REG - Bluefield Solar Inc. - Interim Results to 31 December 2024
27/02/2025 07:15
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RNS Number : 6185Y Bluefield Solar Income Fund Limited 27 February 2025
27 February 2025
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 2024
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 Interim Report for the six months ended 31 December
2024.
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 2024 / 30 June 2024
Net Asset Value (NAV) Dividend Target per Share
£746.5m £781.6m 8.90pps 8.80pps(actual)
NAV per share
126.03p 129.75p
Six month period to 31 December 2024 / 31 December 2023
Underlying Earnings(1) Total Shareholder Return in year(2)
(pre amortisation of debt) -6.63% 2.50%
£40.4m £43.9m
Total Return in year(3)
Underlying Earnings per share(1) 0.52% 0.47%
(pre amortisation of debt)
6.83p 7.19p Total return to Shareholders since IPO
77.19% 92.79%
Underlying Earnings per share available for distribution(1)
(post amortisation of debt)
2.50p 3.57p
Environmental, Social and Governance (ESG)
ESG KPI's5
Ø 166,000 tonnes of CO2e emissions avioded(6) (June 2024: 167,800 tonnes)
Ø 297,000 houses to be powered with renewable energy(7) (June 2024: 300,000)
Ø Payments of approximately £320,000 to community benefit schemes (June
2024: £287,000)
ESG Highlights
* The Investment Adviser won an 'Impact on Climate' award in relation to
biodiversity work undertaken at West Raynham Solar Park.
* A second research project focused upon circular economy and end-of-life
decision making has been commissioned with Lancaster University.
Construction and Development Pipeline
Two assets under construction in FY2023/24 (Yelvertoft and Mauxhall Farm with
total capacity of 93MW) connected to the electricity network shortly after 30
June 2024 and are in their first year of operation.
. 34 MW under construction
· 731 MW
consented
1.5 GW
· 357 MW in
planning
(722 MW solar, 715 MW battery)
· 365 MW development
pipeline
Excluding assets in first year of operation
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. The previous published figure based on NAV for December 2023 (110.14%) has
been restated to reflect return on share price basis.
5. Estimated annual figures based on actual and forecasted generation data for
the Period 1 July 2024 - 30 June 2025.
6. Figure based on generation data aligned with the relevant Government CO2e
conversion factor. Avoided emissions are disclosed on a gross basis,
reflecting the Company's equity share in investments, without allocating
avoided emissions to debt finance providers.
7. Based on Ofgem's Typical Domestic Consumption Values (TDCV).
Results Summary:
Six months ended 31 December 2024 Six months ended 31 December 2023
Total operating income £2,659,272 £5,077,465
Total comprehensive income before tax £1,632,220 £3,991,019
Total underlying earnings(1) £40,443,299 £43,936,028
Earnings per share (per below) 0.27p 0.65p
Underlying EPS available for distribution(2) 2.50p 3.57p
Underlying EPS brought forward(3) 3.42p 9.53p
Total underlying EPS available for distribution 6.39p 11.46p
1st interim dividend 2.20p 2.20p
NAV per share 126.03p 135.95p
Share price as at 31 December 94.2p 118.6p
Total return(4) 0.52% 0.47%
Total Shareholder Return(5) -6.63% 2.50%
Total Shareholder Return since inception(6,7) 77.19% 92.79%
Dividends per share paid since inception 82.99p 74.19p
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 weighted average
number of shares in issue through the Period .
4. Total Return is based on NAV per share movement and dividends paid in the
Period.
5. Total Shareholder Return is based on share price movement and dividends
paid in the Period.
6. Total Shareholder Return since inception is based on share price movement
and dividends paid since the IPO.
7. The previous published figure based on NAV for December 2023 (110.14%) has
been restated to reflect return on share price basis.
John Scott, Chair of Bluefield Solar, said:
"These results mark another period of sound operational performance. The
Company has raised its dividend target, continuing our record of dividend
growth since inception which is once again expected to be fully covered by
cash post debt amortisation. The Company also energised two of its largest
assets - Yelvertoft (48.4MW) and Mauxhall (44.5MW) - and work on the
extensive and accretive development pipeline continued within the constraints
of being unable to raise fresh capital.
"As I have reported previously, the discount to which the Company's shares
trade has been a clear focus of the Board, and strategic measures to add
shareholder value have continued to be executed successfully during the course
of the year. These measures include the completion of Phase Two of our
innovative Strategic Partnership with GLIL Infrastructure in September 2024
which released c.£70 million to BSIF. The completion of the Company's £20
million share buyback programme and the reduction of the Company's Revolving
Credit Facility ('RCF') to £133.5 million also represented notable
milestones.
"Despite these achievements, the Company's share price discount to net asset
value, whilst being among the narrowest of our peers, has continued to widen.
Given this situation, the Board has concluded that it is the right time to
explore strategic initiatives and options including reviewing fee
arrangements, to address the share price discount and to continue to seek to
maximise value for our shareholders.
The Board is committed to reviewing all options available to the Company and
we will look to update shareholders on progress as appropriate.
James Armstrong, Managing Partner of Bluefield Partners LLP, said:
"With the equity markets continuing to be shut, the Period highlights how
Bluefield Solar continues to benefit from the strategic initiatives
established by the Investment Adviser over the past few years: the creation of
a development pipeline started in 2019 has the potential to realise material
returns and liquidity for shareholders if sold and the strategic partnership
with GLIL established in 2023 continues to be a benchmark in the sector in
respect of innovation, alignment and value creation for shareholders with
£91m returned so far, a well-performing operational portfolio and the joint
ambition to create further value through the development of part of the
proprietary pipeline. The track record is clear, and with the Board, Bluefield
Partners will continue to look at strategic initiatives with the aim of
maximising shareholder value"
Analyst presentation
A virtual meeting for analysts will be hosted by John Scott, Chair of
Bluefield Solar, and James Armstrong and Neil Wood of Bluefield Partners LLP
at 9.30am today, 27 February 2025. For details, please contact Burson 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.dbnumis.com)
Ocorian Administration (Guernsey) Limited Tel: +44 (0) 1481 742 742
(Company Secretary & Administrator) www.ocorian.com (http://www.ocorian.com)
Chezi Hanford
Bluefield Solar Board
To be contacted via Ocorian.
Tel: +44 (0) 1481 742 742
bluefieldteam@ocorian.com
Media enquiries: Tel: +44 (0) 20 7466 5000
Buchanan (PR Adviser) www.buchanancomms.co.uk (http://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 883MW, comprising 824.6MW
of solar and 58.3MW 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.
Bluefield Solar Income Fund Limited
Interim Report and
Unaudited Condensed Interim Financial Statements
FOR THE SIX MONTHS ENDED 31 DECEMBER 2024
Company Registration Number: 56708
General Information
Board of Directors (all non-executive)
John Scott (Chair and Chair of Nomination Committee)
Elizabeth Burne (Chair of Audit and Risk Committee)
Michael Gibbons CBE (Senior Independent Director and Chair of Remuneration
Committee)
Meriel Lenfestey (Chair of Environmental, Social and Governance Committee)
Chris Waldron (Chair of Management Engagement and Service Providers Committee)
Glen Suarez (appointed 30 October 2024)
Registered Office
PO Box 286
Floor 2, Trafalgar Court
Les Banques, St Peter Port
Guernsey, GY1 4LY
Administrator, Company Secretary and Designated Manager
Ocorian Administration (Guernsey) Limited
Floor 2, Trafalgar Court
Les Banques, St Peter Port
Guernsey, GY1 4LY
Independent Auditor
KPMG Channel Islands Limited
Glategny Court, Glategny Esplanade
St Peter Port
Guernsey, GY1 1WR
Registrar
Computershare Investor Services (Guernsey) Limited
13 Castle Street
St Helier
Jersey, JE1 1ES
Principal Bankers
Royal Bank of Scotland International Limited
Royal Bank Place
1 Glategny Esplanade
St Peter Port
Guernsey, GY1 4BQ
Investment Adviser
Bluefield Partners LLP
6 New Street Square
London, EC4A 3BF
Sponsor, Broker and Financial Adviser
Deutsche Numis Securities Limited
45 Gresham Street
London, EC2V 7BF
Legal Advisers to the Company
(as to English law)
Norton Rose Fulbright LLP
3 More London Riverside
London, SE1 2AQ
Legal Advisers to the Company
(as to Guernsey law)
Carey Olsen
PO Box 98, Carey House
Les Banques, St Peter Port
Guernsey, GY1 4BZ
Highlights
As at 31 December 2024/30 June 2024
Net Asset Value (NAV)
£746.5m/781.6m
NAV per share
126.03p/129.75p
Dividend Target per Share
8.90pps/8.80pps (actual)
Six month period to 31 December 2024/31 December 2023
Underlying Earnings(1)
(pre amortisation of debt)
£40.4m/£43.9m
Underlying Earnings per Share(1)
(pre amortisation of debt)
6.83p/7.19p
Underlying Earnings per share available for distribution(1)
(pre amortisation of debt)
2.50p/3.57p
Total Shareholder Return(2)
-6.63%/2.50%
Total Return in year(3)
0.52%/0.47%
Total return to Shareholders since IPO(4)
77.19%/92.79%
Environmental, Social and Governance (ESG)
ESG KPIs(5)
• 166,000 tonnes of CO2 emissions avoided(6) (June
2024: 167,800 tonnes)
• 297,000 houses to be powered with renewable
energy(7) (June 2024: 300,000)
• Payments of approximately £320,000 to community
benefit schemes (June 2024: £287,000)
ESG Highlights
*The Investment Adviser won 'Impact on Climate' award in relation to
biodiversity work undertaken at West Raynham Solar Park.
*A second research project focused upon circular economy and end-of-life
decision making has been commissioned with Lancaster University
Construction and Development Pipeline
The two assets under construction in FY2023/24 (Yelvertoft and Mauxhall Farm
with total capacity of 93MW) connected to the electricity network shortly
after30 June 2024 and are in their first year of operation.
· 34 MW under construction
· 731 MW consented 1.5 GW
· 357 MW in planning (772 MW Solar, 715 MW battery)
· 365 MW development pipeline (Excluding assets in first year of operation)
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 on page 23.
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. The previous published figure based on NAV for December 2023 (110.14%) has
been restated to reflect return on share price basis.
5.Estimated annual figures based on actual and forecasted generation data for
the Period 1 July 2024 - 30 June 2025.
6.Figure based on generation data aligned with the relevant Government CO2e
conversion factor. Avoided emissions are disclosed on a gross basis,
reflecting the Company's equity share in investments, without allocating
avoided emissions to debt finance providers.
7.Based on Ofgem's Typical Domestic Consumption Values (TDCV)
Results Summary
Six months ended Six months ended 31 December 2023
31 December 2024
Total operating income £2,659,272 £5,077,465
Total comprehensive income before tax £1,632,220 £3,991,019
Total underlying earnings(1) £40,443,299 £43,936,028
Earnings per share (per page 58) 0.27p 0.65p
Underlying EPS available for distribution(2) 2.50p 3.57p
Underlying EPS brought forward(3) 3.42p 9.53p
Total underlying EPS available for distribution 6.39p 11.46p
1(st) interim dividend 2.20p 2.20p
NAV per share 126.03p 135.95p
Share Price as at 31 December 94.2p 118.6p
Total Return(4) 0.52% 0.47%
Total Shareholder Return(5) -6.63% 2.50%
Total Shareholder Return since inception(6,7) 77.19% 92.79%
Dividends per share paid since inception 82.99p 74.19p
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 on page 23.
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 weighted average
number of shares in issue through the Period
4. Total Return is based on NAV per share movement and dividends paid in the
Period.
5. Total Shareholder Return is based on share price movement and dividends
paid in the Period.
6. Total Shareholder Return since inception is based on share price movement
and dividends paid since the IPO.
7. The previous published figure based on NAV for December 2023 (110.14%) has
been restated to reflect return on share price basis.
Corporate Summary
Investment objective
The investment objective of the Company is to provide Shareholders with an
attractive return, principally in the form of regular income distributions, by
being invested primarily in solar energy assets located in the UK. The Company
also invests a minority of its capital into other renewable assets including
wind and energy storage.
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 as a Green Fund after successful application under the
Guernsey Green Fund Rules to the GFSC 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. On 29
July 2024, the UK Listing Rules were updated and as a result, the Company is
now a member of the Equity Shares in Commercial Companies ("ESCC") category.
The issued capital during the Period comprises the Company's Ordinary Shares
denominated in Sterling.
The Company makes its investments via its wholly owned subsidiary (Bluefield
Renewables 1 Limited) 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 year 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 Company's wholly owned UK
subsidiary, Bluefield Renewables 1 Limited (BR1).
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 wholly owned investment portfolio held by the Company
as at Period end.
In December 2020, Bluefield Renewable Developments 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 its new build portfolio.
Please refer to page 14 for the details of Company's corporate structure.
Chair's Statement
Introduction
The six months to 31 December 2024 ("H1 24/25", or the "Period") have seen an
exacerbation of the challenges to which I have referred in my recent
communications with shareholders. While our underlying business remains
sound and well able to support the rising dividends which we have been paying
to shareholders, our share price has continued to weaken, with the discount to
net asset value ("NAV") widening. The phenomenon of the discount commenced for
us in autumn 2022 when sterling interest rates rose significantly, but it is
distressing that the discount has continued to widen during a period when
interest rates have been falling, albeit modestly. It is little comfort to
your Board that others in our sector are suffering in the same way and that,
compared with our immediate competitors, our discount has been the "least
bad". We recognise it is too high and that something needs to change.
There is a disconnect between the way in which the public markets price our
business and your Board's view of the value of our assets. We re-examine and
publish the Directors' estimates of BSIF's NAV on a quarterly basis and the
result reflects a rigid evaluation of our own operating assumptions, including
such points as power prices, discount and interest rates, inflation and
operating costs. The results which emerge are consistent with the prices we
see being paid for solar assets in the secondary market; in some cases,
Bluefield has been a significant seller of solar farms, so we are very
familiar with this environment.
It has become clear to your Board that the disconnect referred to above, which
has been blighting most of the closed ended fund sector for over two years, is
not a temporary phenomenon which patience alone will cure. Action is needed
and we owe it to our shareholders to examine all options which might lead an
improvement in shareholder value. To this end, we have undertaken and continue
to engage in shareholder meetings and in the new year, supported by Rothschild
& Co, conducted a Perception Study with many of the larger shareholders,
to assess their views and reflect on the way forward. Perhaps unsurprisingly,
there was a spectrum of views; while a number of shareholders seem content
with the Company's current business model, others expressed deep
dissatisfaction with the quoted renewable sector as a whole and are advocates
of a range of initiatives to enable the return of money to shareholders.
As a result of the consultation, the Board has concluded that it is the right
time to explore strategic initiatives to address the share price discount and
to continue to seek to maximise value for our shareholders. The Board is
committed to reviewing all options available to the Company and we will look
to update shareholders on progress as appropriate.
Highlights of the Period
While much more detail is to be found in the Investment Adviser's section, I
am happy to report that the Company has recorded a respectable performance in
the past six months, some of the highlights of this Period being summarised
below:
· The Company's partnership with GLIL Infrastructure has continued
to develop along the lines of the Memorandum of Understanding ('MOU') signed
last year. This included the completion of Phase Two of our Strategic
Partnership, announced in September 2024, which released £70 million to BSIF;
· In July 2024 BSIF energised and connected two of its largest
solar PV facilities, being Yelvertoft (48.4MW) and Mauxhall (44.5MW);
· Work on the Company's 1.5GW development pipeline continued,
within the constraints of our current inability to raise sufficient fresh
capital;
· From the perspective of our core business, which is to generate
electricity from solar and wind energy, the Period experienced, on average,
less irradiation (12.3% below forecasts) and lower wind speeds than expected;
· The Group's outstanding balance on its revolving credit facility
('RCF') reduced, resulting in a loan balance of £133.5 million as at 31
December 2024;
· The NAV per share decreased slightly, to 126.03pps as at 31
December 2024 (30 June 2024: 129.75pps);
· BSIF's closing share price on 31 December 2024 was 94.2pps,
representing a discount of 25% to NAV. Since Period end, the share price
weakened further, the low point being 81.3pps on 6 February 2025. The share
price on 30 June 2024 was 105.6pps;
· The dividend target for FY24/25 has been set at not less than
8.90pps, up from the 8.80pps dividends paid in respect of FY 23/24;
· Consistent with that target, a first interim dividend for FY24/25
of 2.20pps was declared on 28 January 2025;
· Following the end of the Period, refinancing 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.
At the end of 2024, the Group's total outstanding debt stood at £566 million,
and its leverage was 43% (31 December 2023: £577 million, leverage 41%).
Power Prices
The Company's PPA sales strategy is as per earlier years; power sales prices
are fixed for between 12 and 36 months ahead, and BSIF went into 2025 with
more than 68% of its merchant revenue fixed. The Board is confident that, post
debt amortisation, it will again be paying a dividend which is fully covered
by cash for the current financial years.
Investment Advisory fees
The Board is currently in discussions with the Investment Adviser regarding
the level and basis of calculation of the management fees paid to Bluefield
Partners, with a view to implementing any changes with effect from our next
financial year, which commences on 1 July 2025. The Board notes that BSIF's
management fee, which is linked to NAV, has historically been the lowest in
the sector, but at the same time recognises the trend to link a portion of
fees to market capitalisation.
The Board
The process of refreshing the BSIF Board continues. Following an exercise
conducted by an executive search firm, the Board was pleased to appoint Glen
Suarez as a non- executive Director and he joined the BSIF Board on 30 October
2024. Glen, who is a resident of Monaco, has many years' experience of capital
markets, closed ended funds and energy businesses.
Share Buyback Programme/ Capital allocation
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
by share repurchases or payment of dividends. In the Period, we have allocated
capital to all three areas.
The Company continued its share buyback programme through the Period in
response to the weakness in the Company's share price and the steep discount
that the share price represents to the value of the Company's assets. The
Company made an initial allocation of £20 million for buybacks. Shares
repurchased are being held in treasury.
As at 31 December 2024, a total of 19,133,000 shares, representing 3.17% of
the Company's issued shares, had been bought back, at a total cost of
£19,782,655, leading to an accretion of value to continuing shareholders of
0.8pps. Of this number, 10.1 million shares were repurchased during the
Period. Since Period end, a further 239,184 shares have been purchased,
completing the £20 million buyback programme.
Dividends
On January 28, the Board declared the first of its four interim dividends for
the current financial year. The 2.20pps distribution was unchanged from that
paid for the first interim dividend in FY 2023/24, but we have set a total
dividend target for the year of not less than 8.90pps (2023/24: 8.80pps).
This level of distribution is expected to be paid from current cash generation
and to be well covered by current earnings. We have taken the opportunity in
this interim report to provide more detail on the cash position of BSIF and
its subsidiaries.
Conclusion
At an operational level, BSIF's business remains sound and even though
electricity prices have retreated from the remarkable levels seen when the
Ukraine crisis was at its height, the latest predictions from the three firms
of forecasters we employ indicate a robust pricing environment, one in which
we can generate the financial returns we seek. Added to that, it is helpful to
have a new Government which is clear in its intention to foster the continued
expansion of the renewable energy sector. In calendar year 2024, the
proportion of UK electricity generation accounted for by renewable sources
rose to 50%, with solar accounting for 8% (2023: 44% and 7%, respectively).
This trend is set to continue, as indeed it must if the UK is to have any hope
of meeting its 2030 climate goals.
For these and other reasons, I look to BSIF's operational future with
optimism. We now have twelve years of experience, our Investment Adviser
(Bluefield Partners) has built a large and highly professional team in London
and Bristol, we have a strong pipeline of solar and battery storage projects
and our operating record has been consistently strong. Furthermore, from
inception we have a history of growing our dividend.
Nonetheless, given our lacklustre share price 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. While we pursue
these initiatives, I ask shareholders to await developments.
John Scott
Chair
26 February 2025
Report of the Investment Adviser
Introduction from the Managing Partner of the Investment Adviser
The Company is reporting its 12th set of Interim statements and whilst the
financial performance of the Company continues to deliver on the strategy
launched at IPO in July 2013; being payment of a fully covered market leading
level of dividends to shareholders, the wider capital market environment has
changed materially.
Share prices across the listed renewables Investment Trusts first fell below
NAVs in Q3 of 2022, triggered initially by the disastrous 'mini-budget' of the
short lived premiership of Liz Truss and then remained subdued by the impact
of the Bank of England successively increasing the base rate to a peak of
5.25% in August 2023.
The rapid change in interest rates has inevitably impacted transaction
activity compared to the Period pre 2022 and despite the two largest solar
portfolio transactions ever in the UK occurring in the past 12 months;
together totalling over 750MWp, at a combined Gross Asset Value in excess of
£1.2bn and in line with listed trust valuations as well as the Company
selling 112MWp of assets in line with the June 2024 NAV, it is clear wider
interest in operational only portfolios is now less than portfolios which have
significant opportunity for growth through proprietary development pipelines.
However, with base rates now 75bps lower than their peak and predicted to
continue on a downward trajectory for 2025, the widening of the discount
between NAV and share price to over 30% represents a position that is detached
from the fundamentals of the Company and its ability to continue to meet its
strategic objective of delivering high levels of income to shareholders.
As addressed by the Chair, this has led Bluefield Partners and the Board to
explore strategic initiatives to address the share price discount to NAV and
to seek to maximise value for shareholders.
Whilst the Company cannot control the behaviour of the equity markets, it is
highly pleasing to be able to provide positive updates on initiatives launched
to directly address the Company's ability to recycle capital, prove value and
reduce short-term borrowing;
1. Phases One & Two of the Strategic Partnership with GLIL: Announced in
December 2023, the strategic partnership with GLIL, has resulted in cash
generation to BSIF of £91m. This is the result of c£70m being generated from
the sale (in line with 30 June 2024 NAV) of a 50% interest in a 112MW PV
portfolio owned by BSIF and c£21m from improvement in the capital structure
of the Joint venture entity, through a re-financing of £214m of index linked
debt into £297m of fully amortising fixed debt in January 2025. A repayment
of £50m of the Company's RCF was made following the sale and further
repayments are envisaged.
2. Phase Three of the Strategic Partnership with GLIL: Currently in process
and is the sale by BSIF of circa 10% of its proprietary development pipeline
to the Joint venture entity, enabling GLIL and Bluefield Solar to collectively
support construction of the assets over the next two to three years.
3. Sale of development assets: The Company's portfolio of development assets
is a highly valuable differentiator from a standard asset holding company.
Management of this pipeline is crucial and a completed sale in Q4 2024 of a
55MW PV/18MW BESS project, raising net proceeds of c£3m (equivalent to 6x the
original investment) is being followed by the sale of a portfolio of c370MW
(PV and co-located BESS).
4. Share buyback Programme: In February 2024 the Board announced a share
buyback programme of £20m in response to requests from a number of
shareholders. Since the announcement, the Company repurchased 19.8 million
shares to 31 December 2024, providing +0.8pps of NAV accretion to
shareholders. As at 9 January 2025 this programme had been completed, with the
Board continuing to evaluate the merits of a further programme.
The disconnection of the equity markets is now shining a spotlight on the
driver behind the success of the various strategic initiatives; put simply a
unique platform of operational and development assets intrinsically connected
to the activities of the Investment Adviser and the five core tenets
established at IPO and applied rigorously since then:
1. Capital Structure: continued focus on prudent use of leverage and in the
near term a gradual reduction in RCF drawings, with long term financings
secured at attractive rates on a fixed interest basis (a current average cost
of debt of c.3.8% on £455m of long-term borrowings),
2. Power Sales Strategy: striking Power Price Agreements 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.
3. Active Management: continuing to provide a dedicated workforce of 130
within Bluefield Partners and Bluefield Services, providing an end to end
service, offering from development through construction to operation and long
term management, all with ESG embedded across each function.
4. Proprietary Pipeline: constantly applying the DNA of the business around
accessing primary opportunities (as highlighted by the c1.5GW solar and
storage proprietary pipeline the Investment Adviser has built up exclusively
for BSIF) to provide a platform for continued growth or value accretive
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.
Bluefield Partners remain in no doubt that the Group, in tandem with the
expertise of the Investment Adviser and its wider service offering, remains
well positioned for both future growth and continued success. However,
considering the equity market's view on the current valuation of the Company,
Bluefield Partners and the Board are committed to exploring strategic
initiatives, addressing the share price discount to NAV and to seek to
maximise value for shareholders.
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. Structure
The Company's corporate structure is summarised below:
[image: corporate structure]
3. Portfolio: Acquisitions, Performance and Value Enhancement
Portfolio Overview
As at 31 December 2024, the Company owned an operational solar portfolio of
120 photovoltaic ("PV") plants (consisting of 78 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 Period the Phase Two of the strategic
partnership with GLIL was completed, being the sale of a 50% stake in a c112MW
portfolio of UK solar assets owned by BSIF and solar PV assets, Yelvertoft
(48.4MW) and Mauxhall (44.5MW) became fully operational.
Following the Phase Two transaction, the Company now has a 25% stake (30 June
2024: 9%) in a 358.7MW (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 the
joint venture partnership, was 882.9MW as at 31 December 2024, composed of
824.6MW of solar and 58.3MW of onshore wind.
During the Period, the combined solar and wind portfolio, on the 100% owned
assets, generated an aggregated total of 319.2GWh (31 December 2023:
376.1GWh), representing a generation yield of 455.78MWh/MW (31 December 2023:
462.8MWh/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 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 the Company's record of sector
leading returns since listing over a decade ago.
Portfolio Performance and Optimisation
Solar PV Performance - Wholly owned portfolio excluding Yelvertoft and
Mauxhall
In the Period, irradiation levels were 12.3% lower than the Company's
forecasts and 1.32% lower than the Prior Year, whilst generation at 251.2GWh,
was 7.3% lower than forecast. During the Period, generation yield was 391MWh
per MW of installed capacity, 0.35% above the same Period recorded in the
Prior Year.
Table 1. Summary of Solar Portfolio Performance for H1 2024/25:
H1 H1 Delta to H1 Delta 24/25 to
2024/25 2024/25 Forecast (% 2023/24 23/24 Actual (%
Actual Forecast change) Actual change)
Portfolio Total Installed 642 - - 754 -14.87%
Capacity (MW)
Weighted Average 516 588 -12.27% 523 -1.32%
Irradiation (Wh/m2)(1,2)
Total Generation (MWh)(4) 251,201 271,048 -7.32% 294,048 -14.57%
Generation Yield 391 422 -7.32% 390 0.35%
(MWh/MW)
Average Total Power Price 230 221 3.82% 261 -12.15%
(£/MWh)(3)
Total Revenue (Incl. ROC Recycle & LD's) £'000 57,700 59,990 -3.8% 76,884 -25.0%
Total Revenue £'000/MW 90 93 -3.8% 102 -11.8%
Notes
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 Total Unit Price 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
4. Excludes the strategic partnership with GLIL and assets connected
during the Period; Yelvertoft and Mauxhall.
Total revenue for the Period was £57.7 million, 3.8% lower than forecast.
Although revenue was below forecast, the Average Total Power Price was 3.8%
above forecast at £230/MWh but 12.1% lower per MWh than the same Period in
the Prior Year as historically high PPA agreements which commenced from 2022
onwards come 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
proactively address key risks to operational performance.
Large central inverter and HV equipment revamping projects commenced during
the Period, with all of the projects due to be completed prior to Spring 2025.
These projects are expected to further de-risk the portfolio and improve
portfolio performance both short and long term.
As at 31 December 2024, 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 Period, the portfolio's generation was 7.3% below forecast
due to lower than expected irradiation (7.4% below forecast).
Onshore Wind Performance
As at 31 December 2024, 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 58.3MW.
During H1, the wind portfolio generated 68 GWh, 14% below forecast. This was
largely due to lower than expected winds, combined with the several major
component failures resulting in extended downtimes across the portfolio.
Total revenue during the Period was £13.3 million (Prior Year: £15.1
million), with an average revenue per MWh of £195. Revenues achieved were 9%
below forecast, despite the average revenue per MWh being 5.8% above forecast.
Table 2. Aggregated Wind Portfolio Performance for the Year
H1 2024/24 Actual H1 2024/25 Forecast Delta to Forecast (% change) H1 Delta 24/25 to
2023/24 23/24 Actual (%
Actual change)
Portfolio Total Installed Capacity (MW) 58.3 n/a n/a 58.3 0.00%
Total Generation (MWh) 67,993 79,115 -14.06% 82,008 -17.09%
Generation Yield (MWh/MW) 1,166 1,357 -14.06% 1,405 -17.00%
Average Total Unit Price (£/MWh)(1) 195 185 5.84% 184 5.93%
Total Revenue (£,000) 13,281 14,601 -9.04% 15,122 -12.17%
Notes
1. Average Total Unit Price 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
Onshore Wind Optimisation & Enhancement Activity
In Northern Ireland, 17 of the 29 small-scale turbines were identified for
repowering with replacement EWT 250kW turbines. This will increase both
efficiency and output, whilst maintaining their respective NIRO accreditation
status.
As at 31 December 2024 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. The Asset Manager is working closely with
OFGEM to close enquiries on the remaining open audits.
Health & Safety Activities & Cyber Security
Please refer to the Environmental, Social and Governance report for further
information on health & safety activities and cyber security.
4. 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 one offtaker. This means the programme of achieving
value and diversification from contracting with multiple counterparties (which
in turn reduces offtaker risk) is executed for the benefit of Shareholders.
As at 31 December 2024, the average contractual term of the fixed-price PPAs
across the portfolio is c.26 months without adjusting for capacity (Prior
Year: 27.8 months). On a capacity weighted basis, the Company has a price
confidence level of 68% at 31 December 2024 and 49% at 30 June 2025,
representing the percentage of the Company's portfolio that already has fixed
prices in place and thus no exposure to power market fluctuations. Looking
ahead, the strategy has also secured power fixes, and thus revenue certainty,
at levels that are in excess of the latest forecaster expectations.
Table 3. PPA Fixed Power Prices (average for fixes completed vs blended
average forecaster prices)
Metric Jan-25 Jul-25 Jan-26 Jul-26
BSIF Portfolio Weighted Average Contract Price (£/MWh) 122.0 115.3 112.8 45.5
Capacity with Fixed PPA price 538MW 279MW 93MW 8MW
% of BSIF total capacity under PPA Fixed Power Price contract 68% 49% 14% <10%
Blended Average of forecasters nominal terms power prices per 31 December 2024 71.8 71.8 67.5 67.5
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.
5. Proprietary Pipeline
Over the past five years, the Company has continued to implement its new build
strategy across the solar value chain to ensure that the Company continues to
build its market share amongst UK solar power producers, with the Company
signing co-development agreements to fund new sites. The Company also expanded
its strategy to battery storage, which will enable the diversification of the
Company's revenues and allow us to monetise the expected increases in
volatility of power prices in the future.
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; the
first two developments to enter the construction phase (Yelvertoft and
Mauxhall Farm) connected to the electricity network shortly after 30 June 2024
and the development pipeline now stands at over 1.5GW. 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 31 December 2024, 93MW of projects are in the first year of operations,
have passed provisional acceptance tests and performance will be monitored
closely to ensure it is in-line with the contracts. These projects 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).
Mauxhall Farm is planned to be a co-located project and construction of a 25MW
battery energy storage scheme is expected to commence this year after the EPC
contract was signed in December 2024. 9MW of solar (Romsey X solar farm,
accredited under AR4) is under construction and is expected to be energised
towards the end of Q1 2025.
As at the end of the Period, the Company had a pipeline of future solar assets
with a capacity of 541MW and battery storage assets with 190MW capacity that
are fully consented and are in pre-construction. The projects have connection
dates between 2025 and 2030.
Of these, the Company is actively exploring EPC contracts for three projects
(c. 115MW capacity in total), which have CfDs under AR4 and AR5. 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 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 current pipeline status and valuation is summarised in the graphic below.
Post-Period end, three projects have received planning consent, with a
cumulative capacity of 42MW solar and 140MW battery storage. We are also
exploring the opportunity to extend an existing project in our pipeline with
the addition of 100MW solar and 800MW battery as we believe it is located in a
strategic position on the electricity network.
Current pipeline status and valuation at 31 December 2024
[graph images]
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 26,689 2.3 6.2
4 ROC 9,314 0.9 2.7
2.0 ROC 9,298 0.7 1.4
1.6 ROC 48,014 5.0 5.9
1.4 ROC 127,381 16.3 13.8
1.3 ROC 15,386 1.4 1.5
1.2 ROC 30,343 4.4 2.9
1 ROC 18,866 1.2 1.4
0.9 ROC 33,902 3.0 2.3
Subsidy - free 15,629 1.2 0.0
Total 334,822 36.5 38.3
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
Period.
The key driver behind the changes in Underlying Earnings from the Prior Period
is the effect of lower PPA price and generation, offset by disposals in the
Period.
Underlying Portfolio Earnings
Half year Period to Half year Period to Full year to Full year to
31 Dec 24 31 Dec 23 30 June 24 30 June 23
(£m) (£m) (£m) (£m)
Portfolio Revenue 74.8 91.6 183.8 184.4
Liquidated damages and Other Revenue(1) 1.0 3.7 12.6 5.4
Earnings from JV 7.9 0.0 0.0 0.0
Portfolio Income 83.7 95.3 196.4 189.8
Portfolio Operating Costs -22.6 -21.2 -38.2 -36.3
Fund Operating Costs(2,3) -4.6 -4.5 -8.6 -8.7
Total Operating Profit (EBITDA) 56.5 69.6 149.6 144.8
Project Finance Interest Costs -6.6 -6.3 -12.7 -13.6
Group Corporation Tax -3.1 -2.8 -13.9 -7.0
Electricity Generators Levy -0.8 -10.5 -16.2 -9.7
Group Debt Costs(4) -5.6 -6.1 -12.2 -6.1
Underlying Earnings 40.4 43.9 94.6 108.4
Group Debt Repayments -25.6 -22.1 -30.1 -18.3
Underlying Earnings available for distribution 14.8 21.8 64.5 90.1
Brought forward reserves 20.3 58.4 58.4 20.9
Earnings from Disposals 71.4 0.0 0.0 0.0
Repayment of RCF -50.5 -10.0 -10.0 0.0
Share Buybacks -10.4 0.0 -9.4 0.0
New and Portfolio Investment -7.7 0.0 -30.1 0.0
Total funds available for distribution 37.9 70.2 73.4 111.0
Target distribution N/A N/A 53.1 51.4
Declared(5)/Actual Distribution 13.0 13.5 53.1 52.6
Underlying Earnings carried forward
N/A N/A 20.3 58.4
1 Other Revenue includes ROC mutualisation, ROC recycle late payment CP22,
insurance proceeds, O&M settlement agreements and rebates received.
2 Includes the Investment Adviser fees and other fess 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
5 Declared post Period end for Dec 24 and Dec 23
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 24 31 Dec 23 30 June 24 30 June 23
(£m) (£m) (£m) (£m)
Target Distribution - £m N/A N/A 53.1 52.6
Total funds available for distribution (inc. reserves) - £m 37.9 70.2 73.4 111.0
Average number of shares in the Period* 592,319,217 611,452,217 609,849,113 611,452,217
Target Dividend (pps) N/A N/A 8.80 8.40
Total funds available for distribution (pps) 6.39 11.46 12.00 18.13
Total Dividend Declared for the Period (pps) 2.20 2.20 8.80 8.60
Reserves carried forward (pps) ** N/A N/A 3.40 9.53
* Average number of shares is calculated based on the weighted average shares
in the Period.
** Reserves carried forward are based on the shares in issue at the point of
Annual Accounts publication (being 597m shares for 30 June 2024 and 611m
shares for 30 June 2023).
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 2024 was £882.8 million (30 June
2024: £965.5 million).
Valuation Component (£m) Dec 2024 June 2024 Dec 2023 June 2023
DCF Enterprise Value of Portfolio 954.4 1,100.0 1,149.1 1,195.2
DCF Enterprise Value of JV Portfolio 128.2 36.5 - -
Consented development/construction and repowering projects 112.6 110.3 103.7 67.5
Deduction of Project Co debt -432.1 -423.2 -410.1 -430.8
Project Net Current Assets 119.7 141.9 158.4 186.5
Directors' Valuation 882.8 965.5 1,001.1 1,018.4
Portfolio Size (MW) 882.9 834.0 812.6 812.6
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 28):
(i) Despite base rates falling during 2024 and the
expectation they continue that descent in 2025, the Directors portfolio
discount rate has been maintained at 8.00% (June 2024: 8.00%). However, if
rates fall slower than expected or M&A activity for operational assets
activity remains muted, it's possible increases to the discount rate will need
to be considered in future valuation cycles.
(ii) The Company's ownership in the joint venture
established with GLIL Infrastructure has increased to 25% following the
completion of Phase Two of the Strategic Partnership, the sale by BSIF of
112MWp of operational PV assets in line with June 24 NAV, in September 2024.
(iii) 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.
(iv) Inclusion of the latest forecasters' power price curves
as at 31 December 2024 has resulted in an increase in the valuation as there
have been marginal increases in the merchant tail of the forecasts. Further
information regarding power prices is included in section 3 of this report.
(v) The value attributed to the Company's development and
construction portfolio has risen during the Period, reflecting sites receiving
planning permission and further progress and investment into construction
projects.
(vi) Working capital has declined in the Period, reflecting
the payment of dividends through the Period, 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, and performance
compared to forecasts.
By reflecting the core factors above within the Directors' Valuation for 31
December 2024, the enterprise value of the operational portfolio is £1,082.6
million (June 2024: £1,136.5 million), representing an effective price for
the solar component of £1.25m/MW (June 2024: £1.25m/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.
Power Prices
A blended forecast of three leading consultants is used within the latest
Directors' Valuation , as shown in the graph below. This is based on forecasts
released in the three months ended 31 December 2024.
The curves used in the 31 December 2024 Directors' Valuation reflect the
following key updates:
1. Forward electricity prices from 2025 to the
mid-2030s have fallen, driven by expectations for reduced demand and strong
renewables growth as a result of the latest CfD auction round;
2. The release of the Clean Power 2030 Action Plan in
Q4 2024 has put downward pressure on wholesale power prices as renewables are
supported and accelerated and for unabated gas to contribute less than 5% of
generation; and
3. Beyond the mid-2030s, power prices have risen in
response to expectations of increased power demand for electrolysis and higher
fuel and carbon prices.
Change in blended power price forecast
[graph image]
Directors' Valuation movement
(£million) As % of valuation
30 June 2024 Valuation 965.5
Construction and development 2.32 0.26%
Cash receipts from portfolio (36.8) (4.17)%
Date change and degradation (31.82) (3.60)%
Power curve updates (incl. PPAs) 10.52 1.19%
Disposal activity (31.00) (3.51)%
Balance of portfolio return 4.11 0.47%
31 December 2024 Valuation 882.8 (9.36)%
*Disposal activity is the net impact of the sale of c.112MW portfolio of UK
solar assets, the corresponding increase of BSIF's share to 25% in the JV and
the net cash from the sales proceeds after a £50.5m repayment of RCF.
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.
Reconciliation of Directors' Valuation to Balance sheet
Balance at Period End
Category 31 December 2024 (£m) 30 June 2024 (£m) 31 December 2023 (£m) 30 June 2023 (£m)
Directors' Valuation 882.8 965.5 1,001.1 1,018.4
Portfolio Holding Company Working Capital (2.8) (1.5) (3.3) (12.5)
Portfolio Holding Company Debt (133.5) (184.0) (167.0) (153.0)
Financial Assets at Fair Value per Balance sheet 746.5 780.0 830.3 852.9
Gross Asset Value 1,312.1 1,388.7 1,407.3 1,438.0
Gearing (% GAV*) 43% 43% 41% 41%
*GAV is the Financial Assets, as at 31 December 2024, at NAV of £746.5m plus
RCF of £133.5m and third party portfolio debt of £432.1m (giving total debt
of £565.6m).
Enterprise 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.
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 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 31 December 2024 is
3.44% (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 24% of the total
debt balance. 73% of asset-level debt has a fixed interest rate. 27% of
principal for long-term debt is inflation-linked.
Revolving Credit Facility
The Company's subsidiary BR1 has a revolving credit facility with RBS
International, Santander UK and Lloyds Bank Plc, with a total committed amount
of £210 million and facility margin of 1.9% (the 'RCF'). The RCF also has
an uncommitted accordion feature allowing it to be increased by up to a
further £30 million. During the Period, following the completion of Phase Two
of the strategic partnership with GLIL, £50.5 million was repaid reducing the
drawn balance to £133.5 million (30 June 2024: £184 million).
The maturity of the facility is May 2025. The Company is in discussions with
lenders to refinance and extend the RCF to May 2027. Lenders have indicated a
strong appetite for the extension, with all lenders having received initial
credit approval.
External Debt
Excluding the Company's RCF, total outstanding loans from third-party lenders
as at 31 December 2024 totals to £432.1 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
3.44%.
Debt Principal Outstanding (£m) Maturity % of Interest Fixed((1)) All-in Interest Rate
Syndicate - Fund RCF 133.5 May-25 0% 6.38%
Bayern LB - Project Finance 5.7 Sep-29 100% 5.50%
Syndicate - Project Finance 62.9 Dec-34 100% 3.50%
Aviva (fixed) - Project Finance 77.3 Dec-34 100% 2.88%
Aviva (index-linked) - Project Finance 61.8 Dec-34 100% 3.20%
Macquarie (fixed) - Project Finance 6.7 Mar-35 100% 4.60%
Macquarie (indexed-linked) - Project Finance 19.3 Mar-35 100% 4.20%
Gravis (index-linked) - Project Finance 35 Jun-35 100% 6.38%
NatWest - Project Finance 110.7 Jun-40 85% 2.70%
Strategic Partnership Portfolio 52.7 Sep-37 100% 3.40%
Total/Wtd Avg 565.6 73% 4.13%
Total/Wtd Avg excl. RCF 432.1 96% 3.44%
Note: Index-linked debt treated as fixed for the purposes of this table as
proportion fixed represents interest rate risk only
Strategic Partnership Portfolio
Post Period end, 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 to c.£74m. This results in an overall increase in the total debt of the
Company, post Period end, to £588m with the weighted average debt cost of
long-term debt to 3.8% (up from 3.4% as at 31 December 2024).
GAV Leverage
The Group's total outstanding debt as at 31 December 2024 was £565.6 million
(30 June 2024: £584 million) and its leverage stands at 43% of GAV (30 June
2024: 43%), within the 35% - 45% preferred range the Directors have outlined
as desirable for the Company.
9. Market Developments
UK renewable generation capacity and deployment
At 30 September 2024, Government data showed that UK solar PV capacity stood
at 17.4GW across 1.6 million installations. Of this amount, around 7.3GW (42%
of the total solar capacity in the UK) and 5.1GW (30%) is accredited under the
RO and FiT schemes, respectively, 4.7GW (27%) is unaccredited and less than 1%
is under the CfD scheme. Onshore and offshore wind installed capacity stands
at around 16.1GW and 14.8GW, respectively. 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 and meet power demand from the electrification of the domestic heat,
transport and industrial sectors. Deployment is expected to be supported by
several policy initiatives, including the CfD scheme and various significant
planning and grid reforms currently 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.
The chart below illustrates the distribution of total installed capacity
across different renewable generation technologies at 30 September 2024
compared with a year earlier.
Secondary market transactions, development and construction activity
Transactional activity in the UK renewables market has eased to some extent,
with several infrastructure funds completing capital recycling via asset
disposal programmes to demonstrate value and support deleveraging efforts.
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 and the inclusion of solar PV in upcoming CfD auction rounds.
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 an innovative approach to overcome challenges
surrounding high construction costs, grid connection lead times and access to
new capital.
With 642MW of fully owned operational solar capacity, the Company maintains a
strong position within the UK solar market, owning c.4% of the UK's
utility-scale solar PV capacity.
10. 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 under particularly tough macroeconomic conditions. Key themes are
outlined below.
Update on Contracts for Differences (CfD)
In September 2024, the CfD Allocation Round 6 (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 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.
The Government released its response to the consultation on proposed
amendments to AR7 and future rounds in October 2024. Several amendments were
confirmed for AR7 including the inclusion of repowered onshore wind projects.
The Government is due to release the AR7 auction parameters ahead of the
auction planned for later this year.
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 a status update on the UK's Review of Electricity
Market Arrangements ("REMA") in December 2024 alongside a summary of
Consultations Responses to the second REMA consultation. REMA aims to identify
reforms needed to transition to a cost effective, lower carbon and secure
electricity system. Some of the most significant reform options include the
possibility of zonal locational pricing and potential changes to the
Contract-for-Difference scheme. The Government aims to conclude the policy
development phase of the REMA programme by around mid-2025.
Bluefield Partners LLP
26 February 2025
Environmental, Social and Governance Report
1. Introduction from the Chair
An introduction from the Chair
2024 was another record-breaking year for global climate change. New records
were set for global land and sea surface temperatures and it was the first
year with an average temperature exceeding 1.5°C above pre-industrial levels
. Extreme weather events impacted communities across the globe, including
through extreme precipitation and flooding, tropical cyclones, heatwaves and
droughts . Such events further emphasise the critical need for unified climate
action.
Commitments for more ambitious and investable National Determined
Contributions (NDC's) by member states at COP29 signalled a global push in the
right direction, placing emphasis on the need to amplify and accelerate
ambition by unlocking private finance . For businesses, an unprecedented
economic opportunity exists in delivering solutions to aid the transition to a
low carbon economy. The UK government's renewed focus on clean energy and
sustainability highlights its commitment to accelerating the net zero
transition and building greater energy independence.
With a mandate to build, maintain, and optimise a diversified portfolio of
renewable energy infrastructure in the UK, the Company is contributing to a
cleaner and more resilient energy system. Using an integrated understanding of
sustainability-related risks and opportunities, the Company not only aims to
support climate change mitigation but also build resilience into its
investments through strategic consideration of broader environmental and
social impacts, helping it achieve its purpose of "Renewable Energy, Delivered
Responsibly".
The following pages highlight material ESG updates during the Period. Full
details of the Company's ESG strategy can be found within its latest Annual
Report, published in September 2024.
John Scott,
Chair
2. ESG Highlights
Estimated annual figures based on actual and forecasted generation data for
the Period 1 July 2024 - 30 June 2025 .
· Over 800 GWh of renewable energy generation
· 166,000 tonnes of CO2e emissions avoided
· 297,000 houses powered with renewable energy
· Payments of approximately £320,000 to community benefit schemes
3. ESG Regulation & Framework Alignment
SFDR & EU Taxonomy
Please refer to the Company's Periodic Annex IV, appended to its 2024 Annual
Report and Financial Statements, and the Company's website for further
information regarding its ongoing compliance with the SFDR and EU Taxonomy.
UK Sustainability Disclosure Requirements & UK Green Taxonomy
As a non-UK AIF, the Company is not currently in scope of the UK
Sustainability Disclosure Requirements ("SDR"). However, the applicability of
the framework to overseas funds is currently pending. The Company is
monitoring the guidance and will be prepared to review its alignment, subject
to any new legislation.
As a UK authorised firm, the Investment Adviser is within scope of the SDR's
anti-greenwashing rule and has implemented processes to support the Investment
Adviser's compliance.
IFRS S1 & S2 alignment
The UK government is aiming to make the UK-endorsed ISSB standards available
in Q1 2025, and subject to a positive endorsement by the UK government, the UK
Sustainability Reporting Standards (SRS) will be set for UK companies. The
Company continues to evaluate its alignment with the IFRS standards, including
the appropriate timing to transition the format of its disclosures to align
with emerging reporting frameworks as they become applicable to its
activities.
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 third
report was presented within the Company's 2024 Annual Report and Financial
Statements.
Task Force on Nature-related Financial Disclosures
The Company has developed a nature framework aligned with the recommendations
of the Task Force on Nature-related Financial Disclosures ("TNFD"). Please
refer to the Company's 2024 Annual Report and Financial Statements for further
information.
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:
OUR PURPOSE
RENEWABLE ENERGY, DELIVERED RESPONSIBLY:
Driving shareholder returns whilst promoting positive environmental and social
value through our work as a pioneering and responsible renewables fund. As
well as supporting the UK's Net Zero carbon ambition, we aim to enhance nature
across our sites, to support the UK in mitigating both the climate and
ecological crisis.
OUR ESG VISION
The Company is helping to mitigate climate change through decarbonisation of
the energy sector, whilst delivering long-term dividends to our shareholders.
We recognise that being a renewables fund does not mean that we can remove
ourselves from wider environmental, social and governance topics, and are
conscious of the potentially harmful impacts that come with being part of the
renewables industry. We have committed to further developing our due diligence
processes and requirements of our suppliers and contractors and we believe
that the assets within our fund have a part to play at the local level. We aim
to enhance nature at our sites and integrate this in our efforts in the
communities in which we operate, recognising the interconnection between
ecological and climate impact.
ESG STRATEGY
The Company's ambitions will be achieved through the delivery of its ESG
strategy, which is centred around three key pillars. ESG topics are arranged
under the three pillars and reflect:
· Priority focus areas, as identified by stakeholders
· Regulatory requirements, e.g. EU SFDR, EU Taxonomy, TCFD
&TNFD
· ESG reporting frameworks
These underpin what will become the Company's biggest value and impact
drivers.
CLIMATE CHANGE MITIGATION PIONEERING POSITIVE LOCAL IMPACT GENERATING ENERGY RESPONSIBLY
Supporting the UK in achieving its Net Zero Carbon ambition whilst aligning to Enhancing nature and encouraging community engagement at the local level Driving ethical practices within our operations and throughout our supply
the TCFD recommendations. throughout the asset life cycle. chain.
UNDERPINNED BY ESG PROCESSES THAT HELP DRIVE STAKEHOLDER VALUE AND
OPPORTUNITIES
CARBON EMISSIONS NATURE HUMAN & LABOUR RIGHTS GOOD GOVERNANCE &
ADVOCATING RENEWABLE ENERGY DELIVERY PARTNERSHIPS BUSINESS ETHICS
MANAGING CLIMATE-RELATED RISKS AND OPPORTUNITIES COMMUNITY IMPACT AND INITIATIVES RESPONSIBLE & SUSTAINABLE PROCUREMENT
Materiality Assessment
In line with enhanced methodologies to assess the materiality of ESG impacts,
risks and opportunities specified by emerging regulatory frameworks, the
Company is in the process of undertaking a double materiality assessment
(DMA). Materiality will be assessed from both a financial perspective i.e.,
the extent to which ESG issues may positively or negatively influence the
Company's financial prospects, and secondly from an impact perspective i.e.,
the potential for the Company's activities to impact people and the planet .
The results of the assessment will inform a review of the Company's ESG
strategy, including its ESG commitments, KPIs, and the format of its
disclosures.
ESG Risk Management
The Board of the Company has ultimate responsibility for and oversight of ESG
risks and opportunities, and ESG is considered by the Directors as part of
Board meetings, 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 2024 Annual Report and Financial Statements for
its ESG commitments and KPIs for the current financial year.
5. Key Activity Update
Greenhouse Gas (GHG) Accounting & Net Zero
In its 2024 Annual Report and Financial Statements, the Company outlined its
net zero pathway, including near-term targets for financed scope 1 and 2
emissions, as well as a scope 3 engagement target to support and encourage
suppliers set their own scope 1 and 2 emissions targets. During the Period,
target-specific roadmaps have been developed to support the Company in
delivering the required emissions reductions over time.
Biannual calculation of the Company's greenhouse gas inventory (GHG) has
highlighted that the goods & services it procures, which support the
development, operation and maintenance of its assets, are the biggest source
of the Company's emissions, falling within the scope 3 category. In
particular, construction activities can cause a spike in emissions due to the
impact of embodied carbon in procured equipment, and increased site activity
during the construction period.
Focus during the Period has been to establish a more accurate method of
quantifying construction-related emissions through the development of a
customised emissions factor, which will reflect cradle-to-gate , transport,
site installation and waste emissions. This new approach will facilitate the
integration of supplier data, including EPC activity, and available lifecycle
assessments (LCAs) for key equipment being installed. Such will enhance the
accuracy of the Company's emissions and inform the actions needed to help
reduce the emissions associated with the build out of additional renewable
capacity.
Circular Economy
The UK solar industry has experienced substantial growth since the turn of the
century, with approximately 16 GW installed nationwide . Deployment must
continue at pace to deliver the UK's target of 70 GW of solar capacity by 2035
, and 5,500 GW of solar capacity is estimated to be deployed globally by 2030
. Consequently, demand for finite minerals needed to power clean technologies,
such as copper, nickel and rare earth elements known as "critical minerals",
is projected to double between today and 2030, and triple if net zero is
achieved globally . Therefore, ensuring high quality recycling and critical
mineral recovery rates will become an increasingly important consideration for
the energy sector worldwide.
Over a decade on from the UK's first solar installations, the Company views
the present as an opportune moment to develop proactive strategies to maximise
materials recovery, reuse and recycling, as equipment starts to become retired
from operation. Since the beginning of 2024, the Company has invested in a
collaborative partnership with Lancaster University to accelerate research in
this area, consisting of two research projects, the first of which was
outlined in its 2024 Annual Report and Financial Statements.
During the Period, the Company commissioned a second project with Lancaster
University, successfully securing matched funding for a £25,000 investment
through the EPSRC Impact Acceleration Account (IAA) programme. The project
aims to establish a roadmap for future research and innovation needed to shift
the industry from linear to circular resource use, recognised by the Company
as being synergetic with its other ESG priorities, including net zero, nature
and human rights. Over the coming year, the Company hopes to share insights
from this project with the wider industry and supply chain, with a view to
fostering a collaborative approach to achieving a more circular industry.
6. Awards & Accreditations
Awards
The Company is pleased that its Investment Adviser has recently received
external recognition for its ESG efforts, specifically in relation to
biodiversity work undertaken at West Raynham Solar Park, which resulted in the
site receiving inaugural Wild Power® Gold accreditation . Awards and
nominations included:
• Winner - 'Impact on Climate' award at the
Pensions Management Institute's annual Pinnacle Awards ceremony, November
2024. The 'Impact' category endeavours to showcase those that are making a
significant, lasting impact on the industry.
• Finalist - RealDeals ESG Awards, Sector
Specialist of the Year, October 2024
• Shortlisted - IJGlobal ESG Asset Impact Award,
October 2024
Accreditations
In recognition of its positive environmental contribution, the Company has
been awarded the following accreditations:
- Guernsey Green Fund
- TISE Sustainable
- LSE Green Economy Mark
Bluefield Partners LLP
26 February 2025
Statement of Principal and Emerging Risks and Uncertainties for the Remaining
Six Months of the year to 30 June 2025
Risks including emerging risks are mitigated and managed by the Board through
continual review, policy setting and regular assessment 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 all risks, including the
principal risks listed below, to an acceptable level.
The most recent formal review of the full risk matrix (including consideration
of emerging risks) was carried out at the Audit and Risk Committee meeting
held on 5 December 2024. Per the conclusions of this review the Company's
Principal risks were determined to be the following:
• Transaction pricing risk;
• Poor performance of operational sites;
• Supply chain risks;
• Levels of capital available for allocation being
constrained;
• Valuation risk;
• Physical and transitional climate related risks;
• Volatility in power prices;
• The 'investment company structure' loses
shareholder support;
• Reform of energy markets risk; and
• Cyber and ransomware risk.
The Board believes that these risks remain largely unchanged since the
previous formal risk review conducted in May 2024, whilst being highly aware
and exercised by the unprecedented, prolonged period of wide share price
discounts to NAV prevalent across the entire investment company sector.
The Board believes these to be the Principal Risks relevant for the remaining
six months of the year to 30 June 2025.
In order to assess the probability and impact that these inherent risks may
have on the Company the Board relies on Periodic reports provided by the
Investment Adviser and Administrator. When required, experts will be employed
to gather information, including tax advisers, legal advisers, and
environmental advisers.
During the Period, cyber security and ESG advisers have been engaged to
conduct specific project work to assist the Audit and Risk Committee further
understand and manage risks in these areas.
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.
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 2025 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
26 February 2025 26 February 2025
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 2024 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 2024 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
26 February 2025
Unaudited Condensed Statement of Financial Position
As at 31 December 2024
31 December 2024 30 June 2024
Unaudited Audited
Note £'000 £'000
ASSETS
Non-current assets
Financial assets held at fair value through profit or loss 7 745,443 780,043
Total non-current assets 745,443 780,043
Current assets
Trade and other receivables 8 507 924
Cash and cash equivalents 9 1,080 1,253
Total current assets 1,587 2,177
TOTAL ASSETS 747,030 782,220
LIABILITIES
Current liabilities
Other payables and accrued expenses 10 550 663
Total current liabilities 550 663
TOTAL LIABILITIES 550 663
NET ASSETS 746,480 781,557
EQUITY
Share capital 644,026 654,441
Retained earnings 102,454 127,116
TOTAL EQUITY 12 746,480 781,557
Number of Ordinary Shares in issue 12 592,319,217 602,374,217
at Period/year end
Net Asset Value per Ordinary Share (pence) 6 126.03 129.75
These unaudited condensed interim financial statements were approved and
authorised for issue by the Board of Directors on 26 February 2025 and signed
on their behalf by:
Elizabeth Burne Chris Waldron
Director Director
26 February 2025 26 February 2025
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 2024
Six months ended Six months ended
31 December 2024 31 December 2023
Unaudited Unaudited
Note £'000 £'000
Income
Income from investments 4 450 450
Bank interest 9 13
459 463
Net gains on financial assets held at fair value through profit or loss 7 2,200 4,614
Operating income 2,659 5,077
Expenses
Administrative expenses 5 1,026 1,086
Operating expenses 1,026 1,086
Operating profit 1,633 3,991
Profit and total comprehensive income for the Period 1,633 3,991
Attributable to:
Owners of the Company 1,633 3,991
Earnings per share:
Basic and diluted (pence) 11 0.27 0.65
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 2024
Number of Share capital Retained earnings Total equity
Ordinary Shares
Note
£'000 £'000 £'000
Shareholders' equity at 1 July 2024 602,374,217 654,441 127,116 781,557
Dividends paid 12,13 - - (26,295) (26,295)
Purchase of Ordinary Shares into Treasury 12 (10,055,000) (10,415) - (10,415)
Total comprehensive income for the Period - - 1,633 1,633
Shareholders' equity at 31 December 2024 592,319,217 644,026 102,454 746,480
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
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 2024
Six months ended Six months ended
31 December 2024 31 December 2023
Unaudited Unaudited
Note £'000 £'000
Cash flows from operating activities
Total comprehensive income for the Period 1,633 3,991
Adjustments:
Decrease in trade and other receivables 417 443
Decrease in other payables and accrued expenses (54) (57)
Net gains on financial assets held at fair value through profit or loss 7 (2,200) (4,614)
Net cash used in operating activities* (204) (237)
Cash flows from investing activities
Receipts from investments held at fair value through profit or loss** 7 36,800 27,205
Net cash generated from investing activities 36,800 27,205
Cash flows from financing activities
Purchase of Ordinary Shares into Treasury (10,474) -
Dividends paid 12,13 (26,295) (26,904)
Net cash used in financing activities (36,769) (26,904)
Net (decrease)/increase in cash and cash equivalents (173) 64
Cash and cash equivalents at the start of the Period 1,253 969
Cash and cash equivalents at the end of the Period 9 1,080 1,033
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 2023:
£450,000) of investment income.
**Receipts from investments held at fair value through profit or loss
comprises loan principal of £24.5 million (31 December 2023: £13.1 million)
repaid by BR1 and £12.3 million (31 December 2023: £14.1 million) of
interest received from BR1.
Notes to the Unaudited Condensed Interim Financial Statements
For the six months ended 31 December 2024
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 capital into wind,
hydro and energy storage assets.
The Company has appointed Bluefield Partners LLP as its Investment Adviser.
2. Material accounting policies
a) Basis of preparation
The interim condensed financial statements (the "financial statements") 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 2024,
approved for issue on 27 September 2024.
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
2024, 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
To assess the going concern of the Company is to assess the going concern from
a Group perspective, with focus on the performance and financial stability of
the underlying SPVs, the liquidity position and borrowing facilities across
the Group, as well as the strategic initiatives of the Company. The purpose
being to ensure that necessary financial resources exist to meet all
obligations for at least the next 12 months following the date of this report.
The Board, in its consideration of going concern, has reviewed comprehensive
cash flow forecasts prepared by the Investment Adviser. Key factors considered
when assessing these forecasts include:
Performance and financial stability of the underlying SPVs
A core focus of the Investment Adviser's activities is protecting, optimising,
and enhancing the revenues generated from, and value of, the Company's
operational portfolio, taking proactive steps to mitigate risks to both the
short and long term operational performance of the portfolio. This is achieved
through a rolling capital investment programme to proactively address key
risks to operational performance.
Performance and financial stability of the underlying SPVs (continued)
Large central inverter and HV equipment revamping projects commenced during
the Period, with all of the projects due to be completed prior to Spring 2025.
These projects are expected to further de-risk the portfolio and improve
portfolio performance both short and long term.
In terms of receipt of revenue, over 46% is regulated revenue in the form of
ROC and FiT subsidies, giving certainty over the revenues being generated,
with the majority of the remaining revenue coming from Power Purchase
Agreements ('PPA') contracts. The underlying SPVs are contracted only with
investment grade counterparties for key PPA contracts, mitigating PPA
counterparty risk.
Group Liquidity position
The Board monitors the Company's liquidity requirements to ensure there is
sufficient cash to meet the Company's operating needs. The Group had
unrestricted cash of £25.4 million as at 31 December 2024, £57.9m of cash
held in entities subject to lender covenant compliance and available headroom
on its Revolving Credit Facility (RCF) of £76.5 million.
Borrowing Facilities
The Group has access to funding via the RCF, held by the Company's subsidiary
BR1, and receives distributions and cash flows from the underlying group
companies which are passed up to the Company following debt covenant
processes, where required, on a regular basis.
The RCF is for a committed amount of £210 million, with an uncommitted
accordion feature that allows for an additional £30 million. As at 31
December 2024, £133.5 million was drawn from the RCF (30 June 2024: £184
million). The maturity of the facility is 30 May 2025.
The Investment Adviser is in discussions with the lenders of the RCF to
refinance and extend the facility to May 2027, with the option of a one year
extension on the 2 year term. Each of the three lenders have communicated a
strong appetite for the extension. The Investment Adviser does not foresee a
situation where the Group is unable to extend the facility.
The Group is required to meet interest cover ratios and various gearing
limits. These covenants have been tested and met throughout the period and the
Group does not expect these covenants to be breached during the next 12
months.
Strategic Initiatives
Strategic initiatives for the Group continue. On 4 September 2024, the Company
announced the completion of Phase Two of the strategic partnership with GLIL
Infrastructure (GLIL), in which GLIL acquired a 50% stake in a 112MW portfolio
of BSIF's existing solar assets for c.£70m, which was in line with BSIF's
existing valuation. The proceeds of this partial sale were used, in part, to
repay £50.5 million of the RCF, with the repayment taking the RCF balance
from £184 million to £133.5 million by Period end, as noted above.
Following completion of Phase Two, the Company's equity investment in the
joint venture entity with GLIL, Lyceum Solar Limited (Lyceum), has increased
to 25.003% (June 2024: 9.0%).
Over the course of 2024, Lyceum embarked on a re-financing process to replace
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). Completion of
this re-financing occurred post Period end in January 2025 and resulted in
c.£21m being returned to BR1 in February 2025. When combined with the
proceeds from the sale of 112MW under Phase Two, the partnership with GLIL has
generated c.£91m of recycled funds to the Company since inception in January
2024.
Phase Three of the partnership, which is currently in progress, is a
commitment for GLIL and Bluefield Solar to co-invest into a selected portfolio
of circa 10% of the Company's proprietary development pipeline and enable
construction over the next two to three years.
The Strategic Partnership with GLIL is a significant development for the
Company; it creates the opportunity for both parties to invest in BSIF's
sizeable renewable energy pipeline, in difficult capital market conditions,
while responding to shareholder feedback in reducing our short-term debt
position.
This Strategic Partnership 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 objective.
The Company has built up a significant pipeline of over 1.5GW of assets. This
excludes the first two solar developments to enter the construction phase,
Yelvertoft (48.4MW) and Mauxhall Farm (44.5MW), which are now in their first
year of operation.
Romsey extension (8MW) and Mauxhall BESS (25MW) are in construction, with over
670MW of the pipeline having received planning consent and able to be built
over the next five years. The challenge that BR1 and BSIF currently face is
that it does not have the capital available to construct the entire pipeline.
While equity markets remain closed, the fund must act strategically to realise
maximum value from parts of the pipeline to recycle capital into constructing
other projects in the pipeline and repaying the RCF.
As such, the Investment Adviser, with approval from the Board, is actively
managing the Company's large proprietary pipeline, with plans to sell c.30-65%
depending on the Company's funding position. This strategy is under constant
review.
Conclusion
Following the assessment of going concern, the Board have concluded that the
Company has the necessary financial resources to meet its obligations for at
least the next 12 months following the date of this report, and therefore
adopt the going concern basis of accounting in preparing these interim
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 quarterly 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 2024), 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 2024 31 December 2023
£'000 £'000
Monitoring fee in relation to loans supplied (note 14) 450 450
450 450
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 2024
31 December 2023
£'000 £'000
Investment advisory base fee (see Note 14) 307 335
Administration fees 223 252
Legal and professional fees 102 152
Directors' remuneration (see Note 14) 178 120
Audit fees 60 59
Regulatory Fees 36 58
Non-audit fees (interim review) 50 48
Broker fees 24 25
Registrar fees 19 12
Insurance 10 7
Listing fees 2 3
Other expenses 15 15
1,026 1,086
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 Year ended
31 December 2024 30 June 2024
Total Total
£'000 £'000
Opening balance (Level 3) 780,043 852,844
Cash receipts from non-consolidated subsidiary* (36,800) (64,465)
Realised gains on investment in non-consolidated subsidiary 12,308 33,167
Unrealised change in fair value of financial assets held at fair value through (10,108) (41,503)
profit or loss
Closing balance (Level 3) 745,443 780,043
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 2024 31 December 2023
£'000 £'000
Unrealised change in fair value of financial assets held at fair value through (10,108) (9,493)
profit or loss***
Realised gains on investment in non-consolidated subsidiary** 12,308 14,107
Net gains on financial assets held at fair value through profit and loss 2,200 4,614
*Comprising of repayment of Eurobond loans issued by BR1 and Eurobond interest
received
**Interest received on Eurobond loans issued by BR1
***The movement in unrealised losses for the Period ended 31 December 2023 of
(£22,591,000) as stated in the prior year's unaudited condensed interim
financial statements has been amended to reflect the amended presentation of
the principal repayments in the Company's annual financial statements for the
year ended 30 June 2024.
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.
The above tables as presented in the interim condensed financial statements
for the Period ended 31 December 2023 have been revised to show more clearly
the impact on realised and unrealised gains of cash receipts from
non-consolidated subsidiary. These receipts totalling £27,205,000 in the
Period ended 31 December 2023 comprised repayments of Eurobond loan principal
of £13,098,000 and Eurobond interest received of £14,107,000.
31 December 2024 30 June 2024
Total Total
£'000 £'000
Investment portfolio, Directors' Valuation 882,822 965,549
Immediate Holding Company
Cash 16,419 28,671
Working capital (20,298) (30,177)
Debt (133,500) (184,000)
(137,379) (185,506)
Financial assets at fair value through profit or loss 745,443 780,043
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 2024. 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 2024.
Before planning has been achieved, no value is attributed (beyond costs
incurred), 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 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 rate, gearing level and length of debt), power price forecasts, long
term inflation rates, asset life, irradiation forecasts, average wind speeds,
operational costs 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.
Valuations since June 2023 saw the inclusion of the Electricity Generator Levy
("the Levy") on excess profits produced by electricity generators as announced
by the Chancellor of the Exchequer in the Autumn Statement in November 2022.
The Levy is a temporary 45% tax on the extraordinary returns made by
electricity generators towards the end of 2022 while European energy prices
soared in the wake of Russia's invasion of Ukraine. The Levy 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 Levy within the
valuation methodology.
Given the fact discount rates are subjective, there is sensitivity within
these to the interpretation of factors outlined above.
The weighted average discount rate has been maintained at 8.00% as at 31
December 2024 (30 June 2024: 8.00%). The Board have determined that an
effective price of £1.25m/MW (30 June 2024: £1.25m/MW) is an appropriate
basis for the valuation of the BSIF portfolio as at 31 December 2024.
In order to smooth the sensitivity of the valuation to forecast timing or
opinion taken by a single forecast, the Board continues to adopt the
application of blended power curves from three leading forecasters.
The fair values of operational SPVs are 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 2024 30 June 2024
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 + 1.0%* (34.7) (5.86) (20.6) (3.43)
- 1.0%* 36.9 6.23 16.4 2.73
Power prices +10% 58.5 9.88 58.1 9.65
-10% (58.7) (9.91) (62.9) (10.45)
Inflation rate + 0.5% 46.7 7.88 44.5 7.39
- 0.5% (44.0) (7.43) (46.5) (7.73)
Energy yield 10 year P90 (86.9) (14.67) (102.8) (17.07)
10 year P10 93.2 15.73 104.7 17.37
Operational costs +10% (8.8) (1.49) (11.6) (1.93)
-10% 8.8 1.49 6.9 1.14
*For discount rate, the change in fair value as at 30 June 2024 was calculated
based on change in input of +0.5%/-0.5%.
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 Mikado Solar Projects (2) Limited 100
Bluefield Renewables 2 Limited 100 Mikado Solar Projects (1) Limited 100
Bluefield SIF Investments Limited 100 KS SPV 5 Limited 100
HF Solar Limited 100 Eagle Solar Limited 100
Hoback Solar Limited 100 Kislingbury M1 Solar Limited 100
Littlebourne Solar Farm Limited 100 Thornton Lane Solar Farm Limited 100
Molehill PV Farm Limited 100 Gretton Solar Farm Limited 100
Pashley Solar Farm Limited 100 Wormit Solar Farm Limited 100
ISP (UK) 1 Limited 100 Langlands Solar Limited 100
Solar Power Surge Limited 100 Bluefield Merlin Limited 100
West Raynham Solar Limited 100 Harrier Solar Limited 100
Sheppey Solar Limited 100 Rhydy Pandy Solar Limited 100
North Beer Solar Limited 100 New Energy Business Solar Limited 100
WEL Solar Park 2 Limited 100 Corby Solar Limited 100
Hardingham Solar Limited 100 Falcon Solar Farm Limited 100
Redlands Solar Farm Limited 100 New Road Solar Limited 100
WEL Solar Park 1 Limited 100 Blossom 1 Solar Limited 100
Saxley Solar Limited 100 Blossom 2 Solar Limited 100
Old Stone Farm Solar Park Limited 100 New Road 2 Solar Limited 100
GPP Langstone LLP 100 GPP Eastcott LLP 100
Ashlawn Solar Limited 100 GPP Blackbush LLP 100
Betingau Solar Limited 100 GPP Big Field LLP 100
Grange Solar Limited 100 Oak Renewables 2 Limited* 100
Hall Solar Limited 100 Oak Renewables Limited* 100
Trethosa Solar Limited 100 Creathorne Farm Solar Park Limited 100
Welborne Energy LLP 100 Wind Energy Holdings Limited* 100
Barvills Solar Farm Limited 100 Wind Energy 1 Hold Co Limited* 100
Clapton Farm Solar Park Limited 100 Rook Wood Solar Park Limited 100
Court Farm Solar Park Limited 100 Carloggas Solar Park Limited 100
East Farm Solar Park Limited 100 Cross Road Plantation Solar Park Limited 100
Gypsum Solar Farm Limited 100 Delabole Windfarm Limited 100
Woolbridge Solar Park Limited 100 Hampole Windfarm Limited 100
Holly Farm Solar Park Limited 100 Renewable Energy Assets Limited 100
Kellingley Solar Farm Limited 100 Aisling Renewables Limited 100
Little Bear Solar Limited 100 Wind Energy 3 Hold Co Limited 100
Place Barton Farm Solar Park Limited 100 Wind Energy (NI) Limited 100
Willows Farm Solar Limited 100 Ash Renewables No 3 Limited* 100
Southwick Solar Farm Limited 100 Ash Renewables No 4 Limited* 100
Butteriss Down Solar Farm Limited 100 Ash Renewables No 5 Limited* 100
Goshawk Solar Limited 100 Ash Renewables No 6 Limited* 100
Kite Solar Limited 100 Wind Beragh Limited* 100
Peregrine Solar Limited 100 Wind Camlough Limited* 100
Promothames 1 Limited 100 Wind Cullybackey Limited* 100
Rookery Solar Limited 100 Wind Dungorman Limited* 100
Wind Killeenan Limited* 100 E7 Energy Limited* 100
Wind Mowhan Limited* 100 Hallmark Powergen 3 Limited* 100
Wind Mullanmore Limited* 100 Warren Wind Limited 100
Carmoney Energy Limited* 100 Wind Energy Three Limited* 100
Errigal Energy Limited* 100 Mosscliff Power 3 Limited* 100
Galley Energy Limited* 100 Mosscliff Power 4 Limited* 100
S&E Wind Energy Limited 100 Mosscliff Power 6 Limited* 100
Wind Energy 2 Hold Co Limited 100 Mosscliff Power 7 Limited* 100
Boston RE Limited* 100 Mosscliff Power Limited* 100
DC21 Earth SPV Limited* 100 E2 Energy Limited* 100
E5 Energy Limited* 100 Wind Energy One Limited* 100
E6 Energy Limited* 100 Wind Energy Two Limited* 100
Crockbaravally Wind Holdco Limited 100 New Road Wind Limited 100
Crockbaravally Wind Farm Limited 100 Yelvertoft Solar Farm Limited 100
Dayfields Solar Limited 100 Paytherden Solar Farm Limited 100
Farm Power Apollo Limited 100 Lower Tean Leys Solar Farm Limited 60
Freathy Solar Park Limited 100 Lower Mays Solar Farm Limited 100
IREEL FIT TopCo Limited 100 Longpasture Solar Farm Limited 60
IREEL FIT HoldCo Limited 100 Wallace Wood Solar Farm Limited 60
IREEL Wind TopCo Limited 100 LEO1B Energy Park Limited 60
IREEL Solar HoldCo Limited 100 LH DNO Grid Services Limited 60
IREL Solar HoldCo Limited 100 Sweet Briar Solar Farm Limited 60
Ladyhole Solar Limited 100 BF31 WHF Solar Farm Limited 60
Morton Wood Solar Limited 100 BF27 BF Solar Limited 60
Nanteague Solar Limited 100 BF13A TF Solar Limited 60
Newton Down Wind HoldCo Limited 100 HW Solar Farm Limited 100
Newton Down Windfarm Limited 100 AR108 Bolt Solar Farm Limited 100
Padley Wood Solar Limited 100 Wind Energy Scotland (Holmhead) Limited* 100
Peel Wind Farm (Sheerness) Limited 100 Mosscliff Power 5 Limited* 100
Port of Sheerness Wind Farm Limited 100 Mosscliff Power 10 Limited* 100
Sandys Moor Solar Limited 100 Mosscliff Power 2 Limited* 100
St Johns Hill Wind Holdco Limited 100 BF33C LHF Solar Limited 60
St Johns Hill Wind Limited 100 AR006 GF Solar Limited 100
Trickey Warren Solar Limited 100 Mauxhall Farm Energy Park Limited 100
Whitton Solar Limited 100 BF16D BHF Solar Limited 100
LPF UK Equityco Limited 100 BF33E BHF Solar Limited 60
LPF UK Solar Limited 100 WSE Hartford Wood Limited 60
LPF Kinetica UK Limited 100 BF58 Hunts Airfield Solar Limited 60
Wind Energy Scotland (Fourteen Arce Fields) Limited* 100 Twineham Energy Limited 60
Wind Energy Scotland (Birkwood Mains) Limited* 100 Sheepwash Lane Energy Barn Limited 100
Lower End Farm Solar Park Limited 100
Whitehouse Farm Energy Barn Limited 100
Bluefield Durrants GmBH 100
Lightning 1 Energy Park Limited 100
Abbots Ann Farm Solar Park Limited 100
Canada Farm Solar Park Limited 100
Kinetica 846 Limited 100
Kinetica 868 Limited 100
New Road Solar 3 Limited 100
New Road Solar 4 Limited 100
Galton Manor Solar Park Limited 100
Renewable Energy Hold Co Limited 100
Westover Gridco Limited 50
Lyceum Solar Limited 25
Wind Energy 4 Hold Co Limited 100
West Raynham X Energy Park Limited 60
*In voluntary liquidation as at 31 December 2024
8. Trade and other receivables
31 December 2024 30 June 2024
£'000 £'000
Current assets
Monitoring fees receivable 450 900
Other receivables 57 24
507 924
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 2024 30 June 2024
£'000 £'000
Current liabilities
Investment advisory fees (see Note 14) 152 162
Administration fees 121 130
Directors' Fees (see Note 14) 97 85
Audit fees 60 120
Payable for Treasury shares purchased 47 106
Other payables 73 60
550 663
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 2024 31 December 2023
Profit attributable to Shareholders of the Company £1,632,220 £3,991,019
597,171,391 611,452,217
Weighted average number of Ordinary Shares in issue
Basic and diluted earnings from continuing operations and profit for the 0.27 0.65
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 2024 30 June 2024
Number of Number of
Ordinary Shares Ordinary Shares
Opening balance 602,374,217 611,452,217
Purchase of Ordinary shares into Treasury (10,055,000) (9,078,000)
Closing balance 592,319,217 602,374,217
Six months ended Year ended
Shareholders' equity 31 December 2024 30 June 2024
£'000 £'000
Opening balance 781,557 854,189
Purchase of Ordinary shares into Treasury (10,415) (9,368)
Dividends paid (26,295) (53,663)
Total comprehensive income/(loss) 1,633 (9,601)
Closing balance 746,480 781,557
Treasury Shares
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 6 months ended 31 December 2024, 10,055,000 (Year ended 30 June
2024: 9,078,000) shares were purchased at an average price of 103.58 pence per
share. The total amount spent on the buyback during the Period was
£10,414,668 (Year ended 30 June 2024: £9,368,038).
The Company held 19,133,000 Treasury shares at the Period end (30 June 2024:
9,078,000).
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 19 August 2024, the Board declared a third interim dividend of £13,171,273
in respect of the year ended 30 June 2024, equating to 2.20pps (third interim
dividend in respect of the year ended 30 June 2023: 2.10pps), which was paid
on 30 September 2024 to Shareholders on the register on 30 August 2024.
On 27 September 2024, the Board approved a fourth interim dividend of
£13,123,423 in respect of the year ended 30 June 2024 of 2.20pps (fourth
interim dividend in respect of the year ended 30 June 2023: 2.30pps), which
was declared on 30 September 2024 and was paid on 15 November 2024 to
Shareholders on the register on 11 October 2024.
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 £177,653 (31
December 2023: £120,376) of which £97,103 was outstanding at 31 December
2024 (30 June 2024: £85,414).
Remuneration paid to each Director is as follows:
Six months ended Six months ended
31 December 2024 31 December 2023
£'000 £'000
John Scott 43 34
Elizabeth Burne 33 25
Michael Gibbons 31 20
Meriel Lenfestey 31 24
Chris Waldron (appointed 1 December 2023) 30 4
Glen Suarez (appointed 30 October 2024) 10 -
Paul Le Page (retired 30 September 2023) - 13
178 120
The number of Ordinary Shares held by each Director is as follows:
31 December 2024 30 June 2024
John Scott* 703,929 683,929
Elizabeth Burne 15,000 15,000
Michael Gibbons 37,800 37,800
Meriel Lenfestey 20,000 7,693
Chris Waldron* 90,000 55,000
Glen Suarez (appointed 30 October 2024) 14,000 -
880,729 799,422
*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 £2,719,098 (31 December
2023: £2,681,775).
Fees paid during the Period by SPVs to BOL, a company which has the same
ownership as that of the Investment Adviser, totalled £6,269,626 (31 December
2023: £5,834,327).
Fees paid during the Period by SPVs to BRD, a company which has the same
ownership as that of the Investment Adviser, totalled £211,904 (31 December
2023: £386,197).
There were no fees paid during the Period by SPVs to BCM, a company which has
the same ownership as that of the Investment Adviser (31 December 2023:
£nil).
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 £900,000,000 and 0.65% per annum of the NAV above £900,000,000.
The base fee will be calculated on the NAV reported in the most recent
quarterly NAV calculation as at the date of payment. The above fee scale is
effective from 21 December 2023 following the approval of an updated
Investment Advisory Agreement. Previously, the fee was calculated at a rate of
0.8% 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 Company and BR1's investment advisory fees for the Period amounted to
£3,627,367 (31 December 2023: £3,342,456) of which £511,422 (30 June 2024:
£512,618) was outstanding at the Period end and is to be settled in cash. The
investment advisory fees includes £696,913 of fees relating to the Project
Nala transaction (1% of sale consideration). The investment advisory fees
for the Period attributable to the Company amounted to £306,657 (31 December
2023: £334,859) of which £151,777 (30 June 2024: £161,874) 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 2023: £450,000) of which
£450,257 was outstanding at the Period end (30 June 2024: £900,257).
15. Risk Management Policies and Procedures
As at 31 December 2024 there has been no change to financial instruments risk
to those described in note 15 of the financial statements to 30 June 2024.
16. Subsequent events
On 28 January 2025, the Board declared its first interim dividend of
£13,025,761 in respect of the year ending 30 June 2025, equating to 2.20pps
(first interim dividend in respect of the year ended 30 June 2024: 2.20pps),
which will be paid on or around 7 March 2025 to Shareholders on the register
on 7 February 2025.
Post Period end, the company announced completion of re-financing of its
strategic partnership portfolio with GLIL. The re-financing was completed in
January 2025 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.
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
AR means Allocation Round
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
BCM means Bluefield Construction Management Limited
BEIS means the Department for Business, Energy & Industrial Strategy
BEPS means Base erosion and profit shifting
BESS means Battery energy storage systems
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
Companies Law means the Companies (Guernsey) Law 2008, as amended
Cost of debt means the blended cost of debt reflecting fixed and index-linked
elements
CO2e means Carbon Dioxide emissions
CRS means Common Reporting Standard
CSR means Corporate Social Responsibility
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
Directors' Valuation means the gross value of the SPV investments held by BR1,
including their holding companies
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 peak
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
JV means Joint Venture
KID means 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
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 Banking Group plc
LSE means London Stock Exchange plc
LTF means long term facility provided by Aviva Investors Limited
Lyceum means Lyceum Solar Limited, the joint venture entity with GLIL
Infrastructure
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
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
Period means Interim reporting Period from 1 July 2024 to 31 December 2024.
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 holds 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 - Numbers (Unaudited)
Value
Alternative Performance Measure
Total return for the Period 0.52%
Total Shareholder Return for the Period -6.63%
Total Dividends Declared in Period 4.4pps
Underlying Earnings for the Period £40.4m
Market Capitalisation as at 31 December 2024 £558m
NAV per Ordinary Share as at 31 December 2024 126.03pps
Sale of Electricity (PPAs) for the Period 53.2%
Total Revenue for the Period £83.7m
EBITDA for the Period £56.5m
PPA Revenue for the Period £36.5m
Regulated Revenue for the period £38.3m
Ongoing charges ratio for the Period 1.01%
Weighted Average Life as at 31 December 2024 26.8years
Directors' Valuation as at 31 December 2024 £882.8m
Gross Asset Value as at 31 December 2024 £1,312.1m
Total Outstanding Debt as at 31 December 2024 £565.6m
Alternative Performance Measures - Definitions (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. (126.03-129.75+2.20+2.20)/129.75=0.52%
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. (94.20-105.60+2.20+2.20)/105.60= (6.63)%. 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 (£746.5m) divided by the number of ordinary shares in issue
(592,319,217) 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 via PPAs. 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.
EBITDA The Company's portfolio earnings before deducting interest, taxes, A measure to outline the operating profit of the Company's portfolio. Total Revenue minus portfolio operating costs and fund operating costs.
depreciation, and amortisation.
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 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 2024
The Company BR1 Total
£'000 £'000 £'000
Fees to Investment Adviser 307 2,624 2,931
Legal and professional fees* 115 10 125
Administration fees 223 - 223
Directors' remuneration 178 7 185
Audit fees 60 9 69
Other ongoing expenses 107 194 301
Total ongoing expenses 990 2,844 3,834
Average NAV 760,304,904
Annualised Ongoing Charges (using AIC methodology) 1.01%
* Includes non-audit fee (interim review)
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