount of all payables approximates to their fair value.
11. Earnings per share
Six months ended Six months ended
31 December 2023 31 December 2022
Profit attributable to Shareholders of the Company £3,991,019 £37,642,084
Weighted average number of Ordinary Shares in issue 611,452,217 611,452,217
Basic and diluted earnings from continuing operations and profit for the 0.65 6.16
period (pence per share)
12. Share capital and reserves
The authorised share capital of the Company is represented by an unlimited
number of Ordinary Shares of no par value which, upon issue, the Directors may
designate into such classes and denominate in such currencies as they may
determine.
Number of Ordinary Shares Six months ended Year ended
31 December 2023 30 June 2023
Number of Number of
Ordinary Shares Ordinary Shares
Opening balance 611,452,217 611,452,217
Shares issued for cash - -
Closing balance 611,452,217 611,452,217
Six months ended Year ended
Shareholders' equity 31 December 2023 30 June 2023
£'000 £'000
Opening balance 854,189 858,391
Dividends paid (26,904) (50,995)
Total comprehensive income 3,991 46,793
Closing balance 831,276 854,189
Rights attaching to shares
The Company has a single class of Ordinary Shares which are entitled to
dividends declared by the Company. At any General Meeting of the Company each
ordinary Shareholder is entitled to have one vote for each share held. The
Ordinary Shares also have the right to receive all income attributable to
those shares and participate in dividends made and such income shall be
divided pari passu among the holders of Ordinary Shares in proportion to the
number of Ordinary Shares held by them.
Retained earnings
Retained earnings comprise of accumulated retained earnings as detailed in the
unaudited condensed statement of changes in equity.
13. Dividends
On 7 August 2023, the Board declared a third interim dividend of £12,840,497,
in respect of the year ended 30 June 2023, equating to 2.10pps (third interim
dividend in respect of the year ended 30 June 2022: 2.05pps), which was paid
on 1 September 2023 to Shareholders on the register on 18 August 2023.
On 28 September 2023, the Board declared a fourth interim dividend of
£14,063,401 in respect of the year ended 30 June 2023, equating to 2.30pps
(fourth interim dividend in respect of the year ended 30 June 2022: 2.09pps),
which was paid on 6 November 2023 to Shareholders on the register on 6 October
2023.
14. Related Party Transactions and Directors' Remuneration
In the opinion of the Directors, the Company has no immediate or ultimate
controlling party.
The total Directors' fees expense for the Period amounted to £120,376 (31
December 2022: £136,965) of which £61,220 was outstanding at 31 December
2023 (30 June 2023: £71,517).
Remuneration paid to each Director is as follows:
31 December 2023 31 December 2022
£'000 £'000
John Scott 34 24
Elizabeth Burne 25 22
Michael Gibbons (appointed 7 October 2022) 20 10
Meriel Lenfestey 24 23
Paul Le Page (retired 30 September 2023) 13 26
John Rennocks (retired 22 February 2023) N/A 32
Chris Waldron (appointed 1 December 2023) 4 N/A
120 137
The number of Ordinary Shares held by each Director is as follows:
31 December 2023 31 December 2022
John Scott* 643,929 625,619
Elizabeth Burne 15,000 15,000
Michael Gibbons (appointed 7 October 2022) 17,800 -
Meriel Lenfestey 7,693 7,693
Paul Le Page (retired 30 September 2023) N/A 35,000
John Rennocks* (retired 22 February 2023) N/A 320,388
Chris Waldron (appointed 1 December 2023) 30,000 N/A
714,422 1,003,700
*Includes shares held by PCAs.
John Scott and Michael Gibbons are Directors of BR1. Neil Wood and James
Armstrong, who are partners of the Investment Adviser, are also Directors of
BSIFIL and BR1.
Fees paid during the period by SPVs to BSL, a company which has the same
ownership as that of the Investment Adviser, totalled £2,681,775 (31 December
2022: £1,971,264).
Fees paid during the period by SPVs to BOL, a company which has the same
ownership as that of the Investment Adviser, totalled £ 5,834,327 (31
December 2022: £3,706,826).
Fees paid during the period by SPVs to BRD, a company which has the same
ownership as that of the Investment Adviser, totalled £386,197 (31 December
2022: £379,295).
Under the terms of the Investment Advisory Agreement, the Investment Adviser
is entitled to a base fee. The base fee is payable quarterly in arrears in
cash, at a rate equivalent to 0.80% per annum of the NAV up to and including
£750,000,000, 0.75% per annum of the NAV above £750,000,000 and up to and
including £1,000,000,000 and 0.65% per annum of the NAV above
£1,000,000,000. The base fee will be calculated on the NAV reported in the
most recent quarterly NAV calculation as at the date of payment. During the
period an updated Investment Advisory Agreement was approved with an amendment
to the base fee taking effect on 21 December 2023; at a rate equivalent to
0.80% per annum of the NAV up to and including £750,000,000, 0.75% per annum
of the NAV above £750,000,000 and up to and including £900,000,000 and 0.65%
per annum of the NAV above £900,000,000.
The Company and BR1's investment advisory fees for the period amounted to
£3,342,456 (31 December 2022: £3,650,104) of which £545,719 (30 June 2023:
£554,919) was outstanding at the period end and is to be settled in cash. The
investment advisory fees for the period attributable to the Company amounted
to £334,859 (31 December 2022: £397,329) of which £162,673 (30 June 2023:
£163,984) was outstanding at the period end.
The Company's loan monitoring fee income for the period, due from its
subsidiary BR1, amounted to £450,000 (31 December 2022: £437,500) of which
£450,257 was outstanding at the period end (30 June 2023: £900,257).
15. Risk Management Policies and Procedures
As at 31 December 2023 there has been no change to financial instruments risk
to those described in note 15 of the financial statements to 30 June 2023.
16. Subsequent events
On 25 January 2024, the Company announced the successful completion of the
first phase of the partnership with GLIL, with £20 million invested in equity
alongside £200 million from GLIL to acquire a 247 MW portfolio of UK solar
assets from Lightsource bp. BSIF's ownership stake in the portfolio is 9%. The
Company funded the acquisition using earnings which arose in the financial
year ended 30 June 2023, after the payment of dividends, debt amortisation and
the EGL.
On 26 January 2024, the Board declared its first interim dividend of
£13,451,949, in respect of the year ending 30 June 2024, equating to 2.20pps
(first interim dividend in respect of the year ended 30 June 2023: 2.10pps),
which will be paid on or around 9 March 2024 to Shareholders on the register
on 9 February 2024.
On 15 February 2024, the Company announced a share buyback programme in which
it has allocated £20 million to purchase its own shares post closed period.
This announcement was made in response to recent weakness in the Company's
share price. This buy back will be funded from a combination of available
liquidity, excess operating cash flows from the portfolio and the proceeds
from any asset sales as already announced.
Post period end, in early January one solar project of 50MW received planning
permission located in Durham.
Glossary of Defined Terms
Administrator means Ocorian Administration (Guernsey) Limited
AGM means the Annual General Meeting
AIC means the Association of Investment Companies
AIC Code means the Association of Investment Companies Code of Corporate
Governance
AIF means Alternative Investment Fund
AIFM means Alternative Investment Fund Manager
AIFMD means the Alternative Investment Fund Management Directive
Articles means the Memorandum of 29 May 2013 as amended and the Articles of
Incorporation as adopted by special resolution on 7 November 2016.
Auditor means KPMG Channel Islands Limited (see KPMG)
Aviva Investors means Aviva Investors Limited
BEIS means the Department for Business, Energy & Industrial Strategy
BEPS means Base erosion and profit shifting
Bluefield means Bluefield Partners LLP
Bluefield Group means Bluefield Partners LLP and Bluefield Companies
BOL means Bluefield Operations Limited
Board means the Directors of the Company
BR1 means Bluefield Renewables 1 Ltd being the only direct subsidiary of the
Company
BRD means Bluefield Renewable Developments Limited
BSIF means Bluefield Solar Income Fund Limited
BSIFIL means Bluefield SIF Investments Limited
BSL means Bluefield Asset Management Services Limited
BSUoS means Balancing Services Use of System charges: costs set to ensure that
network companies can recover their allowed revenue under Ofgem price controls
Business days means every official working day of the week, generally Monday
to Friday excluding public holidays
CAGR means compound annual growth rate
Calculation Time means the Calculation Time as set out in the Articles of
Incorporation
CCC means Committee on Climate Change
CfD means Contract for Difference
Company means Bluefield Solar Income Fund Limited (see BSIF)
Companies Law means the Companies (Guernsey) Law 2008, as amended (see Law)
Cost of debt means the blended cost of debt reflecting fixed and index-linked
elements
CO2e means Carbon Dioxide equivalent
CSR means Corporate Social Responsibility
CPIH means Consumer Price Index including owner occupiers' housing costs
DCF means Discounted Cash Flow
DECC means the Department of Energy and Climate Change
Defect Risk means that there is an over-reliance on limited equipment
manufacturers which could lead to large proportions of the portfolio suffering
similar defects
DNO means Distribution Network Operator
DSCR means Long Term Debt Service Cover Ratio calculated as net operating
income as a multiple of debt obligations due within one year
DTR means the Disclosure Guidance and Transparency Rules of the UK's Financial
Conduct Authority
EBITDA means earnings before interest, tax, depreciation and amortisation
EGL means Electricity Generator Levy
EGM means Extraordinary General Meeting
EIS means Enterprise Investment Scheme
EPC means Engineering, Procurement & Construction
EPS means Earning per share
ESG means Environmental, Social and Governance
EU means the European Union
EV means enterprise valuation
FAC means Final Acceptance Certificate
FATCA means the Foreign Account Tax Compliance Act
Financial Statements means the unaudited condensed interim financial
statements
FiT means Feed-in Tariff
GAV means Gross Asset Value on investment basis including debt held at SPV
level
GDPR means General Data Protection Regulation
GFSC means the Guernsey Financial Services Commission
GHG means greenhouse gas
GHG Protocol supplies the world's most widely used greenhouse gas accounting
standards
Group means Bluefield Solar Income Fund Limited, Bluefield Renewables 1
Limited and its subsidiaries
Guernsey Code means the Guernsey Financial Services Commission Finance Sector
Code of Corporate Governance
GWh means Gigawatt hour
GW means Gigawatt
IAS means International Accounting Standard
IASB means the International Accounting Standards Board
IFRS means International Financial Reporting Standards as adopted by the EU
Investment Adviser means Bluefield Partners LLP
IPEV Valuation Guidelines means the International Private Equity and Venture
Capital Valuation Guidelines
IPO means initial public offering
IRR means Internal Rate of Return
IVSC means The International Valuation Standards Council
KID mans Key Information Document
KPI means Key Performance Indicators
KPMG means KPMG Channel Islands Limited (see Auditor)
kWh means Kilowatt hour
kW means Kilowatt
Law means Companies (Guernsey) Law, 2008 as amended (see Companies Law)
LD means liquidated damages
Listing Rules means the set of FCA rules which must be followed by all
companies listed in the UK
Lloyds means Lloyds Bank Group plc
LSE means London Stock Exchange plc
LTF means long term facility provided by Aviva Investors limited
Macquarie means Macquarie Bank Limited
Main Market means the main securities market of the LSE
MW means Megawatt (a unit of power equal to one million watts)
MWh means Megawatt hour
NatWest means NatWest International plc
NAV means Net Asset Value as defined in the prospectus
NMPI means Non-mainstream Pooled Investments and Special Purpose Vehicles and
the rules around their financial promotion
NPPR means the AIFMD National Private Placement Regime
O&M means Operation and Maintenance
OECD means The Organisation for Economic Cooperation and Development
Official List means the Premium Segment of the UK Listing Authority's Official
List
Ofgem means Office of Gas and Electricity Markets
Ordinary Shares means the issued ordinary share capital of the Company, of
which there is only one class
Outage Risk means that a higher proportion of large capacity assets hold
increased exposure to material losses due to curtailments and periods of
outage
P10 means Irradiation estimate exceeded with 10% probability
P90 means Irradiation estimate exceeded with 90% probability
PCA means Persons Closely Associated
PPA means Power Purchase Agreement
pps means pence per Ordinary Share
PR means Performance Ratio (the ratio of the actual and theoretically possible
energy outputs)
PRIIPS means Packaged Retail and Insurance - Based Investment Products
PV means Photovoltaic
RBSI means Royal Bank of Scotland International plc
RCF means Revolving Credit Facility
REGO means Renewable Energy Guarantees of Origin
REMA means Review of Electricity Market Arrangements
RO Scheme means the Renewable Obligation Scheme which is the financial
mechanism by which the UK government incentivises the deployment of
large-scale renewable electricity generation by placing a mandatory
requirement on licensed UK electricity suppliers to source a specified and
annually increasing proportion of electricity they supply to customers from
eligible renewable sources or pay a penalty
ROC means Renewable Obligation Certificates
ROC recycle means the payment received by generators from the redistribution
of the buy-out fund. Payments are made into the buy-out fund when suppliers do
not have sufficient ROCs to cover their obligation
RPI means the Retail Price Index
Santander UK means Santander UK plc
SASB means Sustainability Accounting Standards Board
SDG means the United Nations Sustainable Development Goals
SFDR means Sustainable Finance Disclosure Regulation
SONIA means Sterling Over Night Indexed Average
SPA means Share Purchase Agreement
SPVs means a Special Purpose Vehicle which hold the Company's investment
portfolio of underlying operating assets
Sterling means the Great British pound currency
TISE means The International Stock Exchange (based in the Channel Islands)
UK means the United Kingdom of Great Britain and Northern Ireland
UK Code means the UK Corporate Governance Code
UK FCA means the UK Financial Conduct Authority
UNGC means the United Nations Global Compact
United Nations Principles for Responsible Investment means an approach to
investing that aims to incorporate environmental, social and governance
factors into investment decisions, to better manage risk and generate
sustainable, long term returns.
Alternative Performance Measures (Unaudited)
APM Definition Purpose Calculation
Total return The percentage increase/(decrease) in NAV, inclusive of dividends paid, in the A key measure of the success of the Investment Adviser's investment strategy. The change in NAV for the period plus any dividends paid divided by the
reporting period. initial NAV. (135.95-139.70+2.10+2.30)/139.70=0.47%
Total Shareholder Return The percentage increase/(decrease) in share price, inclusive of dividends A measure of the return that could have been obtained by holding a share over The change in share price for the period plus any dividends paid divided by
paid, in the reporting period. the reporting period. the initial share price. (118.6-120.0+2.10+2.30)/120.0=2.50% The measure
excludes transaction costs.
Total Dividends Declared in Period This is the sum of the dividends that the Board has declared relating to the A measure of the income that the company has paid to shareholders that can be The linear sum of each dividend declared in the reporting period.
reporting period. compared to the Company's target dividend.
Underlying Earnings Total net income of the Company's investment portfolio. A measure to link the underlying financial performance of the operational Total income of the Company's portfolio minus Group operating costs minus
projects to the dividends declared and paid by the Company. Group debt costs.
Market Capitalisation The total value of the Company's issued share capital. This is a key indicator of the Company's liquidity. The price per share multiplied by the number of shares in issue.
NAV per Ordinary Share The Company's closing NAV per share at the period end. A measure of the value of one Ordinary Share. The net assets attributable to Ordinary Shares on the statement of financial
position (£831.3m) divided by the number of ordinary shares in issue
(611,452,217) as at the calculation date.
Sale of Electricity The total proportion of revenue generated by the Company's portfolio that is A measure to understand the proportion of revenue attributable to sales of The amount of revenue attributable to electricity sales divided by the total
attributable to electricity sales. electricity. revenue generated by the Company's portfolio, expressed as a percentage.
Total Revenue Total net income of the Company's investment portfolio. A measure to outline the total revenue of the portfolio on per MW basis. Total income of the Company's portfolio owned for the period.
PPA Revenue Revenue generated through PPAs. A measure to outline the revenue earned by the portfolio from power sales. Total revenue from all power price sales during the period from the Company's
portfolio.
Regulated Revenue Revenue generated from the sale of FiTs and ROCs. A measure to outline the revenue earned by the portfolio from government Total revenue from all subsidy income earned during the period from the
subsidies. Company's portfolio.
Ongoing charges ratio The recurring costs that the Company and BR1 has incurred during the period A measure of the minimum gross profit that the Company needs to produce to Calculated in accordance with the AIC methodology detailed in the table below.
excluding performance fees and one off legal and professional fees expressed make a positive return for Shareholders.
as a percentage of the Company's average NAV for the period.
Weighted Average ROC A relative indicator of the regulatory revenues within a renewable portfolio. A measure of the Company's portfolio earnings as a proportion of its assets. Total Regulated Revenue received by the portfolio divided by the product of
the current market value of a ROC and the annual generation capacity of the
portfolio.
Weighted Average Life The average operational life of the Company's portfolio. A measure of the Company's progress in extending the life of its portfolio The sum of the product of each plant's operational capacity in MW and the
beyond the end of the subsidy regime in 2036. plant's expected life divided by the total portfolio capacity in MW.
Directors' Valuation The gross value of the SPV Investments held by BR1, including their holding An estimate of the sum that would be realised if the Company's portfolio was A reconciliation of the Directors' Valuation to Financial assets at fair value
companies minus Project level debt. sold on a willing buyer, willing seller basis. through profit and loss is shown in Note 7 of the financial statements.
Gross Asset Value The Market Value of all Assets within the Company. A measure of the total value of the Company's Assets. The total assets attributable to Ordinary Shares on the Statement of Financial
Position.
Total Outstanding Debt The total outstanding balances of all debt held within the Company and its A measure that is used to establish the Company's level of gearing. The sum of the Sterling equivalent values of all loans held within the
subsidiaries. Company.
Ongoing Charges Six month period to 31 December 2023
The Company BR1 Total
£'000 £'000 £'000
Fees to Investment Adviser 335 3,008 3,343
Legal and professional fees* 84 24 108
Administration fees 252 - 252
Directors' remuneration 120 7 127
Audit fees 59 9 68
Other ongoing expenses 119 103 222
Total ongoing expenses 969 3,151 4,120
Average NAV 839,798
Annualised Ongoing Charges (using AIC methodology) 0.98%
* Includes non-audit fee (interim review)
General Information
Board of Directors (all non-executive)
John Scott (Chair and Chair of Nomination Committee)
Elizabeth Burne (Chair of Audit and Risk Committee and Management Engagement
and Service Providers Committee)
Michael Gibbons CBE (Senior Independent Director and Chair of Remuneration
Committee)
Meriel Lenfestey (Chair of Environmental, Social and Governance Committee)
Paul Le Page (retired 30 September 2023)
Chris Waldron (appointed 1 December 2023)
Registered Office Investment Adviser
PO Box 286 Bluefield Partners LLP
Floor 2, Trafalgar Court 6 New Street Square
Les Banques, St Peter Port London, EC4A 3BF
Guernsey, GY1 4LY
Administrator, Company Secretary and Designated Manager
Sponsor, Broker and Financial Adviser
Ocorian Administration (Guernsey) Limited
Floor 2, Trafalgar Court Deutsche Numis Securities Limited
Les Banques, St Peter Port 45 Gresham Street
Guernsey, GY1 4LY
London, EC2V 7BF
Independent Auditor
KPMG Channel Islands Limited
Glategny Court, Glategny Esplanade
Legal Advisers to the Company
St Peter Port (as to English law)
Guernsey, GY1 1WR Norton Rose Fulbright LLP
3 More London Riverside
Registrar London, SE1 2AQ
Computershare Investor Services (Guernsey) Limited
13 Castle Street Legal Advisers to the Company
(as to Guernsey law)
St Helier
Carey Olsen
Jersey, JE1 1ES
PO Box 98, Carey House
Les Banques, St Peter Port
Principal Bankers
Guernsey, GY1 4BZ
NatWest International plc
35 High Street
St Peter Port
Guernsey, GY1 4BE
1 According to Bloomberg New Energy Finance and Bluefield internal data
2 COP28: Climate finance (mckinsey.com)
(https://www.mckinsey.com/capabilities/sustainability/our-insights/sustainability-blog/cop28-climate-finance)
3 Global Renewables and Energy Efficiency Pledge (europa.eu)
(https://energy.ec.europa.eu/system/files/2023-12/Global_Renewables_and_Energy_Efficiency_Pledge.pdf)
4 PS23/16: Sustainability Disclosure Requirements (SDR) and investment
labels (fca.org.uk) (https://www.fca.org.uk/publication/policy/ps23-16.pdf)
5 Transition Plan Taskforce's Final Disclosure Framework | Deloitte UK
(https://www2.deloitte.com/uk/en/blog/emea-centre-for-regulatory-strategy/2023/transition-plan-taskforces-final-disclosure-framework.html)
6 JC 2023 55 - Final Report SFDR Delegated Regulation amending RTS
(europa.eu)
(https://www.esma.europa.eu/sites/default/files/2023-12/JC_2023_55_-_Final_Report_SFDR_Delegated_Regulation_amending_RTS.pdf)
7 Based on actual generation for the period 1 July 2023 - 31 December 2023,
and forecasted generation for the period 1 January 2024 - 30 June 2024.
8 Based on generation data aligned with the appropriate Government CO2e
conversion factor
9 Based on Ofgem's Typical Domestic Consumption Values
10 https://www.gfsc.gg/industry-sectors/investment/guernsey-green-fund
11 https://tisegroup.com/sustainable
12
https://www.londonstockexchange.com/raise-finance/equity/green-economy-mark
13 PS23/16: Sustainability Disclosure Requirements (SDR) and investment
labels (fca.org.uk) (https://www.fca.org.uk/publication/policy/ps23-16.pdf)
14 UK Sustainability Disclosure Standards - GOV.UK (www.gov.uk)
(https://www.gov.uk/guidance/uk-sustainability-disclosure-standards)
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