REG - Foresight Solar Fund - Autumn Statement - Electricity Generator Levy

Foresight Solar FundAnnouncement

24/11/2022 07:00

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RNS Number : 4244H  Foresight Solar Fund Limited  24 November 2022

24 November 2022

 

Foresight Solar Fund Limited ("Foresight Solar" or the "Company")

 

Autumn Statement Update - Electricity Generator Levy

 

Foresight Solar Fund Limited, a fund investing in a diversified portfolio of
ground-based solar PV and battery storage assets in the UK and
internationally, announces the potential impact of the Electricity Generator
Levy relative to the Company's unaudited NAV as of 30 September 2022 (£771.2
million, 126.4 pence per share).

 

On 17 November 2022 the Chancellor of the Exchequer announced, as part of the
Autumn Statement, the introduction of a new Levy on excess profits realised by
UK electricity generators, the Electricity Generator Levy. The Levy is
proposed to take effect for the period from 1 January 2023 until 31 March 2028
at a rate of 45% of Exceptional Generation Receipts, which are calculated as
revenue from power sales above a benchmark price of £75/MWh. A £10 million
per year allowance will apply, such that Exceptional Generation Receipts below
this threshold will be exempt.

 

The Company's UK solar assets are expected to fall within the scope of the
proposed Levy. The Company's UK battery storage assets are not expected to
fall within the scope of the proposed Levy. In respect of the UK solar assets
which are within scope, revenues earned under Feed in Tariffs ('FiT'),
Renewable Obligation Certificates ('ROCs') or Contracts for Differences
('CfDs') will be exempt from the proposed Levy.

 

The Directors have reviewed the details of the proposed Electricity Generator
Levy and assessed the potential impact the Levy (ignoring any other potential
adjustments) would have on the Company's 30 September 2022 NAV.

 

The Company's NAV calculated as of 30 September 2022 incorporated discounts
applied to the blended Q3 2022 power curves for the period FY 2023 to FY 2027
inclusive, reflective of the uncertainty surrounding the likely form of
Government intervention in the UK energy markets.  In assessing the potential
net impact of the Electricity Generator Levy on the 30 September NAV, the
Company has:

 

 1)  Reversed the power curve discounts applied to the periods FY2023-FY2027
     (increasing the September NAV by 7.8 pence per share); and,
 2)  Applied the proposed Levy on forecast UK solar generation revenues (reducing
     the September NAV by 8.6 pence per share).

 

The net impact of these changes alone would be to reduce the 30 September 2022
NAV by 0.8 pence per share.

 

The Autumn Statement provides greater clarity as to the Government's approach
to energy policy with regards to UK renewable electricity generators. The
Government has announced its intention to publicise draft legislation for the
proposed Electricity Generator Levy in mid-December 2022. The Company will
reflect the expected impact of the Levy (along with any other appropriate
adjustments) in the 31 December 2022 NAV update.

 

 

 

For further information, please contact:

 Foresight Group
 Sophie Sutherland
 (InstitutionalIR@ForesightGroup.eu)

 Jefferies International Limited      +44(0)20 7029 8000
 Neil Winward
 Gaudi Le Roux

 Citigate Dewe Rogerson               +44(0)20 7638 9571
 Toby Moore
 Lucy Gibbs

 

 

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