Foresight Environmental Infrastructure Limited
Annual Report 2025
Foresight Environmental Infrastructure LimitedAnnual Report 2025
About FGEN
Foresight Environmental Infrastructure
Limited (“FGEN” or the “Company”)
is an investment company, investing
in a diversified portfolio of private
infrastructure assets that deliver
stable returns, long-term predictable
income and opportunities for growth
whilst supporting the drivetowards
decarbonisation andsustainable
resource management.
The Company’s portfolio includes 40 assets located across the UK and mainland
Europe. FGEN is a Guernsey-registered company with a premium listing on the
London Stock Exchange and is a proud constituent of the FTSE 250 index.
View our annual
results highlights
here
Contents
Overview
About FGEN inside front cover
Our track record 1
Our mission statement 2
Performance highlights 3
Strategic report
Chair’s statement 4
Our investment proposition 6
Our top 10 assets by portfolio value 8
The Investment Manager 9
Markets and opportunities 12
Strategic priorities 16
Business model 17
Key performance indicators 18
The Investment Manager’s report 20
– Our portfolio at a glance 23
– Investment portfolio and valuation 27
– Operational review 38
Risks and risk management 53
Stakeholder engagement 65
Investment policy 71
Sustainability and ESG 74
Financial review 110
Governance
Chair’s introduction 115
Board of Directors 116
Governance at a glance 118
Board leadership and Company purpose 120
Relations with shareholders 124
Division of responsibilities 125
Nomination Committee report 127
Audit Committee report 131
Risk Committee report 135
Directors’ remuneration report 137
Report of the Directors 139
Statement of Directors’ responsibilities 144
Financial statements
Independent auditor’s report 146
Income statement 152
Statement of financial position 153
Statement of changes in equity 154
Cash flow statement 155
Notes to the financial statements 156
Additional information
Alternative performance measures (“APMs”) 182
Glossary of key terms 184
Company summary 186
Directors and advisers 187
Cautionary statement 188
Front cover: Branden solar site, CNG Fuels refuelling station and ELWA waste management facilityfgen.com
+0.9%
+1.4%
+2.8%
+3.2%
+2.3%
+1.5%
+0.6%
+5.0%
+6.0%
+3.0% +2.1%
6.00p
6.05p
6.14p
6.31p
6.51p
6.66p
6.76p
6.80p
7.14p
Mar 2015 Mar 2016 Mar 2017 Mar 2018 Mar 2019 Mar 2020 Mar 2021 Mar 2022 Mar 2023 Mar 2024
Dividend declared Target
7.57p
7.80p
7.96p
1
Mar 2025 Mar 2026
Weighted average discount rate and gearing
FGEN has one of the highest weighted average discount rates
(“WADR”) with one of the lowest gearing rates as compared to
its peer group:
FGEN has a long-term track record
of delivering stable, progressive
dividends with sustainable dividend
coverage, providing investors
with anopportunity to invest in a
high-quality stock.
9.7%
Weighted average
discount rate
28.7%
Gearing
Gearing is an alternative performance measure (“APM”). The APMs within the accounts
are defined on pages 182 and 183.
Dividend progression
FGEN has an uninterrupted dividend growth track record since IPO in 2014, underpinned by sustainable dividend coverage.
Our track record
£13.8m
£18.6m
£25.4m
£33.4m
£43.6m
£45.0m
£48.2m
£83.6m
£87.0m
£90.4m
Mar 2015 Mar 2016 Mar 2017 Mar 2018 Mar 2019 Mar 2020 Mar 2021 Mar 2022 Mar 2023 Mar 2024 Mar 2025
£56.5m
Consistent growth in income generated from investments
FGEN’s dividend cover is underpinned by unbroken growth in cash receipts from portfolio assets every year since IPO
–atestament to the strength and resilience of our investment strategy.
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Foresight Environmental Infrastructure Limited
Annual Report 2025
Overview
Strategic report
Governance
Financial statements
Additional information
1. This is a target only, there can be no guarantee this target will be met.
At FGEN we believe that investors shouldn’t have to choose between earning
attractive returns and delivering a real-world positive environmental impact.
FGEN invests into private environmental infrastructure to deliver stable returns, long-term predictable income and opportunities
for growth. Our approach covers renewable energy generation, such as wind farms, solar parks and anaerobic digestion
(“AD”) plants, other energy infrastructure such as energy storage, cleaner transportation and heat, and sustainable resource
management initiatives across the waste and water sectors. As a result, we’re able to offer investors a balanced portfolio that
is substantially de-risked from exposure to fluctuations in weather patterns and that contributes to the delivery of essential
infrastructure services while also delivering on the financial characteristics of traditional infrastructure funds: long-term stable
cash flows, secured revenues and inflation linkage.
We pursue this diversified investment strategy so as to fully participate in the transition to a low-carbon economy which we
regard as one of the most compelling investment opportunities of our generation. Our focus is on well-established sectors driven
by the need to address climate change and societal demand for sustainability. Our mandate also enables us to leverage sectors
within environmental infrastructure, once sufficiently mature, to unlock a broader array of income and growth opportunities
across mature environmental infrastructure technologies.
We invest across three key pillars of environmental infrastructure:
The bedrock of FGEN’s portfolio which
includes wind, solar, anaerobic digestion,
biomass, energy-from-waste and hydro.
With an established income generation
profile, these assets provide diversification
across different forms of resource and
deliver attractive risk-adjusted returns.
Non-energy generating assets that support
the transition towards net zero, driven by
increased demand for electrification and
supported by legislation. Thissegment
includes our battery storage units and
low-carbon transport.
Sustainable resource management means
applying sustainable practices to ensure
that resources benefit both current and
future generations. This includes areas
such as waste and wastewater treatment,
as well as sustainability enhanced
agriculture andaquaculture activities.
Renewable energy
generation
Other energy
infrastructure
Sustainable resource
management
10%
Share of portfolio value
73%
Share of portfolio value
17%
Share of portfolio value
“ Our portfolio is thoughtfully diversified
across mature environmental infrastructure
technologies and geographies. We have
constructed a resilient portfolio designed
to deliver stable returns and long-term,
predictable income, while also offering the
potential for capital growth. By providing
investors with access to scarce yet highly
sought-after assets, we are aligning
financial performance with meaningful
environmental impact. The Board remains
strongly aligned with the Company’s
purpose and is confident in the strength
andlong-term potential of ourstrategy.”
Ed Warner
Chair
Our mission statement
Egmere Energy AD site
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Annual Report 2025
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Strategic report
Governance
Financial statements
Additional information
Performance highlights
Our results summary for the full year ended 31 March 2025.
1. Annualised NAV total return, Net Asset Value per share and dividend cover are alternative performance measures (“APMs”). The APMs within the Annual Report are defined on
pages 182 and 183.
2. On a paid basis.
3. This is a target only, there can be no guarantee this target will be met.
4. Based on an opening portfolio valuation of £891.9 million.
5. Buybacks completed at the time of publication, 23 June 2025.
6. Based on closing share price at the time of publication, 23 June 2025.
Earnings and Net Asset Value (“NAV”):
ș NAV per share of 106.5 pence following payment of
dividends to shareholders in line with targets
ș Flat NAV total return of 0.6% in the period
ș Annualised NAV total return of 7.3% since IPO
ș FY26 dividend target increased to 7.96 pence
ș Dividend target represents yield of 10.0% on the closing
share price at 23 June 2025
6
Proposed new adjusted fee structure:
ș Proposal for existing tiers to be applied to an equal blend
of NAV and market capitalisation
Record cash generation from underlying assets:
ș Tenth consecutive year of record cash receipts from
investments
ș 1.32x dividend cover – FGEN’s second highest sinceIPO
ș Dividend cover forecast to remain at comfortablelevels
ș 61% of revenues benefiting from contractual inflation
linkage
Clear and effective capital allocation strategy:
ș £88.6 million raised from sale of 10% of the portfolio
4
ș 28.7% gearing, one of the lowest across the peer group
ș £30 million share buyback programme underway (extended
by £10 million in March 2025 from £20 million); of which
£24.3 million returned to shareholders to date
5
Strategic review:
ș Selective approach to new investment, prioritising core
environmental infrastructure
ș Targeting investments offering long-term stable cash flows,
secured revenues and inflation linkage, and an attractive
balance between income and growth
ș Growth assets expected to be divested in the mediumterm
to maximise shareholder value
40 assets
Diversified portfolio
FY24: 42 assets
£765.7m
Portfolio value
FY24: £891.9m
£678.7m
Net Asset Value (“NAV”)
FY24: £751.2m
106.5p
NAV per share
1
FY24: 113.6p
7.3%
Annualised NAV
totalreturn
1
FY24: 8.0%
28.7%
Gearing
FY24: 31.2%
1.32x
Dividend cover
1,2
FY24: 1.30x
7.96p (+2.1% increase)
2026 dividend target
3
FY25: 7.80p (+3% increase)
1,272GWh
Renewable energy
generated
FY24: 1,358GWh
193,663 tCO
2
e
GHG emissions
avoided
FY24: 212,917 tCO
2
e
703,470
Tonnes of waste
diverted from landfill
FY24: 680,825
£587,440
Contributed to
community funds
FY24: £655,076
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Foresight Environmental Infrastructure Limited
Annual Report 2025
Overview
Strategic report
Governance
Financial statements
Additional information
I’m pleased to present the Annual Report for FGEN for the
year ended 31 March 2025. During the past year, listed
environmental infrastructure companies, including FGEN,
have continued to face a number of headwinds. Inflation has
remained stubbornly high, and interest rates have fallen more
slowly than generally anticipated. The shock engendered
by US policy pronouncements in recent weeks suggests that
these economic conditions are unlikely to be alleviated soon.
One consequence is that shares in our sector have continued
to trade at wide discounts to NAV, placing even greater
scrutiny on capital allocation strategies.
Against this backdrop, I am pleased to be able to report that
FGEN has once again displayed strong resilience rooted in the
quality of its diverse portfolio of environmental technologies.
The total NAV return for the past year was 0.6%, with NAV
per share reducing from 113.6 pence to 106.5 pence (-6.3%)
being counterbalanced by a total declared dividend of 7.80
pence per share. FGEN’s NAV performance during the year
reflected several factors, including the write-down of our
investment in HH2E in the first half of the year. The dividend
reached a record high, prolonging an uninterrupted track
record of growth since IPO in 2014, and together with share
buybacks resulted in record distributions to shareholders.
Thedividend was also covered 1.32 times, supported by
record cash distributions from the portfolio and providing
a firm foundation for the 2.1% uplift in the Board’s dividend
targetto 7.96p per share for the new financial year.
The Investment Manager’s report provides detailed
commentary on the performance of each of the key assets
within FGEN’s portfolio. What is clear is the value of our
diverse mix of technologies, as well as the overall strengths
of environmental infrastructure as an asset class.
Stable, long -term cash flows, often underpinned by
government subsidies, have particular appeal in uncertain
times, especially when they are propelled by social tailwinds
such as growing environmental awareness. FGEN not
only provides those stable returns, but does so through
diversification that mitigates the risk of exposure to a single
weather pattern or regulatory regime.
While the Board is reassured by the quality and resilience
of FGEN’s investments, we are acutely aware of the wide
discount to NAV at which its shares currently trade, nor do we
take any comfort from this being the experience of our peers.
In response, the Board has placed significant emphasis
on capital discipline, which has been core to the actions
undertaken on behalf of shareholders. As previously
reported, asset sales, at or above NAV, amounting to
approximately 10% of FGEN’s overall portfolio, have
taken place in the past year. These sales have enabled
both a material reduction in outstanding debt and,
significantly, an extension to our ongoing £30 million
share buyback programme to take advantage of the NAV
accretion opportunity that a wide share price discount
represents. Where investment has taken place, it has been
disciplined and focused on value enhancement projects
at core operating assets and the buildout of FGEN’s
construction-stage investments.
In recent months, with the assistance of independent external
advisers and extensive engagement with shareholders, the
Board has conducted a rigorous, granular analysis of a wide
range of options for FGEN’s future strategy. These included
a managed wind-down of the Company, targeted disposals,
possible mergers and acquisitions, and refinements to the
current investment approach.
Chair’s statement
“ Our overriding objective in
reviewing FGEN’s strategy
has been to strike the right
balance between the continuing
generation of income to
support a progressive dividend,
and delivering net asset growth
in the medium to longer term.”
Ed Warner
Chair
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Annual Report 2025
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Financial statements
Additional information
Chair’s statement continued
Our overriding objective in reviewing FGEN’s strategy has
been to strike the right balance between the continuing
generation of income to support a progressive dividend,
anddelivering net asset growth in the medium to longer term.
The Board was unanimous in concluding that shareholders
are best served by the proactive management of the existing
portfolio, with a refocused investment strategy that reflects
the structural changes in macroeconomic conditions in recent
years.
FGEN’s growth projects have made encouraging progress
in the past year. Sales from the Glasshouse are ramping up,
Rjukan is approaching its first harvest in July and CNG Fuels
is increasing its fuel dispensed within a newly consolidated
structure that better positions the business for future growth.
The continued development of these operations is a strategic
priority for FGEN and represents a material opportunity for
medium-term capital appreciation.
Our asset disposal strategy is focused on delivering exits
from these growth assets but only at material premiums to
current carrying value, when they are sufficiently mature
and valued accordingly. While we actively engaged in
sales processes to recycle capital earlier this year, the
review of strategic options concluded that further material
asset disposals in the short term would not be beneficial
to shareholders. Instead, through prudent balance sheet
management and the continued use of buybacks and
dividends to generate returns for shareholders, the Board
will focus on successful disposals in the longer term. This will
enable the recycling of capital, prioritising core environmental
infrastructure assets with long-term stable cash flows
delivering predictable income, alongside fresh opportunities
for growth via technologies closely adjacent to FGEN’s core
assets.
The Board has a continuing duty to ensure that FGEN
delivers the best possible value for investors. To that end,
for the second year running, we have secured a change to
the terms of our Investment Management Agreement with
Foresight Group. From a proposed date of 1 October 2025,
management fees will no longer be based entirely on net
assets under management, but instead will be calculated
50%on net assets and the other 50% on market capitalisation
– with the whole capped at NAV. The latest proposed
amendment to our Investment Management Agreement, when
implemented, provides clearer alignment between Foresight
and the interests of our shareholders. TheBoard will continue
to explore all possible ways to reduce overall operating costs
and ensure fee arrangements are aligned withshareholders’
interests.
As a Board, we remain committed to adhering to the
highest possible standards of corporate governance.
At the forthcoming AGM, shareholders will have the
opportunity to vote to discontinue FGEN. This is a special
resolution, requiring 75% of those voting for it to pass. The
discontinuation vote is being proposed at the AGM because
FGEN’s shares have traded at a discount of greater than 10%
to NAV on average over the past year.
The Board recommends shareholders vote against this
resolution so that FGEN is able to deliver on its refocused
investment strategy, prioritising a core portfolio of
environmental infrastructure assets with long-term stable
cash flows delivering predictable income alongside
opportunities forgrowth.
We do, though, acknowledge that a 75% threshold for a
vote of this significance is not optimal in terms of ensuring
shareholder views are equitably considered. In line with our
commitment to meaningful engagement with shareholders
and corporate governance best practice, from the 2026
AGM onwards, we will replace the existing discontinuation
resolution with a simple ordinary resolution, based on the
same triggering mechanism and requiring only 50% of those
voting to pass. A resolution at the 2025 AGM will propose
amendments to the Company’s articles of association to
effect this change. The Board recommends shareholders
votein favour of this resolution. Ahead of the AGM in
September, Iwill once again engage with shareholders to
ensure they have a clear understanding of our refocused
strategy and our plans to deliver returns in the years ahead.
Environmental infrastructure continues to be one of the
most significant investment opportunities of this generation.
FGEN’sstrategic mandate ensures it is uniquely placed to
capitalise across the full suite of renewable generation,
otherenergy infrastructure and sustainable resource
management technologies, delivering continued stable
returns with an overlay of exciting growth assets. While the
past two years have been challenging, the Board believes
the current share price materially undervalues theCompany,
given its high-income profile and the significantgrowth
opportunity ahead.
I would like to thank all shareholders for your continued
support and feedback, which have been invaluable in helping
us steward FGEN on your behalf.
Ed Warner
Chair
23 June 2025
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Annual Report 2025
Overview
Strategic report
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Financial statements
Additional information
Our investment proposition
01.
Delivering stable returns,
predictable income and
opportunities forgrowth
02.
Investing across environmental
infrastructure, one of the
most significant investment
megatrends of this generation
03.
Differentiated offering
providing diversification
across mature environmental
infrastructure technologies
04.
A resilient and attractive
returnprofile with 11 years of
uninterrupted dividend growth
05.
A high-quality manager
with 40 years of investment
experience
06.
Robust governance
framework, providing strong
manager oversight, alignment
and accountability
Bilsthorpe wind farm
Additional information
Financial statements
Governance
Strategic report
Overview
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Foresight Environmental Infrastructure Limited
Annual Report 2025
Our investment proposition continued
01.
Delivering stable returns, predictable
income and opportunities for growth
Providing exposure to scarce but highly sought-after
private environmental infrastructure assets, targeting
projects and businesses characterised by long‑term
stable cash flows, secured revenues, inflation linkage
and delivery of essential infrastructure services.
Our carefully constructed portfolio is focused primarily
on delivering income, alongside the potential for capital
growth. We invest across stable and mature European
markets, with a primary focus onthe UK.
02.
Investing across environmental
infrastructure, one of the most
significant megatrends of this generation
Investing in decarbonisation presents a rare convergence
of financial opportunity and global impact. With over
c.£25
1
trillion in capital required for Europe’s energy
transition by 2030, the sector offers strong long-term
return potential, supported by regulatory momentum,
technological maturity and growing demand for
sustainable solutions.
Our strategy principally targets high quality, mature
assets that not only deliver predictable income alongside
opportunities for growth, but also contribute meaningfully
to climate goals.
03.
Differentiated offering providing
diversification across mature
environmental infrastructure
technologies
The Company is diversified across complementary
sectors, technologies and geographies to deliver
robust and attractive risk-adjusted returns. It invests
across three key pillars of environmental infrastructure:
renewable energy generation, other energy infrastructure
and sustainable resource management.
The Company’s mandate allows it to invest in emerging
areas of environmental infrastructure, provided they are
sufficiently mature and display strong infrastructure
characteristics.
04.
A resilient and attractive return
profile with 11 years of uninterrupted
dividend growth
FGEN is targeting an 11th consecutive year of dividend
growth, backed by sustainable coverage. Since IPO,
we’ve returned £370.4
2
million to shareholders through
dividends and buybacks. We maintain one of the highest
WADRs among peers, the lowest gearing and a strong
pipeline of risk-adjusted opportunities across sectors.
Our income-led strategy is complemented by selective
growth investments at both construction and operational
stage, supported by targeted exits and capital recycling.
05.
A high-quality manager with 40 years
ofinvestment experience
Foresight Group LLP (“Foresight”) is the Investment
Manager for the Company. Foresight manages
£13.2billion of assets under management across
infrastructure, real assets and private equity. Foresight
Infrastructure is a leading investment management
platform with an established track record in developing
investment strategies that support the energy transition.
The infrastructure team of c.190 people across
investment, portfolio management and related functions
manages 437 assets across the UK, Europe and Australia
representing 4.7GW of green technology capacity.
06.
Robust governance framework,
providing strong manager oversight,
alignment and accountability
Fully independent Board providing ongoing oversight
of investment strategy and asset management under
a simple, well aligned management and governance
framework. The framework is underpinned by a
competitive fee structure, with strong alignment between
the Investment Manager and shareholders.
The Company’s governance structure includes a
discontinuation vote allowing shareholders aclear say on
the Company’s future.
1. Source: https://www.pwc.com/gx/en/issues/business-model-reinvention/how-we-fuel-and-power/de-risking-the-energy-transition-in-europe.html.
2. Buybacks completed at the time of publication, 23 June 2025.
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Strategic report
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Financial statements
Additional information
Our top 10 assets by portfolio value
1. Cramlington
Sector: Renewable energy
generation – Biomass
Location: UK
% of portfolio: 10%
3. Amber
Sector: Renewable
energy generation – Solar
Location: UK
% of portfolio: 5%
6. ELWA
Sector: Sustainable resource
management – Wastemanagement
Location: UK
% of portfolio: 5%
10. Bio Collectors
Sector: Renewable
energy generation –
Waste AD
Location: UK
% of portfolio: 3%
8. CNG Fuels
Sector: Other energy
infrastructure – CNG
Location: UK
% of portfolio: 5%
9. Vulcan
Sector: Renewable energy
generation – AD
Location: UK
% of portfolio: 4%
4. Llynfi
Sector: Renewable
energy generation – Wind
Location: UK
% of portfolio: 5%
5. Dungavel
Sector: Renewable
energy generation – Wind
Location: UK
% of portfolio: 5%
2. Rjukan
Sector: Sustainable resource
management – Controlled environment
Location: Norway
% of portfolio: 6%
7. Glasshouse
Sector: Sustainable resource
management – Controlled environment
Location: UK
% of portfolio: 5%
Sector split
1
Split by portfolio value
Asset concentration
Split by portfolio value
Renewable energy
generation 73%
Sustainable resource
management 17%
Other energy
infrastructure 10%
Cramlington 10%
Rjukan 6%
Amber 5%
Llynfi 5%
Dungavel 5%
ELWA 5%
Glasshouse 5%
CNG Fuels 5%
Vulcan 4%
Bio Collectors 3%
Other 47%
40
assets
1. See pages 23 to 26 for further information on our underlying technologies.
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Foresight Environmental Infrastructure Limited
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Additional information
The Investment Manager
FGEN is managed by Foresight
Group LLP (“Foresight” or “Foresight
Group”) as its external Alternative
Investment Fund Manager (“AIFM”)
with discretionary investment
management authority for the
Company.
£13.2bn
1
Assets under
management
10
Countries across the UK,
Europe and Australia
4.7GW
Renewable
energygeneration
Infrastructure Private Equity Capital Management
81%
of assets under management
13%
of assets under management
6%
of assets under management
437
Infrastructure assets
250+
Portfolio companies
7
Investment vehicles
1. AUM as per Foresight Group trading update released on 10 April 2025, all other
figures as at 30 September 2024.
2. For the period 1 April 2024 ― 31 March 2025.
About Foresight Group
Founded in 1984, Foresight is a FTSE 250 listed investment
manager with a focus on infrastructure, private equity and
capital for growth. It manages a range of private and public
funds, including products tailored for retail investors. The firm
develops investment strategies aimed at supporting the energy
transition, industrial decarbonisation, nature recovery and the
growth of high-potential businesses. Its approach combines
financial and operational expertise to enhance asset value and
deliver competitive returns.
The Infrastructure division manages 437 infrastructure assets with
a focus on renewable energy generation (including wind and solar
power, bioenergy, hydropower and geothermal energy), energy
storage and grid infrastructure, as well as sustainable resource
management, social and transport infrastructure projects and
sustainable forestry assets.
The Foresight Infrastructure team includes 190 investment,
commercial and technical professionals operating from offices
inthe UK, Italy, Spain and Australia, and collectively speaking
over10languages.
The Foresight Infrastructure broader strategy is focused onthe
following:
ș making good, consistent returns for investors;
ș satisfying the strong demand for ESG and alternative long-term
investment strategies from its institutional and retail investor base;
ș building on its ability to execute complex clean energy and other
sustainability-led infrastructure investments in order to capitalise
on the projected market growth arising from government and
societal objectives to decarbonise economies; and
ș tapping into the in-house team’s multi-national/disciplinary
expertise which provides full lifecycle support from investment to
exit in order to generate sustainable long-term asset operation and
economic benefits.
Foresight’s platform
Foresight Group divisions
1,000+
2
Investment opportunities
reviewed
190+
Infrastructure
professionals
16
Year track
record
Foresight’s Infrastructure division
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The Investment Manager continued
Foresight’s experience and reputation gives
a competitive edge in the origination of deal flow.
A team of 190 dedicated professionals,
bringing a diverse and comprehensive skillset.
Strong origination capabilities
Foresight pipeline analysis
1,053
Infrastructure investment
opportunities reviewed
654
Aligned with Foresight
Funds criteria
416
Further action taken
The infrastructure investment team
ș The infrastructure investment team consists of 48 professionals with broad sector experience
ș The team leverages established UK and international networks to access emerging market
opportunities
ș Equipped to deploy and manage capital across a wide range of infrastructure sectors and asset
lifestages
ș Bringing extensive investment origination and execution capabilities to FGEN
ș Over 1,000 investment opportunities have been reviewed in 2024/25 across all strategies
The portfolio team
ș The portfolio team comprises 113 professionals, including engineers, commercial managers
andaccountants
ș Equipped to manage assets across development, construction and operational stages
ș The team uses integrated management systems to ensure effective oversight and co-ordination
ofassets
ș Focus on asset management and optimisation, particularly in identifying and delivering value
enhancement opportunities
Other support functions
ș A team of seven dedicated infrastructure Investor Relations (“IR”) professionals managing reporting
requirements for institutional investors and overseeing all aspects of communication and engagement
with all relevant stakeholders
ș A team of five experienced sustainability professionals integrating sustainable practices across
investment, portfolio management and IR utilising proprietary sustainability systems to support
decision-making, portfolio oversight and reporting
ș Other support functions include finance, marketing, administration and compliance
Size and breadth of team allows for
significant deal origination volume
Bilateral transactions avoid
competitive auction processes
A strong track record of execution
enables us to unlock relative value
Co-ordinated origination strategy
ensures optimal pipeline selection
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Additional information
The Investment Manager continued
Chris Tanner
Investment Manager
Chris has been an Investment Manager
1
to FGEN since IPO in 2014. He joined
Foresight in 2019 as a Partner and has
over 25 years of industry experience. Chris
is a Member of the Institute of Chartered
Accountants in England and Wales and has
an MA in Politics, Philosophy and Economics
from Oxford University. Chris also serves
as Chair of the Finance Forum for The
Association of Renewable Energy and
CleanTechnology(“REA”).
Edward Mountney
Investment Manager
Edward has been a part of FGEN since 2016
and joined the senior management team
in 2022. Before this, he served as Head of
Valuations at Foresight Group and John Laing
Capital Management. With over 15 years of
experience in infrastructure and renewables,
Edward is a Member of the Institute of
Chartered Accountants in England and
Wales. He holds a BA (Hons) in Business and
Management from Oxford Brookes University.
Charlie Wright
Investment Manager
Charlie has been at Foresight Group since
2017, recently joining the senior management
team for FGEN. He has over 18 years of
experience in infrastructure and renewables
as an adviser, equity investor and project
director, and has overseen a wide range of
investments across Europe. He was previously
at John Laing Group and KPMG. Charlie holds
a BA in History from Exeter University and an
ICAEW & CISI Diploma in Corporate Finance.
FGEN’s dedicated investment management
teamwith over 50 years of collective experience.
1. Prior to January 2022, FGEN engaged Foresight in an investment advisory capacity rather than as the Investment Manager.
The Shard
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Foresight Environmental Infrastructure Limited
Annual Report 2025
Overview
Strategic report
Governance
Financial statements
Additional information
Markets and opportunities
Overview
Environmental infrastructure assets represent one of the
most significant investment opportunities of this generation.
The market for environmental infrastructure continues to
grow rapidly, both in respect of renewable generation and
infrastructure assets with environmental benefits outside of
low-carbon electricity.
It is estimated that $47 trillion of new energy investment is
required by 2030 to reach net zero, representing a 3x
increase in low-carbon investment annually to 2030 over
the$1.8 trillion invested in 2023, and also 4.5x required
investment in low-carbon energy supply by 2030 for every
dollar invested in fossil fuel supply
1
. This is driven by the
increased demand for electrification and the cost
competitiveness of renewables.
In addition to clean power generation and the supporting
infrastructure required to deliver that clean power
efficiently, governments are also addressing a wider range
of
environmental challenges faced by society than just generation
of low-carbon electricity. Asthecharts show, decarbonisation
consists of many facets, and the electrification of transport and
heat is an integral part ofthe route to net zero.
And finally, the wider governmental and societal push for
more sustainable practices is further resulting in a broad
opportunity set across sustainable resource management,
forexample water and waste.
FGEN’s objective is to leverage this massive investment
opportunity set by investing across three key themes
of environmental infrastructure – renewable energy
generation, other energy infrastructure and sustainable
resource management – to help address a wider range
of environmental challenges faced by society than just
generation of low-carbon electricity.
This is strongly supported by market and regulatory tailwinds that are supercharging the transition to net zero and improved
sustainable resource management – for example, in the UK, the Energy Act 2023, Simpler Recycling legislation, and Ofwat’s Asset
Management Period 8 (“AMP 8”) with a £104 billion
2
investment requirement between 2025 and 2030, and in the EU, the Net-Zero
Industry Act and the REPowerEU Plan.
Global electricity generation by technology
Fuel/technology Coal CCGT
3
Gas peaker Oil Hydrogen Nuclear
Bioenergy Geothermal Solar Wind OtherHydro
100,000
90,000
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
TWh
Energy transition investment – actual vs required
Clean industry
Electrified heat
Electrified transport
Hydrogen
CCS
4
Energy storage
Nuclear
Power grids
Renewable energy
0
1,500
3,000
4,500
6,000
7,500
9,000
2023 2024–2030 2031–2040 2041–2050
1,767
+204%
+48% -6%
5,367
7,950
7,436
$ billion (real 2023)
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Foresight Environmental Infrastructure Limited
Annual Report 2025
Overview
Strategic report
Governance
Financial statements
Additional information
1. Source: BNEF New Energy Outlook
2024 and 2025.
2. Source: Ofwat AMP8.
3. Combined Cycle Gas Turbine.
4. Carbon Capture and Storage.
Source: Global electricity generation by technology/fuel, BNEF 2024.
Source: Energy transition investment – actuals versus required, BNEF 2024.
Markets and opportunities continued
Renewable energy generation
FGEN has been investing into renewable generation since
its inception in 2014. The portfolio comprised seven
assets spanning traditional renewables, then such as wind
and solar as well as waste and wastewater management
projects. Over time it diversified its scope into other forms
of generation including anaerobic digestion, biomass, hydro
and energy-from-waste as those technologies matured and
offered attractive, risk-adjusted returns that were driven by
different dynamics beyond simply wind and solar.
Whilst wind and solar will likely continue to form the
backbone of decarbonisation, whether that be providing
power directly to grid or to other downstream contributors
such as green hydrogen, other forms of generation will play a
meaningful role as well and serve as a diversifier of risk away
from weather resource and technology-specific power price
dynamics.
Renewable energy generation presents a compelling case
from an income perspective, characterised by stable,
predictable cash flows, inflation linkage and often supported
by government subsidies or other regulatory mechanisms
given their criticality to the decarbonisation agenda. Whilst
European jurisdictions have generally moved away from the
feed-in tariff model that drove the buildout of renewables
from the early 2000s, this has been replaced in most
instances by auction-based systems (such as Contract for
Difference (“CfD”) in the UK, the Renewable Energy Sources
Act (“EEG”) in Germany and the SDE++ subsidy scheme in the
Netherlands) with secured revenues still a dominant feature.
Renewables also offer the opportunity for meaningful growth
via investment into capital hungry development platforms
that are looking to build out pipelines of assets supported
by strong regulatory tailwinds. This is particularly the case
where there is visibility over the long-term revenue case,
for example the UK or Germany, and where the regulatory
framework underpinning development is appropriately
mature. Foresight as a platform has significant experience
in funding such development platforms across a range of
technologies and jurisdictions, and FGEN can draw on this
capability.
In addition to renewable power generation, other forms of
energy such as biogas and biomethane will play a critical
role in the path to net zero, particularly given challenges
in decarbonising heat supply and other hard-to-abate
industries. The production of biogas and biomethane via
FGEN’s anaerobic digestion facilities is an area in which the
Company has proven credentials and capability, and it will
continue to capitalise on this going forward, not just in the UK
but in other mature European markets where the regulatory
frameworks and feedstock/demand dynamics are sufficiently
robust. The Labour government in the UK has indicated that
it is working towards a formal biomethane strategy and the
EU has continued to make progress towards its ambition of
producing 35 billion cubic metres of biomethane by 2030
under the REPowerEU plan
1
.
“ Between 2023 and 2050,
the total installed capacity
of solar PV power globally is
forecast to rise from 1,559GW
to 16,887GW, representing a
983% increase, and the total
installed capacity of wind power
globally is forecast to increase
from 1,044GW to 11,382GW, an
increase of 990%.”
2
Asset classes
ș Wind
ș Solar
ș Hydro
ș Biomass
ș Anaerobic digestion
ș Geothermal
ș Energy-from-waste
1. Source: REPowerEU Plan, May 2022.
2. Source: BNEF New Energy Outlook 2022.
Grange Farm AD site
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Foresight Environmental Infrastructure Limited
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Markets and opportunities continued
Other energy infrastructure
In order to achieve the stated ambitions of UK and European
governments across clean energy, economic growth, digital
transformation and to maintain the pace of renewable
buildout, evolution of wider grid infrastructure is required
in order to accommodate the changing nature of power
supply from centralised, gigawatt scale power generators
todistributed renewable energy generation.
Over the last decade or so, investment in expanding
and modernising grids has lagged behind the pace of
the renewable energy buildout, with queues to connect
new projects growing to record sizes as the deadlines to
decarbonise the energy system become ever closer. In 2023,
Europe was estimated to have a 600GW
1
backlog of solar
and wind projects in grid connection queues across France,
Italy, Spain and the UK (with the UK accounting for one-third
of this as one of the worst connection queues in Europe),
acting as an impediment to the energy transition.
Governments are taking steps to address this, for example
the Great Grid Upgrade initiative in England and Wales and
the EU Grid Action Plan, requiring significant investment.
TheUK has been a leading global market for energy storage,
with 19GW
2
of cumulative installed capacity expected by
2030, driven by the limited levels of interconnection with
Europe. European markets are now catching up and we
have seen a large number of opportunities across Italy,
Germany, Spain, the Netherlands and the Nordics. Whilst the
technological solutions will differ by region, different forms of
energy storage and greater interconnection between power
markets are critical, with significant investment required,
encompassing a range of technologies and sectors such as
Battery Energy Storage Systems (“BESS”), pumped hydro
storage and interconnectors.
FGEN has invested in BESS assets in the UK, but will likely
not make further investments in that sector unless backed
by greater certainty of revenue, for example in the form of
tolling agreements or capacity payments. Pumped hydro and
interconnectors are examples of asset classes within wider
grid infrastructure that can offer greater certainty of revenue
via participation in Ofgem’s cap and floor pricing regime and
are sectors within which Foresight is already active.
In addition to grid infrastructure, other forms of low-carbon
energy infrastructure such as heat and cleaner transport also
present real opportunity, with significant investment required
over the coming decades. FGEN has already invested into
low-carbon transportation via the CNG Fuels platform, and
we see similar opportunities across other European markets
as well.
The decarbonisation of residential and commercial heating
is an increasing priority in both the UK and the EU, given
the current reliance on fossil fuels. Foresight has invested
into district heating and heating networks in both the UK
and the EU, and we expect to see significant growth in this
sector supported by regulatory tailwinds – for example,
the UK Government aiming to have district heating provide
approximately 20% of the country’s heat demand by 2050,
and the EU’s Energy Efficiency Directive (“EED”) requiring
municipalities with over 45,000 inhabitants to develop local
heating and cooling plans
3
.
“ Globally, heat accounts
for nearly half of all energy
consumption and 40%
of energy-related carbon
emissions.”
4
1. Source: BNEF New Energy Outlook Grids 2023.
2. Source: BNEF 1H 2023 Energy Storage Market Outlook.
3. Source: EU Energy Efficiency Directive 2023.
4. https://www.carbontrust.com/what-we-do/market-transformation/
heat-decarbonisation.
Asset classes
ș Short and long
duration storage
ș Interconnectors and
transmission assets
ș Cleaner transportation
ș Decarbonisation
ofheat
West Gourdie battery storage
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Foresight Environmental Infrastructure Limited
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Markets and opportunities continued
Sustainable resource management
Sustainable resource management means managing
resources with the future in mind, and it is an area with
increasing societal and political tailwinds driving investment
opportunities. The primary legislation governing sustainable
resource management in the UK is the Environment Act 2021,
which sets long-term environmental targets and provides a
framework for protecting nature, air and water quality, and
waste reduction.
Investments into sustainable resource management will likely
be on a more opportunistic basis for FGEN compared to
the core themes of renewable generation and other energy
infrastructure, but it is an allocation which has the potential
to generate attractive returns and diversification away from
energy. For FGEN, this would be primarily within water and
waste, as mature sectors that typically can benefit from
supporting regulatory frameworks, monopolistic positions
and long-term security of revenue, with the mid-market
particularly representing opportunities for growth and
scalingup.
Water scarcity and stress are important challenges
being faced by the water sector, illustrated by the recent
announcement of Ofwat’s AMP8 record-breaking £104 billion
investment to improve and modernise the water network,
addressing issues like sewage overflows, and enhance water
supply resilience, with specific targets for reducing pollution
and improving water quality. Whilst at the larger end much
of this will be procured via the Direct Procurement for
Customers (“DPC”) model for major infrastructure upgrades,
we are seeing smaller ancillary opportunities across the
ecosystem such as last mile delivery, water metering and
localised water treatment.
FGEN has a track record in waste management across
its portfolio and looking forward we see investment
opportunities arising from the need to deal with different
types of waste (such as municipal waste, biosolids and
hazardous waste) and recycling technologies and other
businesses along the value chain which should be driven by
the UK’s new “Simpler Recycling” regulations, requiring all
workplaces in England to separate food waste from other
waste streams.
Alternative agriculture and aquaculture are other sectors
within the wider sustainable resource management theme
that FGEN is currently invested in via the Glasshouse and
Rjukan. Whilst there is significant potential in those assets,
and we continue to see interesting opportunities within those
sectors, FGEN will not make any further investments into such
controlled environment assets in the future due to the more
disciplined forward looking focus on core renewable and
environmental infrastructure.
“ A significant increase in
investment is needed to enable
the water sector to address
current and future challenges…
almost £290 billion of additional
spending will be needed over the
next 25 years.”
1
Asset classes
ș Waste collection and
processing
ș Recycling
ș Last mile water
ș Wastewater solutions
1. National Audit Office, April 2025.
ELWA waste management site
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Foresight Environmental Infrastructure Limited
Annual Report 2025
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“ Our performance this year was
underpinned bydisciplined capital
allocation, robust income growth
andvalue-accretive asset management.
Our tenth consecutive year of record
cash distribution and a well-covered
dividend reflect the strength and
resilience of our portfolio. Lookingahead,
weremain focused on sustaining
thismomentum through a progressive
dividend policy, proactive portfolio
management anda refocused investment
approach. By prioritising long-term, stable
and inflation-linked cash flows, we are
well positioned to continue delivering
attractive returns for our shareholders
while supporting the transition to a more
sustainable future.”
Ed Warner
Chair
Consistently delivering on our strategic priorities
Deliver income growth for
shareholders
Disciplined capital
allocation
Complete programme
ofassetsales
ș Target dividend of 7.80 pence per
share healthily covered 1.32x
ș Tenth consecutive year of record
cash distribution from the portfolio
ș Successfully reduced gearing to
maintain our position as one of the
lowest-geared investment companies
in the sector
ș Returned £19.2 million to
shareholders over the financial year
via the Company’s share buyback
programme
ș Value accretive disposals totalling
£89.1 million, representing 10% of
the portfolio
1
ș All disposals completed at, or above,
the prevailing valuation
Strategic objectives delivered in 2024/25
Continuation of the
progressivedividend
Proactive management of
existingportfolio
Disciplined investment
focus
ș 2026 dividend target increased by
2.1% to 7.96 pence per share
2
ș Target dividend represents a yield
of 10.0% on the closing share price
prior to announcement
3
ș Dividend cover forecast to remain at
comfortable levels
ș Proactive management of operating
portfolio, alongside ongoing value
enhancement initiatives
ș Operational and revenue ramp-up
across the growth-stage assets
to deliver meaningful capital
appreciation in the medium term
ș Highly selective approach to
new investment, prioritising core
environmental infrastructure assets
and businesses
ș Targeting investments offering
long-term stable cash flows, secured
revenues and inflation linkage, and
an attractive balance between
income and growth
Strategic priorities for 2025/26
1. Based on an opening portfolio valuation of £891.9 million.
2. This is a target only, there can be no guarantee this target will be met.
3. Based on closing share price at the time of publication, 23 June 2025.
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Foresight Environmental Infrastructure Limited
Annual Report 2025
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A resilient business model
How we deliver on our objectivesOur objectives
Underpinned by
Financial objectives
Long-term predictable income
growth for shareholders
Diversification across sectors and
geographies for a more robust,
risk-adjusted return
Potential for capital growth
ESG objectives
Promote the efficient use of
resources
Develop positive relationships with
the communities inwhich FGEN
operates
Ensure effective and ethical
governance across theportfolio
Risk management –
read more
aboutriskmanagement on pages 53 to 64.
Strong governance – read more
about governance on pages 114 to 144.
Financial management – read more
about financial management on pages 145 to 181.
ș Effective use of Foresight’s network
to originate investment opportunities
ș Screened to meet FGEN’s
environmental infrastructure mandate
ș Comprehensive due diligence
processes to assess risks,
valuation assumptions and
ESG considerations
ș Multi-level investment
approvals
ș Cash yield supports
dividend target
ș Seek to deliver capital
appreciation in the medium
term through the disposal of
growth assets once fully
rampedup
ș Active asset management
through various stages of
maturity
ș Strong focus on risk
identification and mitigation
ș Seek partnerships with
experienced partners to secure
future pipeline opportunities
ș Third-party service providers
monitor and manage
day-to-day performance
tomeet ESG objectives
ș Improve operational and
financial performance
ș Identify value enhancement
opportunities
ș Ongoing cost management and
efficiency improvement
ș ESG KPIs are used to monitor
progress and enhance
performance
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17
Foresight Environmental Infrastructure Limited
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Key performance indicators
Definition and rationale
Measure of financial performance of the Company since IPO, on
an annualised basis and after taking into account dividends paid to
shareholders and net of management fees, operating expenses and
finance costs.
Link to Fund objectives:
KPI performance
ș Annualised NAV total return since IPO of 7.3%. The portfolio
continues to show good levels of resilience, with dividend
target being comfortably met for the year and underlying assets
performing well.
Definition and rationale
Operational cash flow divided by dividends paid to shareholders
during the year, being a key measure of performance of underlying
investments from year to year.
Link to Fund objectives:
KPI performance
ș 1.32x dividend cover for the year.
NAV total return
(annualised)
7.3%
Dividend cover
1.32x
8.0%
7.80p
1.30x
7.3%
7.96p
1
1.32x
9.3%
1.51x
8.7%
1.10x
5.5%
1.07x
2024 2025 20242023 20232022 20222021 20212025
2026
target
2025
Key to Fund objectives: Diversification across sectors and geographies
for a more robust, risk-adjusted return
Potential for
capital growth
Long-term predictable income
growth for shareholders
Definition and rationale
Aggregate dividends declared per share in respect of the financial
year, with provision of income to shareholders being a key element of
the Company’s business plan.
Link to Fund objectives:
KPI performance
ș 7.80 pence dividend declared for the year, in line with the stated
target, and comfortably covered by cash received from the
portfolio.
Dividend
7.80p
7.57p
7.14p
6.80p
202420232022
1. This is a target only, there can be no guarantee this target will be met. Past
performance is not indicative of future performance and is not guaranteed.
Objectives for 2026
ș Continue to apply a disciplined approach to capital allocation, that
includes selective investment in opportunities that are accretive to
the Company on a risk-adjusted basis.
Objectives for 2026
ș Target dividend for the next financial year of 7.96 pence, up 2.1%
from2025.
Objectives for 2026
ș Continue to deliver growth in income from underlying investments
in order to maintain a well-covered dividend for the financialyear.
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Foresight Environmental Infrastructure Limited
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Definition and rationale
A key measure of performance from the underlying portfolio.
Link to Fund objectives:
KPI performance
ș Tenth successive year of increasing cash received from
investments since IPO, comfortably covering the dividend and
funding both repayment of floating rate debt and the Company’s
share buyback programme.
Definition and rationale
An illustration of the Company’s exposure to project and fund-level
debt as a proportion of overall gross asset value, allowing investors
to ascertain financial risk in the Group’s balance sheet.
Link to Fund objectives:
KPI performance
ș Managing floating rate debt remains a key priority for the
Company, and gearing has been successfully reduced in the year
–supported by record levels of cash received from investments
and sales of assets.
Gearing
28.7%
31.2%
28.7%
27.3%
23.7%
36.1%
2024202320222021 2025
Definition and rationale
Reflects the net assets of the portfolio divided by the closing number
of shares in issuance at the reporting date, enabling investors to
gauge whether shares are trading at a premium or a discount by
comparing the Net Asset Value per share with the share price.
Link to Fund objectives:
KPI performance
ș NAV £678.7 million, down from £751.2 million at 31 March 2024,
following dividend, new investment, disposals and share buybacks.
ș NAV per share 106.5 pence, down 6.25% compared to
31March2024.
ș 0.6% NAV total return for the 12 months ended 31 March 2025.
NAV per share
106.5p
113.6p
106.5p
123.1p
115.3p
92.2p
2024202320222021 2025
Cash yields
£90.4m
£87.0m
£90.4m
£83.6m
£56.5m
£48.2m
2024202320222021 2025
Key performance indicators continued
Objectives for 2026
ș Prioritise progress in construction-stage and early-stage
operational assets to drive NAV growth.
ș Continue to progress value-enhancement initiatives.
ș Share buybacks considered as NAV accretive option as part of
overall capital allocation strategy.
Objectives for 2026
ș The Company will continue to carefully manage its debt facilities
ina prudent manner and to balance opportunities to further
reduce floating rate debt against other capital allocation priorities.
Objectives for 2026
ș To continue to distribute available cash from underlying projects in
line with financial budgets set at the start of the year, in support of
the Company’s capital allocation objectives.
Key to Fund objectives: Diversification across sectors and geographies
for a more robust, risk-adjusted return
Long-term predictable income
growth for shareholders
Potential for
capital growth
Past performance is not indicative of future performance and is not guaranteed.
19
Foresight Environmental Infrastructure Limited
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In this section:
The year in review 21
Our portfolio at a glance 23
Investment portfolio and valuation 27
Operational review 38
Asset spotlight 46
The Investment
Manager’s report
Amber Fryingdown solar site
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Introduction
Throughout the year, FGEN has continued to benefit from
the broader strengths of Foresight Group’s Infrastructure
platform, consisting of 190 people working in investment,
portfolio management, finance, valuations, sustainability and
investor relations, from offices in the UK, Italy, Spain and
Germany.
This breadth, across both capability and geography, meets
FGEN’s broad environmental infrastructure mandate and is
critical in pursuing opportunities that are diversified beyond
simply wind and solar. It also stands behind Foresight’s
proven origination capabilities across Europe, with over 1,000
opportunities reviewed during the year by the wider team
with nearly half of those aligned with FGEN’s mandate.
Foresight’s construction management capabilities are
also of great value to FGEN in bringing development and
construction-stage assets through to operations and
providing the potential for capital appreciation. The team
is also experienced in managing exits, having carried out
several such transactions in the last 12 months alone.
A large, in-house Portfolio Management team is also
something that we believe sets Foresight’s platform apart,
with 113 people dedicated to managing a total of 437
infrastructure assets, including engineers, commercial
managers and accountants.
This structure enables a more proactive approach to
assetmanagement with constant and sustained efforts
focused on value enhancements, revenue optimisation
andcost efficiency.
Strategic direction
As set out by the Chair, during the period the Board has
undertaken a rigorous evaluation of a full range of strategic
alternatives for the Company. It concluded that the proactive
management of the existing portfolio and a refocused
investment strategy, reflective of the structural changes
in macroeconomic conditions since 2022 characterised
by increased levels of market volatility and higher return
expectations in an elevated rate environment, is the course
of action that best serves long-term shareholder interests.
Thisis a conclusion that the Investment Manager fully
supports and which it is committed to delivering.
We will continue to drive as much value as possible from the
existing portfolio, with ongoing value enhancement initiatives
across the operational portfolio and, importantly, ramp-up
across FGEN’s three growth assets – Rjukan, CNG and the
Glasshouse.
Future investment activity will prioritise core infrastructure
assets and businesses that offer long-term stable cash
flows, secured revenues and inflation linkage. FGEN will
invest across three pillars of environmental infrastructure
– renewable energy generation, other energy infrastructure
and sustainable resource management across the waste and
water sectors, targeting the delivery of an attractive balance
of income and growth across development, construction and
operational-stage investments.
Similarly, as detailed earlier in the Annual Report, the
Investment Manager has simplified the categorisation of its
portfolio across those three pillars in order to ensure that the
diversification across a range of sectors and technologies is
more easily understood.
Diversification and focus
FGEN has always prioritised diversification from its outset,
given the benefits of a lower concentration of risk and a wider
set of opportunities. We also recognise that some of the most
recent investment activity has been into assets that are not
as familiar as more traditional renewable and infrastructure
sectors, for example the Rjukan aquaculture facility and the
Glasshouse project.
Whilst these investments present real opportunity for capital
growth within the Fund over the near term as they progress
through operational ramp-up, the Board and the Investment
Manager recognise that in the changed macroeconomic
environment, any new investment should retain a disciplined
focus on core infrastructure fundamentals. Therefore,
looking forward, whilst diversification across sectors and
technologies will remain a central tenet, FGEN will not
make any further standalone investments into controlled
environment. Indeed, as previously stated, FGEN will look
to exit from its growth assets once sufficiently mature and
valued as such, expected to be in circa two to three years.
Performance summary
NAV per ordinary share at 31 March 2025 was 106.5pence
(31 March 2024: 113.6 pence). The analysis of the Group’s
net assets at 31 March 2025 is set out on page111.
TheCompany’s portfolio valuation was £765.7 million
(31March 2024: £891.9 million). Detailed information on
theportfolio valuation is available on pages 28 to 37.
We have continued to manage the portfolio prudently, with
the aim of generating consistent and predictable cash flows
that provide inflation protection to our investors. It has been
another record year of cash distributions, with £90.4 million
generated across the portfolio which has contributed to a
comfortable dividend cover of 1.32x.
The Investment Manager’s report
The year in review
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The Investment Manager’s report continued
The year in review
This is whilst maintaining a position of being one of the lowest
geared across the peer group, something that we put great
value on given the wider volatility across debt markets.
This performance has been underpinned by the Company’s
diversification strategy, generating revenues across the
sale of power, heat and non-energy output. Whilst the
HH2E impairment was an obvious disappointment for the
Investment Manager, the Board and, most importantly,
shareholders, value enhancements across the portfolio and
progress on the growth assets have helped to offset some of
this value loss and endorses the diversification strategy.
Investment activity
Investment activity during the period has been disciplined
and limited to opportunities with a direct connection to
the existing portfolio, for example the ongoing funding of
commitments to Rjukan and the Glasshouse, and value
enhancement opportunities at Vulcan AD. Including capital
tomeet existing commitments to construction-stage assets,
the Company has deployed £30.7 million into the portfolio
during the year.
Given the disciplined focus on capital allocation throughout
the year, the Investment Manager has completed two
value-accretive asset disposals totalling close to £90m,
generating proceeds that have been used to both repay debt
and return capital to shareholders. Other investment activity
to note includes the restructuring and consolidation of the
CNG structure, the HH2E impairment and further investments
into FEIP; see pages 44 and 45 for more information.
Outlook
As set out in the markets and opportunities section,
environmental infrastructure continues to be one of the
most significant investment opportunities of this generation,
with FGEN’s strategic mandate making it uniquely placed to
capitalise across the full suite of renewable generation, other
energy infrastructure and sustainable resource management
technologies.
Whilst there has been some notable political turbulence
over the period, including the Trump Administration’s tariff
policies and the heightened geopolitical tensions due to the
ongoing events in Ukraine and the Middle East, we retain an
optimistic outlook for the wider environmental infrastructure
opportunity with decarbonisation and the path to net zero
underpinned by robust social and economic winds.
Whilst new investment activity has been limited in the
listedinfrastructure sector over the last few years,
Foresight’sinvestment activity across its private funds
meansthat the broader Infrastructure team has continued
to deploy and manage capital across a wide range of
infrastructure sectors at all stages of the investment
lifecycle, including development and platforms, construction
and operations. Therefore, the core FGEN investment
management team remains close to new investment activity
with the Company well placed to leverage on this when the
conditions are suitable.
Clearly, any new investment activity during the year will need
to be highly selective. However, the Investment Manager,
supported by the wider Foresight infrastructure division, is
currently monitoring opportunities well aligned with FGEN’s
mandate with the capacity to deliver attractive, risk-adjusted
returns and, subject to Board support and approval, will
consider pursuing such opportunities if considered the best
use of capital against other allocation options.
Vulcan Renewables AD site
22
Foresight Environmental Infrastructure Limited
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The Investment Manager’s report continued
Our portfolio at a glance
Renewable energy generation
The bedrock of FGEN’s portfolio in established
income-generatingassetsfocused on diversification
acrosstechnologiestosupport the delivery of attractive
risk-adjustedreturns.
Investment attractions:
ș Government-backed incentives across a
range of mechanisms, including ROCs, RHI
and FITs
ș Mature technologies with low operating
risk and stable production profiles
ș Explicit and implicit inflation linkage
ș Diversification of resource risk across
different weather patterns, forms of
feedstock, and power and gas pricing
ș Delivering a complementary mix of
intermittent and baseload power
generation
Potential risks:
ș Merchant electricity and gas prices
ș Wind and solar resource
ș Cost and supply of feedstock
ș Operational issues
ș REMA/regulatory change
Technologies
1
:
Baseload generators:
ș Anaerobic digestion
ș Biomass
ș Energy-from-waste
Intermittent generators:
ș Wind
ș Solar
ș Hydro
73%
Renewable energy
generation 73%
Wind 27%
Solar 12%
Anaerobic digestion
– crop 14%
Anaerobic digestion
– food waste 6%
Biomass 10%
Energy-from-waste 3%
Hydro 1%
Asset
Location
Ownership
Capacity
(MW)
Commercial
operations date
Wind
Bilsthorpe England 100% 10.2 Mar 2013
Burton Wold Extension England 100% 14.4 Sep 2014
Carscreugh Scotland 100% 15.3 Jun 2014
Castle Pill Wales 100% 3.2 Oct 2009
Dungavel Scotland 100% 26.0 Oct 2015
Ferndale Wales 100% 6.4 Sep 2011
Hall Farm England 100% 24.6 Apr 2013
Llynfi Afan Wales 100% 24.0 Mar 2017
Moel Moelogan Wales 100% 14.3 Jan 2003 & Sep 2008
New Albion England 100% 14.4 Jan 2016
Wear Point Wales 100% 8.2 Jun 2014
1. Excludes FEIP. See page 37 for a full list of FEIP assets.
Overview
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Annual Report 2025
The Investment Manager’s report continued
Our portfolio at a glance
Renewable energy generation continued
1. MWth (thermal) and an additional 0.4MWe CHP engine for on-site power provision.
2. MWth (thermal) and an additional 0.5MWe CHP engine for on-site power provision.
3. MWth (thermal) and an additional 0.25MWe CHP engine for on-site powerprovision.
4. Electrical exporting plant measured as MWe.
5. 10MWth and an additional 1.7MWe capacity through twoCHP engines.
6. 26MWe (electrical) and 6MWth (thermal).
7. Not including FEIP’s 45% ownership. See page 37 for a full list of FEIP investments.
8. Includes a 1.2MW battery storage.
Asset
Location
Ownership
Capacity
(MW)
Commercial
operations date
Anaerobic digestion: food waste
Codford Biogas waste
management
England 100% 3.8
4
2014
Bio Collectors waste management England 100% 11.7
5
Dec 2013
Biomass
Cramlington biomass combined
heat and power
England 100% 32.0
6
2018
Energy-from-waste
Energie Tecnologie Ambiente
(“ETA”)
Italy 45%
7
16.8 2012
Hydro
Northern Hydropower England 100% 2.0
8
Oct 2011 & Oct 2017
Yorkshire Hydropower England 100% 1.8
8
Oct 2015 & Nov 2016
Total 353.0
Asset
Location
Ownership
Capacity
(MW)
Commercial
operations date
Solar
Amber England 100% 9.8 Jul 2012
Branden England 100% 14.7 Jul 2013
CSGH England 100% 33.5 Mar 2014 & Mar 2015
Monksham England 100% 10.7 Mar 2014
Pylle Southern England 100% 5.0 Dec 2015
Anaerobic digestion: agricultural crop
Biogas Meden England 49% 5.0
1
Mar 2016
Egmere Energy England 49% 5.0
2
Nov 2014
Grange Farm England 49% 5.0
2
Sep 2014
Icknield Farm England 53% 5.0
1
Dec 2014
Merlin Renewables England 49% 5.0
2
Dec 2013
Peacehill Farm Scotland 49% 5.0
3
Dec 2015
Rainworth Energy England 100% 5.0
4
Sep 2016
Vulcan Renewables England 49% 5.0
2
Oct 2013
Warren Energy England 49% 5.0
2
Dec 2015
Overview
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24
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Annual Report 2025
The Investment Manager’s report continued
Our portfolio at a glance
Other energy infrastructure
Non-energy generating assets that support the transition
towards net zero, driven by increased demand for
electrification and supercharged by government-backed
legislation. This segment includes ourbattery storage units
and our low-carbon transport investment.
Technologies
1
:
ș Battery Energy Storage Systems (“BESS”) ș Low-carbon transport
Asset
Location
Ownership
Capacity
(MW)
Commercial
operations date
Battery energy storage
West Gourdie battery storage Scotland 100% n/a May 2023
Clayfords battery storage Scotland 50% n/a Pre-construction
Lunanhead battery storage Scotland 50% n/a Pre-construction
Sandridge battery storage England 50% n/a Under construction
Low-carbon transport
CNG Fuels England Minority stake
2
n/a Various
1. Excludes FEIP. See page 37 for a full list of FEIP assets.
2. FGEN holds 25% of CNG Foresight Holdings Ltd, which owns 60% of the shares in CNG Fuels Ltd and holds £150.15 million in 10%
preferred return investments issued by CNG Fuels.
10%
Investment attractions:
ș Strong cash yield expected from sites once
established
ș Merchant revenues from the storage
assets with a degree of inverse correlation
with renewable capture prices, alongside
“sticky” revenues across CNG
ș Diversification of revenue sources away
from power generation
ș Capital growth potential
Potential risks:
ș Construction risk
ș Merchant nature of trading revenue
streams
ș Evolving market and increased competition
ș Shorter track record of operations than for
other technologies
Other energy
infrastructure 10%
Battery energy storage 5%
Low-carbon transport 5%
Overview
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25
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The Investment Manager’s report continued
Our portfolio at a glance
Sustainable resource management
Sustainable resource management means using resources
with the future in mind. It involves applying sustainable
practices to ensure that resources benefit both current
and future generations. This includes areas such as
waste and wastewater concessions, as well as controlled
environments for agriculture and aquaculture.
Asset
Location
Ownership
Capacity
(MW)
Commercial
operations date
Controlled environment
Glasshouse England 10% n/a March 2025
Rjukan aquaculture system Norway 25% n/a Under construction
Waste and wastewater concessions
ELWA waste management England 80%
2
n/a 2006
Tay wastewater treatment Scotland 33% n/a Nov 2001
Technologies
1
:
ș Controlled environment – agriculture and
aquaculture
ș Waste and water management
1. Excludes FEIP. See page 37 for a full list of FEIP assets.
2. 80% of ordinary share capital plus 100% of outstanding loan notes.
17%
Investment attractions:
ș Long-term government contracts from the
concession-based projects
ș Controlled environment investments in
well-established technologies with deep
revenue markets
ș Potential for capital growth across Rjukan
and the Glasshouse
ș Diversification of revenue sources away
from power generation
Potential risks:
ș Merchant revenues and operational
ramp-up at Rjukan and the Glasshouse
ș Handback risk at end of ELWA and Tay
concessions
Sustainable resource
management 17%
Controlled
environment 11%
Waste and wastewater
concessions 6%
Overview
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Foresight Environmental Infrastructure Limited
Annual Report 2025
Investment portfolio
Diversification is a key factor for the Company, reducing dependency on a single market, technology type or set of climatic conditions, whilst allowing exposure to a wide opportunity set, as
illustrated in the analysis below at 31 March 2025, according to share of portfolio value:
The Investment Manager’s report continued
Investment portfolio and valuation
Weighted average remaining asset life of the portfolio is
16.3 years.
Wind
Anaerobic digestion – crop
Solar
Biomass
Controlled environment
Anaerobic digestion – food waste
Waste and wastewater concessions
Low-carbon transport
Energy storage
Energy-from-waste
Hydro
UK
Rest of Europe
Up to 10 years
11 to 20 years
More than 20 years
Operational
Construction
Discounted
cashflow (“DCF”)
Cost
SGRE
Future Biogas
BWSC
Brighter Green
Engineering
Hima Seafood AS
Other
Cramlington
(biomass)
Rjukan (CE aq)
Amber (solar)
Llynfi (wind)
Dungavel (wind)
Top 6-10
Other
27%
12%
89%
22%
52%
26%
90%
16%
10%
10%
7%
6%
51%
14%
11%
10%
10%
11%
6%
6%
5%
5%
3%1%
92%
10%
6%
5%
5%
5%
22%
47%
8%
Sector split Geography
Valuation method
Remaining assetlife
Operator exposure
Operational status
Asset concentration
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Additional information
The Investment Manager’s report continued
Investment portfolio and valuation
This valuation uses key assumptions which are recommended by Foresight using its experience
and judgement, having considered available comparable market transactions and financial
market data in order to arrive at a fair market value. An independent verification exercise of the
methodology and assumptions applied by Foresight is performed by a leading accountancy firm
and an opinion is provided to the Directors. The Directors have satisfied themselves as to the
methodology used and the assumptions adopted and have approved the valuation.
The Directors’ valuation of the portfolio at 31 March 2025 was £765.7 million, compared
to £891.9 million at 31 March 2024. The decrease of £126.2 million is the net impact of
divestments, new acquisitions, cash received from investments, changes in macroeconomic,
power price and discount rate assumptions, and underlying growth in the portfolio.
Areconciliation of the factors contributing to the change in the portfolio during the period
isshown in the chart below.
The movement in value of investments during the year ended 31 March 2025 is shown in the
table below:
2025
£m
2024
£m
Valuation of portfolio at opening balance 891.9 898.5
A c q u i s i t i o n s i n t h e y e a r ( i n c l u d i n g f o l l o w - o n i n v e s t m e n t s ) 30.7 69.2
Divestments (89.1) —
Cash distributions from portfolio (90.4) (87.0)
Rebased opening valuation of portfolio 743.1 880.7
Changes in forecast power prices 8.8 (36.0)
Changes in economic assumptions 1.7 8.6
Changes in discount rates — (29.0)
Changes in exchange rates (0.9) (0.5)
Balance of portfolio return 13.0 68.1
Valuation of portfolio at 31 March 765.7 891.9
Fair value of intermediate holding companies (87.0) (138.3)
Investments at fair value through profit or loss 678.7 753.6
Portfolio valuation
The Investment Manager is responsible for carrying out the fair market valuation of the
Company’s investments, which is presented to the Directors for their approval and adoption.
The valuation is carried out on a quarterly basis as at 30 June, 30 September, 31 December
and 31 March each year.
The valuation is predominantly based on a discounted cash flow analysis of the future expected
equity and loan note cash flows accruing to the Group from each operational portfolio
investment. Where assets are under construction or not yet operational, they are valued at cost
until such time as the risks associated with construction have substantially passed. For some
technologies with more complex construction activities, this will be when the asset reaches the
start of commercial operations, while for others this may be during late-stage construction.
Following the corporate restructuring of CNG Fuels announced on 20 March 2025 that created
a fully integrated biomethane sourcing, station ownership and Renewable Transport Fuel
Certificate business, the Investment Manager has included an assumption around a future
exit of FGEN’s ownership in 2028 within the DCF valuation. The exit proceeds are based on a
multiple of EBITDA, informed by transactional evidence and benchmarked against alternative
valuation approaches. The amendment to the valuation approach resulted in no meaningful
change in valuation.
£m
0
1,000
200
400
600
Portfolio
valuation
31 Mar 2024
Acquisitions
and
investments
Disposal Distributions Economic
assumptions
Forecast
power
prices
Rebased Discount
rate
changes
Balance
of portfolio
return
Portfolio
valuation
31 Mar 2025
Foreign
exchange
rates
800
£891.9m
£743.1m
£765.7m£13.0m
£8.8m
£1.7m
£30.7m
(£89.1m)
(£90.4m)
(£0.9m)
—
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Additional information
Allowing for investments of £30.7 million (including follow-on investments and payment of
deferred consideration), divestments of £89.1 million and cash receipts from investments of
£90.4 million, the rebased valuation is £743.1 million. The portfolio valuation at 31 March 2025
is £765.7 million (31 March 2024: £891.9 million), representing an increase over the rebased
valuation of 3% during the year.
Valuation assumptions
Each movement between the rebased valuation and the 31 March 2025 valuation is
consideredbelow:
Forecast power prices
The project cash flows used in the portfolio valuation at 31 March 2025 reflect contractual fixed
price arrangements under PPAs, where they exist, and short-term market forward prices for the
next two years where they do not.
After the initial two year period, the project cash flows assume future electricity and gas prices
in line with a blended curve informed by the central forecasts from three established market
consultants, adjusted by the Investment Manager for project-specific arrangements and price
cannibalisation.
For the Italian investment, project cash flows assume future electricity prices informed by a
leading independent market consultant’s long-term projections.
The overall change in forecasts for future electricity and gas prices compared to forecasts at
31 March 2024, net of the Electricity Generator Levy (“EGL”), has increased the valuation of the
portfolio by £8.8 million.
The graph on the right represents the blended weighted power curve used by the Company,
reflecting the forecast of three leading market consultants, adjusted by the Investment Manager
to reflect its judgement of capture discounts and a normalised view across the portfolio
of expectations of future price cannibalisation resulting from increased penetration of low
marginal cost, intermittent generators on the GB network. The solid line represents the weighted
average realised price forecast – including short-term price fixes under PPAs – whereas the
dotted line shows the equivalent merchant price for unhedged generation.
Illustrative blended power price curve
The Investment Manager’s report continued
Investment portfolio and valuation
£/MWh
March 2025 realised curve
March 2025 merchant curve
March 2024 realised curve
March 2024 merchant curve
2029 20312027 2039 2041 20492035 20372033 2045 204720432025
40
50
60
70
80
90
100
Guarantees of origin certificates
As the portfolio includes a number of renewable energy generation projects, it is able to
generate revenue from the sale of Renewable Energy Certificates in addition to income from
the sale of gas and electricity. A certificate is issued by Ofgem or the Green Gas Certification
Scheme for each unit of renewable electricity or gas generated respectively, and can be sold
as part of, or separately from, the offtake contracts in place for the wholesale electricity
and/ or gas. The certificates received for UK projects are Renewable Energy Guarantee of Origin
(“REGO”) and Renewable Gas Guarantee of Origin (“RGGO”) for electricity and gas, respectively.
Being traded on the open market, the price is variable and subject to typical demand and
supply dynamics.
As with forecast power prices, valuations reflect contractual fixed price arrangements where
they exist, or the following assumptions informed by forecasts provided from a range of
independent market consultants where they do not:
Year 2025 2026-28 2029+
REGO £5/MWh £5/MWh £2/MWh
RGGO £9.5/MWh £9/MWh £9/MWh
Following a sustained increase in RGGO pricing achieved by the Investment Manager, modelled
assumptions have been increased by £2/MWh.
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Revenue analysis
The graph below shows the way in which the revenue mix of the portfolio changes over time for
future financial years, given the assumptions made regarding future power prices set out on the
previous page. As expected, the proportion of merchant revenues increases in later years as
the subsidies that projects currently benefit from expire.
Renewable generation portfolio
FGEN’s renewable energy generation portfolio includes a combination of intermittent generating
wind and solar investments, alongside baseload generating anaerobic digestion, biomass,
energy-from-waste (“EfW”) and hydropower investments. Revenues in these projects typically
consist of a combination of government-backed inflation-linked subsidies, short-term price fixes
contracted under a PPA/GPA, merchant revenue or other revenues such as those earned from
private wire contracts.
The Company seeks to minimise the impact of power price volatility through its carefully
constructed portfolio of diversified asset types, as well as by maintaining a programme of
rolling price fixes for energy it generates, typically having the majority of projects on fixed price
arrangements in the near term.
At 31 March 2025, 53% of the renewable energy portfolio’s electricity and gas price exposure
was subject to fixed prices for the summer 2025 season and 55% for the winter 2025/26
season. See the power price hedging section in the operational review on page 39 for more
detail about the price fixes in place across the portfolio at the year end.
Taking the proportion of merchant revenues hedged under fixed price short-term PPAs, along
with subsidy revenues and revenues from long-term contracts outside of the energy generating
assets, 68% of total revenues have fixed prices for the financial year to 31March2026.
Thisdemonstrates that merchant revenue remains a low proportion and reflects the broader
diversification of FGEN’s portfolio.
Other energy infrastructure
The desire to mitigate the effects of climate change stimulates not only opportunities connected
to energy generation, but also in supporting and enabling energy infrastructure where significant
investment is needed in the coming years in order to further decarbonise the economy. Thisis
reflected in FGEN’s diversified portfolio, which includes grid-scale batteries and low-carbon
transportation refuelling alternatives for heavy goods vehicles.
The Investment Manager’s report continued
Investment portfolio and valuation
100
%
50
60
70
80
90
40
0
2025 20402035
20
30
10
2030
Subsidy Merchant power
Long-term contracts
Flexible generation Other merchant revenues
On a net present value (“NPV”) basis (using the discount rate applicable to each project),
therelative significance of each revenue category illustrated above is as follows:
Revenue NPV
Subsidy
Merchant power
Long-term contracts
Flexible generation
Other merchant revenues
49%
2%
30%
8%
11%
Subsidy revenues, long-term contracts and revenues from CNG Fuels that sit within other
merchant revenues in the pie chart, all retain contractual inflation linkage, leading to 61% of
total revenues featuring contractual inflation linkage.
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Batteries
FGEN’s portfolio includes one operational and three c.50MW Battery Energy Storage Systems
(“BESS”) at varying stages of construction at 31 March 2025.
Whilst the portfolio currently includes only one operational asset, lower revenue projections
had previously impacted pricing and valuations across the market for BESS assets at all
lifecycle stages. However, revenue performance improved throughout 2024 and into 2025.
Independent market analysis continues to support a positive outlook, with strong fundamentals
expected to underpin long-term sector growth.
Revenues for BESS assets are generated through multiple channels. Third-party consultants
continue to highlight the importance of prioritising the capture of trading margins over the more
limited opportunities from grid service revenues. As a result, merchant revenues are expected
to form the largest component of the revenue model for these assets.
While the sector does not currently benefit from long-term contractual inflation linkage,
revenues are typically driven by a margin over costs, which is expected to be sustained
regardless of inflationary pressures. Notably, recent losses from record high balancing
mechanism volumes are being offset by higher wholesale market prices. This rebound in
wholesale revenues is anticipated to positively impact asset performance, particularly for
WestGourdie.
Low-carbon transport
In the case of FGEN’s investment into CNG Fuels, an integrated business owning and operating
CNG refuelling stations that also sources biomethane for those stations and generates
Renewable Transport Fuel Certificates (“RTFCs”) in the process, revenues are generated from
CNG dispensed and trading activity in biomethane and RTFCs.
Per the terms of the fuel supply contracts, CNG reserves the right to revise pricing to reflect
changes in the wholesale price of natural gas and fuel duty, and will annually adjust prices
(upwards only) in line with CPI inflation. Trading revenues flow from the buying and selling of
biomethane across European markets and the sale of RTFCs created by the use of biomethane
as a transport fuel.
Sustainable resource management
Sustainable resource management means using resources with the future in mind. It involves
applying sustainable practices to ensure that resources benefit both current and future
generations. This includes areas such as waste and wastewater treatment, as well as controlled
environment for agriculture and aquaculture.
Waste and wastewater treatment
This category currently consists of availability-based assets structured under the Private
Finance Initiative (“PFI”)/Public Private Partnership (“PPP”) procurement models, whereby
revenue is derived from long-term contracts with local authorities.
Controlled environment
Controlled environment (“CE”) projects typically face a greater level of market risk than
environmental infrastructure projects with subsidy support or with long-term contracts.
Therefore, the Company has only invested in projects that enjoy a privileged market position
over competitors, for example due to physical location, technology or product differentiation.
In the case of FGEN’s Glasshouse, the investment is primarily built around the debt
service on its senior secured shareholder loan, with potential for further uplift from the
Company’s minority equity investment over time as the business’ operations reach maturity.
TheGlasshouse is co-located with an existing FGEN anaerobic digestion facility, which itself will
receive an additional source of revenue via a private wire supplying low-carbon heat and power
to the Glasshouse. In the future, wastage from the Glasshouse produce may also be returned to
the ADdigester, creating a circular ecosystem. Formore information on the Glasshouse, see the
asset spotlight on page 49.
In the case of CE Rjukan, revenues will primarily be generated from the production and sale of
approximately 8,000 tonnes of trout annually, once the site is fully ramped up in 2027. Thiswill
be sold to European and international salmonid markets via an offtake agreement withan
established Norwegian seafood distribution company with global reach.
The Rjukan investment case is built on the premise of achieving average historic prices
evidenced by the Fish Pool Index; however, our experienced operational partner is targeting
sales at levels between c.5% and 50% higher than this; underpinned by the higher quality of
fishproduction at Rjukan versus the typical fish sold in commodity-based markets.
Whilst these investments do not currently have long-term contractual inflation linkage,
theprojects retain pricing power and are able to increase prices to maintain margins as
theunderlying cost base inflates. For more information on Rjukan, see the asset spotlight
onpage51.
The Investment Manager’s report continued
Investment portfolio and valuation
31
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The degree of contractual inflation linkage of each category illustrated above is as follows:
0
10
20
30
40
50
60
70
80
90
100
Tota l
Sustainable resource
management
Other energy
infrastructure
Renewable generation
portfolio
%
39%
32%
32%
5%
2%
61%
47%
53%
68%
61%
Contractual inflation linkage Pricing powerFlexible generation
No inflation linkage
The Company’s diversification strategy ensures the portfolio benefits from a significant
proportion of contracted revenues and revenues earned by non-energy generating assets.
Under current forecasts, dividend cover is expected to be healthily covered for the
yearsahead.
Useful economic lives
Useful economic lives of assets are based on the Investment Manager’s estimates of the period
over which the assets will generate revenue and are periodically reviewed for continued
appropriateness. The assumption used for the useful life of investments is the lower of lease
duration and 35 years for solar assets, 30 years for wind farms and 20 years for anaerobic
digestion facilities – being the life of the RHI subsidy, after which point the Investment Manager
conservatively assumes that facilities will cease to operate.
In light of growing evidence to suggest AD facilities may be able to successfully operate for
longer durations, the Investment Manager has provided a sensitivity on page 35 to illustrate the
potential impact on extending the lives of FGEN’s AD investments.
Economic assumptions
The valuation reflects an update in inflation assumptions based on a combination of actual
historic inflation and recent independent economic forecasts.
Valuation assumptions for operational assets are set out below:
Economic assumptions used in the portfolio valuation
(31 March 2024 figures shown in brackets)
2025 2026-2030 2031+
UK
RPI 3.5% 3.0% 2.25%
(3.0%) (3.0%) (2.25%)
CPI 2.75% 2.25% 2.25%
(2.25%) (2.25%) (2.25%)
Deposit rates 2.0% 2.0% 2.0%
(2.0%) (2.0%) (2.0%)
Corporation tax 25.0% 25.0% 25.0%
(25.0%) (25.0%) (25.0%)
Italy
Inflation 2.0% 2.0% 2.0%
(2.0%) (2.0%) (2.0%)
Deposit rates —% —% —%
(—%) (—%) (—%)
Corporation tax (IRES) 24.0% 24.0% 24.0%
(24.0%) (24.0%) (24.0%)
Regional tax (IRAP) 4.8% 4.8% 4.8%
(4.8%) (4.8%) (4.8%)
The Investment Manager’s report continued
Investment portfolio and valuation
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The euro/sterling exchange rate used to value euro-denominated investments was €1.19/£1
and the rate for Norwegian krone-denominated investments was NOK13.55/£1 at 31 March
2025 (€1.17/£1 and NOK13.66/£1 at 31 March 2024).
The total net increase in value resulting from changes to inflation rates, deposit rates and
foreign exchange rates in the year is £0.8 million.
Discount rates
The discount rates used in the valuation exercise represent the Investment Manager’s and the
Board’s assessment of the rate of return in the market for assets with similar characteristics
and risk profile. The discount rates are reviewed on a regular basis and updated to reflect
changes in the market and in the project risk characteristics.
UK gilt yields have remained at elevated levels consistent to those prevalent at the start of
the year and transactional activity continues to indicate support for the Company’s valuation
assumptions, therefore no changes have been made to discount rates this year.
In addition to macro-driven changes, the Investment Manager also considers project-specific
changes – such as the completion of major milestones on construction phase investments.
Whilst progress continues at these projects, no changes have been made to discount rates
thisperiod.
Taking the above into account and including an increase in the value of assets in construction,
the overall weighted average discount rate (“WADR”) of the portfolio is 9.7% at 31 March 2025
(31 March 2024: 9.4%).
The WADR applied to each of the principal operational sectors within the portfolio is displayed
in the following table, noting this represents a blend of levered and unlevered investments and
therefore the relevant gearing of each sector is also shown.
Unlevered
discount rate
Levered
discount rate Sector WADRs Gearing
Wind 8.0% 8.8% 8.7% 36%
Solar 7.2% 8.0% 7.3% 18%
Anaerobic digestion – crop fed 8.6% — 8.6% —
Anaerobic digestion – food waste 9.8% — 9.8% —
Biomass 10.3% — 10.3% —
Energy-from-waste 10.0% — 10.0% —
Hydropower — 8.0% 8.0% 41%
Waste and wastewater
concessions — 8.9% 8.9% 24%
Battery storage 10.3% — 10.3% —
Weighted average 9.7% 18.5%
Sectors in which the Investment Manager retains proprietary information, such as controlled
environment and low-carbon transport, are not disclosed in the table above, although discount
rates used in these sectors feed into the portfolio WADR of 9.7%.
As in previous valuations, the discount rate used for energy generating asset cash flows which
have received lease extensions beyond the initial investment period of 25 years retains a
premium of 1% for subsequent years, reflecting the merchant risk of the expected cash flows
beyond the initial 25-year period.
No changes have been made to discount rates during this period, therefore the overall change
in value resulting from changes to discount rates in the year is £nil.
The Investment Manager’s report continued
Investment portfolio and valuation
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Balance of portfolio return
This represents the balance of valuation movements in the year, excluding the factors noted
above. The balance of the portfolio return mostly reflects the impact on the rebased portfolio
value, all other measures remaining constant, of the effect of the discount rate unwinding and
also some additional valuation adjustments from updates to individual project assumptions.
Thetotal represents an uplift of £13.0 million.
Of this, the key positive item is the uplift of £60.2 million from discount rate unwind, partially
offset by a combination of the £19.3 million write-down to the value of FGEN’s investment in
HH2E that was already recognised in the 30 September 2024 interim results, along with an
£8.1 million reduction in value resulting from the downward revision in wind yield assumptions
recognised at the 31 December 2024 valuation. The remaining downward revision in valuation
is largely attributable to asset performance across the portfolio – reflecting uncharacteristic
period of low wind speeds, low solar irradiance, disruption caused by severe weather events
such as Storm Darragh and increases in planned maintenance programme expenditure.
Despite operational challenges across the portfolio, the underlying assets remain highly cash
generative – illustrated by the 10th consecutive period of record cash flows received from
investments.
Valuation sensitivities
The Net Asset Value (“NAV”) of the Company is the sum of the discounted value of the future
cash flows of the underlying asset financial models, construction and development spend, the
cash balances of the Company and UK HoldCo, and the other assets and liabilities of the Group
less Group debt.
The portfolio valuation is the largest component of the NAV and the key sensitivities are
considered to be the discount rate applied in the valuation of future cash flows and the
principal assumptions used in respect of future revenues and costs.
A broad range of assumptions is used in our valuation models. These assumptions are based on
long-term forecasts and are not affected by short-term fluctuations in inputs, whether economic
or technical. The Investment Manager exercises its judgement in assessing both the expected
future cash flows from each investment based on the project’s life and the financial models
produced for each project company and the appropriate discount rate to apply.
The key assumptions are as follows:
Discount rate
The WADR of the portfolio at 31 March 2025 was 9.7% (31 March 2024: 9.4%). A variance of
plus or minus 0.5% is considered to be a reasonable range of alternative assumptions for
discount rates.
An increase in the discount rate of 0.5% would result in a downward movement in the portfolio
valuation of £17.2 million (2.7 pence per share) compared to an uplift in value of £18.0 million
(2.8 pence per share) if discount rates were reduced by the same amount.
Volumes
Base case forecasts for intermittent renewable energy projects assume a “P50” level of
electricity output based on reports by technical consultants. The P50 output is the estimated
annual amount of electricity generation (in MWh) that has a 50% probability of being exceeded
–both in any single year and over the long term – and a 50% probability of being underachieved.
Hence the P50 is the expected level of generation over the long term.
The P90 (90% probability of exceedance over a 10-year period) and P10 (10% probability
of exceedance over a 10-year period) sensitivities reflect the future variability of wind,
hydropower and solar irradiation and the uncertainty associated with the long-term data
source being representative of the long-term mean.
Separate P10 and P90 sensitivities are determined for each asset and historically the results
are presented on the basis that they are applied in full to all wind, hydro and solar assets.
Thisimplies individual project uncertainties are completely dependent on one another;
however, a portfolio uncertainty benefit analysis performed by a third-party technical adviser
identified a positive portfolio effect from investing in a diversified asset base.
That is to say that the lack of correlation between wind, hydro and solar variability means P10
and P90 sensitivity results should be considered independent. Therefore, whilst the overall P90
sensitivity decreases NAV by 4.8 pence, the impact from wind, solar and hydro separately is
3.4 pence per share, 1.2 pence per share and 0.2 pence per share respectively, as shown in the
chart on page 37.
Anaerobic digestion facilities do not suffer from similar deviations as their feedstock input
volumes (and consequently biogas production) are controlled by the site operator.
The Investment Manager’s report continued
Investment portfolio and valuation
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Biomass and EfW forecasts are based on projections of future input volumes and are informed
by both forecasts and independent studies where appropriate. Revenues in the PPP projects
are generally not very sensitive to changes in volumes due to the nature of their payment
mechanisms.
Electricity and gas prices
Electricity and gas price assumptions are based on the following: for the first two years, cash
flows for each project use forward electricity and gas prices based on market rates unless a
contractual fixed price exists, in which case the model reflects the fixed price followed by the
forward price for the remainder of the two-year period. For the remainder of the project life,
a long-term blend of central case forecasts from three established market consultants and
other relevant information is used, and adjusted by the Investment Manager for project-specific
arrangements and price cannibalisation.
The sensitivity assumes a 10% increase or decrease in power prices relative to the base
case for each year of the asset life after the first two-year period. While power markets can
experience movements in excess of +/-10% on a short-term basis, as has been the case
recently, the sensitivity is intended to provide insight into the effect on the NAV of persistently
higher or lower power prices over the whole life of the portfolio. The Directors feel that +/-10%
remains a realistic range of outcomes over this very long time horizon, notwithstanding that
significant movements will occur from time to time.
An increase in electricity and gas prices of 10% would result in an uplift in the portfolio
valuation of £35.9 million (5.6 pence per share) compared to a downward movement in value
of£35.3 million (5.5 pence per share) if prices were reduced by the same amount.
Assuming all other factors remain constant, if electricity prices were to fall to £50/MWh, with a
corresponding decline in gas prices, the Company would continue to maintain a resilient level of
dividend cover over the next three financial years. Even in a more conservative scenario, where
prices fall to £40/MWh, the portfolio is still expected to generate sufficient cash flows to cover
the dividend, though with a reduced margin of headroom.
Useful economic lives
In line with FGEN’s original investment case for anaerobic digestion, the Company continues to
apply the conservative valuation assumption that facilities will simply cease to operate beyond
the life of their RHI tariff. In recent periods, the Investment Manager has seen a growing case
of evidence, including several transactional datapoints, pointing towards a positive change in
market sentiment for valuing these assets – including the potential to run anaerobic digestion
facilities on an unsubsidised basis.
In light of this change, the Investment Manager has provided the following scenarios illustrating
a range of possible avenues to extend the lives of its AD portfolio:
ș Scenario 1: either an extension to the existing RHI or an equivalent alternative subsidy
mechanism on the same terms as the current RHI for a period of five years – capped at the
duration of land rights already in place. Such an extension would result in an uplift in the
portfolio valuation of £21.3 million (3.3 pence per share).
ș Scenario 2: in line with the Investment Manager’s understanding that some investors are
considering AD facilities to run into perpetuity, due to the scarcity and valuable nature
of UK green gas, an alternative scenario has been produced that assumes a permanent
new market opens that provides sufficient incentive for asset owners to continue to run
their plants. Under this scenario, the Investment Manager would expect revenues to be
derived through a combination of corporate offtake, green certificates (such as RTFCs) and
potentially a lower level of government support mechanism. On this basis, the Investment
Manager considers a realistic result would be to provide a value uplift of c.£10 million
(1.6pence per share) and significantly extend the weighted average life of the Company.
The UK government is currently developing a future policy framework for biomethane
production, and these sensitivities will be refined as more information is released.
Uncontracted revenues on non-energy generating portfolio
Non-energy generating assets, such as batteries and controlled environment agriculture and
aquaculture, are not materially affected by either scarcity of natural resource or power price
markets. Therefore, the Investment Manager has presented an alternative sensitivity illustrating
an assumed 10% increase or decrease on all uncontracted revenues for each year of the asset
lives.
An increase in uncontracted revenues of 10% would result in an upward movement in the
portfolio valuation of £23.6 million (3.7 pence per share) compared to a decrease in value of
£23.4 million (3.7 pence per share) if those revenues were reduced by the same amount.
The Investment Manager’s report continued
Investment portfolio and valuation
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Feedstock prices
Feedstock accounts for over half of the operating costs of running an AD plant. As feedstocks
used for AD are predominantly crops grown within existing farming rotation, they are exposed
to the same growing risks as any agricultural product. The sensitivity assumes a 10% increase
or decrease in feedstock prices relative to the base case for each year of the asset life.
An increase in the feedstock prices of 10% would result in a downward movement in the
portfolio valuation of £6.5 million (1.0 pence per share) compared to an uplift in value of
£6.8million (1.1 pence per share) if prices were reduced by the same amount.
No such sensitivity is applicable to FGEN’s biomass investment, where fuel costs are tied under
long-term contracts.
Inflation
Most projects in the portfolio receive a revenue stream which is either fully or partially
inflation-linked. The inflation assumptions are described in the macroeconomic section on
page32. The sensitivity assumes a 0.5% increase or decrease in inflation relative to the base
case for each year of the asset life.
An increase in the inflation rates of 0.5% would result in an uplift in the portfolio valuation of
£20.6 million (3.2 pence per share) compared to a decrease in value of £20.4 million (3.2 pence
per share) if rates were reduced by the same amount.
Euro/sterling and NOK/sterling exchange rates
The proportion of the portfolio assets with cash flows denominated in foreign currency
represents 10% of the portfolio value at 31 March 2025. If foreign currency strengthens by 5%,
the value uplift will be £3.4 million (0.5 pence per share) compared to a £3.3 million (0.5 pence
per share) decrease in value if FX weakens by the same amount.
Corporation tax
The UK corporation tax assumptions applied in the portfolio valuation are outlined in the notes
to the accounts on page 172. The sensitivity below assumes a 2% increase or decrease in the
rate of UK corporation tax relative to the base case for each year of the asset life.
An increase in the UK corporation tax rate of 2% would result in a downward movement in
the portfolio valuation of £11.1 million (1.7 pence per share) compared to an uplift in value of
£11.2million (1.8 pence per share) if rates were reduced by the same amount.
The Investment Manager’s report continued
Investment portfolio and valuation
Grange Farm AD site
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Sensitivities – impact on NAV at 31 March 2025
The following chart shows the impact of the key sensitivities on NAV per share, with the £ labels
indicating the impact of the sensitivities on portfolio value.
0p
NAV per share
-2p 2p 4p 6p 8p-8p -6p -4p
Non-energy
revenues (-/+10%)
FX rates
(+/-5%)
Energy yield:
Wind (P10/P90)
Energy yield:
Solar (P10/P90)
Discount rates
(+/-0.5%)
Electricity and gas
prices (-/+10%)
Feedstock
prices (+/-10%)
Inflation rate
(-/+0.5%)
Tax rates
(+/-2%)
Energy yield:
Hydro (P10/P90)
(£7.9m)
£8.1m
(£21.8m)
£21.2m
(£35.3m)
£35.9m
(£1.2m)
£1.3m
(£11.1m)
£11.2m
(£6.5m)
£6.8m
£20.6m
(£20.4m)
£3.4m
(£3.3m)
(£23.4m)
£23.6m
(£17.2m)
£18.0m
FEIP investment portfolio
Below is a list of investments into several European opportunities through the Company’s
co-investment in Foresight Energy Infrastructure Partners (“FEIP”).
Asset
Location
Capacity
(MW)
Commercial
operations date
FEIP: FGEN has committed €25 million to FEIP
Avalon solar and green hydrogen Spain 137MWp Development
Carna pumped storage hydro and
co-located wind
Scotland 210MW Under construction
Consortium solar Greece 267MW Under construction
ETA Manfredonia EfW Italy 16.8MW 2012
Inca pumped storage hydro Ireland 300MW Development
Kölvallen wind Sweden 277MW Under construction
MaresConnect interconnector Republic
of Ireland
750MW Development and
under construction
Puskakorpi wind Finland 88MW Dec 2022
Quartz battery storage England 106.5MW Development
Skaftåsen Vindkraft AB wind Sweden 231MW June 2023
Torozos wind Spain 93.5MW Dec 2019
85 Degrees geothermal heat Netherlands 53MW Operational/under
construction
Beleolico offshore wind Italy 30MW July 2022
Blue Jay battery storage Scotland 99.3MW Development and
under construction
The Investment Manager’s report continued
Investment portfolio and valuation
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Investment performance
The NAV per share at 31 March 2025 was 106.5 pence, down from 113.6 pence at
31March2024.
FGEN has announced an interim dividend of 1.95 pence per share for the quarter ended
31March 2025, payable on 27 June 2025, in line with the full-year target of 7.80 pence per
share for the year ended 31 March 2025.
Financial performance
The Company’s operating assets delivered strong cash earnings of £90.4 million (31 March
2024: £87 million), making this another strong period of earnings, driving a dividend cover
of1.32x, up from 1.30x in the prior year.
The chart on the right shows the budgeted proportion of cash distributions forecast to be
received from underlying investments at the start of the financial year, versus the relative
sector-level over or under-performance against this target during the year.
The 7.7% under-performance versus budget is largely attributable to low wind and solar
resource, as well as the bringing forward of some capex works on our bioenergy assets.
See overleaf for the equivalent chart showing generation performance of the energy generating
assets versus budget.
Across the portfolio companies, total revenue generated was £284.8 million and total EBITDA
was £131.6 million. The Company operates a diversified portfolio of assets across multiple
sectors which supports diversification of the operating risk profile across the portfolio – with
both revenues and corresponding margins varying based on the underlying operations of
each. For example, wind and solar assets generate electricity through the use of a free natural
resource and therefore typically have a lower cost base than an anaerobic digestion facility,
which requires a feedstock as part of its energy generation process. To compensate, these
anaerobic digestion facilities will also typically have a higher revenue base – as can be seen by
the average all-in energy price table to the right.
The Investment Manager’s report continued
Operational review
£m
0
100
40
20
60
80
-7.7%
88.5
81.5
Budget
Actual
1.5
0.6
Budget
Actual
7.9
8.4
Budget
Actual
97.9
90.4
Total
Budget
Total
Actual
Other energy
infrastructure
-59.3%
Renewable energy
generation
-8.0%
Sustainable resource
management
+5.8%
Financial performance: budget vs actual project distributions
The average all-in price received by the differing technology classes in the UK for their energy
volumes generated in the year ended 31 March 2025 is shown in the table below:
Average all-in energy price
Year ended
31 Mar 2025
Year ended
31 Mar 2024
Wind £201per MWhe £148 per MWhe
AD electric £262 per MWhe £317 per MWhe
AD gas-to-grid £152 per MWhth £148 per MWhth
Biomass £184 per MWhe £205 per MWhe
Energy-from-waste €133 per MWhe €109 per MWhe
Solar £313 per MWhe £217 per MWhe
Hydro £295 per MWhe £308 per MWhe
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Operational performance
Overall, the operating performance of the environmental infrastructure portfolio was
satisfactory. The renewables segment of the portfolio produced 1,272GWh (2024: 1,358GWh)
of green energy, 9.7% below the generational target. While the drop in generation compared to
2024 was partly due to the sale of the rooftop solar portfolio in 2025, the negative deviation
against the annual target was primarily due to low wind resource, an unplanned outage at
Cramlington in Q1 and a biological issue at Bio Collectors in Q3. When grid outages and
compensation (insurance and warranty claims) are taken into consideration, the equivalent
portfolio generation was 1,322GWh, 6.1% below the target for the year.
The concession-based projects, other bioenergy assets and agri-AD portfolios performed in line
with their respective targets.
Renewable energy generation
Power price hedging
FGEN’s exposure to wholesale power prices is mitigated by the practice of having a substantial
proportion of generation for both electricity and gas on fixed price arrangements for durations
ranging from six months out to two years. The extent of generation subject to fixes at 31 March
2025 is as follows:
Summer 2025 Winter 2025 Summer 2026 Winter 2026
Wind 59% 69% — —
Solar 54% 54% 7% 7%
Biomass — — — —
Energy-from-waste — — — —
AD – electric 100% 96% — —
AD – gas 80% 76% 2% 2%
Weighted average 53% 55% 1% 1%
The Investment Manager continues to monitor the market beyond March 2026 for opportunities
to fix prices to mitigate risk across the portfolio, but presently sees more value in having a
higher proportion than usual unfixed as prices stabilise.
Renewable energy: 1,272GWh generated, -9.7% below budget
The Investment Manager’s report continued
Operational review
1. When FGEN’s ownership % is taken into account, the generation by the AD portfolio was 244GWh, 0.4% above the equivalent
sector target.
GWh
0
300
200
100
400
500
70.1
64.7
475.8
476.3
102.4
80.6
108.8
108.1
220.0
188.7
425.6
349.7
Budget
Actual
Budget
Actual
Budget
Actual
Budget
Actual
Budget
Actual
5.4
3.8
Budget
Actual
Budget
Actual
Solar
-7.7%
Wind
-17.8%
Anaerobic
digestion – crop
+0.1%
Anaerobic
digestion – food waste
-21.3%
Biomass
-14.2%
Energy-from-
waste
-0.6%
Hydro
-29.2%
Baseload generators
Anaerobic digestion
The AD portfolio is the largest producer of energy on a GWh basis and generated 37% of the
energy produced by the FGEN portfolio. Gas generation (measured in GWh thermal generated)
was 476GWh
1
, 0.1% ahead of its sector target (2024 variance was 3.6% favourable).
Seven of the nine plants outperformed their generation targets, notably strong performances
coming from Grange Farm, Rainworth and Peacehill, which performed >5% above their
generation targets. Vulcan’s negative variance (-5.6%) against its generational target was due to
the commissioning of two different value enhancement projects, while the prolonged ramp-up
period following a digester degrit at Merlin Renewables resulted in it finishing the year 11.5%
below its target.
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The Investment Manager’s report continued
Operational review
All AD plants have had access to sufficient feedstock
throughout the year despite a poor rye harvest in July 2024.
Maize and rye costs remain stable with no real fluctuations
compared to the previous year. The conditions for digestate
spreading in early 2025 have been optimal, resulting in reduced
storage requirements and therefore cost. Despite this positive
year, more clamp extension and additional lagoon projects are
being developed to enhance climate change resilience.
Wholesale gas and power prices gradually increased from
March 2024, peaking in February 2025. Though political
tensions in Europe and the Middle East contributed to this,
theimpact was mitigated by LNG supplies throughout the year.
The Investment Manager has taken the opportunity to hedge
75%+ of the gas grid capacity for summer and winter 2025,
while opportunities to hedge in summer and winter 2026 are
being monitored, as seen in the table on page 39.
Waste & bioenergy
The renewable energy generation segment of the waste &
bioenergy portfolio is the second largest producer of energy
on a GWh basis and generated 30% of the energy produced
by the portfolio. The waste & bioenergy portfolio generated
377GWh
1
, this was, 12.5% below the sector target; when
compensation from insurance claims and liquidated damages
are considered, the negative variance is reduced to 4.5%.
Despite Cramlington meeting or exceeding its generational
target for six months of the year, an outage spanning May
and June 2024 to address corrosion issues discovered within
the asset’s ID fan meant generation was 14% below the
annualtarget. Compensation for this event has been received
from the O&M contractor while further improvements to the
flue gas treatment line have been made to ensure a long-term
solution is in place.
Bio Collectors has unfortunately had a challenging year
(28%below the generational target) following consistent gas
grid curtailments, technical issues and a digester foaming
incident towards the end of 2024. In reaction to this, the
Investment Manager has identified an expert in the AD
industry to develop and initiate improvement works at
Bio Collectors. Improvements are expected to be realised
midway through the next financial year; to date, the degritting
of both digesters has been initiated and key process
upgrades identified, allowing increased generation and
availability.
Both Codford Biogas and ETA Manfredonia met their
generational targets for the year.
Following the year end, ETA Manfredonia suffered an
unplanned outage as a result of a short circuit within the
turbine’s alternator. Analysis of the work required to repair
the turbine indicates a prolonged period of downtime,
with a plan being worked through by the site’s operator.
Conversations are ongoing with loss adjusters, and it is
believed that a significant proportion of losses will be
recoverable through the site’s insurance. Works remain
ongoing, and an estimate of the remaining downtime and
insurance recoverability has been recognised within the
asset’s valuation.
Hydro
The hydro portfolio generated 4GWh, which was 29% below
target (31 March 2024: 5GWh). This is a very small part of
FGEN’s portfolio and represents less than 1% of the total
energy generation for the year. Though rainfall levels were in
line with expectation, mechanical issues at two of the sites
brought overall generation below the target for the year.
Aninsurance claim for one of the mechanical downtime
events is ongoing and is expected to ensure the plant is
compensated for the loss of revenue.
Intermittent generators
Wind
The wind portfolio generated 350GWh (31 March 2024:
390GWh), representing 27% of the total energy generated
by the portfolio. This was 17.8% below the sector target.
Thenegative variance in production was partly the result of
low wind resource but also availability issues at various sites.
Although a majority of the assets performed as expected,
there were six that experienced significant downtime events
which resulted in the gross availability being 4.6% below
anticipated levels.
Four of the events will be compensated via the O&M
performance mechanism at the conclusion of their respective
contractual years. When these estimated compensation
payments (insurance and warranty claims) are taken into
consideration, the equivalent wind generation for the year
was 362GWh, 15% below the target.
The average power price realised for the wind assets was
112% above the average variable price through FY25 due
to the high level of fixes in place across the portfolio. 50%+
of the wind generational capacity is now hedged until March
2026, as seen in the table on page 39.
Solar
The solar portfolio generated 65GWh, which was 7.6%
below the sector target; this represents 5.1% of the total
energy generated by the portfolio. The negative variance was
primarily due to irradiation levels across the financial year
being 4.2% below expectations.
1. When FGEN’s ownership % is taken into account, the generation by the bioenergy
portfolio was 371GWh, -14.4% below the equivalent sector target.
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In addition, inverter issues at the Amber and Branden sites
and a number of significant grid constraints at CSGH Shoals
Hook also contributed to this. To ensure the inverter issues
do not reoccur, increased investment in the necessary spare
parts, training and optimisation of the inverter units has been
conducted.
A new asset manager has now been appointed at eight of
the 10 sites, the remaining two are expected to move over in
July2025.
Over 50% of the solar portfolio capacity is now fixed until
March 2026, as seen in the table on page 39.
Other energy infrastructure
CNG Fuels (in construction phase)
The CNG refuelling stations achieved a 21% increase in fuel
dispensed year-on-year as customers brought new vehicles
into service and new stations became established.
During this financial year, following completion of
construction, two sites were commissioned at Aylesford
and Doncaster. Construction of a new station in Livingston
commenced and became operational in late May. Following
the CNG Fuels restructuring, a further operational site,
Crewe, is now within the portfolio.
FGEN invested £2.4 million into CNG during the year. As at
31 March 2025, CNG held 16 natural gas refuelling stations,
including the site under construction. FGEN invested a total of
£27.8 million as at the balance sheet date.
Battery storage assets
West Gourdie, FGEN’s operational 50MW battery asset in
Dundee, Scotland, has been participating in various services
including Dynamic Containment (“DC“), wholesale day-ahead,
intraday, balancing mechanism and capacity markets. The
primary source of revenue is the DC frequency balancing
service, which accounts for over 50% of earnings. The
remainder comes from wholesale electricity trading and
capacity market services.
The availability across the year was 94%, which was 4% below
the O&M contractual target. Many of the downtime events
contributing to this are expected to be compensated for via
the performance mechanism in the O&M contract. A majority
of the incidents related to planned outages for maintenance
activities and checks to be conducted.
Based on publicly available data for the last 12 months,
the West Gourdie site has ranked first or second among
comparable peers in Scotland for one-hour indexsites.
Other battery storage assets (in construction phase)
FGEN currently owns three 50MW battery storage assets in the
UK. The Sandridge project has made significant progress, with
all onsite works related to the battery installation successfully
completed. Despite challenges with the distribution network
operator (“DNO”) causing prolonged delays, these issues have
been resolved. Energisation and takeover are now expected in
the second half of 2025.
The Investment Manager is actively pursuing the sale of
both Lunanhead and Clayfords. Lunanhead remains under
exclusivity, with completion targeted for late 2025. Further
options are being explored for Clayfords. These assets
represent 0.5% of total portfolio value.
Sustainable resource management
Waste and wastewater concessions
The ELWA waste project continues to deliver operational and
financial performance in line with expectations. Operational
performance targets were again exceeded with diversion
from landfill at 99.98%, substantially ahead of the 67%
contract target, and recycling at 32.2%, also ahead of the 22%
contract target. Waste tonnages delivered remained stable
throughout the year and were in line with expectations.
Preparations for the handback of this project to the authority
in 2027 have been initiated. All changes and requests
following the sale of Renewi’s UK business to Biffa have been
addressed and no issues are foreseen in the long term.
The Tay wastewater project had another stable year
operationally, with no availability or performance deductions
in the period.
Controlled environment – Glasshouse project
(in ramp-up phase)
The Glasshouse is currently in the operational ramp-up phase
with full sales anticipated by 2026/27. Whilst onboarding
customers has been slower than expected, prices and
margins remain encouraging.
Controlled environment – Rjukan project
(inconstruction phase)
The project is now 30 months into construction and c.90%
complete with the first harvest anticipated by July 2025.
There are currently over 2 million trout in the facility with the
largest fish now over 2.5kg in size.
The Investment Manager’s report continued
Operational review
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Financial statements
Additional information
The Investment Manager’s report continued
Operational review
Cramlington case study
Investment overview
In June 2021, FGEN acquired a 100% stake in Cramlington Renewable Energy Developments
Limited (“Cramlington”) which owns a biomass plant and its underlying contracts. The plant
utilises proven technology to process a diversified biomass fuel mix, creating up to 26MW of
electrical power and 6MW of heat.
Investment highlights
Sector: Renewable energy generation – Biomass
Location: Northumberland, UK
Ownership: 100%
Start of commercial operations: 2018
Operational status: Operational
Accreditation:
ROCs (electricity)
RHI subsidy (heat)
12 years’ remaining life
13 years’ remaining life
Percentage of portfolio by value: 10%
Invested: £51.5 million
Basis of FGEN valuation: Discounted cash flow (“DCF”)
FGEN equity value: £77.1 million
Distributions: £51.2 million
Implied MOIC
1
: 2.5x
Latest IRR: 25.8%
Payback period: 3.8 years
-2.0 -1.5 -1.0 -0.5 0.0 0.5 1.0 1.5 2.0
Discount rates (+/-0.5%)
Tax (+/-2%)
Power price: (+/-10%)
Inflation: (+/-0.5%)
(0.30) 0.30
(0.07)
(1.44)
(0.26)
0.07
1.48
0.19
NAV per share
1. Implied MOIC calculated as total cash consideration plus current valuation, divided by cash invested.
Cramlington sensitivities on NAV per share
Cramlington biomass combined heat and power site
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The Investment Manager’s report continued
Operational review
ș Implementing strategic power price hedging during
volatile periods right after acquiring the project enabled
Cramlington to seize the upside. Coupled with enhanced
availability, this strategy facilitated significant early-year
dividends. We applied the same tactic to REGO
certificates, and with our current four-year fix, we are
selling certificates at 20 times the current market rate.
Sustainability credentials
ș To reduce waste sent to landfill, the project tested and
certified its bottom ash as a soil enhancer for local farms.
Each year, around 2,500 tonnes of ash provide essential
minerals, significantly lowering costs for farmers, while
also allowing us to benefit from repurposing waste.
Cramlington revenue forecast split
1
ROC 53%
PPA export 34%
PPA other
(EB, Triads and REGO) 3%
Private wire electricity 7%
Private wire heat 1%
RHI 2%
1. Based on NPV of future forecast revenues over the remaining life of the asset.
Origination
ș The project was acquired out of an administration process
that was triggered by external lenders who had funded the
previously levered structure. A key priority for FGEN was
to de-risk its investment by buying out the lenders, meaning
that the project is now ungeared and free of restrictive loan
covenants.
ș The project also required technical, contractual and
feedstock optimisation works, which Foresight/FGEN was
uniquely placed to deliver.
Value creation
ș Construction of a fuel processing area to reduce fuel
costs and double handling by allowing the supplier to
process local forestry and arboriculture residues onsite.
This area also enables blending of various stocks to
control fuel quality and moisture content. As a result, the
plant’s monthly availability improved from the high 80s to
over95%.
ș Prior to FGEN’s acquisition, fuel was supplied by a large
number of suppliers, resulting in inconsistent quality and
exposing the project to market price fluctuations. In 2022,
the project streamlined this structure by securing a 12-year
single-supplier agreement with Seras, leading to reduced
costs, price stability and enhanced fuel quality creating a
significant increase in the project’s valuation.
ș In our first year of ownership, we uncovered the key areas
causing downtime. To improve reliability, we implemented
upgrades, such as a fuel bypass chute, which allows for
manual feeding of the boiler during equipment failures in
thefuel hall.
Cramlington case study continued
What is biomass combined heat and
power(“CHP”)?
A CHP plant creates both electricity and heat from its fuel
source, which in Cramlington’s case is a blend of woody
biomass. The fuel is mixed, screened and then fed onto a
vibrating grate for combustion. This process produces a hot
flue gas which in turn raises water temperature inside a boiler
to produce superheated steam. This steam is then used in a
turbine to generate electricity and heat. All heat is exported
along with some electricity to adjacent industrial customers,
with the remaining electricity production exported to the
national grid.
Investment attractions
ș ROCs and RHI subsidy regimes expire in March 2037
and March 2038 respectively. The base investment
caseassumes operation until the end of the ROC regime,
with freehold rights in place to support potential asset
lifeextensions.
ș Exporting both heat and power to two neighbouring
private wire customers, with potential to export higher
levels to both existing customers and new customers in
the surrounding business parks.
ș Long-term contracts for PPA, private wire, feedstock and
O&M services.
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Sustainable resource management continued
Green hydrogen
As announced on 8 November 2024, the Company’s
investment in the HH2E hydrogen development was written
down following HH2E’s decision to file for insolvency as a
result of the failure to secure the further funding necessary to
meet its ongoing commitments. FGEN invested £19.3 million
prior to the write-down and currently considers it unlikely
that there will be any recovery, given that FGEN’s claim on
the company is subordinated to general creditors under
German law. Detailed information about the factors leading to
the write-down of the project can be found on page 28 of the
Half-year Report 2024.
Divestments and restructuring
Disposal of 51% of six AD facilities
In August 2024, the Company announced the sale of 51% of
a portfolio of six gas-to-grid AD facilities to Future Biogas for
a total consideration of £68.1 million, equal to the NAV of the
portfolio. Subsequently, further value has been recognised
through delivery of value enhancements and alignment of
operating assumptions, including the removal of operator
profit sharing that was agreed as part of the transaction
which alone resulted in an additional 9% uplift to valuation.
FGEN will continue to own 49% of the AD portfolio, which
has a combined generating capacity of 38MW, as well as
its interests in three further agri-AD assets which are not
operated by Future Biogas and not part of the agreement.
The Company is optimistic about the partnership with
Future Biogas as it provides a greater alignment of interests
between the parties, creating the potential for further asset
enhancements and life extensions beyond the current
Renewable Heat Incentive (“RHI”) subsidy. These initiatives are
expected to deliver uplifts to the valuation of the Company’s
remaining holding in the AD portfolio over time.
Disposal of 100% of rooftop solar portfolio
In December 2024, the Company announced the sale of 100%
of a portfolio of operational rooftop solar assets foratotal
consideration of £21.2million. This disposal recognised a
premium to NAV and facilitated the recycling of capital from
alower returning, non-core part of the portfolio.
A total of £20.5 million was payable upon completion with
a further £0.7 million in deferred consideration linked to the
satisfaction of certain post-completion obligations which will
likely result in a further £0.2 million in FY26.
CNG restructuring
Shortly after the year end, FGEN, together with another
Foresight fund, completed on a transaction to combine
their investments in the CNG refuelling station assets with
the assets of ReFuels N.V. (“ReFuels”), a leading European
supplier of Bio-CNG for the decarbonisation of heavy goods
vehicles. ReFuels contributed its investments in CNG Fuels
Ltd, the developer and operator of the station assets, and
79.2% of a biomethane sourcing company, Renewable
Transport Fuel Services Ltd.
The combination creates a fully integrated biomethane
sourcing, station ownership and Renewable Transport Fuel
Certificate business well placed to build on its market leading
position. The current network of stations in operation has the
capacity to serve 10,000 HGVs per day and has an annual
dispensing capacity of more than 310 million kg of Bio-CNG
to customers including Amazon, DHL and Marks & Spencer.
The transaction provides a path to further growth via a
rollout of a further nine public access Bio-CNG refuelling
stations by the end of 2028.
The Investment Manager’s report continued
Operational review
ELWA waste management
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Additional information
Performance against these targets will be measured annually,
with the cost of the RCF being amended in the following
financial year. Lenders to the facility include HSBC, ING,
Clydesdale Bank, National Australia Bank and Royal Bank of
Scotland International. The margin can vary between 205 bps
and 215 bps over SONIA (Sterling Overnight Index Average)
for sterling drawings and Euribor (Euro Interbank Offered
Rate) for euro drawings, depending on performance against
the ESG targets.
In addition to the RCF, several of the projects have underlying
project-level debt.
Project-level gearing at 31 March 2025 across the portfolio
was 18.5% (31 March 2024: 16.9%). Taking into account the
amount drawn down under the RCF of £99.3 million, the
overall fund gearing at 31 March 2025 was 28.7% (31 March
2024: 31.2%).
As at 31 March 2025, the Group, which comprises the
Company and the intermediate holding companies, had cash
balances of £7.8 million (31 March 2024: £18.1 million).
Financing
On 25 April 2025, FGEN announced that it has reduced the
size of its multi-currency revolving credit facility (“RCF”) from
£200 million to £150 million. The downsizing of the RCF will
result in an annual cost saving of £367,500. The reduced RCF
continues to provide ample headroom to cover outstanding
portfolio commitments, including the remaining payments
for the Company’s well-progressed construction-stage
investments.
The £150 million RCF has an uncommitted accordion facility
of up to £30 million and an uncommitted option to extend for
a further year.
As at 31 March 2025, drawings under the RCF were
£99.3million.
The RCF provides an increased source of flexible funding
outside equity raisings, with both sterling and euro
drawdowns available on attractive terms. The facility
will principally be used to make future acquisitions of
environmental infrastructure investments to add to the
current portfolio, as well as covering any working capital
requirements.
The interest charged in respect of the renewed RCF continues
to be linked to the Company’s ESG performance, with FGEN
incurring a 5 bps premium or discount to its margin based on
performance against defined targets. Those targets include:
ș environmental: increase coverage of independent
biodiversity assessments and implement initiatives to
enhance biodiversity net gain across the portfolio;
ș social: increase volume of contributions to local
communities; and
ș governance: maintain a low number of work-related
accidents, as defined under the Reporting of Injuries,
Diseases and Dangerous Occurrences Regulations
(“RIDDOR”) by the Health and Safety Executive.
The Investment Manager’s report continued
Operational review
Financing at 31 March 2025
£99.3m
drawn on RCF
28.7%
gearing
1
1. Gearing is an alternative performance measure (“APM”). The APMs within the
accounts are defined on pages 182 and 183.
Other investments
FEIP
FGEN has committed to investing €25 million in Foresight
Energy Infrastructure Partners SCSp (“FEIP”), a Luxembourg
limited partnership investment vehicle. At31 March2025, the
Company has invested in 15 projects and is no longer seeking
to make new investments.
Theinvestment inFEIP allows FGEN to further diversify its
geographic and technology exposure, while also gaining an
allocation to construction-stage assets which is expected
toenhancereturns.
Given construction-stage assets can only represent a small
part of the Company’s portfolio, the FEIP investment allows
a greater level of diversification than would be possible
with direct investments, providing for a more attractive
risk-adjusted return profile. FGEN is excused from any FEIP
investment that is not consistent with FGEN’s investment
policy. No management fees are payable on the amounts
invested by FGEN. FEIP also owns a 45% stake in ETA, the
Italian EfW plant, in which FGEN is also an investor. As at
31March 2025, €22.5 million has been invested in FEIP.
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Asset spotlight
Introduction
The investment policy
FGEN is committed to the substantial majority of
investments in the portfolio by value and number being
operational, however it also has the ability to invest in
earlier-stage investments. Per the terms of the investment
policy
1
, FGENwill not acquire investment interests in any
investmentif, as a result of such investment: (i) 5% or more
of the NAV is attributable to environmental infrastructure
in the development phase (including in developers or
development funding structures); or (ii) 25% or more of
the NAV is attributable to projects that are either in the
development phase (including in developers or development
funding structures) or are in construction and are not yet
fullyoperational.
Construction-stage opportunities
Construction-stage opportunities typically offer higher
rates of return to compensate for the additional risk
associated with construction, such as cost overruns, delays
and disputes. FGEN has three assets that are broader
environmental infrastructure projects, rather than core wind
and solar projects, and these either involve construction
risk or have recently completed construction. These assets
also face risks associated with ramping-up operations to
achieve the expected levels of performance and offtake as
necessary to support their investment cases. While returns
on these projects have the potential to be higher than for
construction-stage wind and solar projects, their risk profiles
are different, as highlighted in the case studies on pages 47
to 52.
Foresight’s value-add
The Foresight Infrastructure team comprises over 190
investment, commercial and technical professionals across
offices in the UK, Italy, Spain, Luxembourg and Australia,
bringing extensive investment origination and execution
capabilities to FGEN. The team typically considers over 900
opportunities a year across all strategies, selecting only those
for FGEN which demonstrate its investment characteristic
preferences while also adhering to its risk appetite.
The team has extensive experience across both a wide
array of infrastructure sectors and also at various stages
of an asset’s lifecycle; through development, construction,
operations and exit – providing capital appreciation at each
stage along the way. The team’s skillsets, experience and
capabilities meet FGEN’s broad environmental infrastructure
mandate and this experience has been critical in determining
which projects to pursue as FGEN has diversified beyond
core renewable energy projects.
FGEN assets currently under construction
In line with the Company’s investment policy
allowing for up to 25% of NAV to be in assets under
construction, at 31March 2025 9% of FGEN’s
NAV(equivalent to 8% of portfolio value) is attributable
to assets in their construction phase.
The following pages include spotlights on three FGEN
investments which are presently either in, or have
recently finished, construction:
ș CNG Fuels
ș Controlled environment – Glasshouse
ș Controlled environment – Rjukan
1. For the full investment policy see our website: www.fgen.com/about-us/investment-policy.
Operational status
Operational 92%
Construction 8%
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Asset spotlight continued
CNG Warrington
Investment highlights
Acquisition date December 2020
Ownership CNG Foresight Holdings is owned 25% by
FGEN and 75% by Foresight ITS
FGEN investment
to date/total
commitment
£27.8 million invested/£13,000 remaining
commitment
Operational status 16 operational sites
Timetable to
completion
Typical site build time <1 year
Location Nationwide (see map on page 48)
Basis of FGEN
valuation
Operational sites: combination of DCF and
cost, with an assumed future exit
FGEN equity value £36.3 million
Percentage of
portfolio value
5%
Gearing £2.66 million vehicle finance. Typically
five-year term with rates between 4-9%
Life of investment No finite end date. Majority of sites are
owned freehold and are well positioned
toadapt to evolving technological and
market trends
Expected return range Low to mid-teens
Source of funding Future station pipeline funded from a
mixture of internally generated cash
flows and non-recourse debt raised at
theCompany level
Nationwide network of low-carbon
transportation refuelling hubs
CNG Fuels
Investment overview
The CNG Foresight investment comprises a portfolio of
biomethane refuelling stations for compressed natural
gas(“CNG”) vehicles in theUK, operating under the brand
CNG Fuels.
The transport sector is the largest source of carbon dioxide
emissions in the UK, accounting for 34% in 2019. Heavy goods
vehicles (“HGVs”) produce 17% of road transport emissions
and 4.5% of total UK GHGs.
HGVs fuelled by biomethane generated by AD plants are the
only commercially available, at-scale solution to substantially
reduce these emissions. Therefore, the take-up of CNG
offers fleet operators the opportunity to significantly lower
their emissions, whilst also providing a cheaper whole-life
alternative to comparable diesel vehicles.
Investment attractions
ș Revenues are earned from sales of biomethane fuel to
customers under contract, which include several of the
largest fleet operators in the UK
ș The commodity price of gas is passed through to the
customer, meaning that FGEN has no exposure to
underlying merchant gas prices
ș The government has committed to maintaining a clear
advantage for gas-powered vehicles until 2032, supporting
the UK’s target of net zero emissions by 2050
ș CNG Fuels is Europe’s largest supplier of 100% renewable
biomethane to transport
ș Attractive combination of predictable and reliable income
and potential for capital growth
ș Contributes to FGEN portfolio diversification as a net user
of electricity rather than a generator
ș FGEN investment structured in part via preferred equity
instruments with emphasis on downside protection
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Revenue structure and key cost base
Sources of
revenue
Customers enter gas supply agreements
that includes recharging of gas costs plus
acompression margin
Revenue growth Ramp-up linked to growth of customer fleets
Inflation linkage Revenues are linked to CPI
Currency strategy No currency risk on operational sites. Currency
exposure on major equipment purchases from
Europe is hedged
Key costs: import
power
Models assume wholesale power curves
plusretail factor
0
20
40
60
80
100
175
5,254
160
140
120
180
0
Jan 25Jan 24Jan 23Jan 22Jan 21Jan 20
1,000
2,000
3,000
4,000
Tonnes
Dispensed volume
Average daily volume
5,000
6,000
7,000
Key operational updates in the period
ș Reached 5 million kg dispensed per month across the
portfolio
ș Completed construction of the Doncaster station
ș Successfully delivered 19% growth in gas dispensed from
April 2024 to March 2025
ș Tesco and M&S have invested in Bio-CNG trucks as part of
their decarbonisation strategy
Operational focus for the year ahead
ș Keep rolling out new stations, aiming to start building two
new sites before the end of the operating year
ș Demo 6x2 axle trucks for customers to increase the
uptake of this larger, long-range vehicle type
Value enhancement opportunities
ș Significant opportunity to reach new customers utilising
large capacity (6x2) vehicles, which require up to 50%
increase in gas per vehicle compared to smaller 4x2 trucks
ș Significant reduction in import electricity costs available
from moving to a flexible trading tariff across the portfolio
Sustainability credentials
ș CNG Fuels supplies renewable Bio-CNG. Bio-CNG
(orcompressed biomethane) differs from fossil-derived
CNG/LNG (liquified natural gas) as it is a bi-product
from the decomposition of food and animal waste. It is
independently verified and approved according to the
Department for Transport’s Renewable Transport Fuel
Obligation (“RTFO”). As well as lower-carbon emissions,
gas-powered vehicles have lower particulate emissions
than diesel equivalents
ș When switching to biomethane from petrol/diesel,
customers can achieve more than an 85% reduction
inCO
2
emissions, and when switching from diesel,
theycansave up to 40% on lifetime fuel costs
Principal risks and mitigants
Risk Mitigant
#1 Ramp-up risk
with lower-
than-forecast
vehicle numbers,
or insufficient
profitability
Customer engagement on sales efforts
and vehicle ordering plans, focus on
cost control, and matching new stations
with confirmed demand
#2 Structural
complexity deters
future acquirers
Restructuring to simplify the relationship
between completed station assets and
the operations associated with them
#3 Emergence of
competition from
either new CNG
suppliers, or
alternatives such
as LNG, hydrogen
or batteries
LNG in use but not gaining ground due to
lack of network and complex refuelling
procedures; hydrogen and battery
vehicles currently not cost competitive
Key
Operational sites – CNG
CNG Foresight – Bio-CNG station map:
Asset spotlight continued
CNG dispensed fuel since acquisition
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Asset spotlight continued
CE Glasshouse exterior
Controlled environment glasshouse,
utilising surplus heat and power
from co-located AD facility
The Glasshouse
Investment highlights
Acquisition date September 2022
Ownership Majority of investment through a
senior loanto fund construction of the
Glasshouse, with a minority equity interest
in the growingpartner
Investment to date/
total commitment
£26.7 million invested; in line with initial
commitment
Operational status Phase 1 (2.4-hectare facility) construction
iscomplete. Currently inoperational
ramp-up period
Timetable to
completion
Ramp-up expected to be complete by2027
Location Co-located with an existing FGEN AD
facility
Basis of FGEN
valuation
Discounted cash flow (“DCF”)
FGEN equity value £37.3 million
Percentage of
portfolio value
5%
Gearing No external debt
Life of investment Land is leased for 25 years
Source of funding Construction funded from surplus portfolio
cash flows and RCF drawings
Investment overview
A 2.4-hectare advanced glasshouse which completed phase
1 of construction in September 2023 and which is co-located
with an existing FGEN AD facility that supplies low-carbon
heat and power via a private wire.
The advanced glasshouse is capable of growing a wide array
of horticultural products, from consumable produce to cut
flowers. Its current operator focuses on the lawful cultivation
ofthe heavily regulated tetrahydrocannabinol cannabis flower
(“THC”), conforming to tightly monitored licence requirements
for secure supply to established UK-based pharmaceutical
manufacturers.
Glass Pharms is the first UK commercial grower of
high-THCcannabis flower for lawful third parties to
producecannabis-based products for medicinal use in
humans (“CBPMs”).
Investment attractions
ș Synergies from co-location of facilities, whereby the
glasshouse receives renewable heat and electricity via
private wires at a discount to market prices it would
otherwise pay and the AD facility benefits from receipt of
RHI subsidy from the provision of otherwise waste heat as
well as selling electricity to the glasshouse at a premium to
the price available from exporting to the grid
ș Attractive risk-adjusted returns with FGEN benefiting from
downside protection via a senior preferred return and
opportunity for capital growth via equity interest
ș High margin business model, requiring low volumes to
achieve breakeven position whilst retaining potential for
significant capital growth
ș The investment generates new diversified revenue streams
for FGEN derived from glasshouses, whilst also increasing
revenues from an existing asset
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Revenue structure and key cost base
Sources of
revenue
Sales of lawful high-THC cannabis flower for
third parties to produce CBPMs
Revenue growth Increased market penetration
Inflation linkage No contractual linkage, although the Company
retains the ability to pass on underlying cost
increases
Margins 65%+
Currency strategy No currency risk post construction
Key costs Staff and electricity
Key operational updates in the period
ș Phase 1 of construction completed in September 2023,
enabling for c.12,000kg of dried flower to be grown
perannum
ș In October 2024, Glass Pharms signed a landmark
multi-million pound deal with Releaf that will see it grow
145kg of cannabis flower per month to supply CBPMs for
Releaf’s patients
ș Further offtake contracts are being negotiated with several
of the UK’s top clinics
Operational focus for the year ahead
ș Principal focus is to continue ramp-up operations,
carefullymanaging costs and attracting new offtake
partners which presently rely on imported sources
Value enhancement opportunities
ș Longer term, once the facility has reached its current
capacity, there is scope to undertake phase 2 of
construction – intended to facilitate more than double the
current volume capacity. The expansion would be funded
from free cash generated by the Glasshouse
Sustainability credentials
ș Co-location: other wasted heat from the co-located AD
facility is used to both heat and cool the facility, avoiding
the emissions usually involved in heating
ș Circular water saving: rainwater is harvested from the
glasshouse roofs and recycled around the facility
ș Advanced glasshouse design using 45% of the energy
compared to indoor growing. Patent pending
Principal risks and mitigants
Risk Mitigant
#1 Lower than
modelled demand
leading to
failure to reach
breakeven cash
flows
Short-term shortfalls managed
through ability to control production
levels to match offtake requirements,
minimising wastage. Longer-term
shortfalls mitigated through alternative
productionopportunities
#2 Poor harvest Reliability of harvests increased through
the controlled nature of the growing
environment, advanced glasshouse
technology and extensive experience
ofthe growing team
#3 Change in
regulation
In addition to the existing licence,
Glass Pharms is actively engaged with
regulators and ministers on the benefits
of medical cannabis. Independent
research shows that prescribing medical
cannabis for chronic pain could save
the NHS nearly £4 billion each year by
reducing reliance on more expensive
alternative treatments
Asset spotlight continued
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Asset spotlight continued
CE Rjukan construction
Investment overview
Rjukan is a land-based trout farm based on technology that
recirculates pure, clean mountain water. The technology is
known as a recirculating aquaculture system (“RAS”) and is
the most sustainable, scalable and environmentally conscious
form of aquaculture production available today. The facility is
capable of producing c.8,000 tonnes of trout (or 22,000,000
dinners) per year which is to besold to European and
international salmonid markets.
Driven by a growing global population and an expanding
middle class, the world faces an increasing demand for
quality protein amid limited resources of usable land
and water. Fish, including salmonids such as salmon and
trout, areconsidered one of the most efficient sources of
high-quality animal protein due to the rate at which fish
convert feed into edible mass, its high protein retention
andhigh rate of edible meat per kilogramme, as well as
various nutritional benefits.
Investment attractions
ș Key environmental infrastructure needed to decarbonise
food production and agriculture sectors for a growing
population
ș Rising global demand for quality, sustainable protein
sources from sustainable practices
ș Unique location providing access to a high-quality source
of fresh water and renewable electricity
ș Access to established Norwegian seafood markets
ș Favourable regulatory environment presenting tax
advantages for fully land-based controlled environment
projects
ș FGEN investment structured via preferred equity
instruments with emphasis on downside protection and
alignment of incentives with developer and minority
shareholders
Investment highlights
Acquisition date July 2022
Ownership 58% Foresight Rjukan HoldCo Limited (FGEN
and Foresight ITS) and 42%HimaSeafood
Investment to date/
total commitment
£42.9 million invested/£1.5 million remaining
commitment
Operational status Partial operations: first fish tanks
have been constructed with first
eggs delivered in January 2024
andsubsequent deliveries accepted
throughout 2025. Construction now
materially complete
Timetable to
completion
Q4 2025
Location Rjukan, Norway
Basis of FGEN
valuation
Cost
FGEN equity value £42.9 million
Percentage of
portfolio value
6%
Gearing External debt (PCP) – 12% during
construction, 11% during operations.
Debt is to be refinanced in June 2028
Life of investment 34 years
Expected return
range
Low double-digit IRR
Source of funding FGEN and Foresight ITS
Land-based recirculating
aquaculturefacility in Norway
Rjukan
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Revenue structure and key cost base
Sources of
revenue
Sales of trout
Revenue growth First harvest in 2025, reaching steady state of
c.7.8kt in 2027
Inflation linkage Implicit inflation linkage via fish commodity
pricing
Margins c.40%
Key costs Feed, power and staff
Currency strategy Construction costs are substantially hedged
but revenues arecurrently exposed to FX risk
(NOK/GBP). Canconsider income hedge in due
course
Key operational updates in the period
ș Appointment of new CEO focused solely on management
ofRjukan
ș Construction progressing to plan with first harvest due in
July2025
Operational focus for the year ahead
ș Construction expected to complete in latter part of 2025 with
first trout harvest expected at similar timeframe
ș Marketing continues to ramp up, including branding exposure
at events such as the Barcelona Fish Expo which is attracting
interested offtakers
Principal risks and mitigants
Risk Mitigant
#1 Construction risks
such as delays,
cost overruns, or
failure to meet
output specs
Contracts with experienced RAS
counterparties for design and
construction, with customary liability
packages and liquidated damages
arrangements
#2 Operational risks
including risks that
costs are higher
than forecast or
that the overall
production value
is lower than
forecast
Some contractual protections through
EPCs and risk transfer to operational
counterparties. Strengthening in-house
management team, robust budgeting
and benchmarking against established
comparable businesses, and internal
controls for early identification of any
potential issues
#3 Financing risk,
including inability
to service debt
leading to default
Regular forecast updates to monitor
loan compliance and coverage, and
engagement with lender as required
Value enhancement opportunities
ș Potential to find efficiencies including increasing fish size
before sale and additional batches etc
ș Estimated output of 4,500mt organic fertiliser which
can be sold to neighbouring industries and farming
communities
Sustainability credentials
ș Land-based aquaculture can provide a range of benefits
compared with alternative methods of aquaculture,
such as improved fish mortality rates, less local
environmental degradation, a lower use of antibiotics
and other chemicals to control disease and parasites,
and a controlled environment supporting factors such as
temperature, salinityand oxygen levels resulting in optimal
growth conditions and consistent fish quality
ș RAS is the most sustainable, scalable and environmentally
conscious form ofaquaculture production available today
ș Facility to use close to 100% renewable energy on site and
99.7% of water is being recycled through RAS
CE Rjukan aquaculture facility
52
Foresight Environmental Infrastructure Limited
Annual Report 2025
Overview
Strategic report
Governance
Financial statements
Additional information
Risk is the potential for events to occur that may result in
damage, liability or loss. Such occurrences could adversely
impact the Company’s business model, reputation or financial
standing. Alternatively, under a well-formed risk management
framework, potential risks can be identified in advance and
can either be mitigated or possibly even converted into
opportunities.
Pages 54 to 64 of this report detail the principal and
emerging risks that the Directors consider are material and
which potentially could impact the Company or occur in an
environmental infrastructure project such as those invested in
by the Company.
In assessing these risks for the purposes of this report, the
Directors typically consider the next 12-18 months as being
the critical window for risks to materialise. Environmental
infrastructure assets are long-term assets and risks can
crystallise throughout an asset’s life; nevertheless, this report
is intended to give the reader an understanding of the current
risk outlook for the Company and the risks that the Board
and the Investment Manager feel have the most significance
at the present time. This outlook is updated regularly in the
publications that the Company puts into the market and so
readers can get a sense of how the Board and the Investment
Manager’s view of risks changes over time.
Given that the Company delegates certain activities to the
Investment Manager and Administrator, reliance is also
placed on the controls of the Group’s service providers.
In the normal course of business, each project will have
developed a rigorous risk management framework, including
a comprehensive risk register, that is reviewed and updated
regularly and approved by its board. The purpose of FGEN’s
risk management policies and procedures is not to eliminate
risk completely, as this is neither possible nor commercially
viable. Rather, it is to reduce the consequence of occurrence
and to ensure that FGEN is adequately prepared to deal with
risks so as to minimise their effect should they materialise.
Risk identification and monitoring
Three lines of defence
First line of defence (“1LoD”): This consists of functions
that manage the risk gateway into the portfolio. They are
accountable for and responsible to perform or enable the
identification, measurement, management, and reporting
of risks inherent to the investment activities. This includes
the design, operation and ensuring performance and
effectiveness of controls.
Second line of defence (“2LoD”): This consists of
independent risk management and compliance functions
which are responsible for establishing Foresight’s risk
management framework and associated control standards,
as well as providing independent challenge over the
activities, processes and controls carried out by the first
line. Additionally, where agreed with the First line of Defence
and the relevant governance forum, 2LoD can perform and
complement the responsibility of identification, measurement,
management, and reporting of risks, with 1LoD retaining
theoverall accountability for risk management related to
their activities.
Third line of Defence (“3LoD”): This provides independent
risk assurance to the Board and senior management about
the adequacy of the overall risk and control framework,
and establishes a mechanism for assessing the effectiveness
of the risk management and control activities of the first
and second lines. FGEN has a separate Risk Committee,
comprising five non-executive Directors, which is responsible
for overseeing and advising the Board on the current and
potential risk exposures of the Company, with particular
focus on the Group’s principal risks, being those with the
greatest potential to influence shareholders’ economic
decisions, and the controls in place to mitigate those risks.
The Board believes that the FGEN Risk Committee provides
effective challenge to the risk and compliance frameworks set
in place by the Investment Manager. The Board acknowledges
that this is not equivalent to an independent internal audit
function but that it provides a sufficient and proportionate
approach. TheBoard feels they have a sufficient level of
oversight of theinternal controls in place.
In the case of new and emerging risks, assessment occurs
outside of the quarterly cycle. These systems of internal
control were in place for the year under review and continue
to be in operation.
FGEN has a comprehensive risk management framework overseen by
theRiskCommittee,comprisingindependentnon-executive Directors.
Risks and risk management
53
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Financial statements
Additional information
Risk management framework
FGEN has a comprehensive risk management framework and
risk register that assesses: a) the probability of each identified
risk materialising; and b) the impact it may have on FGEN.
Mitigations and, where applicable, controls have been
developed with respect to each risk so as first to reduce the
likelihood of such risk occurring and secondly to minimise the
severity of its impact in the case that it does occur.
The risk register is a “live” document that is reviewed and
updated regularly by the Risk Committee as new risks emerge
and existing risks change.
The principal risks faced by the Group are formally reviewed
by the Risk Committee at each quarterly meeting and the
Committee reports to the Board in respect of changes to
the general risk environment and material developments in
already identified risks.
Each of the underlying projects is overseen by an
experienced portfolio manager who reports to their
individual project board. The portfolio managers maintain
strong relationships between counterparties, contractors,
third-party asset managers and other stakeholders.
Thisensures effective management of potential risks.
Risk appetite
Risk assessment
Risk identification
Documentation
Mitigation
Risk limits
Controls testing
Stress testing/sensitivity
Audit
Emerging risks
Emerging risks are characterised by a degree of uncertainty
and the Investment Manager and the Board consider new
and emerging risks at the Risk Committee which takes place
quarterly; the risk register is then updated to include these
considerations if required. Furthermore, the Company is
advised by various advisers within the listed infrastructure
space and the Investment Manager, Foresight, considers
emerging risks over a wider market arena.
Examples of emerging risks that have been considered by the
Board and Investment Manager during the period include the
following:
i) Ongoing uncertainty over energy market reform in the
UK, with perhaps the most critical issue being the extent
of reform to locational and operational signals in the
electricity market, with the most drastic action under
consideration being the implementation of zonal pricing
across the UK. This is a topic of fairly fierce debate within
central government, with further updates from DESNZ
expected in mid-2025.
ii) The re-election of the Trump administration and the
related global impacts of inflationary policies with the
“America First” approach leading to the risk of heightened
geopolitical tensions, and inflationary impacts of the
tradeand tariff wars leading to increasing costs across
supply chains.
iii) Whilst not during the period, the most recent escalation of
the situation in the Middle East, with direct US involvement
in the broader Iran/Israel conflict, has the potential to
heighten geopolitical tension further and disrupt both
energy pricing and global supply chains, amongst other
potential implications.
Risks and risk management continued
Oversight of service providers
Board of Directors
Audit
Committee
Risk
Committee
Nomination Committee
ESG
Committee
Strategy Controls Monitoring
54
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Annual Report 2025
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Governance
Financial statements
Additional information
This risk map shows our assessment of each area of principal risk after mitigation. FGEN’s risk register covers six main areas of risk:
Strategic, economic and political
Operational, business, processes and resourcing
Financial andtaxation
Compliance and legal
Asset specific
ESG
This year we are only detailing the most pertinent principal risks affecting the Company.
Wehave identified 13 risks within two of the above-mentioned categories. These risks
aresummarised below, followed by a detailed discussion of the mitigating factors.
See more on climate-related risks in our
Sustainability and ESG report on pages 83 to 86.
Very low Low Medium High Very high
Residual likelihood
Minimal Minor Moderate Major Severe
Residual impact
1
Interest rates
8
Climate change – physical risk
2
Access to capital
9
Volume and cost of feedstock resource
3
Adverse movement in inflation
10
Cyber risk
4
Changes in regulation and
government support
11
Exposure to market power prices
5
Reputational
12
Construction and development issues
6
Ramp-up risk
13
Operational risk
7
Asset exposure to weather resource
11
1
57
13
Key:
12
2
3 4 8
6 9 10
Risks and risk management continued
55
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Additional information
Risk
type
Change
inyear Potential impact Mitigations Controls
Link to Fund
objectives
Residual
risk
Strategic, economic and political
1
Interest rates
with
interest
rates
continuing
to be at
elevated
levels
ș Interest rate increases may impact on the
Fund in several ways:
i. Valuation of the portfolio through the
discount rate applied to perform the
DCF calculations.
ii. FGEN cash flows to the extent that
interest on borrowings was determined
according to floating rates.
iii. Interest rates and rates of return
from other asset classes impact the
relative attractiveness of FGEN returns
to investors, which could impact on
investor appetite to invest in the Fund.
ș Using interest rate swaps and fixed rate
loans, finance costs are fixed at the time
of the contract being signed, substantially
reducing interest rate risk.
ș Selection of discount rates based on market
intelligence.
ș Detailed cash flow modelling to predict the
impact of increasing interest rates.
ș Foresight’s Valuation Committee meets
quarterly to assess the valuation of the
Company, as prepared by the finance
and valuations teams; which includes
assessment of the discount rates.
ș This valuation is reviewed and signed off
by the FGEN Board at quarterly valuation
meetings that inform the Company’s NAV
updates.
ș An independent verification of the
Company’s valuation methodology and
assumptions is conducted by PwC.
High
2
Access to
capital
ș The challenging macroeconomic backdrop
continued in 2024, with the Company’s
share price, as per the wider renewable
infrastructure investment trust sector,
continuing to trade at a material discount
to NAV, leading to an inability to raise new
equity.
ș As a result, there is a risk that FGEN is
unable to achieve its stated ambition of
growing the portfolio by acquiring new
assets due to a lack of funding, which could
result in long-term NAV decline.
ș The Company has maintained a disciplined
approach to capital allocation over
the period in order to help address the
discount, which has focused on paying down
debt and returning capital to shareholders
via buybacks.
ș The Investment Manager has announced its
medium-term disposal programme, targeting
exit from its growth assets once sufficiently
mature in order to generate proceeds
that can be used under the allocation
strategy as decided by the Board in time,
whether that be reinvestment into portfolio
growth, further debt repayment, return to
shareholders, or a combination.
ș The FGEN Investment Committee oversees
and monitors the discount controls being
applied, with constant evaluation of the
best use of available capital in line with the
capital allocation policy.
Medium
Risks and risk management continued
Change in year:
Increased Decreased No change
Fund objectives:
Potential for
capital growth
Diversification across sectors
and geographies for a more
robust, risk-adjusted return
Long-term predictable income
growth for shareholders
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Risk
type
Change
inyear Potential impact Mitigations Controls
Link to Fund
objectives
Residual
risk
3
Adverse
movement in
inflation
ș The underlying assets in the portfolio, and
therefore the returns expected from them,
have some exposure to inflation. This ranges
from direct exposure, such as subsidies
and service contracts that increase in line
with RPI annually, to other revenue and
cost items where the link to inflation is not
contractual and its effect must be estimated.
ș In the current inflation environment, there is
greater uncertainty than previously about
the path that inflation will follow. If inflation
is materially lower than the assumptions
used in valuations, then there is a risk
that the portfolio value will fall. FGEN has
adopted an assumption of 3.5% RPI inflation
for the current year, dropping to 3% until
2030.
ș Nominal discount rates are used in the
discounted cash flow (“DCF”) valuation
methodology used to value portfolio assets.
There is a risk that discount rates increase
in a high inflation environment, impacting
valuations.
ș Monitoring of market forecasts for
inflation and input from the Company’s
independent valuations specialist regarding
inflation assumptions seen in the market.
Returns from the assets in the portfolio
are highly correlated with inflation due to
revenues from PFI assets, green benefits
for renewable energy assets and most
operational costs being directly linked to
an inflation index. This results in a “natural
hedge”, removing the need for the use of
derivatives to mitigate inflation risk.
ș The adoption of a “progressive”
dividend policy rather than an explicitly
“inflation-linked” one gives the Company
additional flexibility to set dividend targets
at a sustainable level. Higher inflation
ratesmay mitigate the impact of higher
interest rates.
ș The Foresight Valuation Committee will
approve assumptions used in the valuation
and the FGEN Board has ultimate authority
over the portfolio valuation.
ș An external review of valuations and
valuation methodology is also undertaken
by PwC.
Medium
Risks and risk management continued
Change in year:
Increased Decreased No change
Fund objectives:
Potential for
capital growth
Diversification across sectors
and geographies for a more
robust, risk-adjusted return
Long-term predictable income
growth for shareholders
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Additional information
Risk
type
Change
inyear Potential impact Mitigations Controls
Link to Fund
objectives
Residual
risk
4
Changes in
regulation and
government
support
ș Risk that regulatory, legal or contractual
change in the general structure of electricity
network charging regime or basis of
use leads to increased costs for FGEN’s
renewable energy projects or lower
revenues than forecast, negatively impacting
cash flow and portfolio valuation (with
energy market reform in the UK as the most
acute risk at present).
ș FGEN is required to comply with certain
regulations, being a Guernsey company
listed on the London Stock Exchange
(“LSE”), including those under the Alternative
Investment Fund Managers Directive
(“AIFMD”) and the Foreign Account Tax
Compliance Act (“FATCA”). There is a risk
that failure to comply with any of the
relevant rules could result in a negative
reputational or financial impact on the
Company.
ș The newly emerging area of climate-related
disclosures is changing rapidly as
understanding of what constitutes best
practice evolves. There is a risk that FGEN
fails to disclose properly against the new
requirements or that investors consider
disclosures to be insufficient.
ș Cultivating links with trade bodies and
relevant government departments in order
to keep abreast of proposed regulatory
changes and lobby for the Fund’s interests.
ș Maintaining a diversified portfolio so
no one set of regulatory risks related
to a single technology predominates,
alongside scenario planning to inform the
Risk Committee on potential impact or
likelihoodchanges.
ș The Investment Manager engages with
specialist consultants to assist with
developing forecasts reflecting changing
network regulations.
ș Through Foresight's comprehensive
compliance monitoring programme, FGEN
ensures that it remains well informed as
to the legislation, regulation and guidance
relevant to both the Company itself as well
as the project entities in which it invests.
ș The Board monitors compliance information
provided by the Administrator, Company
Secretary, Investment Manager and legal
counsel and monitors ongoing compliance
developments relevant to a Guernsey
company listed on the LSE.
Medium
Risks and risk management continued
Change in year:
Increased Decreased No change
Fund objectives:
Potential for
capital growth
Diversification across sectors
and geographies for a more
robust, risk-adjusted return
Long-term predictable income
growth for shareholders
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Additional information
Risk
type
Change
inyear Potential impact Mitigations Controls
Link to Fund
objectives
Residual
risk
5
Reputational
ș Risk that something occurs that is perceived
by investors or other market participants to
damage FGEN’s reputation, such that they
do not wish to do business with FGEN.
ș FGEN’s activities span a range of
environmental infrastructure sectors with
multiple touchpoints with local stakeholders,
regulators, contractual counterparties,
local communities and other parties who
are active in the areas in which FGEN
operates. As FGEN grows and its operations
become more complex, the risk that FGEN
is considered to have acted improperly
increases, leading to reputational damage
and investors avoiding the Company’s
shares.
ș FGEN aims to conduct its business in
accordance with ESG principles and is
public in this aim. The ESG landscape is
changing rapidly and there is increased
scrutiny of businesses’ claims in this area.
FGEN could suffer reputational damage if it
is considered to be “greenwashing” or falling
short of ESG standards, leading to investors
avoiding the Company’s shares.
ș FGEN engages its own PR advisers, who
would be able to assist in the event of risk
to reputation. It will also need to consider
the possibility of reputational events
occurring that effect the Foresight brand.
ș The FGEN Investment Committee also has
responsibility for approving investments
where risk to reputation is a possibility.
ș On sustainability matters, the Company is
advised by the Investment Manager and
where appropriate it is advised by external
consultants with specific expertise.
ș Regular monitoring of news sources is
conducted by the Foresight marketing team
to identify and address potential issues.
ș As a regulated entity, the Investment
Manager conducts specific training on
anti-greenwashing and adherence to the
FCA Handbook for its relevant employees.
High
Risks and risk management continued
Change in year:
Increased Decreased No change
Fund objectives:
Potential for
capital growth
Diversification across sectors
and geographies for a more
robust, risk-adjusted return
Long-term predictable income
growth for shareholders
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Additional information
Risk
type
Change
inyear Potential impact Mitigations Controls
Link to Fund
objectives
Residual
risk
Operational, business, processes and resourcing
6
Ramp-up risk
ș The three growth assets in the FGEN
portfolio, i.e. Rjukan, CNG and the
Glasshouse, are all in various stages of
ramp-up, with Rjukan targeting first harvest
in the summer, CNG further station rollouts
and higher volumes of dispensed gas, and
the Glasshouse further sales and market
penetration.
ș There is a risk that the operational and
sales ramp-up across the assets does not
progress as envisaged due to issues such as
delays in timing, technical issues, production
volumes being lower than forecast, infection
risk, pricing and sales volumes.
ș Use of suitably experienced contractors.
ș Conservative modelling assumptions with
respect to pricing and ramp-up periods,
including short-term liquidity monitoring.
ș Regular monitoring and oversight of
management team for early identification
ofissues.
ș The approval of project directors is required
for all activities, meaning that there is
constant oversight and early flagging of any
potential risks.
ș The Foresight Portfolio Oversight Committee
and the FGEN Risk Committee are kept
appraised of all such potential risks, and
ensure that the appropriate processes are
in place for comprehensive monitoring, and
application of mitigations.
Medium
Risks and risk management continued
Change in year:
Increased Decreased No change
Fund objectives:
Potential for
capital growth
Diversification across sectors
and geographies for a more
robust, risk-adjusted return
Long-term predictable income
growth for shareholders
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Additional information
Risk
type
Change
inyear Potential impact Mitigations Controls
Link to Fund
objectives
Residual
risk
7
Asset
exposure
to weather
resource
ș By the very nature of wind, solar and
water-related environmental infrastructure
projects, their financial performance is
dependent on the volume of weather
resource available over time, whether
measured through wind speeds, irradiance
or millimetres of rainfall. These are factors
outside the control of FGEN or the projects
themselves, with the risk of a significant
effect on performance if the outcome is
significantly different from the assumptions
made in forecasting revenue and costs and
hence returns to FGEN.
ș For renewable energy projects there is a
degree of protection from this variability
in weather resource from portfolio
diversification, as solar is more productive
in the summer and wind more productive
in the winter, with the absolute level of
resource being weakly negatively correlated.
ș On all projects, technical consultants are
employed to advise on the assumptions
which should be made regarding volume
and its impact on performance for each
individual asset.
ș Risks in this area diminish over time as
operational track record provides a stronger
base for forecasts than consultants’
estimates.
ș The Investment Manager periodically
reviews the performance of the asset and
adjusts assumptions where necessary.
ș Foresight’s Valuation Committee meets
quarterly to assess the valuation of the
Company, as prepared by the finance
and valuations teams, which includes
assessment of the discount rates.
ș This valuation is then reviewed and signed
off by the FGEN Board at quarterly valuation
meetings that inform the Company’s NAV
updates, as well as an annual review by
PwC.
ș Foresight Investment Committee (for project
financing approach); FGEN Investment
Committee.
High
8
Climate
change –
physical risk
ș Climate-related physical risks are related
to the potential physical impacts of both
acute (extreme) weather events and chronic
changes to climate patterns.
ș This risk has the potential to impact FGEN’s
assets, which could impact portfolio returns.
ș The risk is mitigated in part by owning a
portfolio that is diversified by location,
technology, resource use and revenue
make-up.
ș Further information on mitigants is provided
in the Sustainability and ESG report on
page87.
ș Climate-related risks are monitored by the
Investment Manager and reported to the
ESG Committee and Risk Committee.
ș Disaster recovery planning is in place for
loss of systems in the event of severe
physical risks occurring.
Medium
Risks and risk management continued
Change in year:
Increased Decreased No change
Fund objectives:
Potential for
capital growth
Diversification across sectors
and geographies for a more
robust, risk-adjusted return
Long-term predictable income
growth for shareholders
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Additional information
Risk
type
Change
inyear Potential impact Mitigations Controls
Link to Fund
objectives
Residual
risk
9
Volume
and cost of
feedstock
resource
ș For environmental infrastructure assets
that need to source feedstock or analogous
resources, there are risks associated with
the volume of feedstock available and the
costs or revenues associated with it. If
sufficient feedstock is not available for an
asset to operate at its optimum level, or
feedstock is only available at a cost that is
more expensive than the investment case,
then FGEN’s returns can be materially
affected.
ș The feedstock assumptions used for
valuations are based on recent experience
and the views of dedicated staff who are
active in those markets.
ș The assets in FGEN’s portfolio that rely
on supplies of feedstock benefit from
dedicated staff (whether employed by
service providers or directly by the asset)
who work to source suitable feedstock at
the best price available.
ș For agri-anaerobic digestion sites, it is
common to agree feedstock contracts that
adjust for the dry matter content in the
biomaterial and relate pricing to that energy
content and volume which is delivered.
Should a shortfall of a particular feedstock
be likely, for instance due to a poor harvest,
substitute feedstocks are widely available.
ș The Foresight Valuation Committee will
approve assumptions used in the valuation
and the FGEN Board has ultimate authority
over the portfolio valuation. PwC also
independently reviews.
Medium
10
Cyber risk
ș There exists a threat of cyber attack in
which a hacker or computer virus may
attempt to access the IT systems of
Foresight Group, the Investment Manager,
the Administrator or one of the project
companies and attempt to destroy or use
the data for malicious purposes. While
FGEN considers that it is unlikely to be the
deliberate target of a cyber attack, there is
the possibility that it could be targeted as
part of a random or general act.
ș FGEN and the project SPVs' information
technology providers have procedures in
place to mitigate cyber attacks and data is
separately stored on multiple servers which
is backed up regularly.
ș A service provider has been engaged to
provide enhanced cyber security for the
wind portfolio including monitoring of all
internet traffic into the wind sites. This
is now being rolled out to the rest of the
portfolio.
ș FGEN has no dedicated IT systems and
it relies on those of its service providers,
principally the Investment Manager and
Administrator, which have procedures in
place to mitigate cyber attacks and have
robust business continuity plans in place.
ș Project SPV providers have in place
business continuity plans.
Medium
Risks and risk management continued
Change in year:
Increased Decreased No change
Fund objectives:
Potential for
capital growth
Diversification across sectors
and geographies for a more
robust, risk-adjusted return
Long-term predictable income
growth for shareholders
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Risks and risk management continued
Risk
type
Change
inyear Potential impact Mitigations Controls
Link to Fund
objectives
Residual
risk
11
Exposure to
market power
prices
ș The revenues of the renewable energy-
generating assets are dependent to some
extent on the market price of electricity
and natural gas, which is out of the control
of FGEN. There is a risk that the actual
prices received vary significantly from the
model assumptions, leading to a shortfall in
anticipated revenues to FGEN.
ș The Company has introduced battery
storage assets into the portfolio. These
assets also earn revenues that are
determined by electricity markets, although
the business model is more complex than
for generators such as wind and solar
assets.
ș The risk of exposure to variations in
electricity and gas prices from assumptions
made is mitigated by FGEN in the following
ways: i) short-term PPAs are used to fix
electricity and gas prices for between one
and three years ahead depending on market
conditions and many have floor prices;
ii)forward prices based on market rates
are used for the first two years where no
fix is in place; and iii) quarterly reports from
independent established market consultants
are used to inform the electricity prices
over the longer term used in the financial
models. FGEN blends forecasts from three
consultants to reduce volatility in assumed
prices from period to period.
ș FGEN invests in a diversified portfolio of
environmental infrastructure assets that
earn revenues that do not depend on
merchant power sales. At the year end,
72% of the portfolio’s underlying lifetime
revenues, on an NPV basis, were not related
to sales of merchant power.
ș Foresight’s Valuation Committee meets
quarterly to assess the valuation of the
Company, as prepared by the finance
and valuations teams, which includes
assessment of the power price assumptions.
This valuation is then reviewed and signed
off by the FGEN Board at quarterly valuation
meetings that inform the Company’s NAV
updates, and independently reviewed by
PwC.
Very high
12
Construction
and
development
issues
ș Projects in the pre-construction or
construction stages are subject to risks
associated with the underestimation of the
time or costs involved in bringing the project
to operations. Projects may also not operate
as well in practice as was assumed in the
investment case.
ș Given the progression of the
construction–stage assets in the portfolio,
this risk is now decreased compared to
the previous period, but it continues to be
monitored. There are no development-stage
assets currently in the portfolio.
ș The Investment Manager conducts due
diligence by suitable external consultants
on material aspects of the project, including,
but not limited to, market, regulatory
environment, land and permits, and
construction programme.
ș Portfolio diversification: at the year end,
only 8% of the portfolio was invested in
construction and development-stage assets.
ș The Foresight Investment Committee and
the FGEN Investment Committee assess
the opportunity, including the findings from
and the adequacy of the due diligence
programme, prior to committing funds.
ș Ongoing monitoring of the project by the
Investment Manager, including potential
delays and cost overruns as part of its
Portfolio Oversight Committee.
Medium
Change in year:
Increased Decreased No change
Fund objectives:
Potential for
capital growth
Diversification across sectors
and geographies for a more
robust, risk-adjusted return
Long-term predictable income
growth for shareholders
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Risks and risk management continued
Risk
type
Change
inyear Potential impact Mitigations Controls
Link to Fund
objectives
Residual
risk
13
Operational
risks
ș There is a risk that a health and safety
event at an FGEN-owned site could lead
to increased costs to prevent further
occurrences and loss in revenue. FGEN’s
reputation could be adversely affected by
publicity generated by a health and safety
event.
ș There is a risk that poor performance
by sub-contractors, or in the event of
having to replace a sub-contractor, that a
replacement may only be found at a higher
cost, could adversely affect project cash
flows.
ș In the event of a single project suffering
from a material issue, distributions to the
Fund could possibly be impacted absolutely
or for a period of time whilst the issue is
resolved. This includes grid outages and
constraints resulting in a project being
unable to export power and earn associated
revenues.
ș The concession-based assets are
approaching handback, with the risk of
unbudgeted costs needed to meet the
required standards of the third party.
ș Assets are monitored by the Investment
Manager to address risks as they are
identified.
ș The use of a diverse range of service
providers supplying management,
operational and maintenance services
ensures any failure of a single service
provider has a minimal impact. This risk
is mitigated in part by the diversification
represented by FGEN’s portfolio of assets.
ș The portfolio has material damage and
business interruption insurance policies
in place to cover against potential losses,
although these do not typically cover
grid outages. Asset managers mitigate the
impact of this by maintaining a dialogue with
network operators and influencing them as
to when such outages occur.
ș The Board has a regime in place overseen
by the Audit Committee, which provides the
necessary comfort that the internal control
systems at the Investment Manager, the
Administrator and the operating companies
are effective.
ș Each project asset has health and safety
policies overseen by its board of directors,
with health and safety a standing agenda
item. RIDDOR reports are reviewed at every
board meeting, and independent specialists
conduct regular audits.
ș Foresight’s Valuation Committee meets
quarterly to assess the valuation of the
Company, as prepared by the finance
and valuations teams; which includes
assessment of the valuation impact of a
component failure. This valuation is then
reviewed and signed off by the FGEN
Board at quarterly valuation meetings that
inform the Company’s NAV updates, with
independent review from PwC.
Low
Change in year:
Increased Decreased No change
Fund objectives:
Potential for
capital growth
Diversification across sectors
and geographies for a more
robust, risk-adjusted return
Long-term predictable income
growth for shareholders
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Additional information
Whilst directly applicable only to companies incorporated in
the UK, the Board recognises the intention of the AIC Code
that matters set out in Section 172 of the Companies Act
2006 are reported upon. The Board strives to understand
the views of the Company’s key stakeholders and to take
these into consideration as part of its discussions and
decision-making process.
As an investment company, the Company does not have
any direct employees and conducts its core activities
through third-party service providers. Each provider has an
established track record and through regulatory oversight is
required to have in place suitable policies and procedures to
ensure they maintain high standards of business conduct, and
employ corporate governance best practice.
The Board strongly believes that fostering healthy
and constructive relationships with its broad range of
stakeholders and taking into consideration their respective
interests as part of its decision-making process should result
in increased shareholder value over the long term.
FGEN’s principal stakeholders comprise of shareholders,
the Investment Manager, commercial service providers,
asset-level counterparties, local communities and debt
providers. Pages 67 to 69 explain why and how the Company
engages with these stakeholders and the actions taken by it
to ensure their interests are understood and considered in
the Board’s strategic decision-making. These relationships are
considered fundamental to the Company’s sustainability and
are monitored carefully by the Board.
FGEN recognises that community engagement at our
sites is an ongoing process and that at times problems
can arise before we can address them; however, it is our
stated objective to develop positive relationships with the
communities in which we operate.
Continually improving our communications, complaints
handling processes and access to relevant information for
local residents is a priority. These goals have formed part of
our ESG metrics. More information can be found on page 102.
Section 172
The considerations and activities undertaken by the Directors
in complying with Section 172(1), (a) to (f), the stakeholder
groups concerned and how the Directors have formed their
opinion are set out below.
The Board’s annual cycle includes not less than four
scheduled meetings between the Board and the Investment
Manager where the agenda includes updates on matters
relevant to items (a) to (f). The reports provided support
the decisions taken to meet the objectives for each of the
foregoing sections. Supplementing the quarterly meeting
schedule are twice-monthly operational meetings between
the Board, the Investment Manager and relevant portfolio
managers.
The Risk Committee receives a quarterly report on the
Company’s key counterparty exposures, and relationships
with the Company’s suppliers, customers and others forms
part of the quarterly operational review provided to the
Board. A separate agenda item is dedicated each quarter to
matters concerning shareholder engagement and sentiment,
corporate broking activity, investor profile and media
engagement.
The investment vetting process adopted by the Investment
Manager in conjunction with the Risk Committee’s oversight
of the risk management framework ensures consideration is
given to items relevant to the Section 172 statement.
Stakeholder groups typically interface with the Company
through the Investment Manager, corporate broker or the
Company Secretary. Each are responsible for communicating
stakeholder concerns and receiving Board input on the
actions proposed to achieve a positive outcome through
effective engagement. Stakeholder engagement is a standing
agenda item and is considered by the Directors at each ESG
Committee meeting.
Annually, the Board meets with the Investment Manager and
other key advisers to review the strategic position of the
Company, to consider the longer-term factors relevant to the
Board’s decision-making and how such factors may affect
the communities and the local environments in which the
Company operates.
Stakeholder engagement
The Board is committed to promoting the long-term sustainable success of the Company
whilstconductingbusinessina fair, ethical and transparent manner.
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Stakeholder engagement continued
Section 172 Commentary
Long-term decisions The Board considers the likely long-term consequences on all stakeholders as a routine part of its decision-making process. In addition, learning gained over the life
of the Company provides evidence on which the effectiveness of past decisions can be assessed and is considered as part of the annual strategy day.
Please see page 17 for the investment objectives and business model.
Interests of employees As an investment company, at a corporate level, the Company does not have any direct employees. However, certain underlying projects of the Company do have
employees and their interests are managed at Board level by the respective project company and by third-party asset-level counterparties.
Please see page 102 – governance KPIs.
Fostering relationships
with suppliers, customers
and others
The Board believes that building effective business relationships with suppliers, customers and other key counterparties is crucial to preserving long-term
shareholder value.
Excluding the Investment Manager, at the corporate level, these stakeholders include the Administrator and Company Secretary, corporate broker, legal counsel,
public relations agency, the auditor and tax advisers and banks. At the operational level, this includes asset-level counterparties, local communities and debt
providers.
Please see page 68 – stakeholder engagement.
Acting fairly between
Company members
Each decision taken by the Board considers the interests of shareholders as a whole and safeguards are in place to manage conflicts of interest appropriately when
they arise.
Please see page 67 – stakeholder engagement, and page 124 – relations with shareholders.
Impact on the community
and environment
This topic is extensively covered in the Company’s Sustainability and ESG report released annually.
Please see page 69 – stakeholder engagement, and pages 75 to 109 – sustainability and ESG.
Maintaining high
standards of business
conduct
The Board strives to meet or exceed the standards expected of a public company owning and investing in renewable infrastructure assets. Examples include the
development of the Company’s ESG KPIs, implementing an ESG-linked revolving credit facility and adopting the formation of a dedicated ESG Committee and
reporting against the TCFD requirements.
Please see pages 75 to 109 – sustainability and ESG.
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Stakeholder engagement continued
Shareholders Investment Manager
Providers of equity finance and recipients of income distributions.
63
meetings attended with institutional shareholders
Key stakeholders
ș Retail investors
ș Institutional investors
ș Private client and wealth managers
ș Investor platforms
ș Pensions and insurance providers
ș Proxy voting agencies
Key strategic decisions impacting stakeholder group during period
ș Dividend target increased by 2.1% to 7.96 pence per share for the financial year to 31 March 2026,
inline with investment objective
ș Successfully disposed of 10%
1
of the portfolio; proceeds were used to reduce gearing to below 30%
ș Active discount control through the share buyback programme – £19.2 million returned to
shareholders from 30 August 2024 to 31 March 2025
Key counterparty responsible for delivering the Board’s strategy.
81
site visits by the Investment Manager
Key stakeholders
ș Foresight Group
ș Foresight Group employees
Key strategic decisions impacting stakeholder group during period
ș Determination that the Investment Manager maintains a robust internal control environment
ș Confirming the continued appropriateness of the Investment Manager’s delegated authority to take
investment decisions
ș Proposed reduction in investment management fee, calculated 50% based on NAV and 50% on market
capitalisation, which will result in an annual cost saving of over £800,000
ș Effectively managed the renaming and rebranding of the Company following shareholder approval at
the 2024 AGM
1. Asset sales of £89.1 million completed during the year, compared to an opening portfolio valuation of £891.9 million.
How has FGEN communicated and engaged?
ș AGM, investor roadshows and conferences
arranged
ș 1:1 meetings with the Investment Manager,
Chair and Senior Independent Director
ș The Investment Manager arranged a site visit
for investors, analysts and debt providers to
FGEN’s Glasshouse agriculture facility in March
2025 – see case study on page 70
ș Responding to investors’ queries on financial,
strategic and ESG topics and completion of
due diligence documentation
ș Quarterly financial updates, Annual
Report, Sustainability and ESG report, RNS
announcements and quarterly factsheets
ș Dedicated FGEN website
ș Views and feedback sought from institutional
shareholders via corporate broker
ș Investor research notes produced by
QuotedData and frequent articles across
traditional print and social media
How has FGEN communicated and engaged?
ș Quarterly Board meetings in Guernsey and via
video conference
ș Holding of an annual strategy day, with input
from and engagement with key personnel
from the Investment Manager to monitor and
assess FGEN’s strategic position within the
environmental infrastructure market
ș Comprehensive assessment of contractual
relationship with the Investment Manager and
their performance
ș Monitoring the effectiveness of the parameters
for delegated authority to take investment
decisions
ș Regular meetings with the Investment Manager
to discuss operational matters and investment
opportunities under consideration
ș Liaising with the Investment Manager in relation
to the discontinuation vote
ș Liaising with the Investment Manager in relation
to the internal controls arrangements of the
Investment Manager
ș Arranging of a site visit for stakeholders to
FGEN’s Glasshouse agriculture facility
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Stakeholder engagement continued
Commercial service providers Asset-level counterparties
Providers of essential business support services.
11
average years of service
Key stakeholders
ș Administrator and Company Secretary
ș Corporate broker
ș Legal advisers
ș Public relations agency
ș Auditor and tax advisers
ș Independent valuation specialists
Key strategic decisions impacting stakeholder group during period
ș Key service providers retained, providing continuity of service and familiarity with the objectives of
the Company
ș Appointment of specialist financial public relations agency to provide support to the Board with the
delivery of its refocused investment strategy
Asset-level technical and operational management service providers.
32
number of O&M and MSA providers
Key stakeholders
ș Operations and maintenance (“O&M”)
contractors
ș External management services (“MSA”)
providers
ș Supply chain counterparties
ș Landowners
Key strategic decisions impacting stakeholder group during period
ș Following a comprehensive tender process, a new asset manager was appointed at eight of the solar
sites in the financial year, with the remaining two due to move across in July 2025
ș A new technical asset manager was appointed on 10 of the wind assets. Both changes serve to
validate the Investment Manager’s pricing assumptions
How has FGEN communicated and engaged?
ș Regular scheduled update calls as well as
specific interactions on corporate actions and
portfolio acquisitions
ș Collaboration with multiple service providers
in publication of annual and interim reports
ș Annual service provider performance review
ș Consulting on regulatory, governance,
accounting and taxation matters
ș Engaging and liaising on internal control
environment of the Administrator and
Company Secretary
ș Receiving a specific update from the
Company’s independent valuation specialists
on the state of the market
ș Regular meetings with financial public relations
agency and Foresight’s marketing department
to develop tactics to increase engagement
with retail investors and the media, build brand
awareness and enhance FGEN’s reputation in
the market
How has FGEN communicated and engaged?
ș Regular update calls between the Investment
Manager and O&M and MSA providers
to ensure adequate oversight of portfolio
operations
ș Focused engagement on value enhancement
opportunities, including rationalisation of
service provision for cost savings and/or
improved services
ș Increased scrutiny of, and resource allocation
to, emerging risks identified
ș Increased emphasis on the internal control
framework, to ensure that controls are both
robust and effective
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Stakeholder engagement continued
Local communities Debt providers
Members of society living in proximity to an asset of the Company, where the
operations of that asset may have an impact, whether positive or negative.
£587,440
community contributions made
Key stakeholders
ș Local authorities and agencies
ș Community funds
ș Landowners
ș Local environment
ș Local residents
Key strategic decisions impacting stakeholder group during period
ș FGEN donated £587,440 to local community funds over the period, helping to address local needs
and promote long-term sustainable and prosperous communities
Providers of long-term debt to finance assets within the portfolio. Providers of
short to medium-term debt facilities (RCF) to finance the acquisition of investment
opportunities.
14
number of lenders to the Company and portfolio SPVs
Key stakeholders
ș Banks
ș Lenders
ș RCF agent
Key strategic decisions impacting stakeholder group during period
ș Debt remained a key component of the funding strategy. In line with the Company’s stated approach
to capital allocation, FGEN continues to maintain one of the lowest levels of gearing in the sector
ș As at 31 March 2025 total gearing was 28.7%, with the size of the Company’s revolving credit facility
(“RCF”) reduced from £200 million to £150 million, providing annual cost savings of £0.4 million
How has FGEN communicated and engaged?
ș Frequent engagement with local authorities
and other regulators to ensure safe and
compliant operation of our assets
ș Actively engaged with local authorities on
construction planning and obtaining necessary
planning permissions
ș Regular interaction between the owners of
land on which our assets operate and the
Investment Manager’s asset management team
ș Several community outreach programmes took
place during the year to support and educate
stakeholder groups. See the case studies in the
Sustainability and ESG report on pages 91 and
109 for more information
How has FGEN communicated and engaged?
ș Regular updates provided on covenant
compliance and current positioning
ș A number of debt providers, together with
investors and analysts, attended a site visit to
FGEN’s Glasshouse agriculture facility learn
more about the asset’s operations and future
performance expectations
ș FGEN regularly engages with its lenders on
sustainability targets and, as such, the RCF
has achieved Sustainability Linked Loan
status under the Loan Market Association
sustainability provisions
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[•]
[•]
In March 2025, a select group of investors, analysts and
debt providers were invited to visit FGEN’s state-of-the-art,
carbon-negative glasshouse investment, an innovative
partnership with Glass Pharms, a UK-based licensed
cultivator of cannabis exclusively for the medical supply
chain.
The facility’s journey began as a unique co-location
opportunity to capture and monetise otherwise wasted heat
and power generated by one of FGEN’s bioenergy assets,
and only 13 months after shovels hit the ground, the first
plants were in place and growing fast.
Since then, the controlled environment glasshouse facility
has continued to flourish and has become an important
standalone investment in its own right, becoming the
UK’s first commercial grower of the heavily regulated
tetrahydrocannabinol (“THC”) flower for medical use under
strict Home Office licence provisions.
The site visit aimed to introduce delegates to medicinal
cannabis cultivation, offering insight into the operations,
sustainability initiatives, whilst also exploring the broader UK
medicinal cannabis industry and future growth prospects of
the asset.
Following a presentation by the Glass Pharms management
team, delegates were taken on a guided walkabout tour
of the facility where they were introduced to the talented
growing team. The team showcased the advanced cultivation
techniques, including the use of AI systems that continuously
optimise growing conditions. This continuous cultivation
system uses automation to take the plants on a 12-week
journey through various climate chambers to create an
accelerated simulation of a growing year. This innovative
environment uses about 40% of the power compared to
traditional indoor growing facilities and is powered by off-grid
green energy from the adjacent bioenergy facility, making
the Glasshouse one of the most energy-efficient horticultural
facilities in the UK.
The site visit offered delegates a unique opportunity to gain
a deeper, more nuanced understanding of the asset and its
potential. It provided valuable insight into the expertise of
the management team, the quality of the operations and the
sustainability benefits.
The Investment Manager and the Board believe that as global
demand for cannabis-based medicines grows, the investment
is well positioned to generate both revenue and capital
growth in FGEN’s portfolio.
Stakeholder engagement continued
Case study
Glasshouse site visit
Stakeholders considered: Shareholders Asset-level counterparties Debt providers
Glasshouse site visit
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FGEN defines environmental infrastructure as infrastructure
assets, projects and asset-backed businesses that utilise
natural or waste resources or support more environmentally
friendly approaches to economic activity, support the
transition to a low-carbon economy or which mitigate the
effects of climate change.
Environmental infrastructure that the Company invests in
typically has one or more of the following characteristics:
ș they have the benefit of long-term, predictable cash flows,
which may be wholly or partially inflation-linked; and/or
ș they are supported by long-term contracts or stable and
well-proven regulatory and legal frameworks; and/or
ș they feature well-established technologies and
demonstrable operational performance.
The Company will invest in environmental infrastructure
either directly or through holding or other structures that
give the Company an investment exposure to environmental
infrastructure. The Company’s investment interests in
environmental infrastructure may include partnership equity,
partnership loans, membership interests, share capital, trust
units, shareholder loans and/or debt interests in or to project
entities or any other entities or undertakings in which the
Company invests or may invest.
Whilst there are no restrictions on the amount of the
Company’s assets that may be invested in any individual
type of environmental infrastructure, the Company will,
over the long term, seek to invest in a diversified spread of
investments both geographically (although the UK will always
represent a minimum of 50% of the portfolio by value) and
across different types of environmental infrastructure in order
to achieve a broad spread of risk in the Company’s portfolio.
Whilst the Company invests predominantly in operational
assets, it may also invest in environmental infrastructure
which is in its construction or development phase, which
includes investment in developers of environmental
infrastructure or development funding structures relating to
environmental infrastructure.
The Company will also ensure that its investment portfolio
comprises a minimum of five investments at any given time,
save that this requirement shall not apply when the Company
is being wound up or dissolved.
As technologies and the markets in which they contract into
develop and become established, future investments may
differ from those currently within the portfolio. These assets
may incorporate new technologies that have a demonstrable
track record or traditional infrastructure projects with
features such as greater exposure to merchant markets in
feedstock or by-products.
Investment restrictions
With the objective of achieving a spread of risk, the following
investment restrictions will apply to the acquisition of
investment interests in the portfolio:
ș the substantial majority of investments in the portfolio
by value and number will be operational. The Company
will not acquire investment interests in any investment
if, as a result of such investment: (i) 5% or more of the
NAV is attributable to environmental infrastructure in
the development phase (including in developers or
development funding structures); or (ii) 25% or more
of the NAV is attributable to projects that are either
in the development phase (including in developers or
development funding structures) or are in construction and
are not yet fully operational;
ș at least 50% of the portfolio (by value) will be based in
the UK and the Company will only invest in environmental
infrastructure located in the UK, member states of the
European Union or OECD countries and, accordingly, the
Company will not make any investment if, as a result of
such investment, more than 50% of the NAV immediately
post-acquisition would be attributable to investments that
are not based in the UK; and
ș it is intended that interests in any single investment
acquired will not have an acquisition price (aggregated
with the value of any existing investment in the relevant
project, asset or business if relevant) greater than 25% of
the NAV immediately post-acquisition. In no circumstances
will a new acquisition exceed a maximum limit of 30% of
the NAV immediately post-acquisition.
Investment policy
The Company seeks to achieve its objectives by investing in a diversified portfolio of environmental infrastructure.
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Borrowing and gearing
The Company intends to make use of short-term debt
financing to facilitate the acquisition of investments (either by
itself or by one of its subsidiaries). Borrowing may be secured
against the assets comprising the portfolio. It is intended that
such debt will be repaid periodically by the raising of new
equity finance by the Company. The level of such debt is
limited to 30% of the Company’s Net Asset Value immediately
after the acquisition of any further investment. Such debt
will not include (and will be subordinate to) any project-level
gearing or borrowings by assets or businesses in which
the Company may invest which shall be in addition to any
borrowing at Company level.
The Company may acquire investment interests in respect of
projects that have non-recourse project finance in place at
the project entity level. The Company will target aggregate
non-recourse financing attributable to renewable energy
generation projects not exceeding 65% of the aggregate
gross project value of such projects. The Company will target
aggregate non-recourse financing attributable to projects
structured as PFI/PPP projects not exceeding 85% of the
aggregate gross project value of such projects. The Company
will not invest in any project that would cause the Company
to be in breach of the targeted limits set out in this paragraph
if the Directors do not reasonably believe that the relevant
target leverage limit can be achieved within six months of the
date of investment in that project.
It is therefore possible that the Company may exceed the
targeted gearing limits set out in this paragraph, but only in
circumstances where the Directors reasonably believe that
such breach can be cured (by achieving the relevant target
leverage limit) within six months of the date of investment in
the relevant project.
Hedging
Where investments are made in currencies other than
pounds sterling, the Company will consider whether to hedge
currency risk in accordance with the Company’s currency
and hedging policy as determined from time to time by the
Directors. Interest rate hedging may be carried out to provide
protection against increasing costs of servicing debt drawn
down by the Company to finance investments.
This may involve the use of interest rate derivatives and
similar derivative instruments. Hedging against inflation may
also be carried out where appropriate and this may involve
the use of RPI swaps and similar derivative instruments. The
currency, interest rate and any inflationary hedging policies
will be reviewed by the Directors on a regular basis to ensure
that the risks associated with movements in foreign exchange
rates, interest rates and inflation are being appropriately
managed.
Any hedging transactions (if carried out) will only be
undertaken for the purpose of efficient portfolio management
to enhance returns from the portfolio and will not be carried
out for speculative purposes. The execution of hedging
transactions is at the discretion of the Investment Manager,
subject to the policies set by, and the overall supervision of,
the Directors.
Cash balances
Pending reinvestment or distribution of cash receipts or
repayments of any outstanding indebtedness, cash received
by the Company will be invested in cash, cash equivalents,
near-cash instruments, money market instruments and
money market funds and cash funds. The Company may also
hold derivative or other financial instruments designed for
efficient portfolio management or to hedge interest, inflation
or currency rate risks. The Company and any other member
of the Group may also lend cash which it holds as part of its
cash management policy.
Origination of further investments
Each of the investments comprising the portfolio comply with
the Company’s investment policy and further investments
will only be acquired if they comply with the Company’s
investment policy.
Subject to due diligence and agreement on price, the
Company will seek to acquire those investments that fit
the investment objectives and investment policy of the
Company. If, in the opinion of the Investment Manager, the
risk characteristics, valuation and price of the prospective
investment are acceptable and consistent with the
Company’s investment objective and investment policy,
then (subject to the Company having sufficient sources of
capital and, in respect of certain transactions, the approval
of Directors) an offer will be made (without seeking the prior
approval of shareholders) and, if successful, the investment
will be acquired by the Company.
The Investment Manager will be subject to the overall
supervision of the Board, all of whom are independent of the
Investment Manager.
Investment policy continued
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Amendments to and compliance with the
investment policy
Material changes to the investment policy of the Company
may only be made in accordance with the approval of the
shareholders by way of ordinary resolution and (for so long
as the ordinary shares are listed on the official list maintained
by the Financial Conduct Authority) in accordance with the
Listing Rules. Minor changes to the investment policy must be
approved by the Directors.
The investment restrictions detailed above apply at the time
of the acquisition of investment interests and the values of
existing investment interests shall be as at the date of the
most recently published NAV of the Fund, unless the Directors
believe that such valuation materially misrepresents the value
of the Company’s investment interests at the time of the
relevant acquisition. The Fund will not be required to dispose
of investment interests and to rebalance its portfolio as a
result of a change in the respective valuations of investment
interests.
Potential disposal of investments
Whilst the Investment Manager may elect to retain investment
interests in the portfolio of investments that the Company
acquires, and any other further investments made by the
Company over the long term, the Investment Manager
will regularly monitor the valuations of such investments
and any secondary market opportunities to dispose of
investments. The Investment Manager only intends to dispose
of investments where it considers that appropriate value can
be realised for the Company or where it otherwise believes
that it is appropriate to do so. Proceeds from the disposal
of investments may be reinvested or distributed at the
discretion of the Directors.
Investment policy continued
ELWA waste management site
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In this section:
ESG Committee Chair’s foreword 75
At a glance 76
Governance 78
Strategy 82
Risk management 92
Metrics and targets 99
Sustainability
and ESG
Bilsthorpe wind farm
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“ This year we are proud to
report strong progress across
several key areas of our ESG
agenda.”
Jo Harrison
Chair, ESG Committee
This year has marked a significant step forward in our
environmental, social and governance (“ESG”) journey.
We recognise the value of transparent, credible and
decision-useful sustainability reporting for our stakeholders
and continue to evolve our disclosures with that goal in mind.
We are proud to report strong progress across several key
areas of our ESG agenda.
This year’s reporting has started our process of aligning
with the International Sustainability Standards Board (“ISSB”)
Disclosure Standards, IFRS S1 and S2, which will be central
to global sustainability-related financial disclosures going
forward. In parallel, we have developed a set of voluntary
disclosures under the UK’s Sustainability Disclosure
Requirements (“SDR”), in keeping with our approach of being
anearly adopter of ESG standards.
In a key milestone for the year, we published our first
transition plan in line with the Transition Plan Taskforce
(“TPT”) Disclosure Framework. This plan is a critical part
of our long-term net-zero strategy and underscores both
our leadership and our willingness to contribute to the
development of global best practice. Additionally, the
transition plan is able to be expanded in future to cover
otherstrategic targets, including biodiversity.
Sustainability and ESG
ESG Committee Chair’s foreword
In partnership with environmental geospatial consultancy
Frontierra and supported by a grant from the UK Space
Agency, our Investment Manager developed a nature and
climate reporting platform. FGEN’s portfolio was used
to inform development of the platform, which has been
integrated across all of FGEN’s assets. The platform provides
real-time, location-specific insights into physical climate
risks and nature-related factors, strengthening investment
decisions and supporting long-term value creation. The
insights produced have particular value during due diligence
processes by identifying assets most exposed to physical
risks such as flooding, drought or soil erosion, thereby
supporting proactive mitigation strategies and effective
budget setting.
To enhance the credibility of our ESG data, we have also
commissioned third-party assurance of our core non-financial
metrics, verified to the ISAE 3000 standard, as part of this
reporting cycle. This reflects our commitment to high-quality,
reliable disclosures that support stakeholder trust and
informed decision-making.
Looking ahead, our ambition remains focused and has been
clarified by this year’s transition planning process. Our
strategy is being shaped by our long-term Strategic Ambition:
to be net zero by 2050, to be resilient to the changing climate
and to contribute towards a more sustainable future. We are
confident that the work undertaken this year lays a strong
foundation for further progress and continued leadership in
the years to come.
Jo Harrison
Chair, ESG Committee
23 June 2025
Overview
Strategic report
Governance
Financial statements
Additional information
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At a glance
Publication of FGEN’s transition plan
In FY24/25, FGEN voluntarily published its first transition
plan, prepared in line with the Transition Plan Taskforce
(“TPT”) Disclosure Framework. This transition plan sets out
FGEN’s approach to the low-carbon transition and achieving
its net-zero target. Further information on the process
followed is set out on page 81. In particular, the transition
plan formalises two key areas:
FGEN’s Strategic Ambition
FGEN’s activities are aligned with the transition to a
low-carbon economy by way of investing in a diversified
portfolio of environmental infrastructure, including
infrastructure assets, projects and asset-backed businesses
that utilise natural or waste resources or support more
environmentally sustainable approaches to economic activity.
The TPT Disclosure Framework requires entities to state their
Strategic Ambition and describe how their activities align with,
or promote, that Ambition. The Board of Directors considers
FGEN’s Strategic Ambition to be a complementary driver to
delivering on its investment objectives in an evidenced and
effective manner.
Operational targets
The transition plan formalised a series of operational targets
to facilitate further integration of GHG considerations into
investment and portfolio decision-making. The short-term
targets are shown in the table on page 99, with the full set of
targets set out in the transition plan document, available on
the Company’s website
1
, at pages 19 and 20.
Voluntary publication of SDR disclosures
Although FGEN, as a Guernsey company, does not fall within
the scope of the UK Sustainability Disclosure Requirements
(“SDR”) and investment labels, the Board made the decision
to voluntarily determine an SDR equivalent label and publish
associated disclosure documents. In FY24/25, FGEN finalised
and published the documents that offer equivalence to the
Sustainability Focus label. These disclosures are available
onthe Fund’s website
1
. Further information is set out on
page81.
1. https://www.fgen.com/investors/reports-and-publications.
The Company’s Strategic Ambition states:
“ FGEN’s portfolio of investments will
be net zero by 2050 in line with the
1.5°C Paris Agreement objective,
be resilient to the changing climate
and contribute towards a more
sustainable future.”
Data assurance for ESG metrics
This year, FGEN has obtained third-party assurance to
verify a suite of key sustainability metrics in accordance
with ISAE 3000. In the future, FGEN intends to undertake this
third-party assurance each year to align with best practice in
sustainability disclosure. Further information on FGEN’s data
assurance for FY24/25 is set out on page 104. All metrics
marked with an asterisk from pages 77, 101 to 102 and 106
to 108 have been included in the assessment for limited
assurance.
Developing understanding of nature-related risks
and opportunities
Funded by a grant from the UK Space Agency, the Investment
Manager has worked with a third party, Frontierra, to develop
a platform to understand the portfolio’s interface with
nature, helping to better understand nature-related risks and
opportunities across the portfolio. Further information is set
out on page 95.
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Sustainability and ESG continued
At a glance
Renewable energy generated
1,272* GWh
FY24/25
FY23/24
1,272GWh
1,358GWh
Wastewater treated
34.7* billion litres
FY24/25
FY23/24
34.7 billion litres
40.2 billion litres
Full-time equivalent jobs supported
426
FY24/25
FY23/24
426
467
Waste diverted from landfill
703,470* tonnes
FY24/25
FY23/24
703,470 tonnes
680,825 tonnes
Percentage of fully owned operational UK sites
witha biodiversity management plan in place
84%*
FY24/25
FY23/24
84%
69%
Contributed to community funds
£587,440*
FY24/25
FY23/24
£587,440
£655,076
Sustainability metrics
Awards
FGEN has been shortlisted for a number of awards
this past year:
edie Awards 2024
Sustainability Reporting and Communications
IR Magazine Europe 2024
Best ESG Reporting (small cap)
IR Society Best Practice Awards 2024
Best Communication of Sustainability (mid cap)
Investment Week – Sustainable Investment
Awards2024
Best Sustainable Specialist Fund
2024 Investment Company of the Year Awards
Renewables and Energy Infrastructure
AIC Shareholder Communication Awards 2024
Best ESG Communication
* Metrics marked with an asterisk have been included in the assessment for limited assurance. Further detail on the process is set out on page 104.
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Sustainability and ESG continued
Governance
FGEN’s governance of ESG and climate-related risks and opportunities is formalised through clear communication and information flows between its Board of Directors, ESG Committee and
Investment Manager. Summaries of these information flows are set out below.
Governance Strategy Risk management Metrics andtargets
FGEN Board ESG Committee Investment Manager
FGEN’s Board holds overall responsibility for decision-making in
relation to ESG, including topics such asclimate-related risks and
opportunities, transition planning and the Company’s Strategic
Ambition. Information on FGEN’s Board of Directors can be
found on pages 116 and 117 and on FGEN’s website
1
. The Board
meets quarterly and is advised by the Chairpersons of both the
ESG Committee and Risk Committee at each meeting. Among its
other responsibilities, the Board conducts an annual review of the
performance of the Company’s Investment Manager, as well as
other service providers and professional advisers.
The Board delegates the detail of its ESG oversight to the
ESGCommittee, which holds responsibility for a range of
ESG-related duties in its mandate including, but not limited to:
ș Guiding, supervising and supporting the Investment Manager in
the drafting and periodic review of the Sustainability and ESG
strategy.
ș Overseeing the Company’s ESG strategy and Strategic
Ambition, including key objectives and key performance
indicators (“KPIs”), and working with the Audit Committee to
monitor progress against KPIs.
ș Assessing and prioritising ESG risks and opportunities,
including climate change risks, and liaising with the Risk
Committee to integrate relevant material risks into the
Company’s risk register.
ș Overseeing the selection of any external service providers to
audit the Company’s ESG-related performance.
The ESG Committee Chair is responsible for formally reporting
to the Board after each meeting on all matters within its duties,
including any area where action or improvement is required.
Information on the committee membership can be found on
FGEN’s website
1
.
The FGEN ESG Committee is held as a minimum twice a year, with
the Investment Manager presenting an ESG Committee paper for
their review and consideration. The Committee and the FGEN
Board review performance against the Fund’s ESG objectives, the
stipulated KPIs and other sustainability and ESG metrics.
Decisions made by the ESG Committee and the Board in relation
to ESG strategy are communicated to the Investment Manager,
which integrates these decisions into its management of the Fund,
including transaction decisions and risk management.
FGEN does not have any direct employees and, instead, actively
engages with its Investment Manager, Foresight Group, to deliver
on its ESG commitments. The investment management team is
responsible for overall oversight of the FGEN portfolio.
The Investment Manager role includes a mandate to progress
the sustainability and ESG objectives of the Fund, including the
Strategic Ambition, as well as to identify, assess and manage
ESG and climate-related risks and opportunities. The Investment
Manager’s Portfolio Lead for the Company is responsible for both
ensuring that appropriate governance and policies are in place
across the portfolio of assets, and for tracking the ESG KPIs, which
include carbon metrics. Further information on the Investment
Manager’s skills and experience can be found on pages 9 to 11.
The Investment Manager’s management team works directly with,
and is advised by, Foresight Group’s sustainability team, which
comprises sustainability professionals who hold responsibility
for ESG and sustainability across Foresight Group. Further
information on the sustainability team can be found on Foresight’s
website
2
.
The Investment Manager’s management team, Portfolio Lead and
members of the Sustainability team attend the ESG Committee
meetings to report on progress against FGEN’s stated ESG
objectives (including the Strategic Ambition). Any initiatives to
better the performance and responsible management of assets
are agreed in those committee meetings.
1. https://www.fgen.com/about-us/people.
2. https://www.foresight.group/about-us/people.
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Governance
Training could include updates and information on subjects such as regulation and policy changes, climate science and
developments in specific sectors. In FY24/25, the focus was on transition planning and the Board of Directors received training
onthe TPT Disclosure Requirements to launch the development of FGEN’s transition plan.
Sustainability-linked objectives
Entity Sustainability-linked objectives
FGEN Board of Directors FGEN’s primary objective is to attain its goals by investing in a diversified portfolio of environmental
infrastructure projects that support more environmentally friendly approaches to economic activity
whilst generating a sustainable financial return.
FGEN’s Board of Directors is mandated to ensure that the Company achieves its primary objective.
Directors receive a fixed fee per annum based on their role and responsibility within the Company
and the time commitment required. It is not considered appropriate that Directors’ remuneration
should be performance related.
Investment Manager Foresight is required by FGEN to help the Company achieve its primary objective.
All Foresight employees are obliged to incorporate one or more sustainability-related objective(s) as
part of their annual appraisal. Failure to achieve those objectives will result in an impact to the overall
performance grade of the individual. This commitment by Foresight Group ensures that there is a
mechanism in place for inclusion of specific climate-related performance targets in future.
Policies
Investment policy
FGEN’s investment policy is grounded in ESG principles and prioritises environmental, social and governance considerations.
Its primary objective is to attain its goals by investing in a diversified portfolio of environmental infrastructure. Environmental
infrastructure, as defined by FGEN, encompasses infrastructure assets, projects and asset-backed businesses that leverage
natural or waste resources, promote environmentally friendly economic activities, facilitate the transition to a low-carbon
economy or mitigate the impacts of climate change.
Strategic Ambition
The Strategic Ambition was developed and agreed by the Board of Directors as part of the transition planning process. This
ambition incorporates FGEN’s net zero commitment as well as its core ESG principles from the investment policy and states:
“ FGEN’s portfolio of investments will be net zero by 2050 in line with the 1.5°C Paris Agreement objective, be resilient to the
changing climate and contribute towards a more sustainable future.”
Governance Strategy Risk management Metrics andtargets
Investment Manager PRI scores
Robust integration of ESG into the investment lifecycle:
Foresight Group is a signatory to the Principles for
Responsible Investment (“PRI”), a set of voluntary guidelines
that help companies to address social, ethical, environmental
and corporate governance issues as part of the investment
process. The scorecard for Foresight Group’s latest annual
assessment is available via the PRI’s assessment portal and
on Foresight Group’s website. In summary, the Investment
Manager achieved 5 star ratings as shown below:
Category Module score Star score
Policy Governance and Strategy –
Group
92
Direct – Infrastructure 96
Confidence Building Measures 100
The latest assessment transparency report is available on Foresight
Group’s website
1
.
Skills and training
Through the governance approach described above, FGEN’s
Board of Directors is supported and advised by a broad team
of people with significant experience across the environmental
infrastructure and wider sustainability landscape.
In order to ensure continuous improvement in FGEN’s ESG and
climate-related processes, the Board is provided with training
on a range of relevant topics. Training is provided periodically
and the topic is informed by current and future activities.
1. https://www.foresight.group/news/foresight-receives-top-pri-scores.
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Sustainability and ESG continued
Governance
Modern slavery and human trafficking
FGEN does not provide goods or services in the normal
course of business and has no customers, employees or
turnover. As a result, FGEN does not fall within the scope of
the UK Modern Slavery Act 2015 (the “Modern Slavery Act”).
However, the Directors recognise the critical importance
of preventing modern slavery and have chosen to develop
a voluntary statement as part of the Company’s ongoing
commitment to high standards of business conductand in
recognition of the importance of the issues which the Modern
Slavery Act seeksto address. This statement is published on
the Company’s website
1
.
The Board specifically notes the Investment Manager’s
Modern Slavery Act statement which sets out the Investment
Manager’s approach to matters such as services and supply
chain due diligence and training of employees, recruitment
and welfare. The Investment Manager’s policy and practices
in relation to modern slavery and human trafficking are
included in the Foresight Group’s Modern Slavery Act
statement
2
.
Investment Manager policies
The Board acknowledges that, as non-executive Directors of an externally managed investment company, their influence is
necessarily limited and will be significantly informed by the approach and policies of the Investment Manager. Foresight,as
FGEN’s Investment Manager, applies a series ofpolicies in the management of the Company’s assets. These policies include:
ș Human Rights policy and approach;
ș Sustainability and ESG policy;
ș Modern Slavery policy;
ș Approach to diversity, equity and inclusion;
ș Anti-bribery and corruption policy;
ș Anti-money laundering policy;
ș Anti-tax evasion policy; and
ș Whistleblowing policy.
Promote the efficient
useofresources
Develop positive
relationships with the
communities in which
FGEN operates
Ensure effective and
ethical governance
across the portfolio
To invest in projects that manage
the availability of natural resources,
whether through utilisation of
renewable resources, increasing
resource or energy efficiency, or reusing
or recovering waste.
To encourage positive
relationship-building between portfolio
assets and the communities in which
they sit.
To manage portfolio assets in a way that
promotes ethical, effective governance.
Example criteria:
ș Resource management
ș Life on land/below water
ș Climate change and resilience
Example criteria:
ș Health and wellbeing
ș Local economic impact – job creation
ș Local social impact
ș Community engagement and benefit
Example criteria:
ș Anti-bribery and corruption
ș Modern slavery
ș Audit and tax practices
ș Environmental impact
ș Health and safety practices
ș Board composition
Governance Strategy Risk management Metrics andtargets
ESG objectives
FGEN applies the following ESG objectives to its investment and portfolio management activities.
1. https://www.fgen.com/sustainability.
2. https://www.foresight.group/modern-slavery-statement.
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Governance | Case study
Governance Strategy Risk management Metrics andtargets
Amber Fryingdown solar site
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Development of FGEN’s first transition plan
The TPT’s voluntary Disclosure Framework was published
in October 2023 and has been designed to integrate with
and build from the approach to transition plans found in
both the UK regulations and FCA rules that implement the
TCFD recommendations, as well as the ISSB Standards and
guidance from the Glasgow Financial Alliance for Net Zero
(“GFANZ”) on transition plans.
During the reporting period, FGEN developed and
published its first transition plan, marking a key milestone
in its sustainability journey. The development process
was collaborative and iterative and included a series of
internal workshops designed to gather input from, and align
expectations across, the Investment Manager’s teams.
This approach formed a central component of the plan’s
development and included in-depth discussions focused on
identifying opportunities for improvement, and aligning on
realistic and measurable operational targets.
The draft plan and its proposed targets were reviewed
with the Board of Directors, who provided strategic input
and formally approved the final approach in March 2025.
Theplan has been designed as a live document, with updates
planned from time to time in line with the recommendations
of the TPT Disclosure Framework.
A key challenge in the process was ensuring the plan
integrated effectively with existing governance and risk
management frameworks. This focus was essential to avoid
setting targets that were unachievable or disconnected from
operational realities, and to ensure long-term credibility and
impact. Development of the transition plan provided a formal
space within which to have those detailed discussions, and
to set pragmatic operational targets that will allow FGEN to
progress its long-term net-zero target going forward.
Voluntary disclosure against the UK Sustainability
Disclosure Requirements (“SDR”)
In November 2023, the FCA published the final rules on
Sustainability Disclosure Requirements (“SDR”) and investment
labels, with the first requirement, the FCA’s anti-greenwashing
rule, taking effect from May 2024. The SDR enables in-scope
UK domiciled funds to apply the FCA’s sustainability
investment labels from 31 July 2024. At present, the SDR and
investment labels only apply to UK domiciled funds; however,
the UK Government is considering how the regime can be
extended to apply to overseas-domiciled funds.
Although FGEN, as a Guernsey-domiciled company, does not
fall within the scope of the SDR and investment labels, the
Board and the Investment Manager believe that the nature
of FGEN’s business and strategy is intrinsically aligned to the
goal of a greener and less carbon-intensive future.
FGEN is already positioned under Article 9 of the EU’s
SFDR, as a Company that has sustainable investment as an
objective, and the Board and Investment Manager consider
that the FCA’s SDR is a key step to enable UK investors
to have greater confidence with respect to sustainable
investment products. As a result, in FY24/25 FGEN voluntarily
disclosed consumer-facing and pre-contractual disclosures to
demonstrate alignment with the SDR’s “Sustainability Focus”
investment label and in accordance with the requirements
and timeframes under theSDR.
The Investment Manager continues to monitor the
development and implementation of the SDR and
investmentlabels, including the government’s consultation
onoverseas funds.
Voluntary disclosures
By virtue of its investment policy, FGEN aims to make a
significant contribution to reducing global GHG emissions
and mitigating climate change. This goal is embedded into
horizon-scanning activities that the Investment Manager
undertakes on behalf of the FGEN Board of Directors
– seeking to identify risks and opportunities for the
portfolio. The results of these activities feed into regular
communications with the Board of Directors and informs
strategic decision-making including, for example, target
investment sectors and budget planning.
As part of this horizon scanning, the Investment Manager
applies and maintains a risk management framework, as
set out in the risks and risk management section on pages
53to64. This section provides additional detail to expand
onthe risks and risk management section and is intended
tobe read in conjunction with the principal risk register.
Climate-related risks and opportunities
The tables on the following pages identify the top
climate-related risks and opportunities and FGEN’s response
to them, demonstrating the impact that the risks and
opportunities identified have on FGEN’s business, strategy
and financial planning. Each of these risks inform FGEN’s
principal risk register and, where direct linkages exist, those
have been cross-referenced in this section.
Broadly, climate-related risks and opportunities are split into two categories:
Transition Physical
These are risks related to the transition to a net-zero or
low-carbon future. These risks fall into four categories:
ș Policy and legal
ș Technological
ș Market
ș Reputational
These are risks associated with physical impacts of weather
and climate on asset operations and performance. These fall
into two core categories:
ș Acute: extreme weather events
ș Chronic: changes to climate patterns over time
Timescales
In last year’s Annual Report, FGEN piloted assessing climate-related risks over a longer time horizon than that used in the
main risk register, to reflect extended objectives such as net-zero targets. During the development of the transition plan, this
misalignment was identified as a potential source of confusion when assessing risks. Consequently, the Board of Directors
approved realigning the timeframes with the organisation’s overall risk management framework. Climate-related risks continue to
be assessed using the same impact and probability definitions as those applied across the broader risk register.
Climate-related risks and opportunities are assessed against the following timescales:
Category Period Justification
Short term 0-3 years Aligns with business planning and the recommendations of the
Transition Plan Taskforce Disclosure Framework
Medium term 4-10 years Encompasses a period of significant transition risk resulting from
decarbonisation targets
Long term 10+ years A period typically longer than the FGEN investment lifecycle, this
encompasses the typical design life of environmental infrastructure
assets as well as 2050, a key date for delivering net-zero carbon
emissions
Sustainability and ESG continued
Strategy
Governance Strategy Risk management Metrics andtargets
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Strategy
Portfolio-level climate-related risks
Sector and portfolio-level risks are considered by the Investment Manager and mitigation options
are discussed as part of FGEN’s comprehensive risk management framework. A detailed account
of the material climate-related risks that have been identified, as well as their impacts and
mitigation, can be found in the table below.
Very low Low Medium High Very high
Residual likelihood
Minor Moderate Major Severe Critical
Residual impact
A
Changes to power prices as a result of
climate change
D
Changes in regulation and government support
for sustainable infrastructure
B
Extreme weather-related events
E
Displacement of existing assets with new or other
technologies
C
Changes to sustainable investment criteria
A B
C D E
Key:
Grange Farm AD site
Governance Strategy Risk management Metrics andtargets
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Strategy
Risk
type Description
Time
period
Financial
impact Investment Manager’s response Area of impact
Main risk register
reference
A
Changes to power prices as a result of climate change
Transition
(market)
Power price volatility will continue to be a feature of
energy systems as they transition. Risks include:
ș lower-than-forecast power prices driven by
increased renewables deployment;
ș power price cannibalisation;
ș climatic changes resulting in demand dynamic
changes;
ș higher-than-forecast power prices driven by
short-term shocks such as decreased supply
from lower-than-anticipated renewables resource;
and
ș higher-than-forecast power prices driven
by longer-term impacts such as government
reviews of energy pricing.
S, M, L ££ ș Many of the assets in the portfolio earn revenues that are not
dependent on merchant power sales and various mechanisms
are in place to help mitigate the risk of lower power prices (see
principal risks on pages 55 to 64).
ș FGEN employs contractual mechanisms such as PPAs which
provide price certainty and limit exposure to power price volatility.
ș FGEN’s portfolio of assets is diversified across sectors and
geographies as a means of limiting exposure to power price
variation.
Strategy, financial
planning, Company’s
investments
5 6 7 9
B
Extreme weather-related events
Physical
Weather-related catastrophic events have the
capacity to negatively impact assets and their
operational effectiveness. These events can be either:
ș chronic (e.g. changing wind patterns, heat stress,
rising sea levels); or
ș acute (e.g. storms, heat wave, drought, floods).
Weather events have the potential to cause
disruption to the Fund’s business model by
negatively impacting the production output of
operational assets or delaying construction
timelines (e.g. weather events disrupting global
supply chains or making sites inaccessible).
S, M, L ££ ș Physical risks to the portfolio are largely localised to individual
assets and the impact of a single event or limited set of events
is deemed to have a negligible impact on the overall portfolio;
nevertheless, this is an area kept under close review by the
Investment Manager.
ș Portfolio assets are subject to climate risk analysis and stress
testing under different climate scenarios. As such, the Investment
Manager has confidence in the portfolio’s resilience to changing
weather patterns.
Strategy, financial
planning, Company’s
investments
5 6 78
Governance Strategy Risk management Metrics andtargets
Timescales: S Short term (0-3 years) M Medium term (4-10 years) L Long term (10+ years)
Financial impact: £ Moderate financial impact ££ Major financial impact £££ Severe financial impact
Risk register key: 4 Changes in regulation and
government support
5 Reputational 7 Asset exposure to weather
resource
8 Climate change –
physical risk
9 Volume and cost of
feedstock resource
11 Exposure to market
power prices
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Strategy
Risk
type Description
Time
period
Financial
impact Investment Manager’s response Area of impact
Main risk register
reference
C
Changes to sustainable investment criteria
Transition
(regulation,
market)
ș As the energy transition proceeds, and scientific
knowledge regarding the consequences of
particular courses of action increases, there is
a risk that activities and assets that were once
classified as “sustainable” become reclassified
as “unsustainable” with consequences for
FGEN’s ownership of such assets.
ș Risk if the EU and financial institutions continue
to turn away from the energy-from-waste (“EfW”)
sector and policy developments penalise EfW
assets. This could limit future deployment and
impact lifecycle emissions for EfW assets in
FGEN’s portfolio.
M, L £ ș FGEN invests in assets that contribute to the acceleration of the
energy and sustainability transition and have strong transition
characteristics. The Investment Manager assumes an active role in
policy discussions and remains abreast of sustainable investment
changes and reviews its strategy accordingly.
ș The diversified nature of FGEN’s portfolio protects the Company
against overexposure to any one sector. If deemed appropriate
in the future, FGEN would review portfolio construction to further
address these issues.
Strategy, Company’s
investments
45
D
Changes in regulation and government support for sustainable infrastructure
Transition
(market,
regulation,
reputation)
ș Changes in regulation of sectors in which FGEN
is already invested, e.g. EfW not meeting criteria
to be considered aligned to the EU Taxonomy.
ș Changes in farming regulation which impact the
agri-AD portfolio.
ș Government support for short-term energy
solutions that negatively impact the transition to
a low-carbon future, e.g. support of coal.
S, M £ ș Given the diversified nature of the assets, the impact is likely to be
limited to a single asset or small part of the portfolio.
ș The risk over the long term is considered negligible as other
avenues or solutions would be found for the asset or technology
affected, such as selling an asset or finding alternative sources of
feedstock.
Strategy, financial
planning
459
Governance Strategy Risk management Metrics andtargets
Timescales: S Short term (0-3 years) M Medium term (4-10 years) L Long term (10+ years)
Financial impact: £ Moderate financial impact ££ Major financial impact £££ Severe financial impact
Risk register key: 4 Changes in regulation and
government support
5 Reputational 7 Asset exposure to weather
resource
8 Climate change –
physical risk
9 Volume and cost of
feedstock resource
11 Exposure to market
power prices
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Sustainability and ESG continued
Strategy
Risk
type Description
Time
period
Financial
impact Investment Manager’s response Area of impact
Main risk register
reference
E
Displacement of existing assets with new or other technologies
Transition
(technology)
ș As more resource and scientific-backed research
is dedicated to achieving net-zero goals,
technologies could be developed that make
current clean energy infrastructure technologies
obsolete, resulting in lower profitability within
the existing portfolio.
M, L £ ș It is considered likely that new technologies will be developed and
FGEN is well positioned to invest in new energy solutions once
they become proven at scale. It is unlikely that a single solution
would be found for all the energy needs, but if it were, this would
necessitate considerable buildout beyond the lifetime of FGEN’s
current portfolio.
Strategy, financial
planning
n/a
Governance Strategy Risk management Metrics andtargets
Timescales: S Short term (0-3 years) M Medium term (4-10 years) L Long term (10+ years)
Financial impact: £ Moderate financial impact ££ Major financial impact £££ Severe financial impact
Risk register key: 4 Changes in regulation and
government support
5 Reputational 7 Asset exposure to weather
resource
8 Climate change –
physical risk
9 Volume and cost of
feedstock resource
11 Exposure to market
power prices
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Sustainability and ESG continued
Strategy
Disaggregating physical climate impacts
FGEN’s portfolio is influenced by physical climate risks, as noted in the risk table above (extreme weather events). The Investment Manager has been working to disaggregate those key risks, and
associated mitigants, by sector and geography. This year, the asset-class analysis undertaken in FY23/24 has been mapped against FGEN’s three key pillars of environmental infrastructure (see
page 2 for more information). Information on the top physical risks to each of FGEN’s investment sectors is set out in the table below. The Investment Manager continues to work to further FGEN’s
understanding of the materiality of these risks and the relevant time horizons.
Physical risks Impact
Renewable energy
generation
Other energy
infrastructure
Sustainable
resource
management Mitigation
Temperature extremes Increased technology and
equipment degradation
✓ ✓
Ongoing assessment of equipment degradation
Exceedance of threshold for safe
operating conditions
✓ ✓ ✓
ș Ongoing assessment of technology-specific thresholds for
safe operating temperatures
ș Apply mitigation measures e.g. retrofit cooling mechanisms
Drought/water stress Impact on performance due to
lack of water e.g. to generate
steam for turbines or grow crops
✓
Assessment of:
ș Ability to hold additional water reserves
ș Water recycling opportunities
ș Ability to store additional feedstock
Fluvial and pluvial flooding Reduced performance due to
water damage
✓
Review flood risk management plans
Inconsistent water availability
(flood and drought)
Volatile generation profile driven
by excess rainfall and/or drought
conditions
✓ ✓
Minimal mitigation available – the Investment Manager can
consider climate risk in forecasting and annual budgets
Governance Strategy Risk management Metrics andtargets
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Strategy
Timescales: S Short term (0-3 years) M Medium term (4-10 years) L Long term (10+ years) Level of opportunity: Low opportunity Medium opportunity High opportunity
Climate-related opportunities
In addition to its risk management activities, the Investment Manager, on behalf of FGEN, applies climate-related scenarios to identify opportunities for the Company. The primary climate-related
opportunities identified for the Company are set out below.
Opportunity
Opportunity
type Description
Time
period
Level of
opportunity Investment Manager’s response Area of impact
Increased demand
for environmental
infrastructure
and businesses
which support
the transition to
a low-carbon
economy
Transition
(market)
ș Increased demand for infrastructure which helps
to balance the intermittent generation profile of
renewables – e.g. battery storage.
ș Increased demand for shorter-term solutions
to reach net zero by 2050, e.g. CNG refuelling
stations and synthetic low-carbon fuels as
a low-carbon transport option, while other
solutions are further developed.
S, M, L
ș FGEN is already well positioned to invest in environmental
infrastructure sectors that support the transition to a
low-carbon economy, as can be demonstrated in the market
and opportunities section on pages 12 to 15.
Strategy, financial
planning
Changes to energy
pricing and market
pricing of GHGs
Transition
(regulation,
market)
ș The market pricing of GHG emissions
begins to increase, which in turn drives the
competitiveness of renewables.
ș Future changes to energy prices spurred by a
clampdown on fossil fuels. Longer-term view on
building out clean energy generation capacity
when markets are supportive of renewables and
prices are competitive.
S, M, L
ș FGEN is positioned to benefit from future increases in carbon
pricing and cost competitiveness of renewables.
ș FGEN is positioned to benefit from future increases in energy
pricing and the increased buildout of renewables capacity.
Strategy, financial
planning
Increased
governmental
support for
environmental
infrastructure
projects
Transition
(policy and
legal)
ș Government policies aimed at facilitating the
transition to a net-zero carbon economy may
subsidise certain technologies to increase
their uptake or buildout, creating further
opportunities for investment by FGEN.
ș Government policies aimed to help the transition
to reduce the impact on natural resources,
e.g. Norway’s resource rent tax rate in sea
aquaculture.
S, M, L
ș Government support of emerging sectors will change the
risk profile and may open up areas that would otherwise be
insufficiently attractive for FGEN investment.
Strategy, financial
planning
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Sustainability and ESG continued
Strategy
Opportunity
Opportunity
type Description
Time
period
Level of
opportunity Investment Manager’s response Area of impact
Technological
developments
and buildouts in
environmental
infrastructure
Transition
(technology)
ș As new technologies become better developed,
the Company is well positioned to invest in a
diversified range of projects.
ș Examples of new technologies may include
environmental or sustainable infrastructure
related to fuels, controlled environment or
energy production.
S, M
ș FGEN is ideally positioned to invest in a diversified range of
projects and to benefit from such advances in environmental
or sustainable infrastructure related to fuels, controlled
environment or energy production in the future.
Strategy, financial
planning
Changes in weather
patterns leading
to buildout of
certain types of
environmental
infrastructure or
business
Physical ș Changes in weather patterns could lead to
opportunities for new types of infrastructure
or further investment into existing categories.
An example of this could be flood defence
infrastructure in response to increased rainfall
or sea level rise or controlled environment
agriculture facilities in response to higher
temperatures.
M, L
ș The Investment Manager reviews over 1,000 deals a year in
the environmental infrastructure sector, which allows it to take
advantage of these opportunities as they arise.
Strategy, financial
planning, Company’s
investments
Governance Strategy Risk management Metrics andtargets
Strategic resilience
FGEN’s primary approach to resilience is focused on owning a portfolio of assets that is diversified by geography, technology, resource use and revenue composition. TheInvestment Manager
engages with a range of specialists across different areas of expertise and levels of the business to help drive and maintain a resilient portfolio. Risks and opportunities are also assessed within the
framework discussed on pages 92 and 93 and on an ad hoc, day-to-day basis.
As new investment opportunities such as emerging sectors evolve, FGEN will consider these as part of its investment strategy. Likewise, if new risks emerge for existing investment sectors, or if the
impact of existing risks increases, FGEN will consider this at the Risk Committee, ESG Committee and Board level and identify opportunities for mitigation or, if necessary, disposal of assets.
Timescales: S Short term (0-3 years) M Medium term (4-10 years) L Long term (10+ years) Level of opportunity: Low opportunity Medium opportunity High opportunity
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Methodology
In analysing the SSPs, the following risks and opportunities
are applied:
1. Physical risk – Analysing atmospheric data related to
acute and chronic climate hazards across temperature,
precipitation, drought, wildfire, coastal flooding, tropical
cyclones, water stress and fluvial-basin flooding to provide
a rigorous estimate of risk under various conditions.
2. Transition risk – Incorporating modelling of hazards
associated with a global transition to a low-carbon
economy via litigation, reputational, technology and
market.
3. Opportunity modelling – Calculating opportunities derived
from resource efficiencies, energy sourcing, changing
markets and resilience.
An estimate of direct financial impacts for each asset type is
calculated based on the hazards identified. Each technology’s
vulnerability is characterised by the specific ways in which it
is likely to be impacted by a given climate-related variable.
An asset type’s overall “impact function” comprises these
individual impact pathways.
The science of scenario analysis is evolving quickly, and
current assessments are made with the most credible existing
frameworks and input data available. Given the nature of
these estimates, limitations remain. However, the Company is
committed to using best-in-class methodologies to accurately
estimate its performance under different climate futures
and will continue making the necessary adjustments as the
methodologies progress.
Scenario analysis results
NAV per share Difference (p) % Difference
Base case
SSP 2 ― 4.5 106.50 0 0
SSP 1 ― 2.6 107.15 0.65 0.61
SSP 3 ― 7.0 106.84 0.34 0.32
SSP 5 ― 8.5 105.28 -1.22 -1.16
Based on the analysis produced by the Climanomics
platform, the portfolio continues to show a good level of
resilience across a wide variety of climate scenarios and
resultant impacts, with this years analysis showing a slight
narrowing of the perceived impacts across all scenarios.
ș Under the base case, SSP 2-4.5, the portfolio is assessed
to maintain resilience when considering both more and
less severe climate futures.
ș A less severe SSP 1-2.6 scenario, which now appears
unlikely to be achieved, would result in a positive impact
on NAV of 0.61% by 2054 when compared with the central
case.
ș SSP 3-7.0 follows the same trajectory, with a net positive
impact on NAV of 0.34% by 2054.
ș Under the most severe scenario of SSP 5-8.5, one which is
also currently assessed to also be unrealistic given current
estimates, the analysis indicates a negative impact on NAV
of 1.16% by 2054 when compared with the central case.
Climate-related scenario modelling continues to be an
evolving discipline and the Investment Manager continues to
evaluate the landscape of service providers in this space.
Sustainability and ESG continued
Strategy
Governance Strategy Risk management Metrics andtargets
Company-level resilience
Overview
The Investment Manager works with third-party service
providers to analyse the FGEN portfolio across the climate
scenarios published in the Intergovernmental Panel on
Climate Change’s (“IPCC”) sixth Assessment Report. The
Shared Socioeconomic Pathways (“SSPs”) are an evolution of
the earlier Representative Concentration Pathways (“RCPs”)
and represent a range of possible outcomes including future
anthropogenic greenhouse gas emissions, their effects on
atmospheric concentrations of CO
2
and their potential
societal, demographical and economic impacts.
The consequences of the SSP2, SSP3 and SSP5 scenarios set
out below, with rising oceans and alternate climate patterns,
could be devastating for humanity. FGEN currently analyses
the potential impacts of these scenarios on portfolio value
using the Climanomics platform, and the results are set out
below.
The scenarios are best summarised as:
ș SSP 1 ― 2.6 assumes aggressive mitigation and total
GHG emissions reducing to net zero by 2050, resulting in
aglobal average temperature increase of 1.3°C to 2.4°C
by 2100.
ș BASE CASE: SSP 2 ― 4.5 implies aggressive mitigation
with total GHG stabilising at current levels until 2050 and
then declining to 2100. This results in a global average
temperature increase of 2.1°C to 3.5°C by 2100.
ș SSP 3 ― 7.0 estimates limited mitigation with total
GHG emissions doubling by 2100 and global average
temperatures increasing by 2.8°C to 4.6°C.
ș SSP 5 ― 8.5 assumes low mitigation, total GHG emissions
tripling by 2075 and global average temperatures
increasing by 3.3°C to 5.7°C.
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Strategy | Case study
Governance
Strategy
Risk management
Metrics andtargets
One of FGEN’s ESG objectives is to foster positive relationships between its portfolio assets
and the surrounding communities. As part of this, FGEN aims to inspire the next generation
to join the renewable energy sector and help to address the industry’s growing workforce
requirements. To achieve this, FGEN has partnered with Earth Energy Education (“EEE“),
whichempowers and educates young people about the energy transition and encourages
careers inrenewable energy. FGEN’s Investment Manager has collaborated with EEE across its
UK portfolio since 2018.
This year, FGEN planned five local group visits to their solar sites and five in-school workshops.
To date, FGEN and EEE have facilitated three school groups from within three miles of FGEN
assets to visit their local renewable energy site. In total, over 75 children aged seven to ten
and nine teaching staff attended. Attendees also participated in an in-school workshop that
explored the site’s impact, the workings of solar energy, and the biodiversity present on solar
farms. Theremaining visits are scheduled for later in the year.
Nine sessions have been delivered so far, including two sessions at each site visit – the EEE
“Solar Farm Challenge”; and “Biodiversity Study”; and three additional in-school sessions
covering “Solar Power Investigations”; “Wind Turbine Investigations”; and the EEE “Power
YourSchool” investigation.
This initiative not only sparks students’ interest but also boosts teaching staff’s confidence as
climate change solutions become increasingly important in the schools curriculum.
Inspiring the next generation
of workers
Earth Energy Education solar site visit
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FGEN applies a series of measures to identify, assess,
prioritise and monitor risks and opportunities. Assessment
of ESG and climate-related risks is incorporated into FGEN’s
comprehensive risk management framework and risk register,
which assesses:
ș a measure of the probability of each identified risk
materialising; and
ș the potential impact the risk event may have on the asset
and, ultimately, its impact on the Company.
For each risk, mitigation actions are developed to reduce the
likelihood of it occurring and to minimise the severity of its
impact in the event that it does occur.
More information about FGEN’s approach to risks and risk
management is set out in pages 53 to 64.
ESG considerations, including analysis of climate-related risks
and opportunities, are embedded throughout the Investment
Manager’s investment and asset management processes,
from initial investment screening through due diligence and
into ongoing monitoring and reporting. Where material risks
are identified, they are considered by the Risk Committee.
Mitigation options are discussed and the Committee will
determine whether the risk is acceptable under the FGEN risk
management framework. The Risk Committee will advise the
FGEN Board on the results of their findings.
FGEN approaches management of ESG and climate-related
risks and opportunities via the following principles:
Sustainability and ESG continued
Risk management
Assess Monitor Engage
The Investment Manager undertakes due
diligence on each of its asset acquisitions,
including assessing a range of ESG criteria.
Previously, the Investment Manager has
structured its due diligence processes
around use of its proprietary Sustainability
Evaluation Tool (“SET”). From inception, the
tool was designed as a means of aggregating
the wide array of differing sustainability
frameworks, allowing Foresight to interrogate
material sustainability and ESG factors
across both its existing portfolio and
prospective investments, in alignment with
differing investor preferences.
Foresight’s Infrastructure division is
enhancing its approach to climate risk and
sustainability by increasing its alignment
with the narrower and more universal set of
frameworks that the investor, sustainability
and regulatory landscapes are starting to
coalesce around.
Where appropriate, alignment with these
frameworks may require the engagement of
third-party service providers. As an example,
as of FY26, climate-related due diligence
and monitoring will be conducted using a
third party that applies advanced climate
models and datasets to assess both acute
and chronic physical risks in alignment
with the EU Taxonomy’s Climate Risk and
Vulnerability Assessment (“CRVA”)
Third-party service providers, with the
help of technical advisers, monitor and
manage the performance of each asset in
the FGEN portfolio, reporting periodically
to the Investment Manager. The Investment
Manager conducts site visits to ensure
assets are operating as expected and
third-party audits maintain visibility over
ESGperformance.
ESG updates are provided biannually to
the ESG Committee, informing FGEN’s risk
management and strategy evolution.
The primary tool for monitoring, improving
and reporting on sustainability and ESG
is Foresight Infrastructure’s Portfolio
Sustainability Metrics, managed within
the Sennen data platform. These metrics,
collected monthly and reported quarterly,
allow for detailed performance comparisons
and accurate reporting on Foresight’s
investments.
The SET has been redesigned to integrate
data from Sennen, facilitating asset
and fund-level analysis and supporting
decision-making to enhance performance
and mitigate risks.
Stakeholder engagement is an important
part of FGEN’s approach. Engagement with
stakeholders occurs through a combination
of formal (e.g. contractual obligations or
industry events) and informal channels (e.g.
ongoing meetings and discussions). Further
information on stakeholder engagement can
be found on pages 65 to 70.
Reporting is an essential part of FGEN’s
stakeholder communication and the
Investment Manager works to ensure its
ESG reporting is continually improving and
meeting the highest standards to support
that.
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Monitoring future disclosures
The Investment Manager proactively monitors and
engages on a series of evolving disclosures standards.
This approach helps FGEN and its Investment Manager to
develop its strategy in line with emerging regulations and
standards, helping to reduce risks but also helping to identify
opportunities for the Company to improve its stakeholder
communication and approach to investment management.
International Financial Reporting Standards
Foundation’s International Sustainability Standards
Board
In FY23/24 the International Sustainability Standards Board
(“ISSB”) issued its inaugural standards – IFRS S1 and IFRS
S2 – with the aim of helping to improve trust and confidence
in company disclosures about sustainability to inform
investment decisions.
The standards create a common language for disclosing
the effect of climate-related risks and opportunities on a
company’s prospects. IFRS S1 provides a set of disclosure
requirements designed to enable companies to communicate
to investors about the sustainability-related risks and
opportunities they face over the short, medium and long
term. IFRS S2 sets out specific climate-related disclosures
and is designed to be used with IFRS S1. Both fully
incorporate the TCFD recommendations.
Monitoring responsibilities for TCFD transferred to ISSB in
FY23/24. With the ISSB’s standards already outlined, it is
now up to jurisdictional authorities to make the guidance
mandatory and in the UK the mechanism will be through the
UK Sustainability Reporting Standards. It is still considered
best practice to follow the TCFD format until the new
regulatory framework is implemented.
Sustainability and ESG continued
Risk management
1. https://www.fgen.com/investors/reports-and-publications.
Governance Strategy Risk management Metrics andtargets
Horizon scanning Stakeholder engagement
The Investment Manager, on behalf of FGEN, undertakes
continuous market research and horizon scanning to identify
risks and opportunities for the portfolio.
In addition to horizon scanning activities, the Investment
Manager undertakes stakeholder engagement to understand
stakeholder needs and the options for responding to those
needs.
Information on different stakeholder types, how the Company
has engaged and the key strategic decisions impacting the
various stakeholder groups in the year, is set out on pages 65
to 70. Further information on FGEN’s approach to engaging
with stakeholders on its net-zero target and the low-carbon
transition is set out on pages 12 to 15 of the transition plan
1
.
Materiality assessment Early adopter
Foresight Group’s materiality assessment was reported on in
last year’s Annual Report.
In FY24/25, the Investment Manager has integrated the
results of the double materiality assessment into its
Enterprise Risk Management Framework and is focused on
progressing solutions and processes around the material
risks identified. This includes:
ș establishing a series of Group-level working groups;
ș publication of five policies which address the material
topics (Sustainability; Environmental; Human rights;
Responsible investment; and Sustainable sourcing);
ș ensuring alignment of the sustainability strategy with the
material risk topics; and
ș integration of the material risk topics into Foresight
Group’s annual Sustainability Report.
The Investment Manager maintains a watching brief on
forthcoming disclosures frameworks and seeks to be an
early adopter of core elements of those frameworks where
possible, including voluntarily disclosing information such
as through its voluntary TCFD reporting. In FY24/25 FGEN
voluntarily published two disclosures in addition to its TCFD
report:
ș documents that offer equivalence to the Sustainability
Focus label under the UK Sustainability Disclosure
Requirements (“SDR”); and
ș its first transition plan, developed in alignment with the
Transition Plan Taskforce Disclosure Framework.
Both of these disclosure documents are available on the
Fund’s website
1
.
Portfolio-level risk management activities
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UK Sustainability Reporting Standards (“UK SRS”)
The UK Government’s framework to create a UK-based
mechanism that endorses and governs the global corporate
reporting baseline of IFRS Sustainability Disclosure Standards
(IFRS S1 and S2). Development of the standards is ongoing.
The Taskforce on Nature-related Financial Disclosures
(“TNFD”)
The TNFD has developed a set of disclosure
recommendations and guidance that encourage and
enable business and finance to assess, report and act
on their nature-related dependencies, impacts, risks and
opportunities. The recommendations and guidance are
designed to enable businesses and finance to integrate nature
into decision-making.
It is anticipated that TNFD will be integrated as ”Standard3”
(IFRS S3) under the ISSB framework, although specific
timelines for this incorporation have not been confirmed.
Draft guidance has been released by TNFD on nature
transition plans, which closely mirrors the structure and
content of the TPT Disclosure Framework. The Investment
Manager continues to closely monitor developments in this
space and anticipates being able to expand its transition plan
in future to incorporate nature-related actions and activities.
UK Green Taxonomy
In its 2023 Green Finance Strategy, the UK Government
reiterated its commitment to developing a UK Green
Taxonomy. Between November 2024 and February 2025,
the UK Government issued a consultation to gather views on
the value case for a UK Green Taxonomy as part of the UK’s
wider sustainable finance framework.
The reasoning behind this consultation was that “taxonomies
can be complex in practice, and feedback on their value
is mixed. This consultation is therefore seeking views on
whether a UK Green Taxonomy would be additional and
complementary to existing sustainable finance policies.”
The Investment Manager, alongside peers and working
groups, broadly supports the development of a UK
Taxonomy and has provided feedback to that effect via
the UK Sustainable Investment and Finance Association. In
the absence of a UK specific framework, the EU Taxonomy
continues to serve as the de facto authoritative Taxonomy
forsustainable finance in the UK.
The Investment Manager continues to monitor progress in this
area, and any implications it may have on the FGEN portfolio
of assets.
Developing European regulations
The Investment Manager monitors other recently
implemented and developing ESG frameworks closely, such
as the European Sustainability Reporting Standards (“ESRS”)
drafted by the European Financial Reporting Advisory Group
(“EFRAG”) as part of the Corporate Sustainability Reporting
Directive (“CSRD”). In February 2025, the EU published an
Omnibus of proposed changes to CSRD as well as two other
sustainability-related regulations. The Investment Manager
continues to monitor progress in this space.
Sustainability and ESG continued
Risk management
Governance Strategy Risk management Metrics andtargets
CNG Corby
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Sustainability and ESG continued
Risk management | Case study
Governance Strategy Risk management Metrics andtargets
In partnership with environmental geospatial consultancy
Frontierra, the Investment Manager has developed an
integrated nature and climate reporting platform designed
to enhance investment due diligence, portfolio management
and disclosure across its activities. The project, supported by
the UK Space Agency’s Unlocking Space for Business grant
programme, ran for nine months and concluded in March
2025, building on an earlier pilot focused on selected assets.
Project overview
The platform leverages satellite data, geospatial analysis,
climate modelling and proprietary algorithms to evaluate
nature and climate-related risks and opportunities at both
asset and portfolio levels. It delivers decision-ready insights
aligned with disclosure frameworks such as the Task Force
on Climate-related Financial Disclosures (“TCFD”) and the
Taskforce on Nature-related Financial Disclosures (“TNFD”).
Key features
ș Geospatial risk analysis: Incorporates diverse satellite and
environmental datasets.
ș Automated assessment: Site and portfolio-level
evaluations delivered in real time.
ș Standard-aligned metrics: Outputs structured to meet
recognised reporting standards.
ș Asset-level insights: Tailored risk reports identify
site-specific hazards and opportunities.
ș Long-term planning: Climate scenario modelling up
to2100.
Integration and impact
All of the Investment Manager’s infrastructure assets,
including the FGEN portfolio, are now integrated into the
platform. The insights produced will inform investment
decisions going forward and have particular value during
due diligence processes. For example, the platform identifies
assets most exposed to physical risks such as flooding,
drought or soil erosion, supporting proactive mitigation
strategies and effective budget setting.
Risk categories assessed
ș Physical climate hazards, including water stress,
temperature extremes, wildfire and storm events.
ș Nature-related aspects, such as protected areas,
biodiversity hotspots and habitat connectivity.
Portfolio and asset-level outputs
The platform generates fund-level reports ranking assets
by exposure and identifying the top five most at-risk sites.
These insights guide portfolio-level risk management. At the
asset level, reports highlight climate and nature-related risks,
nature-positive opportunities, and key mitigation needs.
A mapping function further visualises land use, ecological
features and biodiversity indicators.
This platform provides a robust, location-based approach
toidentifying and managing environmental risks, enabling
theInvestment Manager to protect and enhance long-term
asset value while supporting improved climate and
nature-related reporting.
Evolving nature and climate-related risk assessments
Example analysis for Amber Five Oaks solar site from the Frontierra platform.
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Asset-level risk management activities
The Investment Manager applies the following risk
management process to its investment and portfolio
management activities:
Investment due
diligence
Asset
management
ș Assets assessed using sustainability
frameworks
ș Conclusions and recommendations
integrated into Investment Committee
documents
ș ESG is a mandatory agenda item for
asset-level SPV board meetings
ș ESG KPIs include ongoing monitoring
and improvement of asset-level ESG
performance
Investment due diligence
Environmental, social and governance criteria are integral
in any investment assessment. The Investment Manager
undertakes a thorough analysis for every asset.
Previously, the Investment Manager structured its
due diligence processes around use of its proprietary
Sustainability Evaluation Tool (“SET”). From inception, the
tool was designed as a means of aggregating the wide array
of differing sustainability frameworks, allowing Foresight to
interrogate material sustainability and ESG factors across
both its existing portfolio and prospective investments, in
alignment with differing investor preferences.
As both the investor and sustainability landscapes start
to coalesce around a narrower and more universal set
of frameworks, the Fund Manager’s processes around
sustainability are continuously being evolved to reflect this.
As a result, the SET has been redesigned to act primarily as
a portfolio management tool. Pre-investment due diligence
and ongoing requirements for monitoring of sustainability
and ESG factors will move towards being structured around
both regulatory requirements and three key frameworks. An
example of these frameworks includes the EU Taxonomy
eligibility – interrogating the investments against the stringent
screening criteria to highlight an investment’s substantial
contribution to climate change mitigation and driving focus on
the minimising of adverse impacts.
Where appropriate, alignment with these frameworks may
require the engagement of third-party service providers.
Asan example, as of FY25/26, climate-related due diligence
and monitoring will be conducted using a third party that is in
alignment with the Climate Risk and Vulnerability Assessment
(“CRVA”) guidance outlined in Annex A of the EU Taxonomy.
This new process involves engaging third-party service
providers to apply advanced climate models and datasets
to assess both acute and chronic physical risks at the
asset level, in alignment with the CRVA. These assessments
are intended to form the basis for long-term climate risk
monitoring once implemented.
Processes for assessing and managing
climate-related risks and opportunities
Climate-related risks
While the Board of Directors holds ultimate responsibility for
risk management activities, the identification, assessment and
management of risks are integral aspects of the Investment
Manager’s work in both managing the existing portfolio on a
day-to-day basis and pursuing new investment opportunities.
The Investment Manager has established internal controls
to manage risks and the management team reviews and
considers the Company’s key risks with the Risk Committee,
on a quarterly basis. This includes consideration of
climate-related risks and will cover new risks arising as
well as changes in the likelihood or impact of any particular
risk. Further information on the approach to managing
climate-related risks can be seen on pages 83 to 87.
Emerging transition risks are also considered by the
Investment Manager’s valuation team and, if they present
a material financial risk, are escalated to the Company’s
risk register and the Board. Further details of Foresight’s
approach to sustainability and how this is carried
through practically to assessing climate-related risks and
opportunities are set out in the risks and risk management
section of this report on pages 53 to 64.
The Investment Manager considers those physical risks
identified by the EU Taxonomy, and incorporates processes
for identifying and assessing climate-related risk as part of its
standard due diligence and portfolio management practices.
Sustainability and ESG continued
Risk management
Governance Strategy Risk management Metrics andtargets
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Climate-related opportunities
There are two key opportunities that the Investment Manager
considers:
Sector opportunities – the Investment Manager frequently
evaluates opportunities for infrastructure investments that
generate lower GHG emissions than earlier infrastructure or
that support the transition to a low-carbon economy. These
opportunities are discussed with, and considered by, the
FGEN Board.
Value-enhancing opportunities – the Investment Manager
assesses existing portfolio assets for opportunities to
enhance climate-related performance and discusses
assessment findings with the FGEN Board where appropriate,
which holds responsibility for authorising significant proposed
enhancements.
At investment level, consideration of the sustainability
credentials of environmental infrastructure and their
resilience to climate-related physical risks is undertaken.
Management of environmental and health and
safety risks and incidents
FGEN takes its environmental and health and safety (“EHS”)
responsibilities very seriously, and seeks to ensure effective
management of these issues in both its own operations and
in its investment portfolio. FGEN aims to manage risks and
incidents in a fair and transparent manner with appropriate
action to reduce risk wherever practicable.
Third-party asset managers are responsible for the
day-to-day management of EHS issues and are required
to report incidents to the Investment Manager, which are
recorded through their portfolio management software.
The software can deliver either a high degree of granularity
on individual assets or an aggregated snapshot of the
portfolio’s performance as a whole. This allows the
Investment Manager to monitor and report individual
asset performance as well as sector and portfolio-level
performance to a range of internal stakeholders.
The Investment Manager periodically contracts third parties
to conduct comprehensive health and safety audits of each
site. This serves both to encourage best possible working
practices and acts as a means of highlighting areas for
development. The Investment Manager’s team also performs
spot auditing and reporting functions on selected assets on
an ongoing basis. Any recommendations from the audits are
allocated to the Investment Manager’s asset management
team, which then becomes responsible for ensuring the
recommendations are actioned as necessary. These tasks
are tracked through the Investment Manager’s portfolio
management software and monitored to ensure they have
been resolved in a timely manner. All audit results, shortfalls
and recommendations are included on the agenda of the
asset’s board meetings.
Human rights processes
FGEN is aware that the renewable energy value chain carries
the risk of significant impacts on human rights, as discussed in
a recent report by the Business and Human Rights Resource
Centre.
Following the OECD Guidelines for Multinational Enterprises,
and the EU Taxonomy’s Minimum Social Safeguards
requirements, the Investment Manager takes a multi-layered
approach to mitigating supply chain risk as follows:
Internal activities
ș The Company specifically targets investment opportunities
in European countries with strong regulatory frameworks
around human rights and labour standards. This approach
means that there are no investment activities in any
countries named in the Conflict Affected and High-risk
Areas list
1
.
ș Key counterparties’ governance frameworks are assessed
during due diligence.
ș The Investment Manager’s Supplier Code of Conduct
references the UN Guiding Principles on Business and
Human Rights, and the OECD Guidelines for Multinational
Enterprises.
ș The Investment Manager also undertakes direct
engagement with suppliers where there are specific areas
of concern.
External activities
ș In 2022, the Investment Manager engaged the Ethixbase
platform to undertake a supply chain interrogation
across regulatory and ESG risk criteria. This included an
assessment of a supplier’s capacity to scrutinise aspects
such as Modern Slavery risk. Detail on this review was
reported in FGEN’s 2023 Annual Report.
ș Enhanced due diligence, using specialist third parties, to
conduct in-person audits of higher-risk counterparties and
their facilities.
ș Collaboration with industry partners (e.g. Solar Power
Europe) and peers to deliver more effective engagement
with key suppliers.
Sustainability and ESG continued
Risk management
Governance Strategy Risk management Metrics andtargets
1. Conflict Affected and High-risk Areas list – https://www.cahraslist.net/.
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Additional information
Supplier Code of Conduct
FGEN began implementing its Supplier Code of Conduct
in FY22/23 with the aim of further embedding ESG
considerations into procurement practices. The Code was
well received by both existing and potential suppliers,
fostering greater engagement on sustainability issues.
Where a supplier identifies a requirement they cannot meet,
this is reviewed in consultation with the Investment Manager’s
sustainability team. Any deviations deemed to fall within
acceptable risk tolerances are clearly documented in the
supplier contract, ensuring transparency and consistency
in ESG risk management across the supply chain. If the
deviations exceed acceptable risk tolerances, further
discussions are held with the supplier to reach a suitable
solution. The Investment Manager assesses the risk of these
deviations in accordance with the contract scope.
Cyber security
The Board of Directors is highly aware of the risks posed
by cyber attacks and has been working with the Investment
Manager to develop and implement a cyber security strategy
for the portfolio.
The Investment Manager has partnered with a third party, a
specialist in securing critical renewable energy infrastructure
against evolving cyber threats, to conduct a comprehensive
assessment of all portfolio assets for potential vulnerabilities.
To date, the majority of assets in FGEN’s portfolio have
undergone an assessment. Implementation of the tailored
recommendations from these assessments is underway
across the portfolio including adding bespoke network
monitoring tools managed by a third party to assess network
threats. Alongside this work, the asset-level cyber security
policies are being updated to incorporate the insights and
requirements identified through the assessment process.
This dual-track approach ensures a more robust, consistent
and proactive cyber risk management framework across the
entire portfolio.
Sustainability and ESG continued
Risk management
Governance Strategy Risk management Metrics andtargets
Yorkshire Hydropower site
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Additional information
The ESG targets currently applied to the portfolio are set out in the table below. Performance against all targets is reviewed at least annually by the ESG Committee and by the FGEN Board. The
associated KPIs, as well as additional metrics collected in relation to the portfolio, are set out in the subsequent table on page 101. The Investment Manager continues to consider additional targets
across the ESG metrics. The timescales against which targets are set are aligned with the risk management timescales set out on page 82.
Category Ta rget Target timescale Progress in FY24/25 Overall progress
Governance: data *New* Data assurance for ESG metrics Short term In FY24/25 FGEN obtained third-party assurance to verify a suite
of key sustainability metrics
Complete
Governance: supply chain Roll out Ethixbase due diligence checks across the FGEN
supply chain
Short term FGEN’s Investment Manager undertakes Ethixbase screening and
due diligence against tier 1 suppliers
Complete
Governance: cyber security Produce and roll out cyber security policy across the portfolio
in FY24/25
Short term An SPV-level cyber policy has been drafted and is undergoing
revisions to better align with regulatory requirements and
recommendations from a third-party specialist. The updated
policy is on track to be published in 2025
Minor delay
Environmental: biodiversity 100% of fully owned, UK-based operating assets to have
biodiversity management plans in place
1
Medium term 84% of fully owned operational UK sites now have a biodiversity
management plan in place, up from 69% in FY23/24.
An ecological consultancy has been instructed to undertake
biodiversity assessments for the Fund’s hydro assets and one
further asset.
On track
Environmental: biodiversity Implement biodiversity enhancement at FGEN’s anaerobic
digestion sites
Medium term Planting was carried out on four AD sites during this period, taking
the total number of AD assets with biodiversity enhancement to
six out of nine (66%). Further enhancement work is planned for the
upcoming period
On track
Environmental: transition Review requirements for completion of a transition plan in line
with the Transition Plan Taskforce Disclosure Framework
Short term FGEN’s first transition plan was published in March 2025
Complete
Environmental: transition *New* Integrate transition plan reporting into Board papers Short term Progress to be reported in 2026
Early stage
Environmental: GHG *New* Integrate carbon intensity benchmarking into annual
target review process
Short term Progress to be reported in 2026
Early stage
Sustainability and ESG continued
Metrics and targets
Governance Strategy Risk management Metrics andtargets
1. The scope of the biodiversity surveys undertaken is intended to be in addition to standard planning and pre-construction surveys. As such, it is not suited to pre-operational sites. Additionally, the survey methodology is specific to UK sites, in that it applies the Defra
biodiversity metric, therefore it is not appropriate for use on non-UK sites at present.
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Category Ta rget Target timescale Progress in FY24/25 Overall progress
Environmental: GHG *New* Embed forecast asset acquisitions into FGEN’s carbon
forecast model
Short term Progress to be reported in 2026
Early stage
Environmental: GHG *New* Integrate carbon forecast model into investment
proposals
Short term Progress to be reported in 2026
Early stage
Environmental: GHG *New* Review Scope 1 emissions sources and identify sector
or portfolio-wide opportunities for improvement
Short term Progress to be reported in 2026
Early stage
Environmental: GHG *New* Develop short and medium-term targets for emissions
reduction
Short term Progress to be reported in 2026
Early stage
Environmental: GHG *New* Engage with relevant portfolio companies to implement
Scope 1 reductions
Short term Progress to be reported in 2026
Early stage
Environmental: GHG Achieve net-zero Scope 1, 2 and 3 emissions by 2050 Long term FGEN’s first transition plan was published in March 2025,
identifying a series of short-term operational and data targets to
help facilitate and accelerate carbon reduction measures
Early stage
Environmental: GHG 95% of assets to purchase energy from renewable tariffs Medium term This target is not material to FGEN’s GHG emissions and is
no longer being prioritised. Further information can be found
in FGEN’s transition plan at page 17. Energy purchased from
renewable sources will continue to be monitored as part of Scope
2 GHG data collection processes, and assets will be strongly
encouraged to purchase energy from renewable tariffs
Removed
Sustainability and ESG continued
Metrics and targets
Governance Strategy Risk management Metrics andtargets
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Additional information
Consolidated baseline
FGEN began calculating and reporting GHG and other ESG data in FY21/22 and previously applied a split baseline, between FY21/22 and FY22/23, for its reporting activities. This reflected the
evolving maturity of data collection and reporting. In order to drive clear progress, FGEN’s baseline year has been consolidated and is set as FY22/23, when a full set of ESG data was collated
and calculated for the first time. Metrics marked with an asterisk have been included in the assessment for limited assurance. Further detail on the process is set out on page 104. FGEN’s ESG key
performance indicators are highlighted in bold text in the tables below.
Sustainability and ESG continued
Metrics and targets
Governance Strategy Risk management Metrics andtargets
Aspect Metric Measurement FY24/25 FY23/24
FY22/23
(revised baseline)
Environmental Scope 1 emissions
1
Tonnes carbon dioxide equivalent (tCO
2
e) 80,651* 77,017
2
82,314
Scope 2 emissions Tonnes carbon dioxide equivalent (tCO
2
e) 4,104* 3,490
3
9,338
Scope 3 emissions Tonnes carbon dioxide equivalent (tCO
2
e) 81,993* 63,100 117,843
Total emissions Tonnes carbon dioxide equivalent (tCO
2
e) 166,748* 143,607
3,4
209,495
Renewable energy generated Megawatt-hours (MWh) renewable energy generated
5
1,272,038* 1,357,805 1,325,132
GHG emissions avoided Tonnes carbon dioxide equivalent (tCO
2
e) avoided 193,663* 212,917 212,263
Waste treatment Tonnes waste diverted from landfill (t) 703,470* 680,825 684,181
Water treatment Wastewater treated (l) 34,656,822,800* 40,213,501,000
6
35,586,057,000
Environmental incidents Reportable environmental incidents
7
5* 2 3
Purchased energy originating
from renewable sources
% of total purchased energy
8
in the portfolio originating from renewable sources 39* 39 21
% of assets sourcing purchased energy from renewable energy tariffs
9
76* 77 45
Management of biodiversity % of assets with biodiversity plans
10
84* 69 42
1. GHG emissions are calculated in line with the GHG Protocol.
2. Biomass waste emission factors was updated from 588 to 1,093 kgCO
2
e/tonne
to align with the Institute for Environmental Protection and Research (“ISPRA”)
factors.
3. Scope 2 emissions revised upwards following a time lag in data availability.
4. Ownership was incorporated into the emissions calculations.
5. For assets which have a dual generation profile of both electricity and heat,
energy is converted and measured in the energy profile that is predominant.
6. The increased water treated in FY23/24 was due to significantly increased
rainfall in that year compared with the previous year.
7. More information on environmental incidents is set out on page 103.
8. Purchased energy refers to the fact that all assets have their own energy
requirements and where these requirements are not met in full by an asset’s own
generation, energy is purchased from energy suppliers for delivery via thegrid.
9. Excludes development and construction assets.
10. This figure includes only fully owned operational sites within the UK. The metric
used to establish the baseline is currently applicable solely to UK sites. Assets
in the construction and development phases will have distinct requirements for
habitat management plans to fulfil planning obligations.
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Aspect Metric Measurement FY24/25 FY23/24
FY22/23
(revised baseline)
Social Health and safety incidents RIDDOR reportable accidents
1
10 * 4 3
Other material accidents 3 0 1
Jobs supported Number of “full-time equivalent” (“FTE”) jobs supported
2
426 467 347
Community funding £ provided to community projects 587,440* 655,076 432,756
Community engagement
procedures
% of assets with a clear, easily accessible complaints handling mechanism in place 84* 76
3
81
Accessibility of community
fund documents
% of community funds that are easily accessible and signposted for local communities
4
84 84 83
Governance Diversity of SPV directors % of assets with at least one female board member 6* n/a 7
Portfolio audits of health and
safety practices
% of assets audited
5
96* 89 84
Portfolio audits of tax and
financial practices
% of assets audited 96* 87
6
89
Cyber security % of assets with cyber security policy in place 57 n/a – new KPI n/a – new KPI
Sustainability and ESG continued
Metrics and targets
Governance Strategy Risk management Metrics andtargets
1. More information on health and safety incidents is set out on page 103.
2. FTE jobs are calculated using total hours worked over the course of the year.
3. Decrease in performance was attributed to new construction assets in the
portfolio.
4. Metric excludes development and construction phase assets.
5. Excludes development assets.
6. Number decreased as four of the audits fell into the first week of April.
Caveats to the data
ș Where it has not been possible to collect specific data,
assumptions have been made using appropriate proxy
technologies, sites and time periods.
ș During this reporting period, several AD sites have
begun disclosing their fugitive emissions. To enhance the
completeness of emissions reporting across the portfolio,
the emissions factor derived from these sites has been
applied to the remaining AD sites.
ș Partnership for Carbon Accounting Financials (“PCAF“)
emission factors have been used to calculate Scope 3
emissions. This is calculated from asset revenue data.
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Additional information
Reportable environmental and health and safetyincidents
The following RIDDOR reportable and environmental incidents were recorded for FGEN’s portfolio during FY24/25. In each case, the incidents were investigated swiftly and repairs or retrofits
undertaken where the incident was caused by mechanical or equipment failure. Where the incident was caused by human error, additional training and protocols were implemented to reduce the
risk of a repeat event.
Sustainability and ESG continued
Metrics and targets
Governance Strategy Risk management Metrics andtargets
Asset class Reportable health and safety incidents Reportable environmental incidents
Anaerobic digestion ș Foaming incident resulted in a roof tear and the uncontrolled release
of >500kg biogas into the atmosphere. No injuries occurred. Also
reported as an environmental incident.
ș Driver twisted his ankle while unloading a trailer.
ș Foaming incident resulted in a roof tear and the uncontrolled release of >500kg biogas into the
atmosphere. Although no injuries occurred, this was also reported as a RIDDOR incident.
Waste processing and recycling ș Member of the public was struck by a reversing vehicle on site (driven
by another member of the public), causing them to fall and resulting in
a head injury.
ș Leachate spill resulted in the escape of some leachate down a surface water drain. A third-party
contractor transported the leachate offsite by tanker and undertook maintenance and repair of the
pump and associated infrastructure.
ș Moped vehicles were incorrectly delivered to a recycling facility without the operator’s knowledge.
The vehicles tipped, resulting in a fuel spill. The vehicles were recovered and stored safely until they
could be removed to a different site and discussions have been undertaken with the client to ensure
no vehicles are delivered to the site again.
Wind ș Technician fractured two fingers when his hand was trapped between
two hatches. The hatches have been retrofitted to prevent such an
incident occurring again.
CNG ș Driver trapped their finger in a vehicle door, resulting in dislocation.
ș Technician received two broken fingers when unloading a vehicle.
Aquaculture ș Sub-contractor’s knife broke and struck him in the eye, resulting in a
need for surgery.
ș Sub-contractor slipped on ice caused by a leak from a nearby water
hose and fractured his ankle.
ș Worker fractured his finger when a pallet fell on his hand.
ș Sub-contractor sustained a broken finger when a pipe fell on his hand.
Water ș Sewer transfer main burst and the pumping station was shut down during repairs, resulting
in screened, settled sewage being discharged to storm outfall pumps in compliance with the
environmental licence. The Scottish Environment Protection Agency (“SEPA”) was notified.
Energy-from-waste ș Half-hourly limit for total organic carbon emissions was breached and exceeded the half-hourly limit
for carbon monoxide. The Italian Environment Agency was notified in line with regulation, despite not
being material.
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Additional information
Despite best intentions to design a robust internal control
framework, there remains scope for error in collation of
underlying data and therefore the Investment Manager is
committed to continuous enhancement of data collection and
validation processes. FGEN recognises that methodologies
for collection and reporting of data evolve over time and,
therefore, data may not always be comparable year-on-year.
Data assurance
In FY24/25, the Investment Manager, on behalf of
FGEN, worked with Aardvark Certification to undertake
independent, third-party limited assurance of the processes
in place to collect sustainability data and analyse the validity
of the information being presented in accordance with ISAE
3000. All metrics marked with an asterisk from pages 77, 101
to 102 and 106 to 108 have been included in the assessment
for limited assurance.
This process aims to verify the inputs and outputs of
FGEN’s environmental, social and governance reporting and
ensure the information is accurate, reliable and consistent.
Going forward, FGEN plans to undertake this process each
year to align with best practice guidance for sustainability
disclosures.
Task Force on Climate-related Financial Disclosures
Although FGEN, as an investment company, is not required to
include a full TCFD disclosure under the Listing Rules of the
FCA, the Board and the Investment Manager believe that the
nature of FGEN’s business and strategy is intrinsically aligned
to the goal of a greener and less carbon-intensive future and
consider TCFD to be a positive step in driving that direction.
Internal controls and collection and verification
ofdata
The following steps have been taken to validate the data
presented in this Sustainability and ESG report, which is
accurate to the best of the Investment Manager’s knowledge.
In order to generate the metrics reported here, the
Investment Manager receives data from two primary sources:
ș front-line site managers and asset operators; and
ș independent sustainability advisers (principally for
climate-related disclosures).
Whilst some reliance is placed on externally generated data,
the Investment Manager performs the following steps to
assess its validity:
ș following submission, data is reviewed for completeness
by the Foresight portfolio management team prior to
upload onto the Investment Manager’s custom-built data
management platform, Sennen;
ș the data is then processed and analysed by the Foresight
sustainability team, including assessment of anomalies and
outliers; and
ș material metrics, such as those associated with FGEN’s
sustainability-linked loan facility, are further subject to
third-party assurance.
ESG performance is also presented and discussed with the
FGEN ESG Committee on a bi-annual basis.
Sustainability and ESG continued
Metrics and targets
As a result, FGEN has again voluntarily included
climate-related financial disclosures in these financial
statements. Thisyear’s report is more closely integrated
withthe wider ESG report and has made steps towards
aligning with the IFRS S1 and S2 disclosure protocols and
thisprocess will be continued next year.
Limitations of the disclosure
Both the Investment Manager and the Board of FGEN are
fully supportive of the TCFD’s goals in bringing climate
change considerations into mainstream reporting. However,
analytical frameworks for evaluating the complex impacts
that climate change will have on the markets in which FGEN
operates are still in their infancy. As a result, there is currently
no standardised way of assessing climate change risks and
opportunities and how these are managed by the Company.
The disclosures in this report comply with the TCFD
recommendations. Further information on where each
disclosure can be located is set out in the following table.
FGENcontinues to work on developing its approach to
climate-related issues and this will be reflected in future
disclosures.
TCFD disclosures table
The table overleaf sets out the TCFD recommendations, a
summary of activities in FY24/25 and a reference to where
the information can be found in this report.
Governance Strategy Risk management Metrics andtargets
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Additional information
Sustainability and ESG continued
Metrics and targets
Governance Strategy Risk management Metrics andtargets
Recommended disclosure Page reference Activities in FY24/25
Governance
a. Describe the Board’s oversight of climate-related risks and opportunities
78 FGEN voluntarily published its first transition plan, including a series of operational targets
to further integrate carbon reduction planning into its activities.
b. Describe management’s role in assessing and managing climate-related risks and opportunities 78
Strategy
a. Describe the climate-related risks and opportunities the organisation has identified over the short,
medium and long term
83 to 91 During the year the Investment Manager identified the level of financial impact that each
climate-related risk might have on the portfolio.
FGEN voluntarily published its first transition plan and the Board of Directors agreed
a Strategic Ambition which explicitly refers to the resilience of FGEN’s portfolio of
investments:
“FGEN’s portfolio of investments will be net zero by 2050 in line with the 1.5°C Paris
Agreement objective, be resilient to the changing climate and contribute towards a more
sustainable future.”
b. Describe the impact of climate-related risks and opportunities on the organisation’s businesses,
strategy and financial planning
83 to 89
c. Describe the resilience of the organisation’s strategy, taking into consideration different
climate-related scenarios, including a 2°C or lower scenario
90
Risk management
a. Describe the organisation’s processes for identifying and assessing climate-related risks
92 to 98 Climate risk is embedded in FGEN’s risk management framework and climate-risk analysis
is included within due diligence process.
During the year, the Investment Manager worked with an environmental geospatial
consultancy to develop a platform for assessing nature-related and physical climate risks
across infrastructure assets, using FGEN’s portfolio as a pilot.
b. Describe the organisation’s processes for managing climate-related risks 92 to 98
c. Describe how processes for identifying, assessing and managing climate-related risks are integrated
into the organisation’s overall risk management
92 to 98
Metrics and targets
a. Disclose the metrics used by the organisation to assess climate-related risks and opportunities in
line with its strategy and risk management process
99, 101 FGEN voluntarily published its first transition plan, including a series of short-term
operational targets to facilitate the development of specific Scope 1 and Scope 3
emissions reduction targets in future. Scope 2 emissions are not material to FGEN’s total
emissions and the target for assets to purchase energy from renewable sources is no
longer a key performance indicator. The data will continue to be collected as part of
Scope 2 calculations and FGEN will continue to encourage assets to purchase energy from
renewable sources.
b. Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas (“GHG”) emissions and the
related risks
101, 106
c. Describe the targets used by the organisation to manage climate-related risks and opportunities
and performance against targets
99, 100
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Sustainability and ESG continued
Metrics and targets
Governance Strategy Risk management Metrics andtargets
TCFD core metrics
Metric Description Expressed as FY24/25 FY23/24
FY22/23
(revised baseline)
Weighted average
carbon intensity
1
Portfolio’s exposure to
carbon-intensive assets
tCO
2
e/£m
revenue
146.06* 231.6 339.9
Total carbon
emissions
2
The absolute greenhouse gas
emissions associated with the
portfolio
tCO
2
e 84,754.9* 79,637 91,653
Carbon footprint Total carbon emissions for a
portfolio normalised by the
market value of the portfolio
tCO
2
e/£m
invested
124.9* 106.0 112.5
Carbon intensity
1
Volume of carbon emissions
per million pounds of revenue
tCO
2
e/£m
revenue
216.9* 280.7 349.9
Exposure to
carbon-related
assets
The amount or percentage of
carbon-related assets in the
portfolio
% 14%* 14.6% 17%
1. The Investment Manager is committed to working with third-party MSA providers to continually improve data quality.
2. In accordance with TCFD methodology, these calculations are undertaken using Scope 1 and Scope 2 emissions only.
* Metrics marked with an asterisk have been included in the assessment for limited assurance. Further detail on the process is set out on page 104.
Performance to date
0
50
100
150
200
250
FY24/25FY23/24FY22/23
Scope 1
Scope 2 Scope 3
GHG emissions kt CO
2
e
FY24/25 saw an increase in Scope 1 emissions as fugitive emissions from AD sites was brought into the calculations for the first time. Increased activity across the CNG portfolio also resulted in an
increase in biomethane usage. Conversely, there has been a reduction in diesel, petrol, and natural gas consumption across the portfolio.
Scope 2 emissions have decreased across the portfolio as a higher percentage of assets purchase electricity from renewable sources. Despite the increase in renewable tariff adoption, overall
Scope 2 emissions have been affected by higher energy consumption at sites not yet transitioned to renewable sources. It’s also important to note that the Scope 2 emissions figure for FY23/24 has
been revised upward to 3.49ktCO
2
e due to a time lag in data availability.
Scope 3 emissions are calculated using the PCAF methodology, which is based on asset revenues. In FY24/25, portfolio revenues increased compared to FY23/24, and several PCAF emissions
factors also rose. The combination of these two factors has resulted in a higher Scope 3 emissions figure for FY24/25.
Overall, FGEN’s total GHG emissions have reduced from the baseline, which is largely driven by a change in calculation methodology. GHG emissions are now calculated by applying ownership
percentages to FGEN’s assets, allowing for a more accurate overview of the emissions directly attributable to the Company.
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Additional information
Portfolio electricity and carbon avoidance
A summary of the greenhouse gas benefits delivered by the portfolio is provided in the table
below. As FGEN invests into broader environmental infrastructure technologies, the Company
anticipates that the GHG emissions avoided will reduce as some assets are net emitters.
Metrics marked with an asterisk have been included in the assessment for limited assurance.
Further detail on the process is set out on page 104.
Sustainability and ESG continued
Metrics and targets
Governance Strategy Risk management Metrics andtargets
Asset portfolio
by sector
FY24/25 GHG
emissions avoided
(tCO
2
e)
FY23/24 GHG
emissions avoided
(tCO
2
e)
FY22/23 GHG
emissions avoided
(tCO
2
e)
Wind 107,949* 120,321 118,385
Solar (including rooftop) 17,588* 19,983 20,725
AD 70,216* 74,481 74,918
Hydro 747* 987 752
Biomass -2,157* -2,167 -1,859
Energy-from-waste -680* -688 -659
Total 193,663* 212,917 212,263
The calculation methodology follows the International Financial Institutions (“IFI”) Approach
to GHG Accounting for Renewable Energy Projects and uses the Harmonised IFI Default Grid
Factors for calculation.
Sustainable Finance Disclosure Regulation
The Sustainable Finance Disclosure Regulation (“SFDR“) is a European regulation introduced
to improve transparency in the market for sustainable investment products, to prevent
greenwashing and to increase transparency around sustainability claims made by financial
market participants.
FGEN discloses under Article 9 of the SFDR, defined as “a fund that has sustainable investment
as its objective”. Pursuant to Article 11 of the SFDR, certain disclosures relating to the
overall sustainability-related impact of the Company are set out in the disclosures below,
andsummarised here:
Sustainable investment objective of the Company
The Company’s objective contributes to the climate change mitigation objective and supports
the transition to a low-carbon economy by investing in a diversified portfolio of environmental
infrastructure, including infrastructure assets, projects and asset-backed businesses that utilise
natural or waste resources or support more environmentally friendly approaches to economic
activity whilst generating a sustainable financial return.
The Company’s activities will contribute materially towards the emissions reduction objectives
set out under the Paris Climate Agreement. By way of example, FGEN has invested into a
portfolio of diversified renewable energy assets, clean fuel distribution assets and other assets
that contribute to decarbonising both the national energy mix and other emissions-intensive
activities.
Alignment with EU Taxonomy (internal assessment)
0
20
40
60
80
100
2022/23 2023/24 2024/25
% alignment
Actual alignment Anticipated alignment Target alignment
ș FGEN commitment: minimum proportion of 80% of investments aligned with EU Taxonomy
by value.
ș Current alignment: 97%*.
ș Greenhouses and other indoor food production systems, inclusive of aquaculture, have
not yet had Technical Screening Criteria (“TSC”) developed. However, the proposed text
for the remaining four Environmental Objectives of the EU Taxonomy clearly stipulates
that both greenhouses and other indoor food production systems are to be prioritised for
development in the next iteration. Using the TSC for other food production systems as a
baseline, FGEN is confident that its assets in these sectors will satisfy the stipulated criteria
as and when they are developed. As such, within this disclosure the Company has chosen to
account for these assets as being Taxonomyaligned.
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Additional information
Performance of sustainability indicators
FGEN discloses under Article 9 of the SFDR. The impact element of FGEN’s SFDR reporting aligns against the UN Sustainable Development Goals (“UN SDGs”).
The SDGs are a set of 17 goals for sustainable development. To be achieved by 2030, they recognise that ending poverty must go hand-in-hand with strategies that build economic growth and
address a range of social needs including education, health, social protection and job opportunities, while tackling climate change and environmental protection. The Investment Manager has
mapped FGEN’s portfolio against the SDGs and the table below records performance against the selected SDGs over the past three years. Metrics marked with an asterisk have been included in the
assessment for limited assurance. Further detail on the process is set out on page 104.
Contribution to the Sustainable Development Goals
SDG Target Metric FY24/25 FY23/24 FY22/23
6.3 Improve water quality by reducing pollution, eliminating dumping and minimising
release of hazardous chemicals and materials, halving the proportion of untreated
wastewater and substantially increasing recycling and safe reuse globally.
Billion litres of wastewater treated 34.7* 40.2 35.6
7.2 Increase substantially the share of renewable energy in the global energy mix. GWh renewable energy produced 1,272* 1,358 1,325
Number of homes powered by renewable energy
per year (excludes AD portfolio)
264,844* 284,167 252,025
8.5 Achieve full and productive employment and decent work for all women and
men, including for young people and persons with disabilities, and equal pay for
work of equal value.
FTE jobs supported by FGEN portfolio 426 467 347
9.1 Develop quality, reliable, sustainable and resilient infrastructure, including
regional and transborder infrastructure, to support economic development and
human wellbeing, with a focus on affordable and equitable access for all.
Total MW generation capacity 409* 422.4 359.5
12.5 By 2030, substantially reduce waste generation through prevention, reduction,
recycling and reuse.
Tonnes waste diverted from landfill 703,470* 680,825 684,181
13.3 Improve education, awareness-raising and human and institutional capacity on
climate change mitigation, adaptation, impact reduction and early warning.
Greenhouse gas emissions avoided (tCO
2
e) 193,663* 212,917 212,263
15.5 Take urgent and significant action to reduce the degradation of natural habitats,
halt the loss of biodiversity and, by 2020, protect and prevent the extinction of
threatened species.
Annual avoidance of fossil fuels (tonnes oil
equivalent (“TOE“))
109,376* 116,771 113,941
Active biodiversity management plans in place (%) 84* 69 42
Sustainability and ESG continued
Metrics and targets
Governance Strategy Risk management Metrics andtargets
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Additional information
Principal Adverse Impact reporting
FGEN’s Principal Adverse Impact reporting for SFDR is set out
in the Annex V disclosure document which is available on the
Company’s website
1
.
SFDR RTS Website Disclosure, Annex III and Annex V
FGEN’s Annex III Pre-Contractual Disclosure is available on
the Company website
1
, as is the RTS Website Disclosure
1
.
FGEN’s Article V Periodic Disclosure is available on the
Company’s website
1
.
1. https://www.fgen.com/sustainability.
Sustainability and ESG continued
Metrics and targets
Governance Strategy Risk management Metrics andtargets
In November 2024, the ETA Manfredonia site hosted a
successful event in collaboration with Susan G. Komen
Italia, an organisation dedicated to the fight against breast
cancer. The event offered two types of cancer screenings
for employees, with a total of 65 appointments available.
The services were divided as follows:
ș 35 endocrinological screenings
ș 30 dermatological screenings
This event follows a previous collaboration in 2023,
wherebreast cancer screenings were offered to women
inthe Manfredonia city centre, all sponsored by the site.
The initiative aims to promote health awareness and
provide much-needed support to the community.
Susan G. Komen Italia was established in 2000 in Rome
as the first European affiliate of the Susan G. Komen
organisation from Dallas, USA.
Susan G. Komen Italia focuses on effective breast cancer
prevention, emphasising early diagnosis to reduce
mortality rates. As a volunteer-based organisation,
it has been working since 2000 to protect women’s
health by offering free screening activities (such as
mammograms and ultrasounds) through the “Carovana
dellaPrevenzione” programme.
This National Traveling Program for the Promotion of
Women’s Health utilises special mobile units equipped
with the latest diagnostic equipment and the expertise of
medical specialists. The primary objective is to provide
free cancer prevention opportunities (e.g. mammograms,
specialist visits, gynaecological ultrasounds) to women
from disadvantaged socio-economic backgrounds who do
not qualify for the free screening programmes offered by
the National Health System (SSN).
Cancer screening
Case study
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Additional information
Analysis of financial results
The financial statements of the Company for the year ended 31 March 2025 are set out on
pages 152 to 181.
The Company prepared the financial statements for the year ended 31 March 2025 in
accordance with UK–adopted international accounting standards as applicable to companies
reporting under those standards. In order to continue providing useful and relevant information
to its investors, the financial statements also refer to the “Group”, which comprises the
Company, its wholly owned subsidiary Foresight Environmental Assets Group (UK) Limited
(“UK HoldCo”) and the indirectly held wholly owned subsidiary HWT Limited (which holds the
investment interest in the Tay project).
Basis of accounting
The Company applies IFRS 10 and Investment Entities: Amendments to IFRS 10, IFRS 12 and
IAS 28, which states that investment entities should measure all their subsidiaries that are
themselves investment entities at fair value. The Company accounts for its interest in its wholly
owned direct subsidiary Foresight Environmental Assets Group (UK) Limited as an investment at
fair value through profit or loss.
The primary impact of this application, in comparison to consolidating subsidiaries, is that
the cash balances, the working capital balances and borrowings in the intermediate holding
companies are presented as part of the Company’s fair value of investments.
The Company’s intermediate holding companies provide services that relate to the Company’s
investment activities on behalf of the parent which are incidental to the management of the
portfolio. These companies are recognised in the financial statements at their fair value, which
is equivalent to their net assets.
The Group holds investments in the 40 portfolio assets which make distributions comprising
returns on investments (interest on loans and dividends on equity) together with repayments of
investments (loan repayments and equity redemptions).
Key investment metrics
All amounts presented in £million (except as noted)
Year ended
31 Mar 2025
Year ended
31 Mar 2024
Net assets
1
678.7 751.2
Portfolio value
2
765.7 891.9
Operating income and loss on fair value of investments 6.0 (3.8)
Net Asset Value per share
3
106.5p 113.6p
Distributions, repayments and fees from portfolio 90.4 87.0
Loss before tax (2.8) (13.9)
Gross asset value
3
951.3 1,091.8
Market capitalisation
3
457.0 619.9
Share price
3
71.7p 93.7p
Total shareholder return since inception
3
41.0% 68.4%
Annualised total shareholder return
3
3.2% 5.4%
1. Also referred to as “NAV”.
2. Classified as investments at fair value through profit or loss in the statement of financial position.
3. Net Asset Value per share, share price, market capitalisation, gross asset value, total shareholder return and annualised total
shareholder return are alternative performance measures (“APMs”). The APMs within the accounts are defined on pages 182and183.
Financial review
0
50
100
150
200
250
Mar
2014
Mar
2015
Mar
2016
Mar
2017
Mar
2018
Mar
2019
Mar
2020
Mar
2021
Mar
2022
Mar
2023
Mar
2024
Mar
2025
Pence
FGEN NAV Total Return FGEN Total Share Return FTSE All Share Total Return
FGEN total return since IPO
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Additional information
Net assets
Net assets decreased from £751.2 million at 31 March 2024 to £678.7 million at 31 March 2025.
The decrease was primarily driven by lower power prices, cash received from investments
and the disposal of two portfolios: 100% of the rooftop solar assets and a 51% stake in six
anaerobic digestion assets.
The net assets of £678.7 million comprise £765.7 million portfolio value of environmental
infrastructure investments and the Company’s cash balances of £2.6 million, partially offset
by £87.5 million of intermediate holding companies’ net liabilities and other net liabilities of
£2.1million.
The intermediate holding companies’ net liabilities of £87.5 million comprises a £99.3 million
credit facility loan, partially offset by cash balances of £5.1 million and other net assets of
£6.7million.
Analysis of the Group’s net assets at 31 March 2025
All amounts presented in £million (except as noted)
At
31 Mar 2025
At
31 Mar 2024
Portfolio value 765.7 891.9
Intermediate holding companies’ cash 5.1 17.8
Intermediate holding companies’ revolving credit facility (99.3) (159.3)
Intermediate holding companies’ other assets 6.7 3.1
Fair value of the Company’s investment in UK HoldCo 678.2 753.5
Company’s cash 2.6 0.3
Company’s other liabilities (2.1) (2.6)
Net Asset Value at 31 March 678.7 751.2
Number of shares 637,443,058 661,531,229
Net Asset Value per share
1
106.5p 113.6p
1. Net Asset Value per share is an alternative performance measure (“APM”). The APMs within the accounts are defined on pages 182
and 183.
At 31 March 2025, the Group (the Company plus intermediate holding companies) had a total
cash balance of £7.8 million (31 March 2024: £18.0 million). This included £2.6 million held
on the Company’s balance sheet (31 March 2024: £0.3 million) and £5.1 million held by the
intermediate holding companies (31 March 2024: £17.8 million). The latter is included in the
Company’s balance sheet under “investments at fair value through profit or loss”.
At 31 March 2025, UK HoldCo had drawn £99.3 million of its RCF (31 March 2024:
£159.3million), which is included in the Company’s balance sheet within “investments at fair
value through profit or loss”.
The movement in the portfolio value from 31 March 2024 to 31 March 2025 is summarised
asfollows:
All amounts presented in £million (except as noted)
Year ended
31 Mar 2025
Year ended
31 Mar 2024
Portfolio value at start of the year 891.9 898.5
Acquisitions and further investment 30.7 69.2
Asset disposals (89.1) —
Distributions received from investments (90.4) (87.0)
Growth in value of portfolio 22.6 11.2
Portfolio value at 31 March 765.7 891.9
Further details on the portfolio valuation and an analysis of movements during the year are
provided in the investment portfolio and valuation section on pages 27 to 37.
Financial review continued
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Additional information
Income
The Company’s loss before tax for the year ended 31 March 2025 was £2.8 million, a loss of
0.4pence per share (year ended 31 March 2024: loss of 2.1 pence per share), driven by the
loss on fair value of investments as a result of power price forecast contraction, future cash
flows and changes in macroeconomic conditions.
All amounts presented in £million (except as noted)
Year ended
31 Mar 2025
Year ended
31 Mar 2024
Interest received on UK HoldCo loan notes 31.1 31.4
Dividend received from UK HoldCo 32.3 28.0
Net loss on investments at fair value (57.4) (63.2)
Operating income and losses on fair value of investments 6.0 (3.8)
Operating expenses (8.8) (10.1)
Loss before tax (2.8) (13.9)
Loss per share (0.4)p (2.1)p
In the year to 31 March 2025, the operating income on fair value of investments was
£6.0million, including the receipt of £31.1 million of interest on the UK HoldCo loan notes,
£32.3 million of dividends also received from UK HoldCo and net losses on investments at fair
value of £57.4 million.
The operating expenses included in the income statement for the year were £8.8 million, in
line with expectations. These comprise £7.2 million Investment Manager fees and £1.6 million
operating expenses. The details on how the Investment Manager fees are charged are set out in
note 15 to the financial statements.
Ongoing charges
The ongoing charges ratio
1
is an indicator of the costs incurred in the day-to-day management
of the Fund. FGEN uses the AIC-recommended methodology for calculating this ratio, which is
an annual figure.
The ongoing charges percentage for the year to 31 March 2025 was 1.24% (year ended
31March 2024: 1.24%).
The ongoing charges have been calculated, in accordance with AIC guidance, as annualised
ongoing charges (i.e. excluding acquisition costs and other non-recurring items) divided by the
average published undiluted Net Asset Value in the period. The ongoing charges percentage has
been calculated on the consolidated basis and therefore takes into consideration the expenses
of UK HoldCo as well as the Company. Adjusting for the impact of the drawn down amount
under the RCF, the ongoing charges ratio would have been 1.06% (31 March 2024: 1.06%).
Foresight believes this to be competitive for the market in which FGEN operates and the stage
of development and size of the Fund, demonstrating that management of the Fund is efficient
with minimal expenses incurred in its ordinary operation.
Cash flow
The Company had a total cash balance at 31 March 2025 of £2.6 million (31 March 2024:
£0.3million).
The breakdown of the movements in cash during the year is shown below.
Cash flows of the Company for the year (£million):
Year ended
31 Mar 2025
Year ended
31 Mar 2024
Cash balance at 1 April 0.3 0.1
Loan repayment from subsidiary 18.0 —
Purchase of treasury shares (19.2) —
Interest on loan notes received from UK HoldCo 31.1 31.4
Dividends received from UK HoldCo 32.3 28.0
Directors’ fees and expenses (0.3) (0.3)
Investment Manager fees (7.8) (8.4)
Administrative expenses (1.3) (1.1)
Dividends paid in cash to shareholders (50.5) (49.4)
Company cash balance at 31 March 2.6 0.3
The Group had a total cash balance at 31 March 2025 of £7.8 million (31 March 2024:
£18.1million) and borrowings under the revolving credit facility of £99.3 million (31 March 2024:
£159.3 million).
Financial review continued
1. The ongoing charges ratio is an alternative performance measure (“APM”). The APMs within the accounts are defined on
pages 182 and 183.
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Additional information
The breakdown of the movements in cash during the year is shown below.
Cash flows of the Group for the year (£million):
Year ended
31 Mar 2025
Year ended
31 Mar 2024
Cash distributions from environmental infrastructure investments 90.4 87.0
Administrative expenses (1.6) (1.3)
Directors’ fees and expenses (0.3) (0.3)
Investment Manager fees (7.8) (8.4)
Financing costs (net of interest income) (10.5) (7.3)
Electricity Generator Levy (3.3) (5.5)
Cash flow from operations
1
66.9 64.2
Debt arrangement fee cost (2.3) (1.0)
Acquisition of investment assets and further investment (30.7) (69.2)
Disposal of assets 88.6 —
Acquisition costs (including stamp duty) (1.6) (0.4)
Short-term project debtors (2.6) (0.9)
Purchase of treasury shares (19.2) —
(Repayment)/drawdown under the revolving credit facility (58.9) 56.8
Dividends paid in cash to shareholders (50.5) (49.4)
Cash movement in the year (10.3) 0.1
Opening cash balance 18.1 18.0
Group cash balance at 31 March 7.8 18.1
During the year, the Group received cash distributions of £90.4 million from its environmental
infrastructure investments, an increase of 3.9% compared to 2024.
Cash received from investments in the year covers the operating and administrative expenses
and financing costs, as well as the dividends declared to shareholders in respect of the
year ended 31 March 2025. Cash flow from operations of the Group of £66.9 million covers
dividends paid in the year to 31 March 2025 of £50.5 million by 1.32x.
The Group anticipates that future revenues from its environmental infrastructure investments
will continue to be in line with expectations and therefore will continue to cover fully future
costs as well as planned dividends payable to its shareholders
2
.
Dividends
During the year, the Company paid a final dividend of 1.89 pence per share in June 2024
(£12.5million) in respect of the quarter to 31 March 2024.
Interim dividends of 1.95 pence per share were paid in September 2024 (£12.9 million)
in respect of the quarter to 30 June 2024, of 1.95 pence per share in December 2024
(£12.7million) in respect of the quarter to 30 September 2024, and of 1.95 pence per share
inMarch 2025 (£12.5 million) in respect of the quarter to 31 December 2024. On 29 May 2025,
the Company declared a final dividend of 1.95 pence per share in respect of the quarter
ended31March 2025 (£12.3 million), which is payable on 27 June 2025.
The target dividend for the year to 31 March 2026 is 7.96 pence per share, a 2.1% increase
from the dividend of 7.8 pence per share declared in respect of the year to 31 March 2025
2
.
1. Cash flow from operations is an alternative performance measure (“APM”). The APMs within the accounts are defined on pages 182
and 183.
2. These are targets only and not profit forecasts. There can be no assurance that these targets will be met.
Financial review continued
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Additional information
Governance
Bilsthorpe wind farm
In this section:
Chair’s introduction 115
Board of Directors 116
Governance at a glance 118
Board leadership and Company purpose 120
Relations with shareholders 124
Division of responsibilities 125
Nomination Committee report 127
Audit Committee report 131
Risk Committee report 135
Directors’ remuneration report 137
Report of the Directors 139
Statement of Directors’ responsibilities 144
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Additional information
Chair’s introduction
The Board believes that a strong corporate governance
culture is essential for the Company to achieve its
investment objectives, to mitigate downside risk, and to
takeaccount of the interests of key stakeholders as part of
itsdecision-making process.
Introduction
The Listing Rules and the Disclosure Guidance and
Transparency Rules (“Disclosure Rules”) of the FCA require
listed companies to disclose how they have applied the
principles and complied with the provisions of the Corporate
Governance Code to which the issuer is subject. The
provisions of the UK Corporate Governance Code (“UK
Code”), as issued by the Financial Reporting Council (“FRC”) in
July 2018 and updated in January 2024, are applicable to the
year under review and can be viewed at www.frc.org.uk.
The related Code of Corporate Governance (the “AIC
Code”), issued by the Association of Investment Companies
(“AIC”), provides specific corporate governance guidelines
to investment companies. The AIC issued their revised code
for member companies in February 2019 and this applies to
accounting periods beginning on or after 1 January 2019.
The FRC has confirmed that AIC member companies who
report against the AIC Code will be meeting their obligations
in relation to the UK Code and the associated disclosure
requirements of the Disclosure Rules. The AIC Code can
beviewed at www.theaic.co.uk.
The Guernsey Financial Services Commission (“GFSC”)
hasissued a Finance Sector Code of Corporate Governance
(the “Guernsey Code”). The Guernsey Code comprises
Principles and Guidance and provides a formal expression of
good corporate practice against which shareholders, boards
and the GFSC can better assess the governance exercised
over companies in Guernsey’s financesector.
Companies which report against the UK Code or the AIC
Code are also deemed to meet the Guernsey Code.
Statement of compliance with the AIC Code
andGuide
The Board recognises the importance of a strong corporate
governance culture that meets the Listing Rules of the FCA.
The Board has put in place a framework for corporate
governance that reflects the scale, nature and complexity of
the Company and its operations. All Directors contribute in a
meaningful way to Board discussions and debates.
The Board believes in providing as much transparency on
the Company’s activities for stakeholders as is reasonably
possible. It should be noted that most of the Company’s
day-to-day responsibilities are delegated to third parties
andthe Company has no employees.
The Company is a member of the AIC and is classified within
the renewable energy infrastructure sector. The Company
currently complies (except as set out in the next paragraph)
with the principles and provisions of good governance
contained in the AIC Code (which complements the UK
Code and provides a framework of best practice for listed
investment companies), and in accordance with the AIC Code,
the Company will be meeting its obligations in relation to
the UK Code and associated disclosure requirements of the
Listing Rules.
The UK Code includes provisions relating to the role of the
Chief Executive, executive Directors’ remuneration and the
need for an internal audit function. The Board considers
these provisions are not relevant to the position of the
Company, as all of the Company’s day-to-day management
and administrative functions are outsourced to third
partiesandithas no executive Directors, employees or
internal operations.
The independent compliance functions and internal control
frameworks in place by service providers undertaking
the Company’s critical business functions, principally
the Investment Manager and the Administrator, provides
comfort that the activities which would otherwise have been
undertaken by an internal audit function have been effectively
addressed through other means. Therefore no further
reporting has been provided in respect of these provisions.
The functions which would typically be carried out by
a management engagement committee are performed
by the Company’s Board as a whole and the Board
has not considered it necessary to appoint a separate
remunerationcommittee.
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Additional information
Page Title continued
Underhead
Board of Directors
Ed Warner
Board Chair
Appointed
2 August 2022
Ed has extensive financial services experience from his
time spent in senior positions at several investment banks
and financial institutions, including IFX Group, Old Mutual,
NatWest Markets and Dresdner Kleinwort Benson.
Past experience
Ed has considerable investment trust experience, having
been Chair of both Standard Life Private Equity Trust plc
and BlackRock Energy and Resources Income Trust. He is
currently Chair of HarbourVest Global Private Equity Limited.
Ed has also previously served as Chair of Air Partner plc and
non-executive Director and interim Chair of Clarkson plc.
Stephanie Coxon
Senior Independent Director
Appointed
11 June 2020
Stephanie is a Fellow of the Institute of Chartered
Accountants in England and Wales and is a non-executive
Director of several London listed companies.
Past experience
Prior to becoming a non-executive Director, Stephanie led
the investment trust capital markets team at PwC for the
UK and Channel Islands. During her time at PwC, Stephanie
specialised in advising FTSE 250 and premium London
listed companies on accounting, corporate governance,
riskmanagement and strategic matters.
Alan Bates
Director
Appointed
10 June 2021
Alan has over 33 years’ experience in the energy and
infrastructure sectors, including electricity, gas and water
utilities. He has developed a broad understanding of the
dynamics behind the energy transition and has assisted the
Government of Guernsey in developing its energy policy.
Alan is the CEO of Guernsey Electricity and is a Director of
the Channel Islands Electricity Grid and Alderney Electricity
Limited. Alan is a Chartered Engineer, Fellow of the Institute
of Mechanical Engineers and a Member of the Institute of
Engineering Technology.
Past experience
Alan commenced his career with P&O and Princess Cruises
as a Marine Engineering Officer, followed by 19 years in the
oil and gas industry working for Mobil Oil/BP Oil and then
International Energy Group before becoming the Managing
Director of Manx Gas in the Isle of Man.
Audit Committee Nomination Committee Risk Committee ESG Committee Chair
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Page Title continued
Underhead
Board of Directors continued
Nadia Sood
Director
Appointed
10 February 2023
Nadia has extensive experience of executing, managing and
overseeing complex infrastructure investments. She has run
large renewable energy infrastructure investment portfolios
worth billions of dollars in multiple countries and served as
a Director on the board of more than 20 prominent privately
owned companies. Nadia is currently CEO of CreditEnable, a
global credit insights and technology solutions company, and
a member of the IFC/World Bank SME Finance Forum.
Nadia holds a Bachelor of Science in Foreign Service from the
Edmund A. Walsh School of Foreign Service at Georgetown
University in Washington D.C., and a Masters in International
Affairs from Columbia University, New York. She is fluent in
English, French and Norwegian.
Past experience
Nadia was previously EVP at SN Power, a $2.5 billion
renewable energy private equity investment fund, where she
also held a senior role within a joint venture with Tata Power.
She was a Director at Nestlé, and worked for the Secretary
General of the United Nations.
Jo Harrison
Director
Appointed
10 June 2021
Jo has over 25 years’ experience working in the water
industry and is the Director of Strategic Planning &
Sustainability at United Utilities, where she is accountable
for leading the approach to environmental and long-term
planning, including developing and strengthening the
approach to all aspects of the environment, climate
change and carbon, asset strategy, risk and resilience.
Jo is a chartered member of the Institute of Water and
Environmental Managers and is a Chartered Environmentalist.
She is also a trustee of the Rivers Trust.
Past experience
Jo started her career working in renewable energy and
has worked for United Utilities since 1998. She has a BSc
in Geography and Ecology from the University of Sheffield
and an MSc in Pollution and Environmental Control from
Manchester University. Jo was also previously a trustee of
the Community Forest Trust and the Mersey Rivers Trust and
a Director of UK Water Industry Research.
Board experience matrix
Experienced Some experience Limited experience
Board skills
Governance
Financial & accounting
Risk
Fund structure/management
Tax & legal
ESG
Thematic experience relevant to FGEN
Audit Committee Nomination Committee Risk Committee ESG Committee Chair
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Additional information
Governance at a glance
The corporate governance and Board structure is outlined below.
Board structure as at 31 March 2025
Ed Warner
Chair
Stephanie Coxon (Chair)
Alan Bates
Jo Harrison
Nadia Sood
Audit
Committee
Alan Bates (Chair)
Ed Warner
Stephanie Coxon
Jo Harrison
Nadia Sood
Risk
Committee
Jo Harrison (Chair)
Ed Warner
Stephanie Coxon
Alan Bates
Nadia Sood
ESG
Committee
Ed Warner (Chair)
Alan Bates
Stephanie Coxon
Jo Harrison
Nadia Sood
Nomination
Committee
Alan Bates
Stephanie Coxon
Jo Harrison
Nadia Sood
Foresight Group led by
Edward Mountney, Charlie Wright and
Chris Tanner as Investment Managers
Directors Investment Manager
Board composition
Board tenure
Gender diversity
Chair 1
Senior Independent
Director 1
Directors 3
0-5 years 5
6-8 years 0
Male 2
Female 3
Corporate governance framework
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Additional information
Board activities in 2024/25
Strategy
Following approval by shareholders, in September 2022
the Company’s investment policy was amended to allow a
greater degree of flexibility. This now allows the Company to
invest in environmental infrastructure in its construction or
development phase. This includes investment in developers
of environmental infrastructure or development funding
structures relating to environmental infrastructure.
In May, the Board attended a strategy day and site visit to
FGEN’s 2.4-hectare Glasshouse facility. Directors were taken
on a tour of the facility and attended a presentation by the
operators of the facility, Glass Pharms, discussing the future
prospects of the business.
Review of strategic options
With the support of independent advisers, the Board
rigorously evaluated a full range of strategic alternatives for
the Company, including a managed wind-down, a targeted
divestment approach, the continuation of the current
investment strategy, and potential mergers and acquisitions.
Following this review, the Board has concluded that the
long-term prospects of the Company and shareholder
interests are best served through the proactive management
of the existing portfolio, and a refocused investment strategy
that reflects the structural changes in macroeconomic
conditions since 2022, characterised by increased levels
of market volatility and higher return expectations in an
elevated rate environment.
Management fees
Last year, the basis for calculation of investment management
fees was changed to Net Asset Value, and the fee rate
charged was also reduced. In June 2025, it was announced
that the basis of calculating fees is being proposed to be
further adjusted to better align the interests of the Investment
Manager, Foresight, with those of shareholders.
From a proposed date of 1 October 2025, fees will be
calculated 50% based on Net Asset Value and 50% on market
capitalisation (the latter element capped at Net Asset Value).
Governance
The Company appointed KPMG Channel Islands Limited
(“KPMG”) as its external auditor following approval of its
appointment at the 2023 AGM. KPMG undertook its first audit
of the Company for the year ended 31 March 2024.
During the year, the Board has continued to engage with
FGEN’s stakeholders. This engagement has taken the form of
meetings with major shareholders and dialogue with senior
executives at Foresight Group.
In order to ensure continuous improvement in FGEN’s
ESG and climate-related processes, the Board received
training and approved the introduction of the Transition Plan
Taskforce Disclosure Framework. Board members were
invited to engage with the ongoing development of FGEN’s
transition plan and feed into key commitments, helping to
develop the Strategic Ambition for the plan.
Risk management
The duties of the Company’s Risk Committee include the
identification, measurement, management and monitoring of
all risks relevant to the Company’s investment strategy and
to which the Company is or may be exposed.
Activities undertaken during the course of the year include
careful monitoring of macroeconomic factors creating
market disruption, assessing the impact of rising interest
rates, inflation and volatile short-term power prices on the
Company’s ability to maintain its target dividend.
The Board has also assessed the robustness of risk
management controls implemented by the Investment
Manager, with a particular focus on the integration of
new technologies into the portfolio and identification
and subsequent management of risks associated with
construction-stage investments, as the proportion of such
assets in the portfolio increases.
The Board places a high degree of importance on ensuring
that high standards of corporate governance are maintained
throughout the Group.
Governance at a glance continued
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Duties and responsibilities
The Board’s annual cycle includes not less than four
scheduled meetings per year and, should the nature of
the activity of the Company require it, additional meetings
may be scheduled, some at short notice. Between meetings
there is regular contact with the Investment Manager and
the Administrator and the Board requires information to be
supplied in a timely manner by the Investment Manager, the
Company Secretary and other advisers in a form and of a
quality appropriate to enable it to discharge its duties, and in
a timely manner to enable full and proper consideration to
be given to the relevant issues. Outside of the formal meeting
schedule, informal sessions are held between the Board and
an annual strategy day is held by the Board with key advisers.
The Board has overall responsibility for the management
of the Company’s affairs. Whilst discretionary management
authority has been delegated to the Investment Manager, the
Board has adopted a set of reserved powers which set out
the particular areas where the Board wishes to retain control.
Such reserved powers include decisions relating to the
determination of investment policy and approval of certain
investment transactions, strategy, capital raising, statutory
obligations and public disclosure, financial reporting, entering
into any material contracts by the Company and overseeing
the Company’s sustainability strategy.
The Board actively promotes a culture of openness,
constructive challenge and debate in the boardroom,
underpinned by robust internal controls and governance
frameworks. Assessment of the personality types of Board
Directors and their cognitive and interpersonal skills forms
part of the Board’s consideration of the expected future
leadership needs of the Company. In considering these
needs, the Board seeks to ensure that the practices and
behaviour throughout the Company’s operations remain
aligned with the Company’s purpose, values and strategy.
No corrective actions were taken during the year in response
to matters arising which did not meet the Board’s expected
standards.
An Investment Management Agreement between the
Company and the Investment Manager sets out the matters
over which the Investment Manager has delegated authority,
including monitoring and managing the existing investment
portfolio, risk management, taking investment decisions
within the agreed parameters and also the limits on cost and
expenditure above which Board approval must be sought.
All other matters are reserved for approval by the Board of
Directors.
In contributing to the delivery of the Company’s strategy,
the Board maintains a high level of engagement with the
Investment Manager and seeks to work in a collegiate and
co-operative manner, whilst encouraging open discussion,
challenge and debate of all significant matters relevant to the
Investment Manager’s delegated authority. In addition to the
Board’s cycle of scheduled meetings, members of the Board
regularly attend operational update meetings hosted by the
investment management team.
The Directors are expected to devote such time as is
necessary to enable them to discharge their duties. Where
necessary, in carrying out their duties, the Directors may
seek independent professional advice at the expense of the
Company. The Company maintains appropriate Directors’
and Officers’ liability insurance in respect of legal action
against its Directors on an ongoing basis.
The Board has responsibility for ensuring that the Company
keeps proper accounting records which disclose with
reasonable accuracy at any time the financial position of the
Company and which enable it to ensure that the financial
statements comply with the Companies (Guernsey) Law, 2008,
as amended.
It is the Board’s responsibility to present a fair, balanced and
understandable assessment, which extends to interim and
other price-sensitive public reports.
Board operation
The overall management of the Company is the responsibility
of the Board, which exercises all the powers of the Company
subject to the relevant statutes, the Company’s Articles of
Incorporation and any directions given by resolutions passed
by shareholders. The Articles empower the Board to allot,
grant options, warrants or other rights over, or otherwise
dispose of, the Company’s shares as the Board determines.
The law permits the Company to make market purchases of
its own shares if the purchase has first been authorised by a
resolution of the Company.
Shareholders authorised the renewal of the Board’s authority
to allot ordinary shares at the 2024 AGM and, subject to
certain terms and conditions, to repurchase ordinary shares
on behalf of the Company. Similar authorities are being
sought at the forthcoming AGM and details will be set out in
the notice of AGM.
The Board’s annual cycle includes quarterly meetings
where the Directors follow a formal agenda, which is fixed
in advance, and standing agenda items at each quarterly
meeting cover each area where the Board has reserved
decision-making power, in addition to receiving reports
from key service providers on portfolio performance, share
price performance, asset valuations and enhancements,
operational matters, business development and capital
allocation, ESG matters, risk management, peer group
information, regulatory and industry developments.
Board leadership and Company purpose
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Board leadership and Company purpose continued
The Board actively monitors the environment in which the
Company operates to ensure any developments which may
affect the Company are considered. Strategy sessions are
held at least annually and are co-ordinated by the Investment
Manager and key advisers, which include site visits and
technical briefings. The Board’s annual cycle also includes a
dividend policy review session and setting the target for the
next financial year.
In order to discharge their duties and to operate effectively
as a Board, the Directors have full and timely access to all
relevant information concerning the Company.
The principal matters considered by the Board during the
year (including attending to matters formally reserved for its
decision-making) included:
ș the strategic direction of the Company within the
investment policy;
ș composition of the Board, diversity and succession
planning;
ș the Annual Report and audited financial statements and
the Half-year Report;
ș the dividend policy;
ș funding requirements of the Company, including usage of
the Company’s existing revolving credit facility (“RCF”) and
the usage of the Company’s accordion facility;
ș the activities of the Board’s formally constituted
committees;
ș the valuation policy, the recognition of value
enhancements, the inclusion of capture discounts and the
ongoing appropriateness of the blended power curve; and
ș the risk management framework and the principal risks
facing the Company.
Committees of the Board
The Board has not deemed it necessary to appoint a
separate remuneration committee as, being comprised of
five non-executive Directors, it considers that such matters
may be considered by the Board as a whole. At the launch
of the Company, the remuneration of the Board was fixed
after consultation with independent external advisers
and in subsequent years the Board has reviewed the
remuneration levels for the Company and received industry
comparison information from advisers in respect of Directors’
remuneration. The Company’s remuneration policy was last
subject to a full independent review in May 2023. As noted
in the Directors’ remuneration report on pages 137 and 138,
an internal review of remuneration levels was undertaken
during March 2025, and recommendations for fee levels to
apply from the financial year commencing April 2025 will be
proposed to shareholders as part of the remuneration policy
at the 2025 AGM.
Following Foresight’s appointment as AIFM, the Board meets
to consider any investment proposals which fall outside
of Foresight’s delegated authority. The Board ensures
compliance with the terms of the investment policy of the
Company and will consider and decide on any changes
to the investment policy (subject to obtaining the relevant
shareholder approvals), including geographical and sectorial
spread of investments, risk profile, investment restrictions
and the approach to project selection.
Prior to January 2022 the Board was responsible for making
discretionary management decisions in respect of the
investment portfolio (with reference as necessary to advice
provided by Foresight Group, which at that time acted as the
Company’s Investment Adviser).
In connection with Foresight’s appointment as discretionary
Investment Manager, the Board and Foresight agreed specific
delegation parameters against which investment proposals
are to be assessed. In cases where the parameters are
exceeded, the transaction qualifies as a “Board Approval
Transaction”, therefore falling outside the scope of Foresight’s
delegated authority.
The Board as a whole also fulfils the functions typically
carried out by a management engagement committee. The
Board reviews and makes recommendations on any proposed
amendment to the Investment Management Agreement and
keeps under review the performance of the Investment
Manager.
The Board also performs a review of the performance of
other key service providers to the Fund and meets at least
once a year to undertake a qualitative performance review.
Inthe case of each service provider, the review seeks to
ensure that:
ș the terms of engagement remain fair and reasonable in the
context of the Company and the market;
ș their objectives remain aligned with those of the Company;
ș they have not been subject to any adverse event which
may present additional risk to the Company;
ș they remain appropriately incentivised to perform their
duties to a high standard; and
ș their continued engagement remains in the best interests
of the Company as a whole.
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Board leadership and Company purpose continued
The Board notes the supporting guidance provided under
provision 17 of the 2019 edition of the AIC Code on means
by which investment companies may assess the relationship
with the Manager. During the 2024/25 financial year, the
Board reviewed the Company’s position against each of the
suggested considerations and concluded that the relationship
was operating effectively, that the duties of the Investment
Manager remained aligned with the objectives of the
Company and that the continued retention of the Investment
Manager’s services remained in the best interests of the
Company.
Audit Committee
The Company has established an Audit Committee, chaired
by Stephanie Coxon, which operates within clearly defined
terms of reference and comprises four non-executive
Directors: Stephanie Coxon, Alan Bates, Jo Harrison and
Nadia Sood, whose qualifications and experience are noted
on pages 116 and 117. All members of the Audit Committee
are independent Directors and have no connections with
the serving external auditor. The Audit Committee meets at
least three times a year, at times appropriate to the financial
reporting calendar.
Further details of the membership and activities of the
AuditCommittee are described in this report on pages
131and 134.
Audit Committee performance evaluation
For the financial year ended 31 March 2025, the Board is
undertaking an internal evaluation of the performance of
the Audit Committee. The evaluation process will include
feedback from all Committee members on the Committee’s
discharge of the duties delegated under its terms of
reference, and on the performance and effectiveness of the
Audit Committee Chair.
External audit
The 2024 financial year was the first annual audit completed
by the Company’s second external auditor since IPO, KPMG
Channel Islands Limited (“KPMG”). KPMG undertook its first
interim review for the period ended 30 September 2023
ahead of their first audit of the Company. In line with the
recommendation of the UK Code and the AIC Code that the
role of the external auditor is retendered every 10 years,
the Company decided to launch a formal tender of its audit
following the 2023 financial year audit. The original external
auditor since inception had been Deloitte LLP.
The Audit Committee is satisfied with the quality, effectiveness
and independence of the audit process, and the effectiveness
of the recent audit and the performance of the external
auditor is reviewed annually. The review process includes
receiving feedback from all key personnel involved in the
audit process and in the production of the annual financial
statements. Any findings from the audit effectiveness review
are communicated to the external auditor in advance of their
next engagement and considered as part of the subsequent
audit planning process.
Risk Committee
The Company has also established a Risk Committee, which
is chaired by Alan Bates and comprises all non-executive
Directors on the Board: Alan Bates, Ed Warner, Nadia
Sood, Jo Harrison and Stephanie Coxon. The duties of the
Risk Committee include the identification, measurement,
management and monitoring of all risks relevant to the
Company’s investment strategy and to which the Company
is or may be exposed. Drawing from this, the Risk Committee
is responsible for determining the principal risks to which the
Company is exposed, being those most likely to threaten the
business model, future performance, solvency or liquidity.
It is the responsibility of the Risk Committee to advise the
Board on the overall risk appetite, tolerance and strategy
of the Company, and to oversee the Company’s current risk
exposures and the controls in place to mitigate those risks.
The Risk Committee meets at least four times per year.
Nomination Committee
The Nomination Committee, chaired by Ed Warner, comprises
all non-executive Directors on the Board: Ed Warner,
Stephanie Coxon, Nadia Sood, Alan Bates and Jo Harrison.
The Nomination Committee’s main function is to regularly
review the structure, size and composition of the Board
and to consider succession planning for Directors. The
Nomination Committee meets at least twice per year.
ESG Committee
The ESG Committee, chaired by Jo Harrison, comprises
all non-executive Directors on the Board: Jo Harrison, Ed
Warner, Stephanie Coxon, Alan Bates and Nadia Sood.
The ESG Committee’s main functions include guiding and
monitoring the development of the Company’s sustainability
and ESG strategy, agreeing the Company’s ESG objectives
and monitoring progress against the KPIs linked to each
objective.
The ESG Committee will also assess and prioritise ESG risks
and opportunities for the Company, including assessing
climate change risks, and working with the Risk Committee
and the Investment Manager to ensure climate governance is
integrated into the Company’s risk management.
Separate reports from the Audit, Risk and Nomination
Committees on their activities for the year are set out on
pages 127 to 136. The terms of reference for each of the
Committees are available on the Company’s website or upon
request from the Company Secretary.
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Board leadership and Company purpose continued
Directors’ attendance
The attendance record of Directors for the year to 31 March 2025 is set out below:
Board
meeting
Audit
Committee
Risk
Committee
Nomination
Committee
ESG
Committee
Number of meetings 4 6 4 4 3
Ed Warner 4 — 4 4 3
Alan Bates 4 6 4 4 3
Stephanie Coxon 4 6 4 4 3
Jo Harrison 4 6 3 3 3
Nadia Sood 4 4 6 4 4 3
Hans Joern Rieks (resigned effective
13 September 2024) 1 2 — — —
A total of 10 other unscheduled Board meetings were held during the year for specific purposes, which were attended by some,
but not all, of the Directors.
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Dialogue with shareholders
The Company welcomes the views of all shareholders and
places great importance on effective communication with its
shareholders through a variety of channels. TheInvestment
Manager produces a quarterly factsheet, which is available
on the Company’s website. The Chair and senior members
of the Investment Manager make themselves available,
as practicable, to meet with principal shareholders, key
sector analysts or other key stakeholders. Meetings
between institutional investors and the Investment Manager
are arranged periodically by the Company’s broker and
representatives of the Company are open to meeting with
allinvestors, on request.
Feedback from these meetings is provided to the Board
on a regular basis. The Board is also kept fully informed
of all relevant market commentary on the Company by
the Company’s financial PR agency, as well as receiving
relevantupdates from the Investment Manager and the
Company’s broker.
Investor publications
All shareholders can address any feedback or queries
concerning the Company in writing at its registered address
via the Company Secretary.
The Chair or the Senior Independent Director are willing
to meet with major shareholders to discuss any particular
items of concern or to understand their views on governance
and the performance of the Company, and the AGM of the
Company provides a forum for shareholders to meet and
discuss issues with the Directors and the Investment Manager.
Company website
The Company’s website, www.fgen.com, is regularly updated
with new information, research, videos and quarterly
publications. The Company’s Prospectus, Key Information
Document and Investor Disclosure Document are all available
for download. The Company also maintains an issuer services
page with the London Stock Exchange, providing details of
key contacts and corporate events over the financial year.
Stakeholders, business relationships and socially
responsible investment
Section 172 statement
Whilst not directly applicable to companies incorporated
outside the UK, the Board recognises the intention of the AIC
Code that matters set out in Section 172 of the Companies
Act 2006 are reported.
The Board strives to understand the views of the Company’s
key stakeholders and to take these into consideration as part
of its discussions and decision-making process.
Additionally, the Board promotes the success of the Company
for the benefit of the Company’s members as a whole as well
as a broad range of stakeholders that the Board recognises
as material to the long-term success of the business. Weset
out the detail of how the Board has considered the duty
under Section 172 on pages 65 and 66.
As an investment company, the Company does not have
any employees and conducts its core activities through
third-party service providers. Each provider has an
established track record and regulatory oversight is required
to have suitable policies and procedures in place to ensure
they maintain high standards of business conduct, treat
shareholders fairly and employ corporate governance
bestpractice.
The stakeholders which the Board has identified as being key
are the Company’s shareholders, the Investment Manager,
commercial service providers, asset-level counterparties,
local communities and debt providers. Understanding
the needs of each stakeholder group and ensuring the
Company’s operations are conducted in a manner which
recognises their interests is crucial for ensuring the
Company’s long-term sustainable success.
Further information on how the Company engages with
stakeholders can be found on pages 65 to 70.
The Board’s commitment to maintaining high standards of
corporate governance, combined with the Directors’ duties
enshrined in company law, the constitutive documents,
the Disclosure Guidance and Transparency Rules and
the UK version of the Market Abuse Regulation, provides
shareholders with regular and detailed announcements
concerning the Company and its activities sufficient for
investors to make informed decisions concerning their
shareholding. At each scheduled meeting, a significant amount
of time is dedicated to risk management and how effectively
the Company can preserve value for shareholders over the
long term through mitigating downside risk. Regular dialogue
with the Investment Manager and the corporate broker
ensures the Board is aware of the investment strategy and the
views of major shareholders and for these to be taken into
consideration as part of the Board’s decision-making process.
Representatives of the Investment Manager are involved in
the governance framework of each project. This reinforces
the effective flow of relevant information to the Board on
the activities of the Company’s significant counterparty
exposures involved in operating each project, and provides
a communication channel through which community
stakeholders’ views can be shared, considered at each
scheduled meeting of the Directors, and to ensure their
interests remain aligned with the objectives of the Company.
Relations with shareholders
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Division of responsibilities
Chair
As Chair, Ed Warner is responsible for leading the Board and
for ensuring its effectiveness in all aspects of its role. Specific
duties of the Chair include demonstrating ethical leadership,
objective judgement, promoting the highest standards of
integrity, probity and a culture of openness and debate. The
Chair sets the Board’s agenda and ensures the Board has
a clear understanding of the views of those who provide
the Company’s capital and that effective decision-making
processes are in place, supported by high-quality information,
that take into consideration the interests of all the Company’s
key stakeholders.
The Chair leads the annual performance evaluation of the
Board, with support from the Senior Independent Director,
and acts as appropriate on the results. One-on-one meetings
are held between the Chair and the Directors each year,
which provides an additional forum through which any
potential training needs are identified, experiences of the
Company are shared or other relevant Board matters are
addressed.
Senior Independent Director
Stephanie Coxon was the Senior Independent Director during
the financial year ended 31 March 2025, and provided
support to the Chair on matters of Board effectiveness,
governance, and acting as an intermediary for the Directors,
shareholders and other key stakeholders. The Senior
Independent Director also provides an additional channel
of communication through which stakeholders may voice
concerns, works annually with the other Directors on
reviewing the performance of the Chair, and is responsible for
leading the succession planning arrangements for the Chair.
Non-executive Directors
Including the Chair and the Senior Independent Director,
the Company currently has five independent non-executive
Directors.
The Company Secretary
The Directors have access to the advice and services of
Apex Fund and Corporate Services (Guernsey) Limited, the
Company Secretary and Administrator, which is responsible
to the Board for ensuring that Board procedures are followed
and that it complies with Guernsey law and applicable
rules and regulations of the Guernsey Financial Services
Commission and the London Stock Exchange.
The Company Secretary is also responsible for the timely
delivery of information to the Board and ensuring that
statutory obligations are met.
Market Abuse Regulation
The Board has formally adopted procedures in relation to the
Company’s obligations under the UK version of the Market
Abuse Regulation (“MAR”), including procedures for the
identification, management and disclosure of price-sensitive
information, share dealing by persons discharging managerial
responsibility and their persons closely associated.
The Board is responsible for overseeing the Company’s
compliance with MAR, and ensuring compliance with MAR by
the Directors.
AIFM Directive
The Company is categorised as an externally managed
non-EEA AIF for the purposes of the Alternative Investment
Fund Managers Regulations 2013 and the AIFM Directive.
The Investment Manager has received authorisation from
the FCA to act as AIFM to the Company. The Board has
delegated responsibility for the Company’s risk management
and portfolio management functions to the Investment
Manager, subject to specific delegation parameters described
in the Investment Management Agreement.
Although the Board delegates discretionary management
authority to the Investment Manager, it actively and
continuously supervises the Investment Manager in the
performance of its functions and reserves the right to take
decisions in relation to the overall investment and risk
management policies and strategies of the Company or
to terminate the appointment of the Investment Manager
(subject to the terms of the Investment Management
Agreement). The Board has the right to request additional
information or updates from the Investment Manager in
respect of all delegated matters, including in relation to the
identity of any sub-delegates and their sphere of operation.
AIFM Directive disclosures
The Company is required, pursuant to Regulation 59(2) of the
Alternative Investment Fund Managers Regulations 2013 and
Article 42(1)(a) of the AIFM Directive, to make certain specified
disclosures to prospective investors prior to their investment
in the Company, in accordance with the FCA’s Investment
Funds sourcebook and Article 23 of the AIFM Directive (the
“Article 23 Disclosures”).
The Company has published an investor disclosure document
on its website (www.fgen.com) for the purposes of making the
Article 23 Disclosures available to prospective investors prior
to their investment in the Company.
The Board has overall responsibility for the management of the Company’s affairs.
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AIFM remuneration
The Investment Manager is categorised by the FCA as a
Collective Portfolio Management Investment (“CPMI”) firm and
is accordingly subject to certain provisions of the FCA’s AIFM
Remuneration Code and MIFIDPRU Remuneration Code for its
MiFID business (the “Remuneration Code”).
The Investment Manager’s Remuneration Policy (the “Policy”)
applies to all staff whose professional activities have a
material impact on the risk profiles of the Investment
Manager or of the funds it manages, including the Company.
This includes senior management, risk takers, control
functions and any employee/member receiving total
remuneration that takes them into the same remuneration
bracket as senior management and risk takers.
The Investment Manager’s Remuneration Code staff have
been identified as:
ș partners as members of the management body, of those
responsible for the prevention of money laundering
and terrorist financing and managerial responsibility for
business units, departments and teams; and
ș Directors/Heads of Teams, including senior staff
responsible for investment management, IT, risk
management and those with authority to take decisions
onthe introduction of new products.
The Investment Manager ensures that the policy is consistent
with, and promotes, sound and effective risk management
and does not encourage risk-taking which is inconsistent
with the risk profile of the funds it manages, including the
Company.
The Investment Manager recognises the importance of an
effective remuneration policy in order to attract, motivate
and retain individuals of the necessary ability and experience
and to reward individuals both on an annual basis and over
the long term for their contributions to the success of the
Investment Manager, the Company and the Company’s
portfolio of assets.
The Investment Manager ensures that where remuneration
is performance related, the total amount of remuneration
is based on a combination of the assessment of the
performance of the individual and of the Company (as an
AIF) and of the Investment Manager’s overall results. When
assessing individual performance, financial and non-financial
criteria are considered. Variable remuneration consists of
bonus payments of employees.
The Investment Manager has an established Employee
Remuneration Committee to oversee the implementation of
its remuneration policies and practices established under the
Remuneration Code.
The Company does not have any employees. The services in
this regard are provided by staff members of the Investment
Manager in its role as AIFM.
In accordance with the Alternative Investment Fund
Managers Regulations 2013 and related FCA rules, the
Investment Manager is required to make certain remuneration
disclosures available to investors and the FCA. In accordance
with these obligations, the Investment Manager’s Policy and
the numerical remuneration disclosures in respect to the
relevant reporting period are available from the Investment
Manager on request.
Non-mainstream pooled investments
The Board notes the rules of the UK FCA on the promotion of
non-mainstream pooled investments.
The Board confirms that it conducts the Company’s affairs,
and intends to continue to do so, in order that the Company’s
shares will be excluded securities under the FCA’s rules.
Thisis on the basis that the Company, which is resident
outside the EEA, would qualify for approval as an investment
trust by the Commissioners for HM Revenue and Customs
under Sections 1158 and 1159 of the Corporation Tax Act
2010 if a resident and listed in the United Kingdom. Therefore,
the Company’s shares will not amount to non-mainstream
pooled investments. Accordingly, promotion of the
Company’s shares will not be subject to the FCA’s restriction
on the promotion of non-mainstream pooled investments.
Significant voting rights
Details of shareholders with notifiable interests in the voting
rights of the Company can be found on page 142.
Share repurchase
Subject to the provisions of the law and the Company’s
Articles of Incorporation, the Company may purchase all
or any of its shares of any class, including any redeemable
shares, and may hold such shares as treasury shares
or cancel them. During August 2024, a share buyback
programme was introduced to allow the purchase of up to
£20 million of the Company’s shares back into treasury by
31March 2025. The buyback allowance was then extended
by a further £10 million in March 2025.
Amendment to the Company’s Articles
ofIncorporation
Subject to the provisions of the law and the Company’s
Articles of Incorporation, the Company’s Articles can be
amended by special resolution.
Division of responsibilities continued
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Ed Warner
Chair of the Nomination Committee
Alan Bates
Director
Stephanie Coxon
Senior Independent Director
Jo Harrison
Director
Nadia Sood
Director
Committee members
The Board of Directors has established a Nomination
Committee from the non-executive Directors of the
Company. The Nomination Committee, chaired by Ed
Warner, operates within clearly defined terms of reference
which are considered and are then referred to the Board for
approval. Acopy of the terms of reference is available on
the Company’s website or upon request from the Company
Secretary.
The main roles and responsibilities of the Nomination
Committee are to:
ș regularly review the structure, size and composition of
the Board and make recommendations to the Board with
regard to any changes, based on merit and objective
criteria (including skills, knowledge and experience,
and promoting diversity of gender, social and ethnic
backgrounds, cognitive and personal strengths);
ș give full consideration to succession planning for
Directors, ensuring effective plans are in place for orderly
succession to the Board and to oversee the development
of a diverse pipeline for succession, taking into account
the challenges and opportunities facing the Company; and
ș lead the process for appointments and be responsible for
identifying and nominating for the approval of the Board,
candidates to fill Board vacancies as and when they arise.
The Nomination Committee reports formally to the Board
on its proceedings on all matters within its duties and
responsibilities and how it has discharged its responsibilities.
The Committee typically meets at least twice a year and at
such other times as the Nomination Committee Chair shall
require. Other Directors and third parties may be invited by
the Nomination Committee to attend meetings as and when
appropriate.
The initial and all subsequent members of the Board are
selected following a comprehensive recruitment exercise with
the aim of establishing a Board with the skills, knowledge,
experience and diversity necessary for providing effective
leadership and maintaining a governance framework suitable
for the nature, scale and complexity of the Company.
The Nomination Committee met on four occasions during the
financial year. Matters considered by the Committee during
the year included, but were not limited to:
ș the Company’s policy on diversity, ensuring this remained
aligned with the Company’s strategy and objectives;
ș monitoring the ongoing effectiveness of the Board and its
Committees;
ș the development of, and implementation of, the Board’s
succession plan;
ș the time requirements and independence of Directors; and
ș consideration and agreement of the terms of reference of
the Nomination Committee for approval by the Board.
“ The Board ensures it has
the appropriate balance of
skills, experience, diversity
and knowledge to operate
effectively.”
Ed Warner
Chair of the Nomination Committee
Nomination Committee report
Composition, succession and evaluation
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Composition, succession and evaluation
The Nomination Committee continues to maintain and
develop the Board’s succession planning arrangements to
ensure the arrangements remain effective, and that a diverse
pipeline for succession is maintained which remains aligned
with the Company’s strategy and future leadership needs.
The Board is committed to maintaining at least 40% female
representation, and having at least one Board member from
an ethnic minority background before the December 2024
target, which it achieved.
Board composition timeline 2025
At the year end, the Board consisted of five non-executive
Directors:
ș Chair – Ed Warner;
ș SID – Stephanie Coxon;
ș Alan Bates;
ș Jo Harrison; and
ș Nadia Sood.
31 March 2025
Board independence and composition
The Board consists of five Directors, all of whom are
non-executive and independent of the Company’s
Investment Manager and other key service providers. Board
independence is formally reviewed annually against the
factors suggested in the AIC Code as likely to impair, or could
appear to impair, independence, in addition to any other
relevant considerations.
The Board considers all of the Directors, including the Chair,
to be independent. The Directors’ details are contained on
pages 116 and 117 and set out the range of investment,
financial and business skills and experience represented. Ed
Warner has been appointed Chair and Stephanie Coxon as
Senior Independent Director.
The Board believes that the Directors provide the appropriate
balance of skills, knowledge and diversity necessary to
manage the affairs of the Company and to operate effectively
as a Board. Biographical details of the Directors are provided
on pages 116 and 117. The composition of the Board is
formally reviewed annually by the Nomination Committee
with the objective of ensuring that it meets the current
and expected future leadership needs of the Company.
The Board’s formal performance evaluation also provides
feedback from the Directors on aspects of the Board’s
operation where greater effectiveness may be achieved.
Tenure, succession planning and induction
In accordance with the recommendations of the AIC Code,
the tenure of all Directors, including the Chair, is expected
not to exceed nine years unless exceptional circumstances
warrant, such as to allow for phased Board appointments
and retirements and to ensure that the Board remains well
balanced and that the skills, knowledge and experience of
the Board is refreshed at appropriate intervals.
In 2019 the Board began the implementation of its succession
plan which involved a staged process of rotating the Directors
first appointed at the Company’s launch. In accordance with
corporate governance best practice as set out in the AIC
Code, each Director will be subject to annual re-election by
shareholders at the AGM.
The Board maintains a succession roadmap which documents
the plans in place for a gradual phasing of the Board and to
avoid any undue disruption which may arise if more than one
Director were to retire within a short space of time.
As part of this succession planning, Hans Joern Rieks did not
seek re-election and therefore retired from the Board at the
AGM on 13 September 2024.
On appointment to the Board, new Directors will be
provided with an induction pack by the Company Secretary
containing all relevant information regarding the Company,
its history, operations, key relationships and their duties
and responsibilities as Directors. New appointees meet
with each of the Directors and with representatives of the
Investment Manager. The Chair is responsible for agreeing
the programme of induction training with new appointees,
and that any training needs of the existing Directors are
addressed.
The Nomination Committee is responsible for ensuring that a
diverse pipeline for succession is maintained, relevant to the
future leadership needs of the Company.
Board diversity
The Board supports the recommendations issued by the FTSE
Women Leaders Review (building on the work of the former
Hampton Alexander and Davies Reviews) and the Listing Rule
requirement relating to diversity. The Board further notes the
recommendations of the Parker Review to have at least one
member of the Board from an ethnic minority background
by December 2024. The Board considers diversity in all its
forms as part of its succession planning and the Directors
are committed to maintaining a gender-balanced Board, and
successfully achieved the recommendations of the Parker
Review in advance of December 2024.
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The objectives of the Company’s diversity policy are to:
ș seek to broaden the diversity represented on the Board;
ș reduce the risks of groupthink which may otherwise exist on less diverse boards; and
ș bring fresh perspectives to the Board’s decision-making processes, from the widest possible
range of backgrounds.
No Director has a service contract with the Company and the terms and conditions of
appointment for each of the Directors are set out in writing between each individual and
the Company. Copies of the relevant appointment letters are available for inspection at the
Company’s registered office.
Statement on Board diversity
In compliance with Listing Rule 9.8.6R (9)(a), the Company has provided information, set out in
the following tables, on how the Board has met the following targets on Board diversity at a
chosen reference date within its accounting period:
ș at least 40% of individuals on its Board are women;
ș at least one of the senior Board positions is held by a woman; and
ș at least one individual on its Board is from a minority ethnic background.
The Board has determined its financial year end, 31March2025, as the reference date for the
data.
The following tables set out the required information as at 31 March 2025 in accordance with
the requirements of the Listing Rules. All the targets were met at the reporting date.
Number of
Board members
Percentage of
the Board
Number of
senior positions
on the Board
1
Men 2 40% 2
Women 3 60% 2
Not specified/prefer not to say — — —
Number of
Board members
Percentage of
the Board
Number of
senior positions
on the Board
(SID and Chair)
1
White British or other White
(including minority white groups) 4 80% 4
Mixed/Multiple ethnic groups — — —
Asian/Asian British 1 20% —
Black/African/Caribbean/Black British — — —
Other ethnic group, including Arab — — —
Not specified/prefer not to say — — —
1. The Listing Rules specify the positions of CEO, CFO, Chair and SID as being senior positions. The Company is an externally
managed investment company, with a board comprised entirely of non-executive Directors. Accordingly, the Company does not
have a CEO or CFO, and within the context of the Company, the applicable senior roles for reporting purposes are considered to
be the positions of Chair, SID and the Chairs of the Risk Committee, ESG Committee and the Audit Committee.
In accordance with the Listing Rules, the Company confirms that the numerical data presented in the table above was collected
directly from the non-executive Directors on the Board. Directors were provided with an anonymised form asking them to specify
how they wished to be categorised for the purposes of the Listing Rule disclosures.
Conflicts of interest
The Directors have undertaken to notify the Company Secretary as soon as they become aware
of any actual or potential new conflict of interest. Only Directors who have no material interest
in the matter being considered will be able to participate in the Board approval process.
Other business relationships, including those that conflict or may potentially conflict with
the interests of the Company, are taken into account when appointing Board members and
are monitored on a regular basis. The terms of each Director’s appointment letter with the
Company require that they seek prior approval from the Board before taking up any additional
external appointments. The Board recognises the holdings of ordinary shares in the Company
held by each of Ed Warner, Stephanie Coxon, Jo Harrison and Alan Bates, details of which are
set out on page 142.
The Board considers these interests at each scheduled meeting and remains satisfied that they
do not affect the ability of the Directors to exercise independent judgement or their objectivity.
Nomination Committee report continued
Composition, succession and evaluation
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Composition, succession and evaluation
Performance and evaluation
The FGEN Board has adopted a process to review its
performance on a regular basis and such reviews are carried
out internally on an annual basis, with an externally facilitated
evaluation expected to take place every three years. The
internal annual evaluation of the Board and the performance
of its Committees has taken the form of questionnaires and
discussion to assess Board effectiveness and individual
Director performance in various areas. The review of the
Chair’s performance is led by the Senior Independent
Director.
The last externally facilitated performance evaluation was
undertaken by BoardAlpha Limited (“BoardAlpha”), which is
an affiliate of Trust Associates Limited (“Trust Associates”),
in respect of the financial year ended 31 March 2023. The
findings from the external review were generally satisfactory
and no material deficiencies were identified.
For the financial year ended 31 March 2025, the Directors
undertook an internal evaluation of the Board. The evaluation
process covered the composition of the Board and meeting
process, Board information, training and development, Board
dynamics, accountability and effectiveness.
Additional reviews were undertaken in respect of the
performance and effectiveness of the Chair, and of the
Audit Committee. Certain points were identified during the
assessment which the Board agreed to take forward in the
coming year. These included:
ș maintaining the diversity of the Board and continuing to
implement a remuneration policy which reflects market
practice and the time commitment and demands placed
on the Directors; and
ș continuing to ensure that the composition of the Board
reflects the requirements of the Company, noting the
retirement of Hans Joern Rieks in September 2024
dropped the size of the Board down to five Directors
and that if a new Director is appointed, they should have
significant technical experience in new technologies.
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Stephanie Coxon
Chair of the Audit Committee
Alan Bates
Director
Jo Harrison
Director
Nadia Sood
Director
Committee members
The Audit Committee is appointed by the Board from
the non-executive Directors of the Company. The Audit
Committee, chaired by Stephanie Coxon, operates within
clearly defined terms of reference and includes all matters
indicated by Disclosure Guidance and Transparency Rule
7.1 and the UK Corporate Governance Code. The terms of
reference are considered by the Audit Committee at each
meeting and any changes are then referred to the Board for
approval. A copy of the terms of reference is available on
the Company’s website or upon request from the Company
Secretary.
Summary of the roles and responsibilities
of the Audit Committee
The main roles and responsibilities of the Audit
Committeeare:
ș monitoring the integrity of the financial statements of
the Company and any formal announcements relating
to the Company’s financial performance and reporting
to the Board on significant financial reporting issues and
judgements contained therein;
ș reviewing the content of the Half-year and Annual
Reports and financial statements and advising the Board
on whether, taken as a whole, it is fair, balanced and
understandable and provides the information necessary
for shareholders to assess the Company’s position,
performance, business model and strategy;
ș agreeing with the external auditor the audit plan and
reviewing the auditor’s report related to the Half-year
Report and the Annual Report and financial statements;
ș maintaining the Company’s policy on the provision of
non-audit services by the external auditor;
ș reviewing and recommending for approval the audit,
audit-related and non-audit fees payable to the external
auditor and the terms of their engagement;
ș taking into account the principal risks, reviewing the
long-term viability and going concern statements,
includingthe underlying documentation prepared by the
Investment Manager;
ș reviewing, in conjunction with the Risk Committee,
the adequacy and effectiveness of the Company’s
internal financial controls and internal control and risk
management systems;
Audit Committee report
Audit, risk and internal control
“ I am pleased to present the
Audit Committee report
for the year ended 31 March
2025 detailing the activities
undertaken this year to fulfil its
responsibilities.”
Stephanie Coxon
Chair of the Audit Committee
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Audit Committee report continued
Audit, risk and internal control
ș reviewing the adequacy and security of the Company’s
arrangements for regulatory compliance, whistleblowing
and fraud, recognising that responsibilities for
whistleblowing arrangements reside with the Board as a
whole;
ș assessing annually the effectiveness of the audit process
and the external auditor’s independence and objectivity,
taking into account relevant professional and regulatory
requirements and the relationship with the auditor as a
whole, including the provision of any non-audit services
and the effectiveness of the audit process;
ș overseeing the external audit tender process;
ș overseeing and liaising with the external valuer; and
ș making recommendations to the Board to be put to
shareholders for approval at the AGM, in relation to
the appointment, reappointment and removal of the
Company’s external auditor.
The Audit Committee reports formally to the Board
on its proceedings on all matters within its duties and
responsibilities and how it has discharged its responsibilities.
Meetings
The Audit Committee meets at least three times a year and at
such other times as the Audit Committee Chair shall require.
In addition to the Audit Committee meeting formally with
the external auditor, the Chair of the Audit Committee
has met them informally on five further occasions and the
independent valuations specialists three times.
These informal meetings have been held to ensure the Audit
Committee Chair is kept up to date with the progress of
their work and that their formal reporting meets the Audit
Committee’s needs. Any member of the Audit Committee
may request that a meeting be convened by the Company
Secretary.
The external auditor may request that a meeting be convened
if it is deemed necessary.
Other Directors and third parties may be invited by the Audit
Committee to attend meetings as and when appropriate.
AGM
The Audit Committee Chair attends the AGM to answer
shareholder questions on the Committee’s activities.
Significant issues
The Audit Committee considered the following significant
issues during the year and in relation to the financial
statements:
Valuation of investments
The Company is required to calculate the fair value of its
investments. Whilst a relatively high volume of transactions
for investments of this nature take place, there is not a
suitable listed or other public market in these investments
against which their value can be benchmarked. As a
result, avaluation is predominantly performed based on a
discounted cash flow methodology in line with IFRS 13 Fair
Value Measurement.
The calculation of the fair value of the investments carries
elements of risk, mainly in relation to the assumptions and
factors such as:
ș the determination of the appropriate macroeconomic
assumptions underlying the forecast investment cash
flows;
ș the determination of the appropriate assumptions
regarding future power prices, inflation forecasts,
energy generation and volumes underlying the forecast
investment cash flows;
ș the determination of appropriate sensitivities to apply to
meet the required disclosures;
ș the impact of project-specific matters on the forecast cash
flows for each investment;
ș the determination of the appropriate discount rate for
each investment that is reflective of current market
conditions;
ș the tax deductibility of interest expense under the Base
Erosion and Profit Shifting (“BEPS”) legislation;
ș the underlying project financial models may not reflect the
underlying performance of the investment;
ș terms and costs of the future refinancing of senior debt on
certain projects;
ș the cash flows from the underlying financial models may
not take into account current known issues; and
ș the updates performed on the underlying financial models
may result in errors in forecasting.
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Audit Committee report continued
Audit, risk and internal control
The Audit Committee is satisfied that the Investment
Manager’s assumptions have been reviewed and
challengedfor:
ș the macroeconomic assumptions, including inflation and
the comparison of these assumptions to observable
market data, actual results and prior year comparatives;
ș the electricity price, gas price, energy generation and
volume assumptions, including the comparison of these
assumptions to observable market data, actual results and
prior year comparatives; and
ș the build-up of the discount rates for consistency and
reasonableness, benchmarking against market data and
peers and project-specific items.
The Audit Committee is also satisfied that the portfolio
valuation and associated disclosures have been checked
for mechanical accuracy, ensuring that the investments
are brought on balance sheet at fair value and that the
independent valuation carried out by an independent firm
has been reviewed and challenged by the Audit Committee,
Board and by the auditor.
Internal audit
The Audit Committee considers at least once a year whether
or not there is a need for an internal audit function. Currently,
the Audit Committee does not consider there to be a need
for an internal audit function specific to the Company,
given that there are no employees in the Company and the
systems and procedures employed by the Administrator and
Investment Manager, including their own internal controls
and procedures in place in relation to the Company and its
subsidiaries, provide sufficient assurance that a sound system
of internal control, which safeguards the Company’s assets, is
maintained.
External audit
KPMG was appointed as the Company’s auditor in September
2023 and this is the second set of annual financial statements
on which it has expressed an audit opinion.
The Audit Committee has assessed the quality and the
effectiveness of the audit process. To draw its conclusions,
the Audit Committee reviewed:
ș the scope of the audit, the audit fee and the external
auditor’s fulfilment of the agreed audit plan;
ș the degree of diligence and challenge demonstrated by
them in the course of their interaction with the Board, the
Audit Committee and the Administrator and Investment
Manager; and
ș the report highlighting the matters that arose during the
course of the audit and the recommendations made by the
external auditor.
The Directors note the recommendation of the UK Code
and the AIC Code that the role of the external auditor is
retendered every 10 years, with the audit partner changing
every five years.
As part of our annual review of the objectivity and
effectiveness of the audit, the Audit Committee conducted
an evaluation in 2025 of the auditor’s performance and the
Audit Committee was satisfied in this regard. This evaluation
was completed by the Audit Committee and senior finance
personnel of the Investment Manager, considering the audit
quality, technical competence and level of professional
scepticism applied during the audit. In accordance with
the relevant Corporate Governance Code principles, the
Committee will continue to review the effectiveness of the
external auditor in line with best practice.
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Non-audit services
The Audit Committee considered the extent of non-audit
services provided by the external auditor. The Company
has adopted a formal policy in relation to the provision of
non-audit services, pursuant to which the external auditor’s
objectivity and independence is safeguarded through limiting
non-audit services to their role as reporting accountants for
capital raising services and in relation to the Half-year Report,
subject to a cap.
The Company paid £48,904 during the year for non-audit
services to KPMG, in relation to the Half-year Report.
Internal control
The Board is responsible for the Company’s system of
internal control and for reviewing its effectiveness, and the
Board has therefore established an ongoing process designed
to meet the particular needs of the Company in managing the
risks to which it is exposed.
The process is based on a risk-based approach to internal
control through a matrix which identifies the key functions
carried out by the Investment Manager, Administrator and
other key service providers, the various activities undertaken
within those functions, the risks associated with each activity
and the controls employed to minimise and mitigate those
risks and the risks at the operating companies.
The Audit Committee works in close co-operation with the
Risk Committee, with the prime responsibility of the Audit
Committee being the review of internal financial controls and
processes, and of the Risk Committee being the principal
risks and uncertainties facing the Company. A separate
report on the activities of the Risk Committee is set out on
pages 135 and 136.
Activities of the Audit Committee
The Audit Committee met on six occasions during the year
ended 31 March 2025. Matters considered at these meetings
included, but were not limited to:
ș reviewing the independent internal controls assurance
process put in place by the Investment Manager;
ș meeting with the independent valuation provider and
with the external auditor without representatives of the
Investment Manager present to receive their views in
relation to the half-year and year-end valuation and the
appropriateness and implementation of the Company’s
asset valuation methodology;
ș monitoring the ongoing appropriateness of the Company’s
blended power price curve and capture price discounts;
ș reviewing the reappointment of the external auditor;
ș reviewing the effectiveness of the external auditor and the
external audit process;
ș considering the short and long-term implications to asset
valuations and cash flows from the significant dislocation
in energy markets, rising inflation and interest rates;
ș reviewing the long-term viability and going concern
statements, including the underlying documentation;
ș approving the external audit fees;
ș considering and agreeing the terms of reference of the
Audit Committee for approval by the Board;
ș reviewing the proposed accounting policies and format of
the financial statements;
ș reviewing the audit plan and timetable for the preparation
of the Annual Report and financial statements;
ș reviewing the Company’s asset valuation methodology;
ș reviewing the independent valuation report; and
ș reviewing the 2025 Annual Report and financial statements
and the 2024 Half-year Report to ensure they are fair,
balanced and understandable.
No areas of significant disagreement or concern were
highlighted during the Audit Committee’s activities during the
year which necessitated further action being taken outside of
the Committee’s routine duties.
As a result of its work during the year, the Audit Committee
has concluded that it has acted in accordance with its terms
of reference.
Approval
On behalf of the Audit Committee:
Stephanie Coxon
Chair of the Audit Committee
23 June 2025
Audit Committee report continued
Audit, risk and internal control
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Risk Committee report
Audit, risk and internal control
Alan Bates
Chair of the Risk Committee
Stephanie Coxon
Director
Jo Harrison
Director
Nadia Sood
Director
Ed Warner
Director
Committee members
The Board of Directors has established a Risk Committee
from the non-executive Directors of the Company. The Risk
Committee, chaired by Alan Bates, operates within clearly
defined terms of reference and works closely with the Audit
Committee in monitoring the internal controls and risk
management of the Company.
The terms of reference are considered at least annually by
the Risk Committee and are then referred to the Board for
approval. A copy of the terms of reference is available on
the Company’s website or upon request from the Company
Secretary.
The main roles and responsibilities of the Risk Committee
areto:
ș when requested to do so, advise the Board on the overall
risk appetite, tolerance and strategy of the Company,
taking account of the extent to which the risk profile of
the Company corresponds to the size, structure and
objectives of the Company, in addition to the current and
prospective macroeconomic, financial and regulatory
environment, including relevant stakeholder issues;
ș oversee and advise the Board on the current risk
exposures of the Company with particular focus on
the Company’s principal risks, being those which could
influence shareholders’ economic decisions, and the
controls in place to mitigate those risks;
ș keep under review the Company’s overall risk
identification and assessment processes and, in
conjunction with the Audit Committee, review the
adequacy and effectiveness of the internal control and risk
management systems;
ș in conjunction with the Audit Committee, ensure that a
framework of strong corporate governance and best
practice is in place, which enables the Company to comply
with the main requirements of the Guernsey Code, UK
Code or the AIC Code where considered appropriate;
ș in conjunction with the ESG Committee, ensure the
effective integration of climate risk into the Company’s risk
management framework;
ș when requested to do so, advise the Board on proposed
strategic transactions including acquisitions or disposals,
ensuring that a due diligence appraisal of the proposition
is undertaken, focusing in particular on risk aspects and
implications for the risk appetite and tolerance of the
Fund, and taking independent external advice where
appropriate and available; and
ș oversee the remit of the risk management function, its
resources, access to information and independence.
“ I am pleased to present the
RiskCommittee report for the
year ended 31 March 2025.”
Alan Bates
Chair of the Risk Committee
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Risk Committee report continued
Audit, risk and internal control
The Risk Committee reports formally to the Board
on its proceedings on all matters within its duties and
responsibilities and how it has discharged its responsibilities.
The Committee must meet at least four times a year and at
such other times as the Risk Committee Chair shall require.
Other Directors and third parties may be invited by the Risk
Committee to attend meetings as and when appropriate. The
Risk Committee met four times in the year.
In order to assist in fulfilling its role on behalf of the Board,
the Committee has established, in conjunction with the
Investment Manager, an ongoing process designed to meet
the particular needs of the Company in managing the risks
to which it is exposed. This is a risk-based approach through
the maintenance of a register which identifies the key risk
areas faced by the Company and the controls employed to
minimise and mitigate those risks. Scoring based on a traffic
light system for likelihood and impact is used to assess the
significance to the Company of each individual risk. The
register is updated quarterly and the Committee considers
all material changes to the risk ratings and the action which
has been, or is being, taken. By their nature, these procedures
will provide a reasonable, but not absolute, assurance against
material misstatement or loss.
Activities of the Risk Committee
The Risk Committee met on four occasions during the year
ended 31 March 2025. Matters considered at these meetings
included, but were not limited to:
ș challenging the Investment Manager’s views on risk
movements during the period;
ș considering and agreeing the Company’s principal risks;
ș monitoring developments with the Company’s major
counterparty exposures;
ș considering changes to the risk profile of the portfolio
arising from proposed investments in new asset classes or
geographies;
ș monitoring the development of emerging risks and
assessing their impact on the Company; and
ș reviewing the effectiveness of the risk management
function.
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Introduction
The Board has established separate Risk, Audit, ESG and
Nomination Committees to effectively oversee the activities of
the Group.
The Board has not deemed it necessary to appoint a
remuneration committee as, being comprised of five
Directors, it considers that such matters may be considered
by the whole Board, provided that no Director is involved in
deciding their own remuneration.
The Board determines and agrees the policy for the
remuneration of the Directors of the Company, including the
approval of any ad hoc payments in respect of exceptional
work required. No Director is involved in determining his or
her own remuneration.
As all Directors of the Company are non-executive, they
receive an annual fee appropriate for their responsibilities
and time commitment, but no other incentive programmes or
performance-related emoluments.
At IPO, the remuneration of the Board was fixed after
consultation with independent external advisers. The
remuneration policy is reviewed annually by the Directors to
ensure it remains appropriate in the context of the activities
of the Company, that the practices continue to support
strategy and promote the Company’s long-term sustainable
success, and that they reflect the time commitment and
responsibility of the role.
In 2022 an external review of the Company’s remuneration
policy was carried out by Trust Associates and their
recommendations were considered by the Board as a whole
prior to determining the policy to apply for the financial
year commencing 1 April 2022. Internal remuneration
policy reviews are undertaken annually by the Directors
for each year intervening an externally facilitated review
ofremuneration.
The external remuneration review included a desktop
benchmarking exercise, comparing the Company’s
remuneration practices against the broader listed investment
company sector, companies based in the Channel Islands,
in addition to a selected peer group comparison. Account
was taken for the time, complexity and level of risk involved
for Directors, which was assessed based on the findings of
questionnaires and calls held with each Director, in addition
to comments received from the Investment Manager,
corporate brokers and the Company Secretary.
The findings confirmed that the Board continued to be highly
responsive to Company demands, demonstrated by the
attendance record at scheduled and ad hoc meetings held
during the financial year. It was also acknowledged that the
Board had adopted a conservative approach to reviewing
its own remuneration by applying an inflationary increase
in the 2019/20 financial year, then retaining those fee levels
for 2020/21 in light of the ongoing uncertainty and market
volatility caused by the Covid-19 pandemic.
The Directors are mindful of maintaining remuneration levels
at a level broadly consistent with market expectations to
avoid fees being a limiting factor by prospective Board
candidates, whilst also taking account of the time requirement
expected for each Board position and any additional
responsibilities. In considering the findings of the external
remuneration review, relevant factors included the Company
remaining competitive against peers, the additional scrutiny
placed on FTSE 250 constituents, and to avoid the need
for substantial fee increases over future years as inflation
levels remain high. Having considered the recommendations
of the external review, the Board agreed to adopt each
recommendation, without variation, which were ratified by
shareholders at the 2024 AGM. The proposed remuneration
policy applicable for the financial year ended 31 March 2025
is set out on the following page.
During March 2025, the Board undertook an internal
evaluation of its remuneration levels. The internal review
of the remuneration policy undertaken during 2025
benchmarked the Company’s position against listed peer
funds in the renewable energy infrastructure sector. The time
commitment of the Directors during the year under review
and additional responsibilities placed on certain Board
members were considered. The review identified certain
aspects of the Company’s policy where changes would
besuitable.
Accordingly, and with effect from 1 April 2025, the
Board isrecommending that shareholders approve the
remunerationlevels proposed in the comparative table
setout on page 138.
Remuneration policy
Each Director receives a fixed fee per annum based on their
role and responsibility within the Company and the time
commitment required. It is not considered appropriate that
Directors’ remuneration should be performance related
and none of the Directors are eligible for pension benefits,
share options, long-term incentive schemes or other benefits
in respect of their services as non-executive Directors of
the Company. Shares held by the Directors are disclosed
in the report of the Directors. The total remuneration of
non-executive Directors has not exceeded the £400,000 per
annum limit approved by shareholders at the EGM of the
Company held on 8 March 2021.
The Company’s Articles of Incorporation empower the Board
to award additional remuneration where any Director has
been engaged in exceptional work on a time spent basis to
compensate for the additional time spent over their expected
time commitment.
Directors’ remuneration report
Remuneration
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Additional information
Directors’ remuneration report continued
Remuneration
All of the Directors have been provided with letters of appointment which stipulate that their
initial term shall be for three years, subject to annual re-election. The Articles of Incorporation
provide that Directors retire and offer themselves for re-election at the first AGM after their
appointment and at least every three years thereafter. Pursuant to the AIC Code, each Director
retires and offers themselves for re-election at each AGM. A Director’s appointment may at any
time be terminated by, and at the discretion of, either party upon three months’ written notice.
A Director’s appointment will automatically end without any right to compensation whatsoever
if they are not re-elected by the shareholders. A Director’s appointment may also be terminated
with immediate effect and without compensation in certain other circumstances.
The terms and conditions of appointment of non-executive Directors are available for
inspection at the Company’s registered office.
Details of individual remuneration
For comparative purposes, the table below sets out the Directors’ remuneration approved
and actually paid for the year to 31 March 2025, as well as that proposed for the year ending
31March 2026.
Director Role
Annual base
proposed for
2025/26
Paid
2024/25
Ed Warner Chair and Nomination
Committee Chair
£83,000 £81,500
Stephanie Coxon Senior Independent Director
and Audit Committee Chair
£63,750 £62,500
Alan Bates Risk Committee Chair £54,000 £53,000
Jo Harrison ESG Committee Chair £54,000 £53,000
Nadia Sood Director £51,500 £50,500
Hans Joern Rieks (resigned
effective13September 2024)
Director — £22,835
Total £306,250 £323,335
Where the Company requires Directors to work on specific corporate actions, an additional fee
may be appropriately determined. No additional fees were paid to the Directors for the year
ended 31 March 2025.
Directors are entitled to claim reasonable expenses which they incur attending meetings or
otherwise in performance of their duties relating to the Company.
The total amount of Directors’ expenses paid for the year ended 31 March 2025 was £3,780
(31March 2024: £8,495).
Approval of report
The Board will seek approval at the AGM on 18 September 2025 for both the remuneration
policy and the annual Directors’ fees for routine business for the year ended 31 March 2025,
asset out above.
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Financial statements
Additional information
The Directors are pleased to submit their report and the
audited financial statements of the Company for the year
ended 31 March 2025.
Principal activities
Foresight Environmental Infrastructure Limited is a
company incorporated and registered in Guernsey under
the Companies (Guernsey) Law, 2008. The Company was
incorporated on 12 December 2013 with the Company
registered number 57682.
At 31 March 2025, the total number of ordinary shares of the
Company in issue was 637,443,058.
The Company is a registered fund under the Registered
Collective Investment Scheme Rules and Guidance, 2021, and
is regulated by the Guernsey Financial Services Commission
and, during the year, its principal activity was as an investor
in environmental infrastructure that utilises natural or
waste resources or supports more environmentally friendly
approaches to economic activity.
Business review
The Company is required to present a fair review of its
business during the year ended 31 March 2025, its position at
the year end and a description of the principal and emerging
risks and uncertainties it faces.
This information is contained within the strategic report on
pages 4 to 113.
Disclosure of information under Listing Rule 9.8.4
The Company is required to disclose information on any
contract of significance subsisting during the period under
review:
ș to which the Company, or one of its subsidiary
undertakings, is a party and in which a Director of the
Company is or was materially interested; and
ș between the Company, or one of its subsidiary
undertakings, and a controlling shareholder.
Details can be found in note 15 to the financial statements.
The Directors note that no shareholder has waived or agreed
to waive any dividends.
Results and dividends
The results for the year are set out in the financial statements
on pages 145 to 181. On 29 May 2025, the Directors
declared a dividend in respect of the period 1 January 2025
to 31March2025 of 1.95 pence per share to shareholders
on the register as at the close of business on 6 June 2025,
payable on 27 June 2025.
Going concern
The Directors, in their consideration of going concern, have
reviewed comprehensive cash flow forecasts prepared by
the Company’s Investment Manager, Foresight Group, which
are based on prudent market data and a reasonable worst
case scenario and believe, based on those forecasts and an
assessment of the Company’s subsidiary’s banking facilities,
that it is appropriate to prepare the financial statements of
the Company on the going concern basis.
In arriving at their conclusion, the Directors assessed the risks
of the volatility of energy prices, the potential impact of the
principal risks (documented in the strategic report) and the
triggering of the discontinuation vote.
In addition to the risks outlined above, the Directors have
also considered the sustainability-related risks covering
environmental, social and governance factors, including
climate change (in line with the recommendations of the Task
Force on Climate-related Financial Disclosures (“TCFD”),
which is integrated throughout the Sustainability and ESG
report found on pages 75 to 109). The Investment Manager
has reviewed the portfolio’s exposure to these risks in the
period under review and has concluded that it is currently
not material to the Fund, although it continues to monitor the
market attentively.
The Board considers the going concern assessment period of
18 months to 30 September 2026 to be appropriate. Alonger
period than the typical requirement of 12 months has been
adopted to factor in the full payment of the March 2026
dividend.
The Directors also considered that the Company has
adequate financial resources, and were mindful that the
Group had unrestricted cash of £7.8 million (including
£2.6million in the Company) as at 31 March 2025 and
a revolving credit and accordion facility (available for
investment in new or existing projects and working capital)
of £200 million. As at 31 March 2025, the Company’s wholly
owned subsidiary UK HoldCo had borrowed £99.3 million
under the facility. All key financial covenants under this
facility are forecast to continue to be complied with for the
duration of the going concern assessment period.
On 25 April 2025, FGEN announced that it has reduced the
size of its multi-currency revolving credit facility (“RCF”) from
£200 million to £150 million. The downsizing of the RCF will
result in an annual cost saving of £367,500.
Report of the Directors
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Report of the Directors continued
The reduced RCF, currently drawn at £99.3 million, continues
to provide ample headroom to cover outstanding portfolio
commitments, including the remaining payments for the
Company’s well-progressed construction-stage investments.
The £150 million RCF has an uncommitted accordion facility
of up to £30 million. All other terms of the RCF announced on
13 June 2024 remain unchanged.
The RCF provides the flexibility for the Fund to continue
meeting existing funding commitments to portfolio assets.
The Company also has sufficient headroom in its revolving
credit facility to finance its hard commitments relating to
construction assets held within the portfolio.
The revolving credit facility covenants have been tested on
downside risk scenarios, with the assumption of 10% lower
power price projections compared to the base case, reduced
generation levels assuming a P90, a proportion of the
portfolio not yielding and a combination of these scenarios. In
all scenarios run, including the combined downside case, the
Company remained compliant with its key covenants.
The shareholders will be presented with a discontinuation
vote at the AGM in September. The trigger for this vote is the
share price has traded, on average, at a discount in excess
of 10% to the Net Asset Value per share in the financial year
under review.
The Directors have made the following considerations
surrounding the discontinuation vote:
ș Recent interactions with shareholders, whilst assessing
their indications of intent.
ș Macroeconomic factors prevalent in the entire renewables
sector. Notwithstanding the average share price discount
to NAV, which has triggered the discontinuation vote, the
presence of discounts is a market-wide event and the
tighter rating for FGEN reflects the relative strong demand
for its shares. The Investment Manager and the Directors
are confident that FGEN’s discount to NAV and associated
triggering of the discontinuation vote is not due to the
individual performance of FGEN, its Investment Manager
or its Board of Directors.
Based on the considerations outlined above, the Investment
Manager and the Directors have no reason to believe that the
special resolution (75% of the total voting members) will be
passed by the shareholders.
Based on the above, the Directors are satisfied that the
Company has sufficient resources to continue to operate for
the foreseeable future, a period of not less than 12 months
from the date of this report. Accordingly, they continue
to adopt the going concern basis in preparation of these
financial statements.
Long-term viability statement
The Directors have assessed the viability of the Group over
the three-year period to June 2028, taking account of the
Group’s current position and the potential impact of the
principal risks documented in the strategic report.
In addition to these risks, the Directors have also considered
the sustainability-related risks covering environmental, social
and governance factors, including climate change (in line with
the recommendations of the Task Force on Climate-related
Financial Disclosures (“TCFD”), which is integrated throughout
the Sustainability and ESG report found on pages 75 to 109).
Sensitivity analysis has been undertaken to consider the
potential impacts of the principal risks on the business model,
future performance, solvency and liquidity over the period.
In particular, this analysis has considered the achievement of
budgeted energy yields, the level of future power prices in a
volatile market, continued government support for renewable
energy subsidy payments and the impact of a proportion of
the portfolio not yielding.
The Directors have determined that a three-year look
forward to June 2028 is an appropriate period over which
to provide its viability statement. This is consistent with
the outlook period used in economic and other medium-
term forecasts regularly prepared for the Board by the
Investment Manager and the discussion of any new strategies
undertaken by the Board in its normal course of business.
These reviews consider both the market opportunity and the
associated risks, principally the ability to raise third-party
funds and invest capital, or mitigating actions which could
be taken if required, such as a reduction of dividends paid to
shareholders or utilisation of additional borrowings available
under the RCF.
The Group’s risk management processes (as outlined on
pages 56 to 64) set out the key risks, which include:
ș exposure to market power prices;
ș construction and development issues; and
ș asset exposure to weather resource.
Whilst these risks are deemed significant to the Group’s
ability to operate its projects, generate revenue and to the
value of the Company’s investments, the Directors believe
that this has had limited impact on the business to date.
Risk mitigating activities (as outlined on pages 56 to 64)
haveaided in the reduction of the impact.
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Additional information
Report of the Directors continued
The risk of exposure to variations in electricity and gas
prices from assumptions made is mitigated by FGEN in the
following ways: i) short-term PPAs are used to fix electricity
and gas prices for between one and three years ahead
depending on market conditions and many have floor prices;
ii) forward prices based on market rates are used for the first
two years where no fix is in place; and iii) quarterly reports
from independent established market consultants are used
to inform the electricity prices over the longer term used
in the financial models. FGEN blends forecasts from three
consultants to reduce volatility in assumed prices from
period to period.
FGEN invests in a diversified portfolio of environmental
infrastructure assets that earn revenues that do not depend
on merchant power sales.
FGEN’s exposure to wholesale power prices is mitigated by
the practice of having a substantial proportion of generation
for both electricity and gas on fixed price arrangements for
durations ranging from six months out to two years.
Latest power prices are fixed for 53% of generation for the
current summer season and 55% for the upcoming winter
2025 season.
The Managers have run downside risk scenarios, with the
assumption of 10% lower power price projections compared
to the base case, reduced generation levels assuming a P90, a
proportion of the portfolio not yielding and a combination of
these scenarios. In all scenarios run, including the combined
downside case, the Company remained solvent, compliant
with its key covenants and could continue to pay dividends to
the shareholders.
The Company utilises the investments’ cash flows from
operations and has historically used proceeds from equity
fund raises to repay the RCF.
FGEN aims to provide investors with a sustainable,
progressive dividend, paid quarterly, and to preserve the
capital value of its portfolio over the long term on a real
basis. As such, the dividend is increased when the Board
considers it is prudent to do so. The Board considers
forecasted cash flows and dividend cover, in conjunction
with inflation, electricity prices and the current operational
performance of the Company’s portfolio in making decisions
surrounding dividends. Dividends are declared quarterly and
are discretionary in nature. The Managers prepare robust
scenario analysis when the target dividend for the next
financial year is set. The Directors consider the anticipated
cash flows under these scenarios and will assess the
sustainability of the proposed dividend during the forecasted
period. When considering this analysis, the Directors are
comfortable that the cash dividend cover projections remain
healthy over the look-forward period.
The shareholders will be presented with a discontinuation
vote at the AGM in September. The trigger for this vote is the
share price has traded, on average, at a discount in excess
of 10% to the Net Asset Value per share in the financial year
under review.
Upon assessing recent interactions with shareholders,
macroeconomic factors prevalent in the entire renewables
sector and considering the tighter rating of FGEN relative to
peers, the Investment Manager and the Directors have no
reason to believe that the special resolution (75% of the total
voting members) will be passed by the shareholders.
Based on this robust assessment, the Directors have a
reasonable expectation that the Group will be able to
continue in operation and meet its liabilities as they fall due
over the period to June 2028.
In making this statement, the Directors have considered and
challenged the reports of the Investment Manager in relation
to the resilience of the Group, taking into account its current
position, the principal risks facing it in reasonable downside
scenarios, the effectiveness of any mitigating actions and the
Group’s risk appetite.
Internal controls review
Taking into account the information on principal risks
and uncertainties provided on pages 55 to 64 of the
strategic report and the ongoing work of the Audit and Risk
Committees in monitoring the risk management and internal
control systems on behalf of the Board, the Directors:
ș are satisfied that they have carried out a robust
assessment of the principal risks facing the Company,
including those that would threaten its business model,
future performance, solvency or liquidity; and
ș have reviewed the effectiveness of the risk management
and internal control systems and no significant failings or
weaknesses were identified.
Share capital
The Company has one class of ordinary shares which carry
no rights to fixed income. On a show of hands, each member
present in person or by proxy has the right to one vote at
general meetings. On a poll, each member is entitled to one
vote for every share held.
The issued nominal value of the ordinary shares represents
100% of the total issued nominal value of all share capital.
There are no specific restrictions on the size of a holding
nor on the transfer of shares, which are both governed by
the general provisions of the Articles of Incorporation and
prevailing legislation.
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Additional information
Report of the Directors continued
The Directors are not aware of any agreements between holders of the Company’s shares that
may result in restrictions on the transfer of securities or on voting rights.
No person has any special rights of control over the Company’s share capital and all issued
shares are fully paid.
The Company’s Memorandum and Articles of Incorporation contain details relating to the rules
that the Company has about the appointment and removal of Directors or amendment to the
Company’s Articles of Incorporation, which are incorporated into this report by reference.
Authority to purchase own shares
A resolution to provide the Company with authority to purchase its own shares will be tabled at
the AGM on 18 September 2025. This shareholder authority was last renewed at the 2024AGM.
Major interests in shares and voting rights
As at 31 March 2025, the Company had been notified, in accordance with Chapter 5 of the
Disclosure Guidance and Transparency Rules, of the following interests in 5% or more of the
voting rights as a shareholder in the Company.
Shareholder
Percentage of
voting rights
and issued
share capital
Number of
ordinary shares
Gravis Capital Management 6.98% 44,495,619
Hargreaves Lansdown, stockbrokers (EO) 6.74% 42,949,434
Evelyn Partners (Retail) 4.99% 31,787,632
Board of Directors
The Board members that served during the year and up until the date of this report, all of whom
are non-executive Directors and independent of the Investment Manager, are listed below.
Theirbiographical details are shown on pages 116 and 117.
Name Function
Ed Warner Chair
Stephanie Coxon Senior Independent Director
Alan Bates Director
Jo Harrison Director
Hans Joern Rieks (resigned effective13September 2024) Director
Nadia Sood Director
Re-election of Directors
In compliance with the provisions of the AIC Code of Corporate Governance, all of the
Directors will stand for re-election at each AGM. The Directors are satisfied that the Board
continues to perform effectively, and that each Director continues to demonstrate commitment
to their roles. Each of the Directors has a letter of appointment rather than a service contract.
Directors’ interests
Directors who held office and had interests in the shares of the Company as at 31 March 2025
were:
Name
Ordinary shares
of no par value
each held at
31 Mar 2025
Ordinary shares
of no par value
each held at
31 Mar 2024
Ed Warner 75,000 60,000
Stephanie Coxon 45,000 15,000
Alan Bates 25,000 12,500
Jo Harrison 8,066 8,066
Nadia Sood — —
There have been no changes in the Directors’ interests from 31 March 2025 to the date of
thisreport.
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Additional information
Report of the Directors continued
AGM
The Company’s AGM will be held at 10.00am on
18September 2025 at 1 Royal Plaza, Royal Avenue, St Peter
Port, Guernsey, Channel Islands. Details of the business to be
conducted will be confirmed in the notice of AGM.
Appointment of the Investment Manager
On 1 July 2019, the Company changed Investment Adviser
from John Laing Capital Management Limited to Foresight
Group LLP. The existing team that had been providing
investment advice since FGEN’s launch in 2014 transferred to
Foresight to continue working with the Company. In January
2022, the former Investment Advisory Agreement was
terminated and the Company entered into a new Investment
Management Agreement with Foresight. Save for the addition
of certain additional regulatory obligations in connection with
Foresight’s role as Alternative Investment Fund Manager and
the delegation of discretionary decision-making authority in
relation to routine investment transactions, the material terms
and provisions of the Investment Management Agreement
with Foresight Group remained the same as the previous
Investment Advisory Agreement.
With effect from 1 October 2024, the investment management
fee was amended to be calculated as a percentage of
the Net Asset Value of the Company (previously this was
calculated as a percentage of the Adjusted Portfolio Value).
In June 2025 it was announced that the Company intends to
implement a new investment management fee structure which
is proposed to take effect from 1 October 2025. The new
structure will see fees calculated 50% based on NAV and 50%
on market capitalisation (the latter element being capped at
NAV). It is felt that this new fee structure will better align the
interests of Foresight Group LLP with those of the Company’s
shareholders. It is the Directors’ opinion that the continuing
appointment of Foresight Group LLP on the agreed terms is in
the best interests of shareholders as a whole.
Auditor
The Board has appointed KPMG as the external auditor
totheCompany.
On behalf of the Board
Ed Warner
Chair
23 June 2025
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Additional information
The Directors are responsible for preparing the Directors’
report and the financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law, they have
elected to prepare the financial statements in accordance
with UK-adopted international accounting standards and
applicable law.
The financial statements are required by law to give a true
and fair view of the state of affairs of the Company and of the
profit or loss of the Company for that period.
In preparing these financial statements, the Directors are
required to:
ș select suitable accounting policies and then apply them
consistently;
ș make judgements and estimates that are reasonable and
prudent;
ș state whether applicable accounting standards have been
followed, subject to any material departures disclosed and
explained in the financial statements;
ș assess the Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going
concern; and
ș use 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.
The Directors are responsible for keeping proper accounting
records which disclose with reasonable accuracy at any
time the financial position of the Company and enable
them to ensure that the financial statements comply with
the Companies (Guernsey) Law, 2008. They are responsible
for such internal control as they determine is necessary
to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or
error, and have general responsibility for taking such steps
as are reasonably open to them to safeguard the assets of
the Company and to prevent and detect fraud and other
irregularities.
The Directors are 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.
The Directors who hold office at the date of approval of this
Directors’ report confirm that so far as they are aware, there
is no relevant audit information of which the Company’s
auditor is unaware, and that each Director has taken all
the steps they ought to have taken as a Director to make
themselves aware of any relevant audit information and
to establish that the Company’s auditor is aware of that
information.
Responsibility statement
We confirm that to the best of our knowledge:
ș the financial statements, prepared in accordance with
UK-adopted international accounting standards, give a
true and fair view of the assets, liabilities, financial position
and profit or loss of the Company;
ș the strategic report includes a fair review of the
development and performance of the business and the
position of the Company and the undertakings taken as
a whole, together with a description of the principal risks
and uncertainties that it faces; and
ș the Annual Report and financial statements, taken as a
whole, are fair, balanced and understandable and provide
the information necessary for shareholders to assess the
Company’s position, performance, business model and
strategy.
On behalf of the Board
Ed Warner
Chair
23 June 2025
Statement of Directors’ responsibilities
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Additional information
Financial
statements
CNG Castleford
In this section:
Independent auditor’s report 146
Income statement 152
Statement of financial position 153
Statement of changes in equity 154
Cash flow statement 155
Notes to the financial statements 156
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Additional information
Our opinion is unmodified
We have audited the financial statements of Foresight Environmental Infrastructure Limited
(formerly JLEN Environmental Assets Group Limited) (the “Company”), which comprise the
statement of financial position as at 31 March 2025, the income statement, statement of changes
in equity and cash flow statement for the year then ended, and notes, comprising material
accounting policies and other explanatory information.
In our opinion, the accompanying financial statements:
ș give a true and fair view of the financial position of the Company as at 31 March 2025, andof
the Company’s financial performance and cash flows for the year then ended;
ș are prepared in accordance with UK-adopted international accounting standards; and
ș comply with the Companies (Guernsey) Law, 2008.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”)
and applicable law. Our responsibilities are described below.
We have fulfilled our ethicalresponsibilities under, and are independent of the Company in
accordance with, UK ethical requirements including the FRC Ethical Standard as required by the
Crown Dependencies’ Audit Rules and Guidance. We believe that the audit evidence we have
obtainedis a sufficient and appropriate basis for our opinion.
Key audit matters: our assessment of the risks of material misstatement
Key audit matters are those matters that, in our professional judgement, were of most significance
in the audit of the financial statements and include the most significant assessed risks of material
misstatement (whether or not due to fraud) identified by us, including those which had the
greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing
the efforts of the engagement team. These matters were addressed in the context of our audit of
the financial statements as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters. In arriving at our audit opinion above, the key audit matter
was as follows (unchanged from 2024):
Independent auditor’s report
to the members of Foresight Environmental Infrastructure Limited (formerly JLEN Environmental Assets Group Limited)
The risk Our response
Investments at fair value through profit and loss
£678,157,000 (2024: £753,572,000); Refer to Audit Committee report (pages 132 and 133), note 2 (f) accounting policy and note 9 disclosures
Basis
The Company’s investment in its immediate subsidiary (the “UK HoldCo”) is carried at fair value through
profit or loss and represents a significant proportion of the Company’s net assets. The UK HoldCo in turn
owns investments in intermediate holding companies and environmental infrastructure projects.
The fair value of the investment in the UK HoldCo, which is reflective of its net asset value, predominantly
comprises of the fair value of underlying environmental infrastructure projects.
The fair value of the underlying environmental infrastructure projects has been primarily determined
using the income approach discounting the future cash flows to be received from the underlying projects
(the “Valuations”), for which there is no active market. The Valuations incorporate certain assumptions
including generation output assumptions, discount rates, power price forecasts, inflation rates and other
macroeconomic assumptions.
Management engages an independent valuation specialist to review the Valuations and form an opinion on
the appropriateness of the Valuations.
Our audit procedures included:
Internal Controls:
We have obtained an understanding of the valuation process and tested the design and implementation of
the valuation process control.
We performed the procedures below rather than seeking to rely on the control as the nature of the balance
is such that we would expect to obtain audit evidence primarily through the detailed procedures described.
Managements independent valuation specialist valuation report:
ș We assessed the objectivity, capabilities and competence of management’s independent valuation
specialist;
ș We assessed the scope of management’s independent valuation specialist review of the Valuations
and read their valuation report and the investment valuation memoranda produced by the Investment
Manager; and
ș We held discussions with management’s independent valuation specialist to understand the nature of the
procedures performed by them in arriving at their opinion on the appropriateness of the Valuations.
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Additional information
Independent auditor’s report continued
to the members of Foresight Environmental Infrastructure Limited (formerly JLEN Environmental Assets Group Limited)
The risk continued Our response continued
Investments at fair value through profit and loss
£678,157,000 (2024: £753,572,000); Refer to Audit Committee report (pages 132 and 133), note 2 (f) accounting policy and note 9 disclosures
Risk:
The Valuations represent both a risk of fraud and error associated with estimating the timing and amounts
of long-term forecasted cash flows alongside the selection, and application, of appropriate assumptions.
Changes to long-term forecasted cash flows and/or the selection and application of different assumptions
may result in a materially different valuation of investments held at fair value through profit or loss.
We therefore have determined that the Valuations have a high degree of estimation uncertainty giving
risetoa potential range of reasonable outcomes greater than our materiality for the financial statements
asa whole.
Challenging managements’ assumptions and inputs including use of KPMG valuation specialists
With the support of KPMG valuation specialists we challenged the appropriateness of the Company’s
valuation methodology and key assumptions such as discount rates, power price forecasts, inflation rates,
and other macroeconomic assumptions applied, by:
i) assessing the appropriateness of the valuation methodology applied;
ii) benchmarking the discount rates applied against independent market data and relevant peer group
companies;
iii) assessing the reasonableness of the power price forecasts used by reference to power price curves
supplied to management by external consultants;
iv) challenging inflation rates and other macroeconomic assumptions used, by reference to observable
market data and market forecasts;
v) agreeing significant additions of operational and non-operational environmental infrastructure projects to
supporting documentation;
vi) comparing, where appropriate, the valuation of the underlying environmental infrastructure projects to
the price of recent transactions and to any indicative non-binding offers received by management; and
vii) using our KPMG valuation specialists’ experience in valuing similar investments.
For a risk based sample of the cash flow valuation models:
ș we tested their mathematical accuracy including, but not limited to, material formulae errors;
ș we challenged the generation output assumptions, by reference to due diligence reports prepared by
third-party engineers or historical performance, where available;
ș we agreed other key inputs, such as contracted revenue to supporting documentation;
ș we assessed the appropriateness of changes to operational assumptions and cash flows in the
underlying models, with reference to third-party support and historical experience where required; and
ș in order to assess the reliability of management’s forecasts, we assessed the historical accuracy of the
cash flow forecasts against actual results and project disposals in the year.
Assessing disclosures:
We considered the appropriateness and adequacy of the disclosures made in the financial statements
(see notes 2(f), 9 and 16) in relation to the use of estimates and judgements regarding the fair value of
investments, the valuation estimation techniques inherent therein and fair value disclosures for compliance
with UK-adopted international accounting policies.
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Independent auditor’s report continued
to the members of Foresight Environmental Infrastructure Limited (formerly JLEN Environmental Assets Group Limited)
Our application of materiality and an overview of the scope of our audit
Materiality for the financial statements as a whole was set at £14.4 million, determined with
reference to a benchmark of net assets of £678.7 million, of which it represents approximately
2% (2024: 2%).
In line with our audit methodology, our procedures on individual account balances and
disclosures were performed to a lower threshold, performance materiality, so as to reduce
toan acceptable level the risk that individually immaterial misstatements in individual account
balances add up to a material amount across the financial statements as a whole. Performance
materiality for the Company was set at 75% (2024: 65%) of materiality for the financial
statements as a whole, which equates to £10.8 million. We applied this percentage in our
determination of performance materiality because we did not identify any factors indicating an
elevated level of risk.
We reported to the Audit Committee any corrected or uncorrected identified misstatements
exceeding £0.72 million, in addition to other identified misstatements that warranted reporting
on qualitative grounds.
Our audit of the Company was undertaken to the materiality level specified above, which has
informed our identification of significant risks of material misstatement and the associated
auditprocedures performed in those areas as detailed above.
Going concern
The Directors have prepared the financial statements on the going concern basis as they do
notintend to liquidate the Company or to cease its operations, and as they have concluded
that the Company’s financial position means that this is realistic. They have also concluded
that there are no material uncertainties that could have cast significant doubt over its ability
to continue as a going concern for at least a year from the date of approval of the financial
statements (the “going concern period”).
In our evaluation of the Directors’ conclusions, we considered the inherent risks to the
Company’s business model and analysed how those risks might affect the Company’s
financialresources or ability to continue operations over the going concern period.
The risks that we considered most likely to affect the Company’s financial resources or ability
to continue operations over this period were:
ș availability of capital to meet operating costs and other financial commitments; and
ș the outcome of the upcoming discontinuation vote.
We considered whether these risks could plausibly affect the liquidity in the going concern
period by comparing severe, but plausible downside scenarios that could arise from these
risksindividually and collectively against the level of available financial resources indicated
bythe Company’s financial forecasts.
We also considered the risk that the outcome of the discontinuation vote could affect the
Company over the going concern period, by considering the outcome of previous votes held
bythe Company, inspecting summaries of discussions held with the broker, and considering
keyfinancial metrics including the discount of the Company’s share price against its reported
net asset value per share, in comparison to its peers over the last 12 months.
We considered whether the going concern disclosure in note 2 (b) to the financial statements
gives a full and accurate description of the Directors’ assessment of going concern.
Our conclusions based on this work:
ș we consider that the Directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate;
ș we have not identified, and concur with the Directors’ assessment that there is not,
amaterialuncertainty related to events or conditions that, individually or collectively,
maycast significant doubt on the Company’s ability to continue as a going concern forthe
going concern period; and
ș we have nothing material to add or draw attention to in relation to the Directors’ statement
in the notes to the financial statements on the use of the going concern basis of accounting
with no material uncertainties that may cast significant doubt over the Company’s use of
that basis for the going concern period, and that statement is materially consistent with the
financial statements and our audit knowledge.
However, as we cannot predict all future events or conditions and as subsequent events may
result in outcomes that are inconsistent with judgements that were reasonable at the time
they were made, the above conclusions are not a guarantee that the Company will continue
inoperation.
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As the Company is regulated, our assessment of risks involved gaining an understanding
of the control environment including the entity’s procedures for complying with regulatory
requirements.
The Company is subject to laws and regulations that directly affect the financial statements
including financial reporting legislation and taxation legislation and we assessed the extent of
compliance with these laws and regulations as part of our procedures on the related financial
statement items.
The Company is subject to other laws and regulations where the consequences of non-
compliance could have a material effect on amounts or disclosures in the financial statements,
for instance through the imposition of fines or litigation or impacts on the Company’s ability
to operate. We identified financial services regulation as being the area most likely to have
such aneffect, recognising the regulated nature of the Company’s activities and its legal
form. Auditing standards limit the required audit procedures to identify non-compliance with
these laws and regulations to enquiry of management and inspection of regulatory and legal
correspondence, if any. Therefore if a breach of operational regulations is not disclosed to us
or evident from relevant correspondence, an audit will not detect that breach.
Context of the ability of the audit to detect fraud or breaches of law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not
have detected some material misstatements in the financial statements, even though we have
properly planned and performed our audit in accordance with auditing standards. Forexample,
the further removed non-compliance with laws and regulations is from the eventsand
transactions reflected in the financial statements, the less likely the inherently limited
procedures required by auditing standards would identify it.
In addition, as with any audit, there remains a higher risk of non-detection of fraud, as this may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
controls. Our audit procedures are designed to detect material misstatement.
We are not responsible for preventing non-compliance or fraud and cannot be expected to
detect non-compliance with all laws and regulations.
Fraud and breaches of laws and regulations – ability to detect
Identifying and responding to risks of material misstatement due to fraud
To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events
or conditions that could indicate an incentive or pressure to commit fraud or provide an
opportunity to commit fraud. Our risk assessment procedures included:
ș enquiring of management as to the Company’s policies and procedures to prevent and
detect fraud as well as enquiring whether management have knowledge of any actual,
suspected or alleged fraud;
ș reading minutes of meetings of those charged with governance; and
ș using analytical procedures to identify any unusual or unexpected relationships.
As required by auditing standards, and taking into account possible incentives or pressures
to misstate performance and our overall knowledge of the control environment, we perform
procedures to address the risk of management override of controls, in particular the risk that
management may be in a position to make inappropriate accounting entries, and the risk of
bias in accounting estimates such as valuation of unquoted investments. On this audit we do
not believe there is a fraud risk related to revenue recognition because the Company’s revenue
streams are simple in nature with respect to accounting policy choice, and are easily verifiable
to external data sources or agreements with little or no requirement for estimation from
management. We did not identify any additional fraud risks.
We performed procedures including:
ș identifying journal entries and other adjustments to test based on risk criteria and comparing
any identified entries to supporting documentation;
ș incorporating an element of unpredictability in our audit procedures; and
ș assessing significant accounting estimates for bias.
Further detail in respect of valuation of unquoted investments is set out in the key audit
mattersection of this report.
Identifying and responding to risks of material misstatement due to
non-compliancewith laws and regulations
We identified areas of laws and regulations that could reasonably be expected to have a
material effect on the financial statements from our sector experience and through discussion
with management (as required by auditing standards), and from inspection of the Company’s
regulatory and legal correspondence, if any, and discussed with management the policies and
procedures regarding compliance with laws and regulations.
Independent auditor’s report continued
to the members of Foresight Environmental Infrastructure Limited (formerly JLEN Environmental Assets Group Limited)
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Corporate governance disclosures
We are required to perform procedures to identify whether there is a material inconsistency
between the Directors’ corporate governance disclosures and the financial statements and our
audit knowledge.
Based on those procedures, we have concluded that each of the following is materially
consistent with the financial statements and our audit knowledge:
ș the Directors’ statement that they consider that the Annual Report and financial statements
taken as a whole is fair, balanced and understandable, and provides the information
necessary for shareholders to assess the Company’s position and performance, business
model and strategy;
ș the section of the Annual Report describing the work of the Audit Committee, including the
significant issues that the Audit Committee considered in relation to the financial statements,
and how these issues were addressed; and
ș the section of the Annual Report that describes the review of the effectiveness of the
Company’s risk management and internal control systems.
We are required to review the part of Corporate Governance Statement relating to the
Company’s compliance with the provisions of the UK Corporate Governance Code specified by
the Listing Rules for our review. We have nothing to report in this respect.
We have nothing to report on other matters on which we are required to report
by exception
We have nothing to report in respect of the following matters where the Companies (Guernsey)
Law, 2008 requires us to report to you if, in our opinion:
ș the Company has not kept proper accounting records; or
ș the financial statements are not in agreement with the accounting records; or
ș we have not received all the information and explanations, which to the best of our
knowledge and belief are necessary for the purpose of our audit.
Other information
The Directors are responsible for the other information. The other information comprises the
information included in the Annual Report but does not include the financial statements and
our auditor’s report thereon. Our opinion on the financial statements does not cover the other
information and we do not express an audit opinion or any form of assurance conclusion
thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the audit, or otherwise appears to
be materially misstated. If, based on the work we have performed, we conclude that there is a
material misstatement of this other information, we are required to report that fact. We have
nothing to report in this regard.
Disclosures of emerging and principal risks and longer term viability
We are required to perform procedures to identify whether there is a material inconsistency
between the Directors’ disclosures in respect of emerging and principal risks and the viability
statement, and the financial statements and our audit knowledge. We have nothing material to
add or draw attention to in relation to:
ș the Directors’ confirmation within the long-term viability statement (pages 140 and 141)
that they have carried out a robust assessment of the emerging and principal risks facing
the Company, including those that would threaten its business model, future performance,
solvency or liquidity;
ș the emerging and principal risks disclosures describing these risks and explaining how they
are being managed or mitigated; and
ș the Directors’ explanation in the long-term viability statement (pages 140 and 141) as to how
they have assessed the prospects of the Company, over what period they have done so and
why they consider that period to be appropriate, and their statement as to whether they
have a reasonable expectation that the Company will be able to continue in operation and
meet its liabilities as they fall due over the period of their assessment, including any related
disclosures drawing attention to any necessary qualifications or assumptions.
We are also required to review the long-term viability statement, set out on pages 140 and 141
under the Listing Rules. Based on the above procedures, we have concluded that the above
disclosures are materially consistent with the financial statements and our audit knowledge.
Independent auditor’s report continued
to the members of Foresight Environmental Infrastructure Limited (formerly JLEN Environmental Assets Group Limited)
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Independent auditor’s report continued
to the members of Foresight Environmental Infrastructure Limited (formerly JLEN Environmental Assets Group Limited)
The purpose of this report and restrictions on its use by persons other than the
Company’s members as a body
This report is made solely to the Company’s members, as a body, in accordance with section
262 of the Companies (Guernsey) Law, 2008. Our audit work has been undertaken so that
we might state to the Company’s members those matters we are required to state to them in
an auditor’s 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 and the Company’s
members, as a body, for our audit work, for this report, or for the opinions we have formed.
Barry Ryan
For and on behalf of KPMG Channel Islands Limited
Chartered Accountants and Recognised Auditors
Guernsey
23 June 2025
Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on page 144, the Directors are responsible
for: the preparation of the financial statements including being satisfied that they give a true
and fair view; such internal control as they determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error;
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.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about whether the financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue our
opinion in an auditor’s report. Reasonable assurance is a high level of assurance, but does not
guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of the financial statements.
A fuller description of our responsibilities is provided on the FRC’s website at
www.frc.org.uk/auditorsresponsibilities.
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Income statement
for the year ended 31 March 2025
Notes
2025
£’000s
2024
£’000s
Operating income and loss on fair value of investments 4 5,958 (3,827)
Operating expenses 5 (8,793) (10,110)
Operating loss (2,835) (13,937)
Loss before tax (2,835) (13,937)
Loss for the year (2,835) (13,937)
Loss per share
Basic and diluted (pence) 8 (0.4) (2.1)
The accompanying notes form an integral part of the financial statements.
All results are derived from continuing operations.
There is no other comprehensive income in either the current year or the preceding year, other than the loss for the year, and therefore no separate statement of comprehensive income has
beenpresented.
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Statement of financial position
as at 31 March 2025
Notes
2025
£’000s
2024
£’000s
Non-current assets
Investments at fair value through profit or loss 9 678,157 753,572
Total non-current assets 678,157 753,572
Current assets
Trade and other receivables 10 21 25
Cash and cash equivalents 2,617 271
Total current assets 2,638 296
Total assets 680,795 753,868
Current liabilities
Trade and other payables 11 (2,094) (2,654)
Total current liabilities (2,094) (2,654)
Total liabilities (2,094) (2,654)
Net assets 678,701 751,214
Stephanie Coxon
Director
Notes
2025
£’000s
2024
£’000s
Equity
Share capital account 13 664,401 664,401
Treasury shares 13 (19,156) —
Retained earnings 14 33,456 86,813
Equity attributable to owners of the Company 678,701 751,214
Net assets per share (pence per share) 106.5 113.6
The accompanying notes form an integral part of the financial statements.
The financial statements were approved by the Board of Directors and authorised for issue on
23 June 2025.
They were signed on its behalf by:
Ed Warner
Chair
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Statement of changes in equity
for the year ended 31 March 2025
Year ended 31 March 2025
Notes
Share capital
account
£’000s
Treasury
shares
£’000s
Retained
earnings
£’000s
Total
£’000s
Balance at 1 April 2024 664,401 — 86,813 751,214
Loss for the year — — (2,835) (2,835)
Loss and total comprehensive income/(expense) for the year — — (2,835) (2,835)
Treasury shares purchased 13 — (19,156) — (19,156)
Dividends paid 7 — — (50,522) (50,522)
Balance at 31 March 2025 664,401 (19,156) 33,456 678,701
Year ended 31 March 2024
Notes
Share capital
account
£’000s
Treasury
shares
£’000s
Retained
earnings
£’000s
Total
£’000s
Balance at 1 April 2023 664,401 — 150,167 814,568
Loss for the year — — (13,937) (13,937)
Loss and total comprehensive income/(expense) for the year — — (13,937) (13,937)
Dividends paid 7 — — (49,417) (49,417)
Balance at 31 March 2024 664,401 — 86,813 751,214
The accompanying notes form an integral part of the financial statements.
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Additional information
Cash flow statement
for the year ended 31 March 2025
Notes
2025
£’000s
2024
£’000s
Cash flows from operating activities
Loss from operations (2,835) (13,937)
Adjustments for:
Investment interest (31,073) (31,401)
Dividends received (32,300) (28,000)
Net loss on investments at fair value through
profitor loss 57,415 63,228
Operating cash flows before movements
in working capital (8,793) (10,110)
Decrease in receivables 4 118
(Decrease)/increase in payables (560) 136
Net cash outflow used in operating activities (9,349) (9,856)
Investing activities
Loan repayment from subsidiary 18,000 —
Investment interest 31,073 31,401
Dividends received 32,300 28,000
Net cash from investing activities 81,373 59,401
Notes
2025
£’000s
2024
£’000s
Financing activities
Purchase of treasury shares (19,156) —
Dividends paid 7 (50,522) (49,417)
Net cash used in financing activities (69,678) (49,417)
Net increase in cash and cash equivalents 2,346 128
Cash and cash equivalents at beginning of the year 271 143
Cash and cash equivalents at end of the year 2,617 271
The accompanying notes form an integral part of the financial statements.
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Notes to the financial statements
for the year ended 31 March 2025
Consequently, the Company does not consolidate its subsidiaries or apply IFRS 3 Business
Combinations when it obtains control of another entity as it is considered to be an investment
entity under UK-adopted international accounting standards. Instead, the Company measures
its investment in its subsidiary at fair value through profit or loss.
The financial statements incorporate the financial statements of the Company only.
UK HoldCo is itself an investment entity. Consequently, the Company need not have an exit
strategy for its investment in UK HoldCo.
Each investment indirectly held has a finite life. For the PPP assets, the shareholder debt will
mature towards the end of the concession, and at the end of the concession the investment
will be dissolved. In the case of renewable energy assets, the life of the project is based on the
expected asset life and the land lease term, after which the investment will also be dissolved.
The exit strategy is that investments will normally be held to the end of the concession, unless
the Company sees an opportunity in the market to dispose of investments. Foresight Group,
the Company’s Investment Manager, and the Company’s Board regularly consider whether any
disposals should be made.
The Directors continue to consider that the Company demonstrates the characteristics and
meets the requirements to be considered as an investment entity.
The following relevant standards which have not been applied in these financial statements
were in issue but not yet effective:
ș Amendments to the Classification and Measurement of Financial Instruments – Amendments
to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures (applicable for
annual periods beginning on or after 1 January 2026);
ș Annual Improvements to IFRS Accounting Standards (applicable for annual periods beginning
on or after 1 January 2026) – Amendments to:
ș IFRS 1 First-time Adoption of International Financial Reporting Standards;
ș IFRS 7 Financial Instruments: Disclosures and its accompanying Guidance on
implementing IFRS 7;
ș IFRS 9 Financial Instruments;
ș IFRS 10 Consolidated Financial Statements; and
ș IAS 7 Statement of Cash flows;
ș Contracts Referencing Nature-dependent Electricity – Amendments to IFRS 9 and IFRS 7; and
ș IFRS 18 Presentation and Disclosure in Financial Statements (applicable for annual periods
beginning on or after 1 January 2027).
1. General information
Foresight Environmental Infrastructure Limited (the “Company” or “FGEN”, formerly known
as JLEN Environmental Assets Group Limited, “JLEN”) is a closed-ended investment company
domiciled and incorporated in Guernsey, Channel Islands, under Section 20 of the Companies
(Guernsey) Law, 2008. The shares are publicly traded on the London Stock Exchange under
a premium listing. The audited financial statements of the Company are for the year ended
31March 2025 and have been prepared on the basis of the accounting policies set out
below. The financial statements comprise only the results of the Company as its investment
in Foresight Environmental Infrastructure (UK) Limited (“UK HoldCo”, formerly known as
JLEN Environmental Assets Group (UK) Limited) is measured at fair value as detailed in the
significant accounting policies below. The Company and its subsidiaries invest in environmental
infrastructure that utilises natural or waste resources or supports more environmentally
friendly approaches to economic activity.
2. Accounting policies
(a) Basis of preparation
The financial statements, which give a true and fair view, were approved and authorised for
issue by the Board of Directors on 23 June 2025. The set of financial statements included in this
financial report has been prepared in accordance with UK-adopted international accounting
standards as applicable to companies reporting under those standards and complies with the
Companies (Guernsey) Law, 2008.
As a result of adopting the amendments to IFRS 10, IFRS 12 and IAS 28 first adopted in the
Company’s Annual Report to 31 March 2015, the Company is required to hold its subsidiaries
that provide investment services at fair value, in accordance with IFRS 9 Financial Instruments
Recognition and Measurement, and IFRS 13 Fair Value Measurement. The Company accounts
for its investment in its wholly owned direct subsidiary UK HoldCo at fair value. The Company,
together with its wholly owned direct subsidiary UK HoldCo and the intermediate holding
subsidiary HWT Limited, comprise the Group (the “Group”) investing in environmental
infrastructure assets.
The net assets of the intermediate holding companies (comprising UK HoldCo and HWT
Limited), which at 31 March 2025 principally comprise working capital balances, the revolving
credit facility (“RCF”) and investments in projects, are required to be included at fair value in the
carrying value of investments.
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Notes to the financial statements continued
for the year ended 31 March 2025
The Board considers the going concern assessment period of 18 months to 30 September 2026
to be appropriate. A longer period than the typical requirement of 12 months has been adopted
to factor in the full payment of the declared dividend in year 2025/26.
The Directors also considered that the Company has adequate financial resources, and
were mindful that the Group had unrestricted cash of £7.8 million as at 31 March 2025.
Additionally,the Group had an RCF and uncommitted accordion facility in total of £180
million, available until June 2027 with an uncommitted option to extend for a further year, for
investment in new or existing projects and working capital. As at 31 March 2025, the Company’s
wholly owned subsidiary UK HoldCo had borrowed £99.3 million under the facility, leaving
£50.7 million undrawn under the current committed amount. All key financial covenants under
this facility are forecast to continue to be complied with for the duration of the going concern
assessment period.
The RCF provides the Fund with the flexibility to meet its existing funding commitments to
portfolio assets. Additionally, the Company has sufficient headroom in its RCF to finance its
hard commitments related to construction assets within the portfolio.
The RCF covenants have been stress-tested under downside risk scenarios. These scenarios
include a 10% reduction in power price projections relative to the base case, lower generation
levels assuming a P90, a portion of the portfolio not yielding, and combinations of these factors.
In all scenarios, including the combined downside case, the Company remained compliant with
its key covenants.
At the Annual General Meeting (“AGM”) in September 2024, shareholders were presented with a
discontinuation vote, triggered by the Company’s shares trading at an average discount of more
than 10% to the Net Asset Value (“NAV”) per share during the financial year under review. The
Directors are pleased with the overwhelming support from shareholders, who voted against the
proposed discontinuation of the Company.
The Company will face another discontinuation vote at the September 2025 AGM after
trading at a discount of more than 10% during the 2024/25 financial year. There have been no
indications of concern from shareholders that the vote will pass and the Investment Manager
and the Directors have no reason to believe that the special resolution (75% of the total voting
members) will be passed by the shareholders.
2. Accounting policies continued
The Company is currently assessing the impact of IFRS 18 on its financial statements. Particular
focus is being given to potential changes in the structure of the income statement, the statement
of cash flows, and the enhanced disclosure requirements related to management performance
measures (“MPMs”). The assessment also includes a review of how information is grouped and
presented within the financial statements.
The following relevant standards became effective during the year and did not have a material
impact on the Company’s reported results:
ș Lease Liability in a Sale and Leaseback – Amendments to IFRS 16 Leases (applicable for
annual periods beginning on or after 1 January 2024);
ș Classification of Liabilities as Current or Non-Current and Non-current Liabilities with
Covenants – Amendments to IAS 1 Presentation of Financial Statements (applicable for
annual periods beginning on or after 1 January 2024);
ș Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures
– Supplier Finance Arrangements (applicable for annual periods beginning on or after
1January 2024); and
ș Lack of Exchangeability – Amendments to IAS 21 The Effects of Changes in Foreign Exchange
Rates (applicable for annual periods beginning on or after 1 January 2025).
(b) Going concern
The Directors, in their consideration of going concern, have reviewed comprehensive cash
flow forecasts prepared by the Company’s Investment Manager, Foresight Group, which are
based on prudent market data and a reasonable worst case scenario, and believe, based on
those forecasts and an assessment of the Company’s subsidiary’s banking facilities, that it is
appropriate to prepare the financial statements of the Company on the going concern basis.
In reaching their decision, the Directors considered several key risks, including the volatility of
energy prices and the potential impact of the principal risks (as documented in the strategic
report).
Additionally, the Directors have assessed sustainability-related risks, including environmental,
social and governance (“ESG”) factors, with a particular focus on climate change. In line with the
recommendations of the Task Force on Climate-related Financial Disclosures (“TCFD”), which is
integrated throughout the Sustainability and ESG report, the Investment Manager has reviewed
the portfolio’s exposure to these risks. The conclusion is that such risks are not currently
material to the Company, although they continue to be monitored closely.
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Notes to the financial statements continued
for the year ended 31 March 2025
(f) Financial instruments
Financial assets and financial liabilities are recognised on the Company’s statement of financial
position when the Company becomes a party to the contractual provisions of the instrument.
Financial assets are derecognised when the contractual rights to the cash flows from the
instrument expire or the asset is transferred and the transfer qualifies for derecognition in
accordance with IFRS 9 Financial Instruments.
I) Financial assets
The Company classifies its financial assets as either investments at fair value through profit
or loss or financial assets at amortised cost. The classification depends on the results of
the “solely payments of principal and interest” and the business model test. The Company
determines the business model at a level that reflects how groups of financial assets are
managed together to achieve a particular business objective. This assessment includes
judgement reflecting all relevant evidence including how the performance of the assets is
evaluated and their performance measured, the risks that affect the performance of the assets
and how these are managed and how management are compensated. Monitoring is part of the
Company’s continuous assessment of whether the business model, for which the remaining
financial assets are held, continues to be appropriate and, if it is not appropriate, whether there
has been a change in business model and so a prospective change to the classification of those
assets.
i) Investments at fair value through profit or loss
Investments at fair value through profit or loss are recognised upon initial recognition as
financial assets at fair value through profit or loss in accordance with IFRS 10. In these financial
statements, investments at fair value through profit or loss is the fair value of the Company’s
subsidiary, UK HoldCo, which comprises the fair value of UK HoldCo and HWT Limited and the
environmental infrastructure investments.
The intermediate holding companies’ net assets (UK HoldCo and HWT Limited) are mainly
composed of cash, working capital balances and borrowings under the Company’s wholly
owned direct subsidiary’s RCF, and are recognised at fair value, which is equivalent to their
net assets. Although the working capital and the RCF outstanding balance are measured at
amortised cost, their fair values do not materially differ from their amortised costs.
The Company’s investment in UK HoldCo comprises both equity and loan notes. Both elements
are exposed to the same primary risk, being performance risk. This performance risk is taken
into consideration when determining the discount rate applied to the forecast cash flows.
2. Accounting policies continued
Following the September 2024 vote, both the Investment Manager and the Directors are
confident that FGEN’s discount to NAV is not attributable to the individual performance of
FGEN, its Investment Manager, or its Board of Directors.
In light of this, the Directors are satisfied that the Company has sufficient resources to continue
operating for the foreseeable future, defined as a period of no less than 12 months from the
date of this report. Accordingly, they have continued to adopt the going concern basis in the
preparation of these financial statements.
(c) Revenue recognition – Operating income and loss on fair value of investments
Operating income and loss on fair value of investments in the income statement represents
gains or losses that arise from the movement in the fair value of the Company’s investment in
UK HoldCo, dividend income and interest received from UK HoldCo. Dividends from UK HoldCo
are recognised when the Company’s right to receive payment has been established. Interest
income is accrued by reference to the loan principal outstanding, applicable interest rate and in
accordance with the loan note agreement. Refer to note 9 fordetails.
(d) Taxation
Under the current system of taxation in Guernsey, the Company itself is exempt from paying
taxes on income, profits or capital gains. Dividend income and interest income received by the
Company may be subject to withholding tax imposed in the country of origin of such income.
The underlying intermediate holding companies and project companies in which the Company
invests provide for and pay taxation at the appropriate rates in the countries in which they
operate. This is taken into account when assessing the fair value of the Company’s investments.
(e) Cash and cash equivalents
Cash and cash equivalents comprise cash balances, deposits held on call with banks and
other short-term highly liquid deposits with original maturities of three months or less. Bank
overdrafts that are repayable on demand are included as a component of cash and cash
equivalents for the purpose of the cash flow statements. Deposits held with original maturities
of greater than three months are included in other financial assets.
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Notes to the financial statements continued
for the year ended 31 March 2025
ș other non-derivative financial instruments, including trade and other payables, which are
measured at amortised cost using the effective interest method less any impairment losses.
In accordance with IFRS 9, financial guarantee contracts are recognised as a financial liability.
The liability is measured at fair value and subsequently in accordance with the expected credit
loss model under IFRS 9.
The fair value of financial guarantees is determined based on the present value of the difference
in cash flows between contracted payments required under the debt instrument and the
payments that would be required without the guarantee, or the estimated amount that would be
payable to a third party for assuming the obligations.
III) Effective interest method
The effective interest rate is the rate that exactly discounts estimated future cash payments or
receipts through the expected life of the financial instrument to the relevant asset’s carrying
amount.
IV) Fair value estimation for investments at fair value
The Company’s investments at fair value are not traded in active markets.
Fair value is calculated by discounting at an appropriate discount rate future cash flows
expected to be received by the Company’s intermediate holdings, from investments in both
equity (dividends and equity redemptions), shareholder and inter-company loans (interest
and repayments). The discount rates used in the valuation exercise represent the Investment
Manager’s and the Board’s assessment of the rate of return in the market for assets with similar
characteristics and risk profile. The discount rates are reviewed on a regular basis and updated,
where appropriate, to reflect changes in the market and in the project risk characteristics.
Thediscount rates that have been applied to the financial assets at 31 March 2025 were in the
range of 7.0% to 18.4% (31 March 2024: 7.0% to 17.7%). Refer to note 9 for details of the areas
of estimation in the calculation of the fair value.
For subsidiaries which provide management/investment-related services, the fair value is
estimated to be the net assets of the relevant companies, which principally comprise cash,
loans and working capital balances.
(g) Segmental reporting
The Board is of the opinion that the Company is engaged in a single segment of business, being
investment in environmental infrastructure to generate investment returns while preserving
capital. The financial information used by the Board to allocate resources and manage the
Company presents the business as a single segment comprising a homogeneous portfolio.
2. Accounting policies continued
In determining fair value, the Board considered observable market transactions and has
measured fair value using assumptions that market participants would use when pricing the
asset, including assumptions regarding risk. The loan notes and equity are considered to have
the same risk characteristics. As such, the debt and equity form a single class of financial
instrument for the purposes of disclosure. The Company measures its investment as a single
class of financial asset at fair value in accordance with IFRS 13 Fair Value Measurement.
ii) Financial assets at amortised cost
Trade receivables, loans and other receivables that are non-derivative financial assets and that
have fixed or determinable payments that are not quoted in an active market are classified as
“loans and other receivables”. Loans and other receivables are measured at amortised cost
using the effective interest method, less any impairment. They are included in current assets,
except where maturities are greater than 12 months after the reporting date, in which case they
are classified as non-current assets. The Company’s loans and receivables comprise “trade and
other receivables” and “cash and cash equivalents” in the statement of financial position.
The loan notes issued by the Company’s wholly owned subsidiary UK HoldCo are held at fair
value, which is included in the balance of the investments at fair value through profit or loss in
the statement of financial position.
II) Financial liabilities and equity
Debt and equity instruments are classified as either financial liabilities or as equity in
accordance with the substance of the contractual arrangement.
i) Equity instruments
Ordinary shares are classified as equity. Costs directly attributable to the issue of new shares
that would otherwise have been avoided are written off against the balance of the share capital
account as permitted by Companies (Guernsey) Law, 2008.
ii) Financial liabilities
Financial liabilities are classified as other financial liabilities, comprising:
ș loans and borrowings which are recognised initially at the fair value of the consideration
received, less transaction costs. Subsequent to initial recognition, loans and borrowings
are stated at amortised cost, with any difference between cost and redemption value being
recognised in the income statement over the period of the borrowings on an effective
interest basis; and
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Notes to the financial statements continued
for the year ended 31 March 2025
The project cash flows used in the portfolio valuation at 31 March 2025 reflect contractual fixed
price arrangements under PPAs, where they exist, and short-term market forward prices for the
next two years where they do not.
After the initial two-year period, the project cash flows assume future electricity and gas prices
in line with a blended curve informed by the central forecasts from three established market
consultants, adjusted by the Investment Manager for project-specific arrangements and price
cannibalisation.
For the Italian investment, project cash flows assume future electricity prices informed by a
leading independent market consultant’s long-term projections.
The power price assumptions, including the discount to the near-term power price
assumptions, are a key source of estimation and uncertainty. Information on the sensitivity of
the portfolio to movement in power price is disclosed in note 16.
Discount rates used in the valuation represent the Investment Manager’s and the Board’s
assessment of the rate of return in the market for assets with similar characteristics and risk
profile. The discount rate is deemed to be one of the most significant unobservable inputs
and any change could have a material impact on the fair value of investments. Underlying
assumptions and discount rates are disclosed in note 9 and sensitivity analysis is disclosed in
note 16.
Due to the current economic environment, the Investment Manager and the Board believe
that the rate of inflation should also be considered a key source of estimation uncertainty.
Information on the sensitivity of the portfolio valuation to movements in inflation rates is
disclosed in note 16.
Critical accounting judgements
Equity and debt investment in UK HoldCo
In applying their judgement, the Directors have satisfied themselves that the equity and debt
investments in UK HoldCo share the same investment characteristics and, as such, constitute a
single asset class for IFRS 7 disclosure purposes. Please refer to the accounting policies in note
2 for further detail.
Investment entities
The Directors consider that the Company demonstrates the characteristics and meets the
requirements to be considered as an investment entity. Please refer to the accounting policies
innote 2 for further detail.
2. Accounting policies continued
(h) Statement of compliance
Pursuant to the Protection of Investors (Bailiwick of Guernsey) Law, 2020, the Company is a
registered closed-ended investment scheme. As a registered scheme, the Company is subject to
certain ongoing obligations to the Guernsey Financial Services Commission, and is governed by
the Companies (Guernsey) Law, 2008, as amended.
(i) Seasonality
Neither operating income nor profit are impacted significantly by seasonality. While
meteorological conditions resulting in fluctuation in the levels of wind and sunlight can affect
revenues of the Company’s environmental infrastructure projects, due to the diversified mix of
projects, these fluctuations do not materially affect the Company’s operating income or profit.
3. Critical accounting judgements, estimates and assumptions
In the application of the Company’s accounting policies, which are described in note 2, the
Directors are required to make judgements, estimates and assumptions about the fair value
of assets and liabilities that affect reported amounts. Actual results may differ from these
estimates.
Key sources of estimation uncertainty
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 periods if the revision affects
both current and future periods.
Investments at fair value through profit or loss
The fair value of environmental infrastructure investments is calculated by discounting at
an appropriate discount rate future cash flows expected to be received by the Company’s
intermediate holdings, from investments in both equity (dividends and equity redemptions),
shareholder and inter-company loans (interest and repayments). Estimates such as the cash
flows are believed to be reasonable under the circumstances, the results of which form the
basis of making judgements about the fair value of assets not readily available from other
sources. Actual results may differ from these estimates.
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Notes to the financial statements continued
for the year ended 31 March 2025
6. Tax
Income tax expense
The Company has obtained exempt status from income tax in Guernsey under the Income
Tax (Exempt Bodies) (Guernsey) Ordinance, 1989. FGEN is charged an annual exemption fee of
£1,600 (year ended March 2024: £1,600).
The income from its investments is therefore not subject to any further tax in Guernsey,
although the investments provide for and pay taxation at the appropriate rates in the
countries in which they operate. The underlying tax within the subsidiaries and environmental
infrastructure assets, which are held as investments at fair value through profit or loss,
isincluded in the estimate of the fair value of these investments.
7. Dividends
Year ended
31 Mar 2025
£’000s
Year ended
31 Mar 2024
£’000s
Amounts recognised as distributions to equity holders during the
year (pence per share):
Final dividend for the year ended 31 March 2024 of 1.89
(31 March 2023: 1.79) 12,503 11,841
Interim dividend for the quarter ended 30 June 2024 of 1.95
(30 June 2023: 1.89) 12,858 12,503
Interim dividend for the quarter ended 30 September 2024
of 1.95 (30 September 2023: 1.89) 12,667 12,503
Interim dividend for the quarter ended 31 December 2024
of 1.95 (31 December 2023: 1.90) 12,494 12,569
50,522 49,417
1
1. Total may not cast due to rounding.
A dividend for the quarter ended 31 March 2025 of 1.95 pence per share was approved by the
Board on 29 May 2025 and is payable on 27 June 2025.
4. Operating income and loss on fair value of investments
Year ended
31 Mar 2025
£’000s
Year ended
31 Mar 2024
£’000s
Interest income 31,073 31,401
Dividend income 32,300 28,000
Net loss on investments at fair value through profit or loss (57,415) (63,228)
5,958 (3,827)
5. Operating expenses
Year ended
31 Mar 2025
£’000s
Year ended
31 Mar 2024
£’000s
Investment management fee 7,208 8,468
Directors’ fees and expenses 327 343
Administration fee 124 104
Other expenses 1,134 1,195
8,793 10,110
The Company had no employees during the year (31 March 2024: nil). There was no Directors’
remuneration for the year other than Directors’ fees as detailed in note 15 (31 March 2024: £nil).
Included within other expenses is an amount of £197,000 to KPMG Channel Islands Limited
for the audit of the Company for the year ended 31 March 2025 (year ended 31 March 2024:
£170,775).
The Company paid £48,904 during the year for non-audit services to KPMG Channel Islands
Limited, all in relation to the Half-year Report (year ended 31 March 2024: £54,532).
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Notes to the financial statements continued
for the year ended 31 March 2025
9. Investments at fair value through profit or loss
As set out in note 2, the Company accounts for its interest in its 100% owned subsidiary
UK HoldCo as an investment at fair value through profit or loss. UK HoldCo in turn owns
investments in intermediate holding companies and environmental infrastructure projects.
The table below shows the movement in the Company’s investment in UK HoldCo as recorded
on the Company’s statement of financial position:
31 Mar 2025
£’000s
31 Mar 2024
£’000s
Fair value of environmental infrastructure investments 765,674 891,927
Fair value of intermediate holding companies (87,517) (138,355)
Total fair value of investments 678,157 753,572
8. (Loss)/earnings per share
Earnings per share is calculated by dividing the profit attributable to equity shareholders of the
Company by the time weighted average number of ordinary shares in issue during the year:
Year ended
31 Mar 2025
£’000s
Year ended
31 Mar 2024
£’000s
(Loss)/earnings
(Loss)/earnings for the purposes of basic and diluted earnings
pershare, being net profit attributable to owners of the Company (2,835) (13,937)
Number of shares
Time weighted average number of ordinary shares for the
purposes of basic and diluted earnings per share 653,841,890 661,531,229
The denominator for the purposes of calculating both basic and diluted earnings per share is
the same, as the Company has not issued any share options or other instruments that would
cause dilution. Shares held in treasury are excluded from the calculation.
Pence Pence
Basic and diluted (loss)/earnings per share (0.4) (2.1)
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Notes to the financial statements continued
for the year ended 31 March 2025
9. Investments at fair value through profit or loss continued
Reconciliation of movement in fair value of portfolio of assets
The table below shows the movement in the fair value of the Company’s portfolio of environmental infrastructure assets. These assets are held through other intermediate holding companies.
Thetable also presents a reconciliation of the fair value of the asset portfolio to the Company’s statement of financial position as at 31 March 2025, by incorporating the fair value of these
intermediate holding companies.
Portfolio
value
31 Mar 2025
£’000s
Cash, working
capital and
debt in
intermediate
holdings
31 Mar 2025
£’000s
Total
31 Mar 2025
£’000s
Portfolio
value
31 Mar 2024
£’000s
Cash, working
capital and
debt in
intermediate
holdings
31 Mar 2024
£’000s
Total
31 Mar 2024
£’000s
Opening balance 891,927 (138,355) 753,572 898,539 (81,739) 816,800
Acquisitions
Portfolio of assets acquired 30,722 — 30,722 69,221 — 69,221
Disposal of assets (89,137) — (89,137) — — —
(58,415) — (58,415) 69,221 — 69,221
Growth in portfolio
1
22,585 — 22,585 11,181 — 11,181
Yields from portfolio to intermediate holding companies (90,423) 90,423 — (87,014) 87,014 —
Yields from intermediate holding companies
Interest on loan notes
1
— (31,073) (31,073) — (31,401) (31,401)
Dividend payments from UK HoldCo to the Company
1
— (32,300) (32,300) — (28,000) (28,000)
— (63,373) (63,373) — (59,401) (59,401)
Other movements
Movement in working capital in UK HoldCo — (19,512) (19,512) — (13,425) (13,425)
Expenses borne by intermediate holding companies
1
— (16,626) (16,626) — (15,008) (15,008)
Repayment/(drawdown) of UK HoldCo revolving credit facility borrowings — 59,926 59,926 — (55,796) (55,796)
Fair value of the Company’s investment in UK HoldCo 765,674 (87,517) 678,157 891,927 (138,355) 753,572
1. The net loss on investments at fair value through profit or loss for the year ended 31 March 2025 is £57,415,000 (31 March 2024: net loss of £63,228,000). This, together with interest received on loan notes of £31,073,000 (31 March 2024: £31,401,000) and dividend income of
£32,300,000 (31 March 2024: £28,000,000) comprises operating income and gains/(losses) on fair value of investments in the income statement.
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Notes to the financial statements continued
for the year ended 31 March 2025
The following economic assumptions have been used in the discounted cash flow valuations:
31 Mar 2025 31 Mar 2024
UK – inflation rates 3.5% for 2025, decreasing to
3% until 2030, decreasing to
2.25% from 2031
3.5% for 2024, decreasing to
3% until 2030, decreasing to
2.25% from 2031
Italy – inflation rates 2.0% from 2025 onwards 2.0% from 2024 onwards
UK – deposit interest rates 2.0% from 2025 onwards 2.0% from 2024 onwards
Italy – deposit rates 0% 0%
UK – corporation tax rates 25% from April 2025 onwards 25% from April 2024 onwards
Italy – corporation tax rates National rate of 24%, plus
applicable regional premiums
National rate of 24%, plus
applicable regional premiums
Euro/sterling exchange rate 1.19 1.17
Refer to note 16 for details of the sensitivity of the portfolio to movements in the discount rate
and economic assumptions.
The assets in the intermediate holding companies substantially comprise working capital, cash
balances and the outstanding RCF debt; therefore, the Directors consider the fair value to be
equal to the amortised cost.
9. Investments at fair value through profit or loss continued
The balances in the table on the previous page represent the total net movement in the fair
value of the Company’s investment. The “cash, working capital and debt in intermediate
holdings” balances reflect investment in, distributions from or movements in working capital
and are not value generating.
Fair value of portfolio of assets
The Investment Manager has carried out fair market valuations of the investments as at
31March 2025. The Directors have satisfied themselves as to the methodology used and the
discount rates applied for the valuation. Investments are all investments in environmental
infrastructure projects and are valued using a discounted cash flow methodology, being the
most relevant and most commonly used method in the market to value similar assets to the
Company’s. The Company’s holding of its investment in UK HoldCo represents its interest in
both the equity and debt instruments. The equity and debt instruments are valued as a whole
using a blended discount rate and the value attributed to the equity instruments represents the
fair value of future dividends and equity redemptions in addition to any value enhancements
arising from the timing of loan principal and interest receipts from the debt instruments, while
the value attributed to the debt instruments represents the principal outstanding and interest
due on the loan at the valuation date.
The valuation techniques and methodologies have been applied consistently with the valuations
performed since the launch of the Fund in March 2014.
Discount rates applied to the portfolio of assets range from 7.0% to 18.4% (31 March 2024:
7.0% to 17.7%). The weighted average discount rate of the portfolio at 31 March 2025 is 9.7%
(31 March 2024: 9.4%).
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Notes to the financial statements continued
for the year ended 31 March 2025
% holding at 31 Mar 2025 % holding at 31 Mar 2024
Project name Equity Shareholder loan Equity Shareholder loan
Icknield 53% 100% 53% 100%
Llynfi 100% 100% 100% 100%
Lunanhead 50% 50% 50% 50%
Merlin Renewables 49% 49% 100% 100%
Moel Moelogan 100% 100% 100% 100%
Monksham 100% 100% 100% 100%
New Albion Wind Farm 100% 100% 100% 100%
Northern Hydro 100% n/a 100% n/a
Panther — — 100% 100%
Peacehill 49% 100% 49% 100%
Pylle Southern 100% 100% 100% 100%
Rainworth 100% 100% 100% 100%
Rjukan 25% 33% 25% 33%
Sandridge 50% 50% 50% 50%
Tay 33% 33% 33% 33%
Thierbach 36% 25% 36% 25%
Lubmin 30% 5% 30% 5%
Vulcan 49% 49% 100% 100%
Warren 49% 49% 100% 100%
Wear Point 100% 100% 100% 100%
West Gourdie 100% 100% 100% 100%
Yorkshire Hydro 100% n/a 100% n/a
% holding at 31 Mar 2025 % holding at 31 Mar 2024
Project name Equity Shareholder loan Equity Shareholder loan
Amber 100% 100% 100% 100%
Bilsthorpe 100% 100% 100% 100%
Bio Collectors 100% 100% 100% 100%
Biogas Meden 49% 49% 100% 100%
Branden 100% 100% 100% 100%
Burton Wold Extension 100% 100% 100% 100%
Carscreugh 100% 100% 100% 100%
Castle Pill 100% 100% 100% 100%
Clayfords 50% 50% 50% 50%
CNG Foresight 25% 25% 25% 25%
Codford 100% 100% 100% 100%
Cramlington 100% 100% 100% 100%
CSGH 100% 100% 100% 100%
Dungavel 100% 100% 100% 100%
Egmere Energy 49% 49% 100% 100%
ELWA 80% 80% 80% 80%
ETA Manfredonia 45% 45% 45% 45%
Ferndale 100% 100% 100% 100%
Glasshouse 10% 100% 10% 100%
Grange Farm 49% 49% 100% 100%
Hall Farm 100% 100% 100% 100%
9. Investments at fair value through profit or loss continued
Details of environmental infrastructure project investments are as follows:
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Notes to the financial statements continued
for the year ended 31 March 2025
12. Loans and borrowings
The Company had no outstanding loans or borrowings at 31 March 2025 (31 March 2024: £nil),
as shown in the Company’s statement of financial position.
As at 31 March 2025, the Company held loan notes of £330.9 million which were issued by UK
HoldCo (31 March 2024: outstanding amount of £348.9 million).
As at 31 March 2025, UK HoldCo had an outstanding balance of £99.3 million under a revolving
credit facility (31 March 2024: £159.3 million). The loan bears interest of SONIA + 205 to
215bps.
There were no other outstanding loans and borrowings in either the Company, UK HoldCo or
HWT at 31 March 2025.
13. Share capital account
Number of
shares
31 Mar 2025
£’000
31 Mar 2024
£’000
Opening balance at 1 April 661,531,229 664,401 664,401
Treasury shares (24,088,171) (19,156) —
Balance at 31 March 637,443,058 645,245 664,401
The number of voting shares at 31 March 2025 was 637,443,058 and 24,088,171 shares were
kept in treasury as a result of the share buyback programme that started on 30 August 2024.
14. Retained earnings
31 Mar 2025
£’000
31 Mar 2024
£’000
Opening balance 86,813 150,167
Loss for the year (2,835) (13,937)
Dividends paid (50,522) (49,417)
Balance at 31 March 33,456 86,813
9. Investments at fair value through profit or loss continued
Additionally, the fair value of the portfolio of assets includes the Fund’s investment into FEIP,
details of which can be found on page 45 of this report.
Details of investments made during the year
During the year, £2.4 million was injected into CNG Foresight Limited. As at 31 March 2025,
theportfolio held 16 natural gas refuelling stations, including the sites in construction phase.
The Group funded a capital call of €5.3 million to Foresight Energy Infrastructure Partners SCSp
(“FEIP”), in line with its existing commitment to the fund.
The Group also invested £14.2 million into Rjukan Holdings Limited, £2.9 million into
Cramlington, £2.3 million into Sandridge Battery Storage, £1.1 million into Vulcan Renewables
Limited, £0.9million into the Glasshouse project, and £2.5 million to various other projects.
10. Trade and other receivables
31 Mar 2025
£’000
31 Mar 2024
£’000
Prepayments 19 25
Other debtors 2 —
Balance at 31 March 21 25
11. Trade and other payables
31 Mar 2025
£’000
31 Mar 2024
£’000
Accruals 2,094 2,654
Balance at 31 March 2,094 2,654
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Notes to the financial statements continued
for the year ended 31 March 2025
Transactions with related parties
During the year, the Directors of the Company, who are considered to be key management,
received fees of £323,335 (31 March 2024: £334,500) for their services. The Directors of the
Company were also paid £3,780 of expenses (31 March 2024: £8,495).
The Directors held the following shares:
Ordinary
shares
of no par
value each
held at
31 Mar 2025
Ordinary
shares
of no par
value each
held at
31 Mar 2024
Ed Warner 75,000 60,000
Alan Bates 25,000 12,500
Stephanie Coxon 45,000 15,000
Jo Harrison 8,066 8,066
Hans Joern Rieks — 95,000
Nadia Sood — —
All of the above transactions were undertaken on an arm’s length basis. Hans Joern Rieks
retired from the Board on 13 September 2024.
The Directors were paid dividends in the year of £8,811 (31 March 2024: £14,235).
15. Transactions with the Investment Manager and related parties
Transactions between the Company and its subsidiaries, which are related parties of the
Company, are fair valued and are disclosed within note 9. Details of transactions between
the Company and related parties are disclosed below. This note also details the terms of the
Company’s engagement with Foresight Group as Investment Manager.
Transactions with the Investment Manager
Foresight Group (“Foresight”) is the Company’s Investment Manager. Foresight’s appointment as
Investment Manager is governed by an Investment Management Agreement.
For the first half of the financial year Foresight was entitled to a base fee equal to:
a) 1.0% per annum of the Adjusted Portfolio Value
1
of the Fund
2
up to and including
£500million; and
b) 0.8% per annum of the Adjusted Portfolio Value of the Fund in excess of £500 million.
The Board approved a reduction in the management fee payable to Foresight Group LLP
bychanging the basis of calculating the fee from adjusted NAV to NAV.
With effect from 1 October 2024, the management fee was calculated as follows:
a) 0.95% per annum of the portfolio Net Asset Value of the Fund
2
up to and including £500 million;
b) 0.80% per annum of the portfolio Net Asset Value of the Fund on the balance above
£500million up to and including £1 billion; and
c) 0.75% per annum of the portfolio Net Asset Value of the Fund in excess of £1 billion.
The total Investment Manager fee charged to the income statement for the year ended
31March 2025 was £7,208,000 (31 March 2024: £8,468,000), of which £1,530,000 remained
payable as at 31 March 2025 (31 March 2024: £2,147,000). In addition, the Investment Manager
charged a fee of £125,000 in respect of additional management obligations, of which £62,500
remained payable as at 31 March 2025 (31 March 2024: £nil).
1. “Adjusted Portfolio Value” is defined in the Investment Management Agreement as:
a. the fair value of the investment portfolio; plus
b. any cash owned by or held to the order of the Fund; plus
c. the aggregate amount of payments made to shareholders by way of dividend in the quarterly period ending on the relevant
valuation day, less:
i. any other liabilities of the Fund (excluding borrowings); and
ii. any uninvested cash.
2. “Fund” means the Company and Foresight Environmental Infrastructure (UK) Limited together with their wholly owned subsidiaries
or subsidiary undertakings (including companies or other entities wholly owned by them together, individually or in any
combination, as appropriate) but excluding project entities.
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Financial statements
Additional information
Notes to the financial statements continued
for the year ended 31 March 2025
16. Financial instruments
Financial instruments by category
The Company held the following financial instruments at 31 March 2025. There have been no transfers of financial instruments between levels of the fair value hierarchy. There are no non-recurring
fair value measurements.
31 Mar 2025
Cash and
bank balances
£’000s
Financial
assets
held at
amortised
cost
£’000s
Financial
assets
at fair value
through profit
or loss
£’000s
Financial
liabilities
at amortised
cost
£’000s
Total
£’000s
Non-current assets
Investments at fair value through profit or loss (Level 3) — — 678,157 — 678,157
Current assets
Trade and other receivables — 21 — — 21
Cash and cash equivalents 2,617 — — — 2,617
Total financial assets 2,617 21 678,157 — 680,795
Current liabilities
Trade and other payables — — — (2,094) (2,094)
Total financial liabilities — — — (2,094) (2,094)
Net financial instruments 2,617 21 678,157 (2,094) 678,701
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16. Financial instruments continued
31 Mar 2024
Cash and
bank balances
£’000s
Financial
assets
held at
amortised
cost
£’000s
Financial
assets
at fair value
through profit
or loss
£’000s
Financial
liabilities
at amortised
cost
£’000s
Total
£’000s
Non-current assets
Investments at fair value through profit or loss (Level 3) — — 753,572 — 753,572
Current assets
Trade and other receivables — 25 — — 25
Cash and cash equivalents 271 — — — 271
Total financial assets 271 25 753,572 — 753,868
Current liabilities
Trade and other payables — — — (2,654) (2,654)
Total financial liabilities — — — (2,654) (2,654)
Net financial instruments 271 25 753,572 (2,654) 751,214
The Company’s investments at fair value through profit or loss are classified at Level 3 within the IFRS fair value hierarchy.
The Level 3 fair value measurements derive from valuation techniques that include inputs to the asset or liability that are not based on observable market data (unobservable inputs).
In the tables above, financial instruments are held at carrying value as an approximation to fair value unless stated otherwise.
Reconciliation of Level 3 fair value measurement of financial assets and liabilities
An analysis of the movement between opening and closing balances of the investments at fair value through profit or loss is given in note 9.
The fair value of the investments at fair value through profit or loss includes the use of Level 3 inputs. Please refer to note 9 for details of the valuation methodology.
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31 March 2024
Inflation rates Minus 0.5% Base 3.5% (2024),
then 3% to 2030,
then 2.25%
Plus 0.5%
Change in portfolio
valuation
Decreases £18.9m £891.9m Increases £19.3m
Change in NAV per share Decreases 2.9p 113.6p Increases 2.9p
The fair value of the investments is based on a “P50” level of electricity generation for the
renewable energy assets, being the expected level of generation over the long term.
Wind, solar and hydro assets are subject to electricity generation risks.
The sensitivity of the portfolio to movements in energy yields based on an assumed “P90”
level of electricity generation (i.e. a level of generation that is below the “P50”, with a 90%
probability of being exceeded) and an assumed “P10” level of electricity generation (i.e. a level
of generation that is above the “P50”, with a 10% probability of being achieved) is as follows:
31 March 2025
Energy yield: wind P90 (10 year) Base P50 P10 (10 year)
Change in portfolio
valuation
Decreases £21.8m £765.7m Increases £21.2m
Change in NAV per share Decreases 3.4p 106.5p Increases 3.3p
Energy yield: solar P90 (10 year) Base P50 P10 (10 year)
Change in portfolio
valuation
Decreases £7.9m £765.7m Increases £8.1m
Change in NAV per share Decreases 1.2p 106.5p Increases 1.3p
Energy yield: hydro P90 (10 year) Base P50 P10 (10 year)
Change in portfolio
valuation
Decreases £1.2m £765.7m Increases £1.3m
Change in NAV per share Decreases 0.2p 106.5p Increases 0.2p
16. Financial instruments continued
Sensitivity analysis of the portfolio
The sensitivities below include the impact of the EGL.
The sensitivity of the portfolio to movements in the discount rate is as follows:
31 March 2025
Discount rate Minus 0.5% Base 9.7% Plus 0.5%
Change in portfolio
valuation
Increases £18.0m £765.7m Decreases £17.2m
Change in NAV per share Increases 2.8p 106.5p Decreases 2.7p
31 March 2024
Discount rate Minus 0.5% Base 9.4% Plus 0.5%
Change in portfolio
valuation
Increases £20.7m £891.9m Decreases £19.8m
Change in NAV per share Increases 3.1p 113.6p Decreases 3.0p
The sensitivity of the portfolio to movements in long-term inflation rates is as follows:
31 March 2025
Inflation rates Minus 0.5% Base 3.5% (2025),
then 3% to 2030,
then 2.25%
Plus 0.5%
Change in portfolio
valuation
Decreases £20.4m £765.7m Increases £20.6m
Change in NAV per share Decreases 3.2p 106.5p Increases 3.2p
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The sensitivity assumes a 10% increase or decrease in power prices relative to the base
case for each year of the asset life after the first two-year period. While power markets can
experience movements in excess of +/-10% on a short-term basis, as has been the case
recently, the sensitivity is intended to provide insight into the effect on the NAV of persistently
higher or lower power prices over the whole life of the portfolio. The Directors feel that +/-10%
remains a realistic range of outcomes over this very long time horizon, notwithstanding that
significant movements will occur from time to time.
The sensitivity of the portfolio to movements in electricity and gas prices is as follows:
31 March 2025
Energy prices Minus 10% Base Plus 10%
Change in portfolio
valuation
Decreases £35.3m £765.7m Increases £35.9m
Change in NAV per share Decreases 5.5p 106.5p Increases 5.6p
31 March 2024
Energy prices Minus 10% Base Plus 10%
Change in portfolio
valuation
Decreases £37.4m £891.9m Increases £37.0m
Change in NAV per share Decreases 5.7p 113.6p Increases 5.6p
Waste & bioenergy assets (excluding Bio Collectors) do not have significant volume and price
risks and therefore are not included in the above volume and price sensitivities.
16. Financial instruments continued
31 March 2024
Energy yield: wind P90 (10 year) Base P50 P10 (10 year)
Change in portfolio
valuation
Decreases £28.3m £891.9m Increases £27.0m
Change in NAV per share Decreases 4.3p 113.6p Increases 4.1p
Energy yield: solar P90 (10 year) Base P50 P10 (10 year)
Change in portfolio
valuation
Decreases £9.3m £891.9m Increases £9.5m
Change in NAV per share Decreases 1.4p 113.6p Increases 1.4p
Energy yield: hydro P90 (10 year) Base P50 P10 (10 year)
Change in portfolio
valuation
Decreases £1.3m £891.9m Increases £1.4m
Change in NAV per share Decreases 0.2p 113.6p Increases 0.2p
Agricultural anaerobic digestion facilities do not suffer from similar deviations as their feedstock
input volumes (and consequently biogas production) are controlled by the site operator.
For the waste & bioenergy projects, forecasts are based on projections of future input volumes
and are informed by both forecasts and independent studies where appropriate. Revenues in
the PPP projects are generally not very sensitive to changes in volumes due to the nature of
their payment mechanisms.
Electricity and gas price assumptions are based on the following: for the first two years, cash
flows for each project use forward electricity and gas prices based on market rates unless a
contractual fixed price exists, in which case the model reflects the fixed price followed by the
forward price for the remainder of the two-year period. For the remainder of the project life,
a long-term blend of central case forecasts from three established market consultants and
other relevant information is used, and adjusted by the Investment Manager for project-specific
arrangements and price cannibalisation.
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Euro/sterling exchange rate sensitivity
As the proportion of the portfolio assets with cash flows denominated in euros represents a
small proportion of the portfolio value at 31 March 2025, the Directors consider the sensitivity
to changes in euro/sterling exchange rates to be insignificant.
The Directors consider that the carrying value amounts of financial assets and financial
liabilities recorded at amortised cost in the financial statements are approximately equal to
their fair values.
Uncontracted revenues on non-energy generating portfolio sensitivity
Non-energy generating assets, such as batteries and controlled environment agriculture and
aquaculture, make up a growing proportion of the portfolio. These assets are not materially
affected by either scarcity of natural resource nor power price markets. Therefore the
Investment Manager has presented a sensitivity illustrating an assumed 10% increase or
decrease on all uncontracted revenues for each year of the asset lives.
An increase in uncontracted revenues of 10% would result in an upward movement in the
portfolio valuation of £23.6 million (3.7 pence per share) (2024: £17.9 million, 2.7 pence per
share) compared to a decrease in value of £23.4 million (3.7 pence per share) (2024: £20.2
million, 3.0 pence per share) if those revenues were reduced by the same amount.
Capital risk management
Capital management
The Group, which comprises the Company and its non-consolidated subsidiaries, manages its
capital to ensure that it will be able to continue as a going concern while maximising the return
to shareholders through the optimisation of the debt and equity balances. The capital structure
of the Group principally consists of the share capital account and retained earnings as detailed
in notes 13 and 14, and debt as detailed in note 12. The Group aims to deliver its objective by
investing available cash and using leverage whilst maintaining sufficient liquidity to meet ongoing
expenses and dividend payments.
16. Financial instruments continued
The sensitivity of the portfolio to movements in AD feedstock prices is as follows:
31 March 2025
Feedstock prices Minus 10% Base Plus 10%
Change in portfolio
valuation
Increases £6.8m £765.7m Decreases £6.5m
Change in NAV per share Increases 1.1p 106.5p Decreases 1.0p
31 March 2024
Feedstock prices Minus 10% Base Plus 10%
Change in portfolio
valuation
Increases £8.7m £891.9m Decreases £8.9m
Change in NAV per share Increases 1.3p 113.6p Decreases 1.3p
No such sensitivity is applicable to FGEN’s biomass investment, where fuel costs are tied under
long-term contract.
The sensitivity of the portfolio to movements in corporation tax rate is as follows:
31 March 2025
Corporation tax Minus 2% Base 25% Plus 2%
Change in portfolio
valuation
Increases £11.4m £765.7m Decreases £11.3m
Change in NAV per share Increases 1.8p 106.5p Decreases 1.8p
31 March 2024
Corporation tax Minus 2% Base 25% Plus 2%
Change in portfolio
valuation
Increases £13.6m £891.9m Decreases £13.9m
Change in NAV per share Increases 2.1p 113.6p Decreases 2.1p
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Liquidity risk
The Directors monitor the Company’s liquidity requirements to ensure there is sufficient cash to
meet the Company’s operating needs.
The Company’s liquidity management policy involves projecting cash flows and forecasting the
level of liquid assets necessary to meet these. Due to the nature of its investments, the timing of
cash outflows is reasonably predictable and, therefore, is not a major risk to the Company.
The Company was in a net cash position and had no outstanding debt at the balance sheet
date. At the balance sheet date, the Group had debt of £99.3 million, being the amount drawn
on the RCF.
Market risk – foreign currency exchange rate risk
As the proportion of the portfolio assets with cash flows denominated in euros represents a
small proportion of the portfolio value at 31 March 2025, the Directors consider the sensitivity
to changes in the euro/sterling exchange rate to be insignificant.
Where investments are made in currencies other than pounds sterling, the Company will
consider whether to hedge currency risk in accordance with the Company’s currency and
hedging policy as determined from time to time by the Directors. A portion of the Company’s
underlying investments may be denominated in currencies other than pounds sterling. However,
any dividends or distributions in respect of the ordinary shares will be made in pounds sterling
and the market prices and NAV of the ordinary shares will be reported in pounds sterling.
Currency hedging may be carried out to seek to provide some protection for the level of
pounds sterling dividends and other distributions that the Company aims to pay on the ordinary
shares, and in order to reduce the risk of currency fluctuations and the volatility of returns
that may result from such currency exposure. Such currency hedging may include the use of
foreign currency borrowings to finance foreign currency assets and forward foreign exchange
contracts.
Financial risk management – Company and non-consolidated subsidiaries
The following risks impact the Company’s subsidiaries and in turn may impact the fair value of
investments held by the Company.
16. Financial instruments continued
Gearing ratio
The Company’s Investment Manager reviews the capital structure of the Company and the
Group on a semi-annual basis. The Company and its subsidiaries intend to make prudent use
of leverage for financing acquisitions of investments and working capital purposes. Under the
Company’s Articles, and in accordance with the Company’s investment policy, the Company’s
outstanding borrowings, excluding the debts of underlying assets, will be limited to 30% of the
Company’s Net Asset Value (“NAV”).
As at 31 March 2025, the Company had no outstanding debt. However, as set out in note 12,
asat 31 March 2025, the Company’s subsidiary UK HoldCo had an outstanding balance of
£99.3 million under a revolving credit facility (31 March 2024: £159.3 million).
Financial risk management
The Group’s activities expose it to a variety of financial risks: capital risk, liquidity risk, market
risk (including interest rate risk, inflation risk and power price risk) and credit risk. The Group’s
overall risk management programme focuses on the unpredictability of financial markets and
seeks to minimise potential adverse effects on the Group’s financial performance.
For the Company and the intermediate holding companies, financial risks are managed by the
Investment Manager, which operates within the Board-approved policies. For the environmental
infrastructure investments, due to the nature of the investments, certain financial risks (typically
interest rate and inflation risks) are hedged at the inception of a project. All risks continue
to be managed by the Investment Manager. The various types of financial risk are managed
asfollows:
Financial risk management – Company only
The Company accounts for its investments in its subsidiaries at fair value. Accordingly, to the
extent there are changes as a result of the risks set out below, these may impact the fair value
of the Company’s investments.
Capital risk
The Company has implemented an efficient financing structure that enables it to manage
its capital effectively. The Company’s capital structure comprises equity only (refer to the
statement of changes in equity). As at 31 March 2025, the Company had no recourse debt,
although as set out in note 17, the Company is a guarantor for the RCF of UK HoldCo.
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Credit risk
Credit risk is the risk that a counterparty of the Company or its subsidiaries will default on
its contractual obligations it entered into with the Company or its subsidiaries. Credit risk
arises from cash and cash equivalents, derivative financial instruments and deposits with
banks and financial institutions, as well as credit exposures to customers. The Company and
its subsidiaries mitigate their risk on cash investments and derivative transactions by only
transacting with major international financial institutions with high credit ratings assigned by
international credit rating agencies.
The Company’s infrastructure investments receive regular, long-term, partly or wholly
index-linked revenue from government departments, local authorities or clients under the
Renewables Obligation Certificates and Feed-in Tariff regimes. The Directors believe that the
Group is not significantly exposed to the risk that the customers of its investments do not fulfil
their regular payment obligations because of the Company’s policy to invest in jurisdictions with
satisfactory credit ratings.
Given the above factors, the Board does not consider it appropriate to present a detailed
analysis of credit risk.
The Company’s maximum exposure to credit risk is the £330.9 million owed by HoldCo,
detailed in note 12.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as
they fall due. The Group adopts a prudent approach to liquidity management by ensuring it
maintains adequate reserves and banking facilities by continuously monitoring forecast and
actual cash flows and matching the maturity profiles of financial assets and liabilities.
The Directors monitor the Company’s liquidity requirements to ensure there is sufficient cash to
meet the Company’s operating needs.
The Company’s liquidity management policy involves projecting cash flows and forecasting
the level of liquid assets required to meet its obligations. Due to the nature of its investments,
the timing of cash outflows is reasonably predictable and, therefore, is not a major risk to the
Group.
Debt raised by asset investments from third parties is without recourse to the Group.
16. Financial instruments continued
Market risk – interest rate risk
Interest rate risk arises in the Company’s subsidiaries on the RCF borrowings and floating rate
deposits. Borrowings issued at variable rates expose those entities to variability of interest
payment cash flows. Interest rate hedging may be carried out to seek to provide protection
against increasing costs of servicing debt drawn down by UK HoldCo as part of its RCF. This
may involve the use of interest rate derivatives and similar derivative instruments.
Each infrastructure investment hedges their interest rate risk at the inception of a project. This
will either be done by issuing fixed rate debt or variable rate debt which will be swapped into
fixed rate by the use of interest rate swaps.
Market risk – inflation risk
Some of the Company’s investments will have part of their revenue and some of their costs
linked to a specific inflation index at inception of the project. In most cases this creates a natural
hedge, meaning a derivative does not need to be entered into in order to mitigate inflation risk.
Market risk – power price risk
The wholesale market price of electricity and gas is volatile and is affected by a variety of
factors, including market demand for electricity and gas, the generation mix of power plants,
government support for various forms of power generation, as well as fluctuations in the
market prices of commodities and foreign exchange. Whilst some of the Company’s renewable
energy projects benefit from fixed prices, others have revenue which is in part based on
wholesale electricity and gas prices.
A decrease and/or prolonged deterioration in economic activity in the UK, for any reason, could
result in a decrease in demand for electricity and gas in the market. Short-term and seasonal
fluctuations in electricity and gas demand will also impact the price at which the investments
can sell electricity and gas. The supply of electricity and gas also impacts wholesale electricity
and gas prices. Supply of electricity and gas can be affected by new entrants to the wholesale
power market, the generation mix of power plants in the UK, government support for various
generation technologies, as well as the market price for fuel commodities.
Volume risk – electricity generation risk
Meteorological conditions poorer than forecast can result in generation of lower electricity
volumes and lower revenues than anticipated.
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17. Guarantees and other commitments
As at 31 March 2025, the Company provided a guarantee over the Company’s wholly owned subsidiary UK HoldCo’s obligations under the £200 million RCF.
On 13 June 2024, UK HoldCo refinanced the £200 million revolving credit facility with a three-year agreement with ING, HSBC, National Australia Bank, Royal Bank of Scotland International and
Clydesdale Bank. The contract includes an uncommitted accordion facility of up to £30 million and an uncommitted option to extend for a further year. Subsequently, the committed facility of
£200million was voluntarily reduced to £150 million with effect from 25 April 2025 with no change on the accordion facility.
As at 31 March 2025, the Group has the following future investment obligations over a 12-month horizon: £2.1 million to Cramlington, £1.6million to Sandridge battery storage, €1.2 million
(equivalent to £1.0 million) to FEIP, 12.7 million NOK (equivalent to £0.9 million) to the Rjukan project and £0.5 million in other projects. TheCompany had no other commitments or guarantees.
18. Subsidiaries and associates
The following subsidiaries and associates have not been consolidated in these financial statements as a result of applying the requirements of “Investment Entities: Applying the Consolidation
Exception (Amendments to IFRS 10, IFRS 12 and IAS 27)”:
Name Category
Place of
business
Registered
office
Ownership
interest Voting rights
Foresight Environmental Infrastructure (UK) Limited
1
Intermediate holding UK A 100% 100%
HWT Limited Intermediate holding UK B 100% 100%
Easton PV Limited Project holding company UK A 100% 100%
Pylle Solar Limited Project holding company UK A 100% 100%
Second Energy Limited Operating subsidiary UK A 100% 100%
JLEAG Wind Holdings Limited Project holding company UK A 100% 100%
JLEAG Wind Limited Project holding company UK A 100% 100%
Amber Solar Parks (Holdings) Limited Project holding company UK C 100% 100%
Amber Solar Park Limited Operating subsidiary UK C 100% 100%
Bilsthorpe Wind Farm Limited Operating subsidiary UK D 100% 100%
Ferndale Wind Limited Project holding company UK K 100% 100%
Castle Pill Wind Limited Project holding company UK K 100% 100%
Wind Assets LLP Operating subsidiary UK D 100% 100%
1. Foresight Environmental Infrastructure (UK) Limited (“UK HoldCo”, formerly known as JLEN Environmental Assets Group (UK) Limited).
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Name Category
Place of
business
Registered
office
Ownership
interest Voting rights
Hall Farm Wind Farm Limited Operating subsidiary UK D 100% 100%
Branden Solar Parks (Holdings) Limited Project holding company UK A 100% 100%
Branden Solar Parks Limited Operating subsidiary UK A 100% 100%
KS SPV 3 Limited Operating subsidiary UK A 100% 100%
KS SPV 4 Limited Operating subsidiary UK A 100% 100%
Carscreugh Renewable Energy Park Limited Operating subsidiary UK D 100% 100%
Wear Point Wind Limited Operating subsidiary UK D 100% 100%
Monksham Power Ltd Project holding company UK A 100% 100%
Frome Solar Limited Operating subsidiary UK A 100% 100%
BL Wind Limited Operating subsidiary UK D 100% 100%
New Albion Wind Limited Operating subsidiary UK D 100% 100%
Dreachmhor Wind Farm Limited Operating subsidiary UK D 100% 100%
France Wind GP Germany GmbH
2
Project holding company DE E 100% 100%
France Wind Germany GmbH & Co. KG
2
Project holding company DE E 100% 100%
CSGH Solar Limited Project holding company (dormant) UK A 100% 100%
CSGH Solar (1) Limited Project holding company (dormant) UK A 100% 100%
sPower Holdco 1 (UK) Limited Project holding company (dormant) UK C 100% 100%
sPower Finco 1 (UK) Limited Project holding company (dormant) UK C 100% 100%
Higher Tregarne Solar (UK) Limited Operating subsidiary UK A 100% 100%
Crug Mawr Solar Farm Limited Operating subsidiary UK A 100% 100%
Golden Hill Solar (UK) Limited Project holding company (dormant) UK C 100% 100%
2. Underlying French wind assets were disposed of in January 2022.
18. Subsidiaries and associates continued
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Name Category
Place of
business
Registered
office
Ownership
interest Voting rights
Golden Hill Solar Limited Operating subsidiary UK A 100% 100%
Shoals Hook Solar (UK) Limited Operating subsidiary UK A 100% 100%
CGT Investment Limited Project holding company UK F 100% 100%
CWMNI GWYNT TEG CYF Operating subsidiary UK F 100% 100%
Moelogan 2 (Holdings) Cyfyngedig Project holding company UK F 100% 100%
Moelogan 2 C.C.C. Operating subsidiary UK F 100% 100%
Llynfi Afan Renewable Energy Park Limited Operating subsidiary UK D 100% 100%
Bio Collectors Holdings Limited Project holding company UK I 100% 100%
Bio Collectors Limited Operating subsidiary UK I 100% 100%
Riverside Bio Limited Operating subsidiary UK I 100% 100%
Riverside AD Limited Operating subsidiary UK I 100% 100%
Yorkshire Hydropower Holdings Limited Project holding company UK D 100% 100%
Yorkshire Hydropower Limited Operating subsidiary UK D 100% 100%
Northern Hydropower Holdings Limited Project holding company UK D 100% 100%
Northern Hydropower Limited Operating subsidiary UK D 100% 100%
Codford Biogas Limited Operating subsidiary UK L 100% 100%
Rainworth Energy Limited Operating subsidiary UK J 100% 100%
FS West Gourdie Limited Operating subsidiary UK A 100% 100%
Spruce Bioenergy Limited Project holding company UK A 100% 100%
Cramlington Renewable Energy Developments Limited Operating subsidiary UK K 100% 100%
Fryingdown Solar Park Limited Non-trading entity UK C 100% 100%
Five Oaks Solar Parks Limited Non-trading entity UK U 100% 100%
18. Subsidiaries and associates continued
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Name Category
Place of
business
Registered
office
Ownership
interest Voting rights
Warren Power Limited Project holding company UK G 100% 100%
ELWA Holdings Limited Project holding company UK K 80% 80%
ELWA Limited
3
Operating subsidiary UK K 80% 81%
Green Gas Oxon Limited Project holding company UK H 52.6% 52.6%
Icknield Gas Limited Operating subsidiary UK H 52.6% 52.6%
Foresight Biomass Holding Italy S.r.l. Project holding company IT M 45% 45%
Energie Tecnologie Ambiente S.r.l. Operating associate IT M 45% 45%
Foresight Rjukan Holding Limited Project holding company UK A 43% 43%
Catchment Tay Holdings Limited Project holding company UK N 33.3% 33.3%
Catchment Tay Limited Operating associate UK N 33.3% 33.3%
Foresight Hydrogen HoldCo GmbH Project holding company DE O 40.1% 40.1%
Hima Seafood Rjukan AS Operating associate NO P 25% 25%
HH2E Werk Thierbach GmbH Operating associate DE Q 23% 23%
HH2E Werk Lubmin GmbH Operating associate DE Q 23% 23%
HH2E AG Project holding company DE Q 23% 23%
Foresight Battery Storage Holding Limited Project holding company UK A 50% 50%
Sandridge Battery Storage Limited Operating associate UK A 50% 50%
Clayfords Energy Storage Limited Operating associate UK R 50% 50%
AD Holdco 1 Limited Project holding company UK G 49% 49%
Egmere Energy Limited Operating associate UK G 49% 49%
Warren Energy Limited Operating associate UK G 49% 49%
18. Subsidiaries and associates continued
3. ELWA Holdings Limited holds 81% of the voting rights and a 100% share of the economic benefits in ELWA Limited.
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Name Category
Place of
business
Registered
office
Ownership
interest Voting rights
Vulcan Renewables Limited Operating associate UK G 49% 49%
Grange Farm Energy Limited Operating associate UK G 49% 49%
Merlin Renewables Limited Operating associate UK G 49% 49%
Biogas Meden Limited Operating associate UK G 49% 49%
Foresight Battery Storage Holdings Limited Project holding company UK A 50% 50%
Lunanhead Energy Storage Limited Operating associate UK A 50% 50%
JLEAG AD Limited Project holding company UK A 49% 49%
Peacehill Gas Limited Operating associate UK S 49% 49%
CNG Foresight Holdings Limited Project holding company UK A 25% 25%
CNG Foresight Limited Operating associate UK T 25% 25%
CNG Newton Aycliffe Limited Operating associate UK T 25% 25%
CNG Eurocentral Limited Operating associate UK T 25% 25%
CNG Avonmouth North Limited Operating associate UK T 25% 25%
CNG Corby Limited Operating associate UK T 25% 25%
CNG Doncaster Limited Operating associate UK T 25% 25%
CNG Bracknell Limited Operating associate UK T 25% 25%
CNG Bangor Limited Operating associate UK T 25% 25%
CNG Aylesford Limited Operating associate UK T 25% 25%
CNG Station Holdings Limited Operating associate UK T 25% 25%
CNG Leyland Limited Operating associate UK T 25% 25%
CNG Knowsley Limited Operating associate UK T 25% 25%
CNG Castleford Limited Operating associate UK T 25% 25%
18. Subsidiaries and associates continued
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Ownership
interest Voting rights
Lavant Down Northampton Limited Operating associate UK T 25% 25%
Oxford Erdington Limited Operating associate UK T 25% 25%
Hams Warrington Limited Operating associate UK T 25% 25%
Nexus Newark Limited Operating associate UK T 25% 25%
Registered offices
A) The Shard, 32 London Bridge Street, London SE1 9SG
B) 50 Lothian Road, Festival Square, Edinburgh, Midlothian EH3 9WJ
C) Long Barn, Manor Farm, Stratton-On-The-Fosse, Radstock, England, BA3 4QF
D) C/O RES White Limited, Beaufort Court, Egg Farm Lane, Kings Langley, Hertfordshire, England, WD4 8LR
E) Steinweg 3-5, Frankfurt Am Main, 60313, Germany
F) Cae Sgubor Ffordd Pennant, Eglwysbach, Colwyn Bay, Conwy LL28 5UN
G) 10-12 Frederick Sanger Road, Guildford, Surrey GU2 7YD
H) Friars Ford, Manor Road, Goring, Reading RG8 9EL
I) 10 Osier Way, Mitcham, Surrey CR4 4NF
J) C/O Material Change, The Amphenol Building 46-50 Rutherford Drive, Park Farm Industrial Estate, Wellingborough, England, NN8 6AX
K) 8 White Oak Square, London Road, Swanley, England, BR8 7AG
L) 20 Central Avenue, St Andrews Business Park, Norwich, England, NR7 0HR
M) Piazza Barberini 52, 00187, Rome, Italy
N) C/O Infrastructure Managers Limited, 2nd Floor Drum Suite, Saltire Court, 20 Castle Terrace, Edinburgh, United Kingdom, EH1 2EN
O) C/O Intertrust (Deutschland) GmbH Eschersheimer Landstraße 14, 60322 Frankfurt am Main
P) Skriugata 26, 3660, Rjukan
Q) Kaiser-Wilhelm-Straße 93, 20355 Hamburg
R) Foresight Group LLP, Clarence House, 133 George Street, Edinburgh, Scotland, EH2 4JS
S) Peacehill Farm, Wormit, Fife, Scotland, Scotland, DD6 8PJ
T) C/O FLB Accountants LLP, 1010 Eskdale Road, Winnersh Triangle, Wokingham, United Kingdom, RG41 5TS
U) 2 Fitzroy Place, 8 Mortimer Street, London, England, W1T 3JJ
18. Subsidiaries and associates continued
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Additional information
Notes to the financial statements continued
for the year ended 31 March 2025
19. Events after balance sheet date
A dividend for the quarter ended 31 March 2025 of 1.95 pence per share, amounting to
£12.3 million, was approved by the Board on 29 May 2025 for payment on 27 June 2025.
On 25 April 2025, FGEN announced that it had reduced the size of its multi-currency revolving
credit facility (“RCF”) from £200 million to £150 million.
On 3 June 2025, FGEN announced an update to the Investment Manager fee structure.
From1October 2025, investment management fees will be calculated 50% based on Net Asset
Value and 50% on market capitalisation (the latter element capped at Net Asset Value).
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Additional information
Alternative performance measures (“APMs”)
APM Purpose Calculation APM value Reconciliation to IFRS
Total
shareholder
return (since IPO
and annualised)
Measure of financial performance, indicating the
amount an investor reaps from investing since IPO
and expressed as a percentage (annualised or total
since IPO of the Fund)
Since IPO: closing share price as at 31 March 2025
plus all dividends since IPO assumed reinvested,
divided by the share price at IPO, expressed as a
percentage
41.0% Calculation for total shareholder return since IPO:
closing share price as at 31 March 2025, as per key
investment metrics on page 110 plus all dividends
since IPO assumed reinvested, divided by the share
price at IPO, expressed as a percentage
Annualised: closing share price as at 31 March 2025
plus all dividends since IPO assumed reinvested,
divided by the share price at IPO, to the power of
one over the number of years since IPO, expressed
as a percentage
3.2%
annualised
Calculation for annualised total shareholder return:
closing share price as at 31 March 2025 as per key
investment metrics on page 110 plus all dividends
since IPO assumed reinvested, divided by the share
price at IPO, to the power of one over the number of
years since IPO, expressed as a percentage
Net Asset Value
per share
Allows investors to gauge whether shares are
trading at a premium or a discount by comparing
the Net Asset Value per share with the share price
The net assets divided by the number of ordinary
shares in issuance
106.5 pence The calculation divides the net assets as per the
statement of financial position on page 153 by the
closing number of ordinary shares in issue as per note
13 on page 166. Shares held in treasury are excluded
from the calculation
Market
capitalisation
Provides an indication of the size of the Company Closing share price as at 31 March 2025 multiplied
by closing number of ordinary shares in issuance
£457.0
million
The calculation uses the closing share price as at
31March 2025 as per the key investment metric table
on page 110 and closing number of ordinary shares
as per note 13 of the financial statements on page
166. Shares held in treasury are excluded from the
calculation
Gross Asset
Value (“GAV”)
A measure of the value of the Company’s total
assets
Gross Asset Value on investment basis including
debt held at SPV level
The sum of total assets of the Company as shown
on the statement of financial position and the total
debt of the Group and underlying investments
£951.3
million
This is the total debt (RCF drawn: £99.3 million plus
project-level debt: £173.3 million) plus the Net Asset
Value as per the statement of financial position on
page 153
Gearing Ascertain financial risk in the Group’s balance sheet Total debt of the Group and underlying investments
as a percentage of GAV
28.7% The calculation uses the total debt (RCF drawn: £99.3
million plus project-level debt: £173.3 million) and
shows this as a percentage of the GAV
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Additional information
Alternative performance measures (“APMs”) continued
APM Purpose Calculation APM value Reconciliation to IFRS
Distributions,
repayments
and fees from
portfolio
A measure of performance from the underlying
portfolio
Total cash received from investments in the period £90.4 million As per “Cash flows of the Group for the year”,
also titled “Cash distributions from environmental
infrastructure investments” on page 113
Cash flow from
operations of
the Group
Gauge operating revenues and expenses of
theGroup
As per the “Cash flows of the Group for the year”
table on page 113, the calculation takes the cash
distributions from environmental infrastructure
investments and subtracts the following:
administrative expenses, Directors’ fees and
expenses, Investment Manager’s fees, financing
costs (net of interest income), Electricity Generator
Levy
£66.9 million Detailed breakdown as per page 113 in the “Cash
flows of the Group for the year”
Cash dividend
cover
Investors can gauge the ability of the Group to
generate cash surplus after payment of dividend
Cash flow from operations of the Group divided by
dividend paid within the reporting period
1.32x The calculation uses the cash flows from operations
as per “Cash flows of the Group for the year” on page
113 and the dividends paid in cash to shareholders as
per the cash flow statement on page 155
Ongoing charges
ratio
A measure of the annual reduction in shareholder
returns due to operational expenses, based on
historical data
The ongoing charges have been calculated, in
accordance with AIC guidance, as annualised
ongoing charges (i.e. excluding acquisition costs
and other non-recurring items) divided by the
average published undiluted Net Asset Value in the
period. Total annualised ongoing charges include
Investment Manager fees, legal and professional
fees, administration fees, Directors’ fees
1.24% Annualised ongoing charges for the year ended
31March 2025 have been calculated as £8.8million.
The ongoing charges ratio divides this by the
published average Net Asset Value over the last four
quarters (including 31 March 2025)
Annualised NAV
total return
since IPO
Measure of financial performance (annualised),
which indicates the movement of the value of the
Company since IPO
Closing NAV per ordinary share as at 31 March
2025 plus all dividends since IPO assumed
reinvested, divided by the NAV at IPO, to the power
of one, over the number of years since IPO
7.3% Calculated using the closing NAV per ordinary share
as per the statement of financial position on page 153
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Financial statements
Additional information
Glossary of key terms
Discontinuation vote As part of the Company’s discount
management policies, the Board intends to
propose a discontinuation vote if the ordinary
shares trade at a significant discount to Net
Asset Value per share for a prolonged period
of time. If, in any financial year, the ordinary
shares have traded, on average, at a discount
in excess of 10% to the Net Asset Value
per share, the Board will propose a special
resolution at the Company’s next AGM that
the Company ceases to continue in its present
form. If such vote is passed, the Board will be
required to formulate proposals to be put to
shareholders within four months to wind up or
otherwise reconstruct the Company, bearing
in mind the illiquid nature of the Company’s
underlying assets.
The discount prevailing on each business day
will be determined by reference to the closing
market price of ordinary shares on that day
and the Net Asset Value per share
DNO distribution network operator
DPC Direct Procurement for Customers
EED the EU Energy Efficiency Directive is a
pan-European mandatory compliance
scheme obligating large EU final customer
organisations to complete mandatory
independent energy audits and reporting at
least every four years
EEG the EEG, or Renewable Energy Sources Act
(Erneuerbare Energien Gesetz), is a German
law designed to promote renewable energy
sources
EfW energy-from-waste
AD anaerobic digestion
AGM Annual General Meeting
AIFM Alternative Investment Fund Manager
AIFM Directive or
AIFMD
the EU Alternative Investment Fund Managers
Directive (No. 2011/61/EU)
APMs alternative performance measures are
financial measures that are not currently
defined or specified in the applicable financial
reporting framework
BESS Battery Energy Storage System
bps basis points
CBPMs cannabis-based products for medicinal use in
humans
CE controlled environment
CfD Contracts for Difference
CHP combined heat and power
CNG compressed natural gas
the Company or
FGEN or the Fund
Foresight Environmental Infrastructure Limited
CPI Consumer Price Index
DCF discounted cash flow
Defra Department for Environment, Food and Rural
Affairs
EGL Electricity Generator Levy
ESG environmental, social and governance
ETA Energie Tecnologie Ambiente
EU European Union
FATCA Foreign Account Tax Compliance Act
FEIP Foresight Energy Infrastructure Partners
FIT Feed in Tariff
Foresight Group or
Foresight
Foresight Group LLP
FTE full-time equivalent
GAV Gross Asset Value
GFSC Guernsey Financial Services Commission
GHG greenhouse gas
green hydrogen hydrogen produced by splitting water by
electrolysis using renewable or low-carbon
electricity
gross project value the fair market value of the investment
interests held in a project as increased by the
amount of any financing in the relevant project
entity
Group Foresight Environmental Infrastructure Limited
and its intermediate holding companies UK
HoldCo and HWT Limited
GWh gigawatt hour
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Additional information
Glossary of key terms continued
portfolio valuation the sum of all the individual investment values
PPAs Power Purchase Agreements
PPP/PFI the Public Private Partnership procurement
model
PRI Principles for Responsible Investment
price cannibalisation the depressive influence on the wholesale
power price at timings of high output from
intermittent weather-driven generation such as
solar and wind
PV photovoltaic
RAS recirculating aquaculture system
RCF revolving credit facility
REGO Renewable Energy Guarantee of Origin
REMA Review of Electricity Market Arrangements
REPowerEU a European Commission plan to end reliance
on Russian fossil fuels before 2030 in response
to the 2022 Russian invasion of Ukraine
RGGO Renewable Gas Guarantee of Origin
RHI Renewable Heat Incentive
RIDDOR Reporting of Injuries, Diseases and Dangerous
Occurrences Regulations
ROC Renewables Obligation Certificate
RPI Retail Price Index
RTFCs Renewable Transport Fuel Certificates
HGVs heavy goods vehicles
intermediate holding
companies
companies within the Group which are used as
pass-through vehicles to invest in underlying
environmental infrastructure assets, namely
UK HoldCo and HWT Limited
Investment Manager Foresight Group LLP
IPO Initial Public Offering
IR Investor Relations
IRR internal rate of return
ISSB International Sustainability Standards Board
KPIs key performance indicators
MOIC money on invested capital
MSA external management services
MWe megawatt electric
MWh megawatt hour
MWth megawatt thermal
NAV Net Asset Value
NPV net present value
O&M operations and maintenance
PCAF Partnership for Carbon Accounting Financials
portfolio the 40 assets in which FGEN had a
shareholding as at 31 March 2025
SDE++ a Netherlands government subsidy scheme
initiative that stimulates sustainable energy
production and CO
2
reduction
SDR Sustainability Disclosure Requirements
SET Sustainability Evaluation Tool
SFDR Sustainable Finance Disclosure Regulation
SID Senior Independent Director
SONIA Sterling Overnight Index Average
SPV special purpose vehicle
TCFD Task Force on Climate-related Financial
Disclosures
THC tetrahydrocannabinol
TNFD Taskforce on Nature-related Financial
Disclosures
total shareholder
return
total shareholder return combines the share
price movement and dividends since IPO
expressed as an annualised percentage
TPT Transition Plan Taskforce
UK HoldCo Foresight Environmental Infrastructure (UK)
Limited, wholly owned subsidiary of Foresight
Environmental Infrastructure Limited
WADR weighted average discount rate
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Additional information
Company summary
Below are the Company key facts, advisers and other information.
Company
information
Foresight Environmental Infrastructure Limited is a Guernsey-registered
closed-ended investment company (registered number 57682) with a premium listing
on the London Stock Exchange
Registered address 1 Royal Plaza, Royal Avenue, St Peter Port, Guernsey, GY1 2HL
Ticker/SEDOL FGEN/BJL5FH8
Company year end 31 March
Dividend payments Quarterly in March, June, September and December
Investment Manager Foresight Group LLP, No. OC300878, registered in England and Wales and authorised
and regulated by the Financial Conduct Authority
Company Secretary
and Administrator
Apex Fund and Corporate Services (Guernsey) Limited, a company incorporated in
Guernsey on 13April 2005 (registered number 43046)
Market capitalisation £457.0 million at 31 March 2025
Investment Manager
fees
0.95% per annum of portfolio NAV up to £0.5 billion, 0.80% on balance between
£0.5 billion and £1 billion and 0.75% on the balance in excess of £1 billion.
Noperformance or acquisition fees
1
Investment Manager
term
Rolling one-year notice
1. From a proposed date of 1 October 2025, investment management fees will be calculated 50% based on Net Asset Value and 50%
on market capitalisation (the latter element capped at Net Asset Value).
ISA, PEP and SIPP
status
The ordinary shares are eligible for inclusion in PEPs and ISAs (subject to applicable
subscription limits) provided that they have been acquired in the market, and they
are permissible assets for SIPPs
AIFMD status The Company is classed as an externally managed Alternative Investment Fund
under the Alternative Investment Fund Managers Regulations 2013 and the AIFM
Directive. TheInvestment Manager acts as the Company’s AIFM
Non-mainstream
pooled investment
status
The Board conducts the Company’s affairs, and intends to continue to conduct
the Company’s affairs, such that the Company would qualify for approval as an
investment trust if it were resident in the United Kingdom. It is the Board’s intention
that the Company will continue to conduct its affairs in such a manner and that
independent financial advisers should therefore be able to recommend its ordinary
shares to ordinary retail investors in accordance with the FCA’s rules relating to
non-mainstream investment products
FATCA The Company has registered for FATCA and has a GIIN number 2BN95W.99999.
SL.831
Investment policy The Company’s investment policy is set out on pages 71 to 73 of the 2025 Annual
Report
Website www.fgen.com
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Additional information
Directors and advisers
Directors
Ed Warner (Chair)
Stephanie Coxon (Senior Independent Director)
Alan Bates
Jo Harrison
Nadia Sood
Administrator to the Company, Company Secretary
and registered office
Apex Fund and Corporate Services (Guernsey) Limited
formerly known as Sanne Fund Services (Guernsey)
Limited
1 Royal Plaza
Royal Avenue
St Peter Port
Guernsey
GY1 2HL
Registrar
Link Registrars (Guernsey) Limited
Mont Crevelt House
Bulwer Avenue
St Sampson
Guernsey GY2 4LH
Channel Islands
UK transfer agent
Link Asset Services
The Registry
34 Beckenham Road
Beckenham
Kent B43 4TU
United Kingdom
Auditor
KPMG Channel Islands Limited
Glategny Court
Glategny Esplanade
St Peter Port
Guernsey GY1 1WR
Channel Islands
Investment Manager
Foresight Group LLP
The Shard
32 London Bridge Street
London SE1 9SG
United Kingdom
Public relations
SEC Newgate
14 Greville Street
London EC1N 8SB
United Kingdom
Corporate broker
Winterflood Securities Limited
The Atrium Building
Cannon Bridge House
25 Dowgate Hill
London EC4R 2GA
United Kingdom
Corporate bankers
HSBC
PO Box 31
St Peter Port
Guernsey GY1 3AT
Channel Islands
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Additional information
Pages 1 to 113 of the Annual Report, including about
FGEN, our track record, mission statement, performance
highlights, Chair’s statement, investment proposition,
toptenassets, markets and opportunities, strategic priorities,
the business model, the KPIs, the Investment Manager’s
report, theportfolio at a glance, the portfolio and valuation,
operational review, sustainability and ESG and the financial
review (together, the review section) have been prepared
solely to provide additional information to shareholders
to assess FGEN’s strategies and the potential for those
strategies to succeed. These should not be relied on by
anyother party or for any other purpose.
The review section may include statements that are, or may
be deemed to be, “forward-looking statements”. These
forward-looking statements can be identified by the use of
forward-looking terminology, including the terms “believes”,
“estimates”, “anticipates”, “forecasts”, “projects”, “expects”,
“intends”, “may”, “will” or “should” or, in each case, their
negative or other variations or comparable terminology.
These forward-looking statements include all matters that
are not historical facts. They appear in a number of places
throughout this report and include statements regarding the
intentions, beliefs or current expectations of the Directors
and the Investment Manager concerning, amongst other
things, the investment objectives and investment policy,
financing strategies, investment performance, results
of operations, financial condition, liquidity, prospects,
opportunities and distribution policy of the Company
andthemarkets in which it invests.
These forward-looking statements reflect current
expectations regarding future events and performance and
speak only as at the date of this report. By their nature,
forward-looking statements involve risks and uncertainties
because they relate to events and depend on circumstances
that may or may not occur in the future.
Forward-looking statements are not guarantees of future
performance or results and will not necessarily be accurate
indications of whether or not or the times at or by which such
performance or results will be achieved. The Company’s
actual investment performance, results of operations,
financial condition, liquidity, prospects, opportunities,
distribution policy and the development of its financing
strategies may differ materially from the impression created
by the forward-looking statements contained in this report.
Subject to their legal and regulatory obligations, the
Directors and the Investment Manager expressly disclaim any
obligations to update or revise any forward-looking statement
contained herein to reflect any change in expectations
with regard thereto or any change in events, conditions or
circumstances on which any statement is based.
In addition, the review section may include target figures for
future financial periods. Any such figures are targets only and
are not forecasts.
This Annual Report has been prepared for the Group as a
whole and therefore gives greater emphasis to those matters
which are significant to Foresight Environmental Infrastructure
Limited and its subsidiary undertakings when viewed as
awhole.
Cautionary statement
188
Foresight Environmental Infrastructure Limited
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Additional information
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Foresight Environmental Infrastructure Limited
1 Royal Plaza
Royal Avenue
St Peter Port
Guernsey GY1 2HL
Channel Islands
fgen.com
Foresight Environmental Infrastructure LimitedAnnual Report 2025