REG - Bluefield Solar Inc. - Annual Report for the Year Ended 30 June 2025
21/10/2025 07:00
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RNS Number : 1156E Bluefield Solar Income Fund Limited 21 October 2025
21 October 2025
Bluefield Solar Income Fund Limited
('Bluefield Solar' or the 'Company')
Annual Report and Financial Statements for the Year Ended 30 June 2025
Update on Strategic Initiatives
Bluefield Solar (LON:BSIF), the London listed income fund focused on acquiring
and managing renewable energy and storage assets predominantly in the UK, is
pleased to announce its Annual Results for the Year Ended 30 June 2025.
Annual Report:
The Company's Annual Report for the year ended 30 June 2025 is now available
on the Reports & Publications section of the Company's website
(https://bluefieldsif.com/investors/reports-and-publications/
(https://bluefieldsif.com/investors/reports-and-publications/) )
The Annual 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 30 June 2025 / 30 June 2024
Net Asset Value (NAV) Dividend Target per Share
£690.1m £781.6m 8.90pps 8.80pps
NAV per share
116.56p 129.75p
Underlying Earnings(1) Total Shareholder Return in year(2)
(pre amortisation of debt) 0.38% -4.67%
£95.3m £94.6m
Total Return in year(3)
Underlying Earnings per share(1) -3.38% .-0.83%
(pre amortisation of debt)
16.03p 15.51p Total return to Shareholders since IPO
84.59% 84.19%
Underlying Earnings per share available for distribution(1)
(post amortisation of debt)
10.40p 10.57p
Environmental, Social and Governance (ESG)
ESG KPIs
Ø Generated 797,974 MWh of renewable energy(4) (June 2024: 810,602 MWh)
Ø Powered the equivalent of 295,500 UK homes(5) (June 2024: 300,000)
Ø Avoided 141,200 tonnes of CO2e emmissions(6) (June 2024: 167,800 tonnes)
ESG Highlights
*Completed a Double Materiality Assessment (DMA), used to refresh the
Company's ESG framework and strategy.
*Delivered an industry-academic research partnership focused upon circular
economy.
*Awarded 'ESG Innovation of the Year (Research)' by Environmental Finance as
part of their 2025 Sustainability awards.
Construction and Development Pipeline
· 25 MW under construction
· 1,063 MW consented
· 220 MW in planning
· 110 MW development pipeline
1.4 GW
(763 MW Solar, 655 MW battery)
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.
2.Total Shareholder Return is based on share price movement and dividends paid
in the Year.
3. Total Return is based on the NAV movement and dividends paid in the Year.
4. Performance relates to the Company's wholly owned investments.
5. Based on Ofgem's Typical Domestic Consumption Values (TDCV).
6. Based on generation data aligned with the relevant 2025 Government CO2e
conversion factor. In the current Year, the Company reported avoided emissions
on a gross basis, reflecting its equity share in investments but without
allocating any avoided emissions to debt finance providers.
Results Summary:
For the year ended For the year ended
30 June 2025 30 June 2024
Total operating income (£25,948,967) (£7,410,520)
Total comprehensive income before tax (£28,470,960) (£9,600,983)
Total underlying earnings (pre amortisation of debt)(1) £95,344,272 £94,580,146
Earnings per share (per page 70) (4.79p) (1.57p)
Total underlying EPS available for distribution(2) 10.40p 10.57p
Total declared dividends per share for year 8.90p 8.80p
Underlying earnings per share carried forward 6.51p 3.40p
(See Page 26)
NAV per share 116.56p 129.75p
Share price at 30 June 97.2p 105.60p
Total return(3) (3.38)% (0.83)%
Total Shareholder Return(4) 0.38% (4.67)%
Total Shareholder Return since inception(5) 84.59% 84.19%
Dividends per share paid since inception 87.39p 78.59p
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.
2. Total underlying EPS is calculated using underlying earnings available
for distribution, including unutilised prior year underlying earnings per
share carried forward and proceeds received in the period for strategic
activities, divided by the average number of shares.
3. Total return is based on NAV per share movement and dividends paid in the
year.
4. Total Shareholder Return is based on share price movement and dividends
paid in the year.
5. Total Shareholder Return since inception is based on share price movement
and dividends paid since the IPO.
Analyst presentation
A remote call for analysts will be hosted by James Armstrong and Neil Wood of
Bluefield Partners LLP at 09:30am today, 21 October 2025. Michael Gibbons and
John Scott will also be present on the call. For details, please contact
Buchanan on BSIF@buchanan.uk.com.
A copy of the presentation is available via the Company's website and an audio
webcast of the presentation will also be made available at 09:30am today.
https://bluefieldsif.com/ (https://bluefieldsif.com/)
For further information:
Bluefield Solar Board Tel: +44 (0) 1481 742 742
bluefieldteam@ocorian.com (mailto:bluefieldteam@ocorian.com)
To be contacted via Ocorian
Tel: +44 (0) 20 7078 0020
Bluefield Partners LLP (Company Investment Adviser) www.bluefieldllp.com (http://www.bluefieldllp.com/)
James Armstrong / Neil Wood / Giovanni Terranova
Deutsche Numis (Company Broker) Tel: +44 (0) 20 7260 1000
Hugh Jonathan / Matt Goss www.dbnumis.com (http://www.numis.com/)
Ocorian
(Company Secretary & Administrator)
Chezi Hanford Tel: +44 (0) 1481 742 742
www.ocorian.com (http://www.ocorian.com/)
Media enquiries: Tel: +44 (0) 20 7466 5000
Burson Buchanan (PR Adviser) www.bursonbuchanan.com (http://www.bursonbuchanan.com)
Henry Harrison-Topham / Henry Wilson
BSIF@buchanan.uk.com (mailto:BSIF@buchanan.uk.com)
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 850MW, comprising 792MW of
solar and 58MW of onshore wind.
Further information can be viewed at www.bluefieldsif.com
(http://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 £6.3
billion renewable funds and/or transactions in both the UK and Europe,
including over £1.9 billion in the UK since December 2011.
Bluefield Partners LLP has led the acquisitions of, and currently advises on,
over 100 UK based solar photovoltaic 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.
Introduction
I am pleased to place before Shareholders a significant statement regarding
the Company's future direction, drawing upon the fundamental review of BSIF's
strategy which is currently underway.
The Directors recognise that the historically low interest rate environment
that supported the early years of the Company and its peers is unlikely to
return; these conditions fostered the creation of a substantial new industry
sector, becoming known as 'renewable utility yieldcos', with BSIF as one of
the leading actors on the stage. But financial markets have changed and your
Board has therefore been working to determine a more appropriate structure in
which to place an integrated green power entity, suitable for the next decade
and beyond. In this statement we will analyse the background to the current
situation and explain what your Board has done to assess it, together with our
conclusions to be discussed with Shareholders.
The past financial year, which ended on 30 June 2025 (the "Year"), has seen a
continuation of most of the issues your Company has been confronting since
2022 - with the happy exception that irradiation was much better in the second
six months (January to June 2025).
Longer term Shareholders will recall that, until summer 2022, with our shares
trading at a consistent premium to NAV, we were able to raise significant
equity capital through a series of oversubscribed placings. This route became
more challenging towards the end of the Johnson administration, when the
Financial Times ran articles suggesting that the renewable energy sector would
face windfall taxes. The fundraising door closed completely following the
Truss mini-budget in autumn 2022; although most measures proposed therein were
promptly reversed by Jeremy Hunt on becoming Chancellor, the legacy spooked
markets and provoked significantly higher sterling interest rates for an
extended period.
This caused our share price to fall and a concomitant discount to NAV emerged
(at times to more than 30%), a position which we, along with the rest of our
sector, have found ourselves in for the past three years; we are thereby
becalmed in a sea of equity starvation, with little prospect of more benign
conditions. Access to equity capital, which had facilitated the expansion of
the Company's asset base and its burgeoning development pipeline, has been
closed. Fortunately, our Investment Adviser has been successful, not only in
creating a series of liquidity events which have realised over £120m in cash
proceeds in the past eighteen months, but also in identifying other sources of
funds, notably through our partnership with GLIL Infrastructure ("GLIL").
Much of this narrative will be familiar to Shareholders who read last year's
Annual Report. Recognising that positive action was required, my statement in
the Company's interim report, released on 27 February 2025, disclosed that
"the Board is committed to exploring strategic initiatives to address the
share price discount and to continue to seek to maximise value for our
shareholders" and it is indeed down this path that your Board has been working
for the past seven months to explore options for the future of the Company.
The Board, in conjunction with the Investment Adviser and with the support of
its own financial advisers, has evaluated numerous and diverse possibilities
to seek to maximise value for BSIF Shareholders, including evaluating offers
for the Company's assets as a whole. Despite the strong level of interest
shown, leading to an exclusivity agreement and the commencement of due
diligence, the preferred bidder decided not to move to a binding offer for the
Company's assets. We learned a great deal from this experience; it became
clear to the Board that potential investor interest was greatest when
considering the Company's operating assets in combination with its sizeable
development pipeline, alongside the Investment Adviser, with its proven
development and operating capabilities. From the launch of BSIF, our
Investment Adviser has been Bluefield Partners and together with its
affiliated service companies is known today as the Bluefield Group.
Put simply, we discovered that the whole Bluefield enterprise is worth more
than the sum of its parts. This insight helps define the Board's current
thinking in terms of the future direction of BSIF, which I discuss further
later in this statement.
The past year
In the second half of the Year - January to June 2025 - BSIF experienced its
best period of irradiation, which underpinned our strong operating
performance. Solar generation for the six months was 8.49% ahead of forecast
and wind farm output was marginally behind expectations. Our overall
performance for the year was 2.25% behind budget, reflecting in the main a
disappointing solar performance in the latter half of 2024.
Our partnership with GLIL has continued to work for the benefit of both
parties. During the Year, Phase Two of the strategic partnership was
completed, being the sale of a 50% stake in a c.112MW portfolio of UK solar
assets owned by BSIF. This has provided BSIF with a source of capital to
invest in our project pipeline, and we have been able to repay some of our
revolving credit facility. Our joint venture with GLIL, Lyceum Solar, in which
BSIF holds a 25% stake, now has an installed capacity of 358.7MW.
In February 2024 we embarked on a share buyback programme and this concluded
on 10th January 2025. We have many other calls on our capital and have no
current plans to resume buybacks.
Two of our largest solar investments - Mauxhall Farm (44.54MW) and Yelvertoft
(48.4MW) - were energised early in the Year. Whilst post period end, in August
2025, Mauxhall as well as 150MW of solar and 25MW of BESS developments was
sold to Lyceum Solar under Phase Three of our partnership with GLIL. As a
result, the Company's operational net capacity on a look-through basis has
reduced from 883MW to 850MW, with 749MW of the Company's operational capacity
being 100% owned.
From July 2024 to 30 June 2025 the Company crystallised c. £92.0m in
realisations from the portfolio, paid down £50.5 million of its RCF, deployed
c.£10.6 million into buybacks and invested a further c.£21.7 million across
construction, development and target equipment replacements with its operating
asset base; when combined with the carried forward earnings from FY 24/25 of
c.£29.4 million, this means the Company has surplus cash balance of c.£38.5m
available for strategic initiatives.
To this end, I am pleased to report that the cash surplus carried forward from
FY 24/25 and the sale proceeds from Phase Three in August 2025 have enabled
the Company, post Year end, to secure 100% ownership of 249MW of PV and 130MW
of BESS (the "Galaxy Portfolio"). This represents c. 40% of the Company's
ready-to-build PV pipeline and c. 20% of its ready-to-build BESS pipeline by
capacity. It carries material strategic value for the Company and demonstrates
how the Company differentiates itself from its listed peers.
The Galaxy Portfolio was developed together with BRD, with the Company having
a 60% shareholding in each project and BRD owning the remaining 40%. Post year
end a Sale and Purchase Agreement ('SPA') has been entered into with BRD to
increase BSIF's shareholding to 100% ownership.
Highlights of the year
· Total declared dividends for the Year increased to 8.90pps, in
line with our previously declared target (30 June 2024: 8.80pps) and with
dividends covered 1.2x times by current earnings;
· Irradiation was 6.8% above expectation and solar generation was
1.9% above forecast even after significant plant downtime due to material DNO
outages and planned inverter replacements;
· The average total unit price for the solar portfolio was 0.8%
above forecast and for the wind portfolio was 5.7% above forecast despite spot
electricity prices falling - thanks to contracts struck earlier and to our
high proportion of regulated and inflation-linked revenues;
· Phase Two of the Strategic Partnership with GLIL, being the sale
of a 50% stake in a 112MW portfolio of UK solar assets owned by BSIF, released
c.£70 million;
· Work on the Company's development pipeline continued, with
planning consents being secured on 1,063MW;
· The NAV per share fell to 116.56 pence (30 June 2024: 129.75
pence), driven primarily by forecasts of lower long term electricity prices;
· BSIF's shares traded at a persistent discount to NAV, the closing
price on 30 June 2025 97.20pps being 17% below the NAV (30 June 2024: 19%
discount);
· In February 2025, re-financing of the Strategic Partnership
portfolio was completed with a consortium of lenders, replacing index linked
debt from M&G with c. £297m of fixed rate debt from Blackstone (£149m),
KfW (£74m) and Caixa bank (£74m), maturing in December 2035;
· In May 2025, the Company extended the term of its Revolving
Credit Facility (the 'RCF') with RBS International, Santander UK and Lloyds
Bank Plc by two years to May 2027, reducing the commitment of the facility
from £210 million to £150 million. The facility also achieved green loan
status, reducing the margin from 1.90% to 1.85%; and
· Subsequent to 30 June 2025, the Company announced the signing of
Phase Three of its long-term Strategic Partnership with GLIL, being the sale
of a c.250MW portfolio of solar and BESS assets which had been 100% owned by
the Company. The proceeds of the sale are c.£38m, of which £10m is deferred
and contingent on project milestones being met, expected over the following
twelve months.
At the Year end, the Group's total outstanding debt stood at £581m, with
leverage at 45.7% of GAV (30 June 2024: 43% of GAV).
Underlying Earnings and Dividends
The Underlying Earnings for the Year, before repayments, were £95.3 million,
or 16.0pps, and underlying cash available for distribution, post debt
repayments of £33.5m or 5.6pps, were £61.8 million or 10.4pps. This has
enabled the declaration of a fourth interim dividend of 2.30pps, bringing the
total dividend for the Year to 8.90pps (Prior Year: 8.80pps). Once again, the
total dividend for the Year has been covered by earnings. The yield on our
shares - based on a share price of 83 pence on 17 October 2025 - is 10.72%.
The Board has set a target dividend for the year ended 30 June 2026 of not
less than 9.00pps, which extends our long record of progressive increases.
Valuation and Discount Rate
There has been considerable activity in the secondary market for renewable
electricity projects; demand for solar portfolios remains strong, providing
ample evidence to validate the asset values adopted by BSIF. Prices seen in
the market over the past two years range between £1.20m/MW and £1.45m/MW and
over 1GW of operational capacity has been brought to market in the Year.
Some of this activity involves BSIF as a seller of operating solar
investments; by entering into its partnership with us, GLIL acquired a 50%
stake in a selection of BSIF's solar assets in Phase Two of the Strategic
Partnership, for a price which values the 112MW portfolio at circa £140
million. The financial assumptions underlying this transaction are consistent
with those used by the Company in publishing its latest NAV at the time, being
129.75pps as at 30 June 2024. The portfolio discount rate is unchanged at 8%
for the valuation and the enterprise value of the Company's operational
portfolio is £1,094.5m, representing £1.11m/MW for the solar assets (30 June
2024: £1.24m/MW).
Inflation and interest rates
UK inflation has been significantly more stable in the Year than was the case
in 2023/24; in June 2024 RPI inflation was running at 2.9%, but this rose to
4.4% for June 2025. On a CPI basis, the figures were 2.0% and 3.6%,
respectively. Sterling interest rates, however, have been slower to fall. In
August 2024 the Bank of England reduced Base Rate by 0.25%, to 5.00%.
Following a series of cuts of 0.25%, Base Rate now stands at 4.0%, with the UK
5 year gilt rate now just over 4%.
Shareholders will appreciate that BSIF is in many ways a beneficiary of
inflation. Our regulated revenues (ROCs and FiTs) are linked to RPI and in
times of inflation these tend to rise faster than our operating costs. Much of
our debt (74% at Year end) is on a fixed rate basis, interest having been set
prior to 2022, but expectations of higher inflation increase the interest
payable on our RCF and, in pushing up long bond rates, have the effect of
raising the opportunity cost of capital and the price of any new finance we
raise.
Power Prices
Spot electricity prices have softened considerably in the Year, but the
Company's PPA strategy of fixing power prices for between one and three years
in advance has again allowed the Company to benefit from power contracts which
are insulating the Company from short term price weakness. The average
weighted prices for these contracts were c. £119/MW for June 2025 (June 2024:
£149/MW).
Environmental, Social and Governance ("ESG")
This Year is the Company's third year of implementing and monitoring its ESG
performance against its KPIs and further information is available on page 50.
Our ESG reporting continues to be well received by Shareholders and industry
analysts. We continue to develop our methodology as the Company strives to
achieve best practice in this area.
Capital allocation and gearing
As noted earlier, our shares have continued to trade at a significant
discount. We operated a programme to buy back £20 million of our own shares,
which was completed in January 2025. While buying back shares at a discount
was modestly accretive to our NAV per share, it was by no means clear to your
Board that the buyback programme was having any significant effect on the
discount, so once the initial capital allocation was exhausted it was not
renewed.
Thanks largely to the proceeds received from sales of assets to our joint
venture with GLIL, we have been able to reduce the balance on our RCF.
The Board
In October 2024 Glen Suarez joined the BSIF Board as a non-executive
director.
Having been a director of BSIF since its formation in 2013, in last year's
Annual Report I announced my intention to retire in 2025. I will step down
from the Chair on 21 October 2025, when Michael Gibbons, CBE will assume that
position. I have agreed to remain on the Board until not later than 30
November to assist with this transition. Michael has already shown himself to
be a most effective Director of the Company for the past three years and his
appointment as Chair comes as a result of an exercise conducted by our
Nominations Committee (from which I recused myself).
The AGM
The Company's Annual General Meeting will take place on 11 December 2025 at
Floor 2, Trafalgar Court, Les Banques, St Peter Port, Guernsey. Shareholders
who are unable to be present in person are encouraged to submit questions in
advance of the meeting.
Strategic considerations
There is a plausible future for BSIF in continuing to operate under its
existing business model without the need for new capital, while continuing to
pay a sector-leading dividend - the "business as usual" option. But
Shareholders need to be aware that, in the absence of access to additional
equity and the cheap debt we enjoyed for many years, continuing to operate
with the current capital structure will necessitate the sale of development
and prospectively operational assets. Such disposals will gradually starve the
Company of growth opportunities and confine BSIF to its current position,
namely the steady erosion of the Company's NAV, reflecting attrition of our
capital base, with returns delivered only in the form of income.
Our market engagement process over the last few months makes it clear that
there is widespread confidence in the future of solar power. What is also
clear to your Board is that greater value is placed on a more integrated
business that brings together BSIF's operating portfolio with its sizeable
near-term development pipeline, coupled with the proven development and
operating capability that exists within the Bluefield Group.
The Board is therefore considering other paths for the future of BSIF,
including options that could see it move towards a more integrated business
model which is better placed to capture the growth opportunity that eludes
Shareholders in the Company's current form, but is more readily available in
an integrated Bluefield model. On the basis of initial discussions with the
owners of the Bluefield Group, it would appear to be a model which is
attractive to both BSIF and its Investment Adviser. Integrating the Bluefield
Group's 140 person platform, covering development activities through to
operations, would create a UK-focused green Independent Power Producer, one
that with the appropriate capital structure, corporate debt and dividend
policies could be a largely self-funded growth model. This would enable the
Company to build out its valuable and return-accretive development pipeline
and deliver what the Board expects to be a materially higher total return to
Shareholders than has been possible under the Company's current business model
and dividend policy. This transition would require a re-examination of our
capital structure and dividend policy as we examine the proportion of our net
income that we would be able to distribute if we are to fund our pipeline from
retained earnings and additional borrowings.
The Board and Investment Adviser will engage with Shareholders in the coming
weeks on this potential strategy as they consider the merits of moving from
the current structure to a more integrated and growth driven business model.
Management fee change
The Board has agreed a fee change with its Investment Adviser, Bluefield
Partners LLP. The Investment Adviser has been paid 0.80% of the Company's NAV
up to £750 million, a threshold which is now well above the Company current
and expected future NAV. The revised IA fee agreement will be made up of 50%
of the prevailing Net Asset Value and 50% on the Company's market
capitalisation, creating a more balanced and, at the current share price,
materially lower overall fee. The blended total fee is capped so that, in the
event of the share price moving to a premium to NAV, it will not exceed the
current arrangement of 0.80% of NAV. This change is effective from 1 October,
2025. At the time of writing the Company's NAV per share is 116.56 pence and
the share price per share is 83 pence, which would result in a fee reduction
of £792,767, or 14.39% over a twelve month period.
Outlook
Whatever the issues we are experiencing with debt and equity markets, the
background to the sector in which we operate is an exciting one. We are
witnessing a period of remarkable progress and success in the renewable
electricity sector, notably in the solar power business which represents 93%
of the capacity operated by your Company. Over the past decade the cost of
silicon PV panels has fallen by nearly 90%, while the electricity output of
each iteration of new panels continues to grow. Those being installed today
are typically 24% efficient, as compared with about 17% when BSIF was launched
in 2013. Recent developments suggest that further improved PV panels will
soon become available, perhaps offering a conversion rate which approaches
30%. When BSIF was created, the high cost and relatively low output of the
panels then available dictated that the economics of solar power were reliant
on government subsidies - typically by way of Renewable Obligation
Certificates (ROCs) for 20 years - but plummeting equipment costs have allowed
ROCs on new installations to be progressively reduced, prior to being phased
out entirely from 2017.
The results of the UK Government's drive to boost renewable energy supplies
are remarkable. In 2024, some 50% of the electricity supplied in the UK came
from renewable sources of all kinds, including solar, wind, biomass and hydro.
A decade ago, that number was approximately 2%, with some 75% of electricity
coming from fossil fuels, primarily gas. Bluefield is proud to have been in
the vanguard of what can justifiably be described as a revolution in the
electricity supply industry, one which is by no means complete.
We observe with some concern the steady retreat by governments from their
stated goals of reducing carbon dioxide output; despite their continuing
support for renewable generation, the Conservative Party is the latest to join
this bandwagon, promising to repeal the Climate Change Act 2008. Worse still,
for those of us who recognise that supplies of fossil fuels are finite and
understand that there is ample evidence to support the thesis that elevated
levels of CO₂ in the atmosphere drive climate change, are the siren calls by
politicians on both sides of the Atlantic; many now see short term electoral
advantage in what might be called "renewables bashing", promising to ban new
solar and wind installations, to renege on historic subsidies and to maximise
fossil fuel extraction by drilling, mining and fracking. And, in the case of
the US, even planning to dismantle its apparatus for measuring the levels of
greenhouse gases, a move which is the equivalent of disconnecting your car's
thermometer in the hope that it will stop the engine overheating. This change
of sentiment seems particularly inappropriate at a time when solar power has
reached levels of efficiency which make it the cheapest source of electric
power, especially when coupled with battery storage, which is now driving a
world-wide revolution in electricity generation.
Conclusion
Serving as a director of BSIF from its foundation over 12 years ago has been a
great privilege and I take this opportunity to congratulate James Armstrong
and his team at Bluefield Partners for all that they have achieved so far.
Despite my long tenure on the Board, I am grateful to Shareholders for
electing me to the Chair for the past 3 years and, in handing over to Michael
Gibbons, I leave the Company in excellent hands. The BSIF Board and Bluefield
Partners make a powerful team, well qualified to navigate the many challenges
and opportunities which lie ahead, not the least of which is the determination
of a capital structure which I believe will be better adapted to the financial
markets of today, allowing BSIF both to grow and to continue to deliver sector
leading performance over the long term.
John Scott
Chair
20 October 2025
Report of the Investment Adviser
Introduction from the Managing Partner of the Investment Adviser
The listed investment company sector has not improved in the past twelve
months and it feels like there is an irrevocable shift in the growth prospects
of the yield focused renewable generators. Whilst the Company continues to
deliver successfully on the primary objective launched at IPO in July 2013 -
namely the payment of a market leading, fully covered, dividend from the
production of electricity from solar PV in the UK - it has been essential for
the Investment Adviser and its Board to look at what options are available to
maximise shareholder value (the 'Strategic Initiatives' announced in
February). We are pleased to see the result of this is a bold reimagining of
the Company as articulated in the Chair's Statement and supported by the
Investment Adviser. We look forward to discussing them with the Shareholders.
The challenge faced by renewable investment companies, including BSIF, is well
documented. The Company's shares have been at a discount to NAV for over three
years, shutting the door to equity markets. With surplus capital being used to
pay dividends, it makes it growth unachievable, impeding the ability to
capitalise on its key strengths such as its large proprietary development
pipeline. Without the ability to raise equity or re-direct material levels of
earnings into a large scale programme of new build investments (its pipeline
is circa 1.4GW) the Company is inherently in long term run off.
Notwithstanding these challenges the Company has had a very successful period
since June 2024: we have delivered Phase Three of the strategic partnership
with GLIL and delivered back c.£92m to BSIF; we have acquired the minority
shareholdings in a selected group of development assets already majority owned
by the Company; we have sold some development assets delivering a 6 x return
on investment; and we have refinanced the
RCF.
However, it is our view that 'business as usual' is no longer ambitious enough
for the Company's Shareholders. In February the Board announced it was
evaluating all options to see how to maximise shareholder value, with the
support of its advisers, including Bluefield Partners. Part of the initial
evaluation was to look at the core strengths of the Company to see whether
these would highlight the best path for shareholder value.
The first core strength is the Bluefield Group, the 140 person-strong, end to
end platform, that provides development through to operational services for
the Company, essentially creating, in its current form, an externally managed
Independent Power Producer. The Bluefield Group is the engine for value
growth, protection and enhancement. Second, the Company's large co-owned
proprietary pipeline provides the opportunity for strategic and scaled growth
through the Bluefield Group's development and construction funding
capabilities. There are other core strengths and reasons for the unparalleled
long term performance of the Company - its debt strategy, its highly
successful power sales approach and its capital discipline - but the Bluefield
Group and the development pipeline are key differentiators in offering the
Company's Shareholders the ability to be presented with a much more rewarding
future.
It has become evident that internalisation of the Bluefield Group platform and
the creation of an Independent Power Producer (IPP) is attractive to private
capital and should be explored further. It also has the potential to offer an
attractive and ambitious future to existing and new Shareholders on the public
markets. It reimagines the Company as a growth-orientated vehicle that can
maximise the value of its large development pipeline supported by Bluefield's
platform. It would require an evaluation of the purpose the Company -
balancing growth, debt and income - but has the ability to be a self-funding
model that could deliver higher total returns for Shareholders than is
currently available. All of this requires the consultation and the support of
the Shareholders and, to be clear, all options remain on the table; however it
offers a 'built in' long term growth opportunity for Shareholders to consider
as a compelling solution to the challenges the sector faces today.
I am under no illusion of the boldness of this vision. It is made with the
conviction that the solid foundations we have built since leading the listing
of BSIF in 2013 provide the ideal launchpad for making this transformation and
turning the Company from one constrained and frustrated by sector challenges
to one empowered to embrace the changes of the wider macro- economic
environment and to continue to thrive in the decade to come.
Our sole aim is to work with the Board to ensure that BSIF delivers highest
possible total return for Shareholders and, if we were to become an
internalised IPP, we feel incredibly optimistic about the future.
James Armstrong
Managing Partner, Bluefield Partners LLP
1. About Bluefield Partners LLP ('Bluefield')
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 the UK and Europe. The Bluefield team has been
involved in over £6.3 billion renewable funds and/or transactions in both the
UK and Europe, including over £1.9 billion 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, operations, finance, legal and
portfolio executives. As Investment Adviser, Bluefield takes responsibility
for selection, origination and execution of investment opportunities for the
Company, having executed over 200 individual SPV acquisitions on behalf of
BSIF and European vehicles.
2. Portfolio: Acquisitions, Performance and Value Enhancement
Portfolio Overview
As at 30 June 2025, the Company owned an operational solar portfolio of 122
photovoltaic ("PV") plants (consisting of 80 large scale sites, 39 micro sites
and 3 roof top sites), 6 wind farms and 109 small scale UK onshore wind
turbines, all 100% owned by the Company, with a total capacity of 793.2MW (30
June 2024: 812.6MW). During the Year, Phase Two of the strategic partnership
with GLIL was completed, being the sale of a 50% stake in a c.112MW portfolio
of UK solar PV assets owned by BSIF.
Following the Phase Two transaction, the Company now has a 25% stake (30 June
2024: 9%) in a 358.5MW (30 June 2024: 246.6MW) joint venture portfolio of UK
solar assets in partnership with GLIL Infrastructure.
The total portfolio capacity, comprising both the 100% owned portfolio and
BSIF's share in the joint venture partnership, was 882.9MW as at 30 June 2025,
composed of 824.6MW of solar and 58.3MW of onshore wind.
During the Year, the combined solar and wind portfolio, on the 100% owned
assets, generated an aggregated total of 797.9GWh (Prior Year: 810.6GWh),
representing a generation yield of 1,006MWh/MW (Prior Year: 997.6MWh/MW).
Investment Approach, Acquisitions, and Divestments in the Year
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 will 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 the Company's record of sector
leading returns since listing over a decade ago. In the Year, due to limited
capital availability, the
Company has focused on paying down a proportion of the RCF, utilising funds
from the sale of assets to the JV with GLIL and recycling of capital from its
development pipeline. The Company has also continued with investment in a
select number of construction projects.
Portfolio Performance and Optimisation
Solar PV Performance - Wholly owned portfolio
In the Year, irradiation levels were 6.8% higher than the Company's forecasts
and 9.9% higher than the Prior Year, whilst generation at 663.9GWh, was 1.9%
higher than forecast. During the Year, generation yield was 903MWh per MW of
installed capacity, 5.1% higher than recorded in the Prior Year.
Table 1. Summary of Solar Portfolio Performance for Full Year 2024/25:
Year Year Delta to Prior Year Delta Year to
Forecast (% Prior Year Actual (%
Actual Forecast change) Actual change)
Portfolio Total Installed 735 - - 754 -2.5%
Capacity (MW)
Weighted Average 1,267 1,186 6.8% 1,136 11.5%
Irradiation (MWh/m2)(1,2)
Total Generation (MWh)(4) 663,909 651,230 1.9% 647,920 2.5%
Generation Yield 903 886 1.9% 859 5.1%
(MWh/MW)
Average Total Unit Price 202 200 0.8% 247 -18.2%
(£/MWh)(3)
Total Revenue (£'000) (3) 133,902 130,285 2.8% 159,775 -16.2%
Total Revenue (£'000/MW) (3) 182 177 2.8% 212 -14.0%
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. Revenue includes all income associated with the sale of power and all
subsidy payments. It excludes liquidated damages, insurance claims amounts,
mutualisation rebates, and business rate rebates. ROC recycle revenue is
included assuming a 10% recycle rate for both actual and forecast revenue
4. Excludes the Strategic Partnership with GLIL
Total revenue for the Year was £133.9 million, 2.8% higher than forecast. The
Average Total Power Price was 0.8% above forecast at £202/MW, but 18.2% lower
per MW than the Prior Year, as historically high PPA agreements which
commenced from 2022 onwards came to an end.
Solar PV Optimisation & Enhancement Activity
The Investment Adviser is taking proactive steps to mitigate risks to both the
short-term and long-term operational performance of the portfolio. This is
achieved through a rolling data-led capital investment programme to address
key risks to operational performance.
Large central inverter and HV equipment revamping projects commenced during
the Year, with key projects completed by the end of the Year. These projects
are expected to further de-risk the portfolio and improve portfolio
performance both short and long term. Further central inverter revamping
projects are planned for the winter months of FY25/26.
As at 30 June 2025, 392MW of the PV portfolio (being 61% of the solar PV
portfolio) have leases that allow for terms beyond 30 years. The Investment
Adviser continues to pursue lease extensions on the remaining assets in the
portfolio.
GLIL Partnership Portfolio
Further to the successful completion of Phase Two of the strategic partnership
with GLIL, the total UK operational solar portfolio capacity increased to
358.7MW. During the Year, the portfolio's generation was 5.6% above forecast,
largely due to higher than expected irradiation (3.1% above forecast).
Onshore Wind Performance
As at 30 June 2025, the Company held an operational onshore wind portfolio of
135 installations, comprising 109 small scale turbines (55-250kW) and 26
larger turbines (850kW-2,300kW), with an aggregated capacity of 58.4MW.
During the Year, the wind portfolio generated 134 GWh, 18.8 % below forecast.
This was largely due to significantly lower than expected wind speeds
throughout the Year, combined with the several turbine outages resulting in
extended downtimes across the portfolio.
Total revenue during the Year was £25.7 million (Prior Year: £30.3 million),
with an average revenue per MWh of £192. Revenues achieved were 14.2 % below
forecast, despite the average revenue per MWh being 5.7% above forecast.
Table 2. Aggregated Wind Portfolio Performance for the Year
Year Year Delta to Forecast Prior Year Delta to Prior Year Actual
Actual Forecast (% change) Actual (% change)
Portfolio Total Installed 58.4 n/a n/a 58.4 0.0%
Capacity (MW)
Total Generation (MWh) 134,065 165,116 -18.8% 162,682 -17.6%
Generation Yield 2,300 2,832 -18.8% 2,786 -17.5%
(MWh/MW)
Average Total Unit Price £192 £182 5.4% £186 3.2%
(£/MWh)(1)
Total Revenue (£,000) (1) 25,726.01 29,972.83 -14.2% 30,254.30 -15.0%
1. Revenue includes all income associated with the sale of power and
all subsidy payments. It excludes liquidated damages, insurance claims
amounts, mutualisation rebates, and business rate rebates. ROC recycle revenue
is included assuming a 10% recycle rate for both actual and forecast revenue
Onshore Wind Optimisation & Enhancement Activity
In Northern Ireland, 17 of the 29 small-scale turbines were identified for
repowering with replacement EWT 250kW turbines. These increase both efficiency
and output, whilst maintaining their respective NIRO accreditation status.
As at 30 June 2025 14 turbines have been repowered and returned to operation,
with the remaining three turbines having received planning approval for
repowering, with a new 25-year term.
General Portfolio
OFGEM Audits
As part of the industry-wide audits of FiT and RO-accredited generating
assets, the Asset Manager has been working closely with the regulator on
certain assets that have been selected, at random, for audit. All closed OFGEM
audits have had relevant enquiries satisfied, with the respective assets'
accreditation being maintained.
Health & Safety Activities & Cyber Security
Please refer to the Environmental, Social and Governance report for further
information on health & safety activities and cyber security.
3. Power Purchase Agreements
The Company actively monitors power market conditions, ensuring that contract
renewals are spread evenly through any 12-month period, with competitive
tender processes on both fixed and floating price options run for PPA renewals
in the 3 months prior to the commencement of a new fixing period. Flexibility
within the Company's capital structure enables PPA counterparties to be
selected on a competitive basis and not influenced by lenders requiring
long-term contracts with particular offtakers. This means the programme of
achieving value and diversification from contracting with multiple
counterparties is executed for the benefit of Shareholders.
As at 30 June 2025, the average contractual term of the fixed-price PPAs
across the portfolio is 27.9 months without adjusting for capacity (Prior
Year: 32.5 months) and the Company has a price confidence level of c. 41% to
December 2025 and c. 23% to June 2026 (on a capacity basis), representing the
percentage of the Company's portfolio that already has fixed prices in place
and therefore no exposure to power market fluctuations. Looking ahead, the
strategy has also secured power fixes, and thus revenue certainty, at levels
that are generally in excess of the latest forecaster expectations.
Table 3. PPA Fixed Power Prices (average for fixes completed vs blended
average forecaster prices)
Metric Jul-25 Jan-26 Jul-26 Jan-27
BSIF Portfolio Weighted Average Contract Price (£/MWh) 95.2 99.1 68.1 76.4
Capacity with Fixed PPA price 522MW 323MW 184MW 112MW
% of BSIF total capacity under PPA Fixed Power Price contract 66% 41% 23% 14%
Blended Average of forecasters' nominal terms power prices per 30 June 2025 77.4 78.5 71.0 72.0
valuation (£/MWh)
Footnote: data excludes assets which are part of the Strategic Partnership
with GLIL; values shown are as at the beginning of the month
The Investment Adviser believes its PPA policy is the best strategy for
Shareholders, who are looking for stable revenues and forecastable,
sustainable dividends with high visibility of revenues on a rolling multiyear
basis.
4. Proprietary Pipeline
The Company has continued to implement its new build strategy across solar
development and construction to ensure that the Company has the optionality to
build its market share amongst UK solar power producers. As part of this
approach, the Company had co-development agreements in place since 2019 to
fund the development of new sites. The Company also expanded its strategy to
include battery, which will enable the diversification of the Company's
revenues and allow it to monetise the expected increases in volatility of
power prices in the future. The first battery project is progressing well
through construction.
This focus on development activities has enabled the Company to identify a
significant pipeline of assets which can be built over the next five years. As
these projects progress, the Company is working with selected construction
contractors to ensure that projects are designed and built to a high
specification for long term performance.
The new build strategy has delivered well on its objectives thus far; three
developments, with a cumulative capacity of 102MW, have been constructed and
are fully operational (Yelvertoft, Mauxhall Farm and Romsey X), while the
development pipeline now stands at over 1.4GW. Nine sites have achieved CfDs
across AR4, AR5 and AR6, representing potentially over 450MW of installed
capacity.
The following sections provide a more detailed update on both our construction
and development programmes.
Construction Programme
As at 30 June 2025, 102MW of solar PV projects had been energised in the Year
and had passed provisional acceptance tests. Performance will be monitored
closely to ensure it is in line with the contracts over the two year warranty
period. These projects are Yelvertoft Solar Farm (a 48.4MW solar PV park in
Northamptonshire) and Mauxhall Farm Energy Park (a 44.5MW solar PV project in
North East Lincolnshire) and Romsey X (a 9.2MW solar PV extension to Romsey
solar farm in Hampshire). Mauxhall Farm is planned to be a co-located project
and construction of a 25MW battery energy storage scheme is underway.
As at the end of the Year, the Company had a pipeline of future solar assets
with a capacity of 633MW and battery storage assets with 430MW capacity that
are fully consented and are in pre-construction. The projects have connection
dates between 2025 and 2035.
Of these, the Company is actively exploring EPC contracts for seven projects
(c. 360MW capacity in total), which have CfDs under AR4, AR5 and AR6. EPC
agreements for the Company's new build projects are expected to be fixed price
contracts comparable to Yelvertoft and Mauxhall Farm and will 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.
Development Programme
The Investment Adviser has been pursuing its development strategy since 2019
to enable the Company to continue to be a key player in the UK renewable
energy market. Since this time, a portfolio of over 1GW of solar and 1.5GW of
batteries has been funded across 31 development projects. The Company has an
investment limit in pre-construction development stage activities, restricted
to 5% of gross assets; less than 3% 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's 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 pipeline status and valuation as at the year-end is summarised in the
graphic below. In the Year, 4 projects received planning consent, with a
cumulative capacity of 92MW solar and 140MW battery storage. Post Year end, 2
projects received planning consent, with a cumulative capacity of 105MW solar
PV and 40MW battery storage.
Post Year end, the opportunity was taken to extend an existing project in our
pipeline with the addition of 100MW solar and 800MW battery as it was believed
to be located in a strategic position on the electricity network. In addition,
funding has commenced for the development of a 125MW solar and 500MW battery
site in Hertfordshire.
25
5. Analysis of underlying earnings
The total generation and revenue earned in the Year by the Company's wholly
owned portfolio, split by subsidy regime, is outlined below:
Subsidy Regime Generation (MWh) PPA Revenue (£m) Regulated Revenue (£m)
FiT 60,862 4.8 13.1
4 ROC 18,959 1.7 4.9
2.0 ROC 23,138 1.6 3.4
1.6 ROC 116,309 10.7 13.7
1.4 ROC 295,244 34.4 29.4
1.3 ROC 36,947 3.1 3.6
1.2 ROC 73,728 8.9 6.8
1 ROC 37,939 2.3 2.8
0.9 ROC 65,414 5.1 4.3
Subsidy - free 69,433 4.6 0.3
Total 797,973 77.2 82.3
The Company includes ROC recycle assumptions within its long term forecasts
and applies a market based approach on recognition within any current
financial year, including prudent estimates within its accounts where there is
clear evidence that participants are attaching value to ROC recycle for the
year.
The key drivers behind the changes in Underlying Earnings between this Year
and the Prior Year are the combined effects of lower PPA pricing, lower than
expected wind speeds, increased costs and debt interest and repayments.
Underlying Portfolio Earnings
Year Prior Year Year to
30-Jun-25 30-Jun-24 30-Jun-23
(£m) (£m) (£m)
Portfolio Revenue 161.8 183.8 184.4
Liquidated damages and Other Revenue(1) 3.5 12.6 5.4
Earnings from JV 9.9 0.0 0.0
Portfolio Income 175.2 196.4 189.8
Portfolio Costs -36.7 -38.2 -36.3
Fund Operating Costs(2,3) -8.2 -8.6 -8.7
Total Operating Profit (EBITDA) 130.3 149.6 144.8
Project Finance Interest Costs -12.5 -12.7 -13.6
Group Corporation Tax -9.6 -13.9 -7.0
Electricity Generator Levy -2.9 -16.2 -9.7
Group Debt Costs(4) -10.0 -12.2 -6.1
Underlying Earnings 95.3 94.6 108.4
Group Debt Repayments -33.5 -30.1 -18.3
Underlying Earnings available for distribution 61.8 64.5 90.1
Brought forward reserves 20.3 58.4 20.9
Earnings from Disposals 92.0 0.0 0.0
Repayment of RCF -50.5 -10.0 0.0
Share Buybacks -10.6 -9.4 0.0
Acquisitions and CapEx -21.7 -30.1 0.0
Total funds available for distribution 91.3 73.4 111.0
Target distribution 52.7 53.1 51.4
Declared/Actual Distribution 52.7 53.1 52.6
Underlying Earnings carried forward 38.5 20.3 58.4
1 Other Revenue includes ROC mutualisation, ROC recycle late payment,
insurance proceeds, O&M settlement agreements and rebates received.
2 Includes the Investment Adviser fees and other fees at Company and BR1
level.
3 Excludes one-off transaction costs and the release of up-front fees related
to the Company's debt facilities
4 RCF Interest and commitment fees
The table below presents the underlying earnings on a per share basis.
Year Prior Year Year to
30-Jun-25 30-Jun-24 30-Jun-23
(£m) (£m) (£m)
Actual Distribution 52.7 53.1 52.6
Total funds available for distribution (including reserves) 91.3 73.4 111.0
Average Number of shares in Year* 594,651,711 609,849,113 611,452,217
Target Dividend (pps) 8.90 8.80 8.40
Total funds available for distribution (pps) 15.41 12.00 18.13
Total Dividend Declared & Paid (pps) 8.90 8.80 8.60
Reserves carried forward 6.51 3.40 9.53
(pps) **
* Average number of shares is calculated based on the weighted average shares
in the Year.
** Reserves carried forward are based on the shares in issue at the point of
Annual Accounts publication (being 592m shares for 30 June 2025, 597m shares
for 30 June 2024 and 611m shares for 30 June 2023).
6. 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 30 June 2025 was £820.3 million (30 June
2024: £965.5 million).
Valuation Component (£m) June 2025 June 2024 June 2023
DCF Enterprise Value of Portfolio 971.5 1,100.0 1,195.2
DCF Enterprise Value of JV Portfolio 123.1 36.5 -
Consented development/construction and repowering projects 36.2 110.3 67.5
Deduction of Project Co debt -446.1 -423.2 -430.8
Project Net Current Assets 135.6 141.9 186.5
Directors' Valuation 820.3 965.5 1,018.4
Portfolio Size (MW) 882.9 834.0 812.6
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 valuation
There have been several factors that have been considered in the Investment
Adviser's recommendation to the Directors' Valuation (and which are quantified
in the NAV movement chart on page 29):
(i) Despite interest rates falling during 2025, the Directors' portfolio
discount rate has been maintained at 8.00% (June 2024: 8.00%). The discount
rate remains a key area of consideration but with gilt yields remaining at an
elevated level since the interim valuation, it has been concluded that there
are insufficient market signals to warrant a change in the cost of equity at
this point.
(ii) Renewable Energy Guarantees of Origin for the period 2026-2030 have
been updated to reflect the latest available forecast and checked against
pricing achieved in the latest round of tendering.
(iii) Inclusion of the latest forecasters' power price curves as at 30 June
2025 has resulted in a decrease in the valuation as there have been decreases
in projected electricity prices of up to 10% in the period from 2026 to 2045.
Further information regarding power prices is included in section 3 of this
report.
(iv) Yelvertoft Farm and Mauxhall Farm solar projects have been introduced to
the valuation on a discounted cashflow basis rather than being held at cost,
as they had been during their first year of operations and during their
construction.
(v) Working capital has declined in the Year, reflecting the payment of
dividends through the Year, the execution of the Company's share buyback
programme, the amortisation of the Company's portfolio-level debt, the partial
repayment of the Revolving Credit Facility.
(vi) The Investment Advisor has identified a systemic defect with a
particular model of central inverters used in approximately 4.5% of the
portfolio. The expected cost of a remediation plan to replace the affected
inverters has been included in the valuation.
By reflecting the core factors above within the Directors' Valuation for 30
June 2025, the enterprise value of the operational portfolio is £1,094.5
million (June 2024: £1,136.5 million), representing an effective price for
the solar component of £1.11m/MW (June 2024: £1.24m/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.
There have been no material changes to assumptions regarding the future
performance of the portfolio when compared to the Directors' Valuation of 30
June 2024.
The assumptions set out in this section remain subject to continuous review by
the Investment Adviser and the Board.
Power Prices
As has been the case for some years, a blend of the forecasts from three
leading consultants is used within the latest Directors' Valuation(,) as shown
in the graph below. This is based on the latest forecasts available as at 30
June 2025.
The curves used in the 30 June 2025 Directors' Valuation reflect the following
key updates:
1. Forward electricity prices from 2026 to the mid-2030s broadly
trending lower, driven by expectations for reduced demand and strong
renewables growth as a result of the ambitions set out in the Government's
strategy for Clean Power 2030;
2. Beyond the mid-2030s, power prices have decreased further in response
to expectations of increased renewables capacity on the system.
Movements in NAV
The Company's NAV decreased to £690.1m (116.56pps) in June 2025 from £781.6m
(129.75pps) in June 2024. The movement in NAV was driven primarily by the
following factors:
Power Prices
This is a Combination of power curve impact of -1.6pps and PPA impact of
+0.5pps. The power curves available from the Company's three leading
independent power forecasters as at 30 June 2025 report electricity prices
falling slightly, particularly in the period 2027 to 2030. The decline is
attributed to a combination of factors, including downward revisions to power
demand expectations and stronger renewable capacity growth as the market seeks
to achieve Clean Power 2030.
REGO Update
REGO prices were updated for the latest annual REGO curve. The forecast has
dropped significantly during the past year; for the period 2025 to 2030, the
average price is now £1.30/MWh, compared to a circa £4/MWh for the same
period in the June NAV.
Actual Generation vs Forecast
Whilst solar revenue in the Year was 2.8% above forecast, the wind portfolio
generated 18.8% below forecast, resulting in wind revenue of 14.2% below
forecast, due to significantly lower than expected wind speeds throughout the
Year, combined with the several turbine outages resulting in extended
downtimes across the portfolio. This resulted in the total portfolio revenue
being £600k below forecast (-0.1pps).
Impact of Grid Outages
This reflects the grid outages and curtailments outside of the Company's
control and the impact on lost revenue.
Dividends Paid
Total dividends paid in the Year amounted to £52.3m (8.80pps).
Share Buybacks
On 15 February 2024, the Company announced a share buyback programme in which
it had allocated £20 million to purchase its own shares post closed period.
During the year ended 30 June 2025, 10,294,184 (2024: 9,078,000) Treasury
shares were purchased at an average price of 103.28 (2024: 103.19) pence per
share. The total amount spent on the buyback during the year was £10,632,163.
Annual Indexation of OpEx Costs
This is an update following the annual review of the cost base over the life
of the assets, which also accounts for actual inflation.
Working Capital Movements
This movement reflects the change of the calculation date of cash flows from
June 2024 to June 2025, along with tax, degradation, debt, and working capital
adjustments.
Other Movements
This movement reflects the £7.2m reduction in NAV since the announcement of
the unaudited 30 June 2025 NAV on 19 August 2025. The reduction is
predominantly due to a systemic defect with a particular model of central
inverters used in approximately 4.5% of the portfolio, identified by the
Investment Adviser and highlighted in the unaudited 31 March 2025 NAV
announcement.
Reconciliation of Directors' Valuation to Balance sheet
Balance at Year End
Category 30 June 2025 30 June 2024 (£m) 30 June 2023 (£m)
(£m)
Directors' Valuation 820.3 965.5 1,018.4
Portfolio Holding Company Working Capital 4.7 (1.5) (12.5)
Portfolio Holding Company Debt (134.9) (184.0) (153.0)
Financial Assets at Fair Value per Balance sheet 690.1 780.0 852.9
Gross Asset Value 1,271.1 1,388.7 1,438.0
Gearing (% GAV*) 45.7% 43% 41%
*GAV is the Financial Assets, as at 30 June 2025, at NAV of £690.1 plus RCF
of £134.9m and third party portfolio debt of £446.1m (giving total debt of
£581.0m).
Enterprise Valuation sensitivities
Valuation sensitivities are set out in tabular form in Note 8 of the financial
statements.
7. 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 is split into (1) long-term asset-level debt,
and (2) a 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 the Company to take advantage of more competitive PPA pricing.
The Company's weighted average cost of long-term debt at 30 June 2025 is 3.95%
(30 June 2024: 3.53%) and is largely locked in via fixed interest rates.
Whilst the Company has some index-linked debt, it also has significant levels
of RPI linked revenues, leaving the Company a net beneficiary of inflation.
The revolving credit facility, detailed below, is the only short term
floating-rate debt instrument in the portfolio and represents 23% of the total
debt balance. 74% of asset-level debt has a fixed interest rate. 23% of
principal for long-term debt is inflation-linked.
Revolving Credit Facility
In May 2025, the Company extended the term of its Revolving Credit Facility
(the 'RCF') with RBS International, Santander UK and Lloyds Bank Plc by two
years to May 2027, reducing the commitment of the facility from £210 million
to £150 million. The margin for the facility is 1.85%, a reduction from the
previous margin of 1.90%.
The Company remains focused on reducing its short term debt, whilst managing
its development pipeline, with the reduced size of the committed extended RCF
reflecting this. The Company has repaid £50.5 million of the RCF in the Year
to 30 June 2025, reducing the drawn balance to £134.9 million (30 June 2024:
£184 million). The RCF also has an uncommitted accordion feature allowing it
to be increased by up to a further £30 million.
The Company is also pleased to report that the amended and restated RCF has
achieved Green Loan status, which introduces enhanced monitoring and reporting
obligations in line with the Company's Green Financing Framework.
External Debt
Excluding the Company's RCF, outstanding loans from third-party lenders as at
30 June 2025 totals to £446.1 million, with each loan secured against a
portfolio of assets and fully amortising within the life of the respective
asset's subsidies. The average interest cost, excluding the Company's RCF,
across the external debt facilities in the table below, is 3.95%.
Syndicate - Fund RCF 134.9 May-27 0% 5.49%
Bayern LB - Project Finance 5.2 Sep-29 100% 5.50%
Syndicate - Project Finance 60.0 Dec-33 100% 3.50%
Aviva (fixed) - Project Finance 76.7 Sep-34 100% 2.88%
Aviva (index-linked) - Project Finance 62.9 Sep-34 100% 3.20%
Macquarie (fixed) - Project Finance 6.5 Mar-35 100% 4.60%
Macquarie (indexed-linked) - Project Finance 18.7 Mar-35 100% 4.20%
Gravis (index-linked) - Project Finance 33.9 Jun-35 100% 6.48%
NatWest - Project Finance 109.8 Dec-39 85% 3.18%
Strategic Partnership Portfolio 72.4 Dec-35 100% 5.50%
Total/Wtd Avg 581.0 74% 4.30%
Total/Wtd Avg excl. RCF 446.1 96% 3.95%
Note: Index-linked debt treated as fixed for the purposes of this table as
proportion fixed represents interest rate risk only
Strategic Partnership Portfolio
In January 2025 the re-financing of the strategic partnership portfolio was
completed, replacing c.£214m of index linked debt from M&G with c.£297m
of fixed rate debt from Blackstone (£149m), KfW (£74m) and Caixa bank
(£74m), maturing in December 2035. The re-financing released c.£21m of cash
proceeds to BSIF, whilst its share of the balance of underlying long-term debt
now stands at c.£72.4m. This results in an overall increase in the total debt
of the Company to £581m at the year end with the weighted average debt cost
of long-term debt to 3.95%.
GAV Leverage
The Group's total outstanding debt as at 30 June 2025 was £581 million (30
June 2024: £584 million) and its leverage stands at 45.7% of GAV (30 June
2024: 43%).
8. Market Developments
UK renewable generation capacity and deployment
Latest Government data showed that UK solar PV capacity stood at c.19GW across
c.1.8 million installations. Of this amount, c.7GW (37% of the total solar
capacity in the UK) and c.5GW (27%) is accredited under the RO and FiT
schemes, respectively, c.6GW (30%) is unaccredited and less than 6% is under
the CfD scheme. Each of the onshore and offshore wind installed capacity
stands at around 16GW. The UK has over 5GW of operational battery storage
capacity, according to data from energy association RenewableUK.
The UK's total renewable generation capacity is projected to continue to grow
over the coming years as the Government strives to meet its Clean Power 2030
targets. Deployment is expected to be supported by several policy initiatives,
including the CfD scheme and various significant planning and grid reforms
already underway.
The Clean Power 2030 Action Plan outlines the Government's roadmap to
achieving a clean power system by 2030, based on expert independent advice
from the National Energy System Operator. The plan focuses on accelerating the
deployment of renewable energy, investing in new innovative flexible
technologies and policy and legislation reforms to support the energy
transition.
Secondary market transactions, development and construction activity
Transactional activity in the UK renewables market has increased in recent
months, driven by ambitious decarbonisation targets and increasing preferences
by customers for clean energy. Several infrastructure funds have continued to
complete capital recycling via asset disposal programmes to demonstrate value
and support deleveraging efforts.
Development activity has been noticeable in the battery storage area, with
developers seeking to provide solutions to help manage the grid as larger
quantities of intermittent renewables are added to the system. Solar
development activity has been somewhat slower, primarily due to grid
constraints.
Some construction activity has been observed in the UK solar and battery
storage area, although this is against a backdrop of supply chain challenges
and elevated development costs. Converting the UK's significant development
pipeline into operational solar and storage projects over the next five years
will require developers to adopt innovative approaches to overcome challenges
surrounding high construction costs, grid connection lead times and limited
access to new capital.
With 735MW of fully owned operational solar capacity, the Company maintains a
strong position within the UK solar market, owning c.4.4% of the UK's
utility-scale solar PV capacity.
9. Regulatory Environment
The regulatory environment remains under the spotlight as the Government seeks
to support renewable energy deployment as part of its Clean Power 2030 Action
Plan through particularly tough macroeconomic conditions. Key themes are
outlined below.
Update on Contracts for Differences (CfD)
In September 2024, the AR6 results were published. A total of 9.6GW of
renewable energy projects were successful, of which 3.3GW solar projects won
contracts (or 34% of total awarded capacity), onshore wind at 990MW (10%),
offshore wind (fixed-bottom) at 4.9GW (51%) and floating offshore at 400MW
(4%). The Government revised the overall AR6 budget to £1.6 billion, up by
£0.5 billion from the previous level amid calls from industry to help meet
renewable targets. Most of the budget uplift went to offshore wind, while
established technologies including solar and onshore wind rose by £65 million
to £185 million. The AR6 administrative strike prices across all technologies
rose from the previous round, with solar and wind up by 30% and 21%
respectively, at £61/MWh and £64/MWh, respectively (in 2012 prices).
In July 2025, the Government released its response to the consultation on
further reforms to the CfD scheme for AR7 which ran from February - March
2025. Several positive reforms were announced, including CfD contract tenor
extension from 15 years to 20 years for solar and other key technologies. This
marks a significant positive step forward for the renewables sector. The
Government is also committed to increasing the length of the target
commissioning window for solar new build projects from 3 months to 12 months,
providing developers with greater flexibility to adapt to unexpected
construction related events and aligning solar with other "Pot 1"
technologies.
The application round for AR7 opened on 7 August 2025 and closed on 27 August
2025. The Government is due to publish its budget notice after reviewing all
qualifying applications and before the auction, scheduled later in the year.
The movement in AR7 administrative strike prices compared with AR6 was mixed
across technologies. The ASP for solar (Pot 1) was £54/MWh (in 2012 prices),
down from £61/MWh in AR6 (or c. 11%) driven in part by longer tenors and
lower cost assumptions, while onshore wind (Pot 1) was up by just c. 3% at
£66/MWh driven in part by lower onshore wind load factor assumptions.
Electricity Generator Levy
The Electricity Generator Levy - a 'temporary' 45% tax on income from
electricity sold above the benchmark price - is set to be in place until 31
March 2028. It applies to extraordinary returns made by renewable (solar,
wind, biomass), nuclear and energy from waste generators that are connected to
the UK national transmission or local distribution networks. Revenues from
CfDs are excluded from this levy.
Review of Electricity Market Arrangements
The Government published its long-awaited update on the UK's Review of
Electricity Market Arrangements ("REMA") post period end, in July 2025. It
confirmed plans to reform the existing Great Britain national pricing system
rather than implementing zonal pricing, whereby electricity might have been
subject to different pricing regimes in different parts of the UK. Other
initiatives announced included transmission network charging and balancing
mechanism reforms and greater focus on central planning. The Investment
Adviser looks forward to continuing collaborative initiatives with Government
and supporting its Clean Power 2030 Action Plan.
Bluefield Partners LLP
20 October 2025
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