Foresight
Solar Fund
Limited
Annual Report and Financial Statements
For the year ended 31 December 2024
About us
Foresight Solar is a closed‑end
investment company with more
than £1 billion deployed in a
diversified portfolio of solar PV
and battery storage assets.
Contents
Strategic Report
Highlights 1
Investment proposition 2
Business model 3
Company structure 4
Chair’s statement 6
Investment Manager’s report 10
Sustainability 36
Risk and risk management 46
Going concern and viability statement 68
Financial review 71
Alternative Performance Measures (APMs) 81
Governance
Board of Directors 85
Corporate Governance report 86
Management Engagement Committee report 95
Nomination Committee report 97
Audit and Risk Committee report 101
Directors’ Remuneration report 105
Directors’ report 107
Statement of Directors’ responsibilities 111
Financial Statements
Independent Auditor’s report 113
Statement of profit and loss
and other comprehensive income 120
Statement of financial position 121
Statement of changes in equity 122
Statement of cash flows 123
Notes to the Financial Statements 124
AIFMD disclosures (unaudited) 157
Advisors 158
Glossary of terms 159
Front cover: Paddock Wood, UK
Foresight Solar Fund Limited (FSFL) was awarded the Green Economy Mark in
2019. This recognises companies that derive 50% or more of their revenues from
environmental solutions.
The sustainability-focused fund contributes to a lower-carbon future by investing
in and managing approximately 2GW of operational and under-development
renewable energy infrastructure, primarily in the UK and in mainland Europe.
In this report
Chair’s statement
Read more on page 6
Investment Manager’s report
Read more on page 10
Sustainability
Read more on page 36
Highlights
As at 31 December 2024
Reliable cash generation
In a year with the lowest amount of sun hours in the UK
since 2013, global portfolio performance proved resilient,
confirming the 8.00 pence per share (pps) target dividend
with 1.4x cover
2
.
Expanded divestment target
Enhanced programme, committing to sell 75MW+ of
operational capacity in addition to the Australian portfolio.
Proceeds from further sales to facilitate greater liquidity for
investors.
Focus on returning cash to Shareholders
Returned ~£67m to investors between buybacks and
dividends in 2024. Prioritising enhanced and accelerated
capital returns going forward.
Growing development pipeline
Signed joint venture agreement to develop 400MWp of BESS
in Spain, doubling the proprietary pipeline. First solar project
is expected to be ready to build later this year.
Strategic option consideration
Board taking a proactive approach to address investor
concerns and exploring all options with support from the
Investment Manager to deliver long-term solutions for
Shareholders.
1. Refer to the Alternative Performance Measures (APMs) shown on page 81 for more
details and definitions of the terms used in this report.
2. Net dividend cover calculated solely from operating cash flow generated in the
period. (See details on page 79.)
3. Generation figures have been adjusted, where relevant, for events in which
compensation has been, or will be, received.
Investment objectives: Key performance indicators (KPIs)
1
Preserve and
enhance
capital value
£634.4m
Net Asset Value (NAV)
(31 December 2023: £697.9m)
112.3p
NAV per share
(31 December 2023: 118.4p)
7.4%
Annualised total NAV
return since IPO
(31 December 2023: 8.0%)
3.8%
Annualised total
shareholder return since IPO
(31 December 2023: 6.2%)
Deliver
sustainable,
progressive
quarterly
dividends
8.10p
Target dividend per share
for 2025
(31 December 2024: 8.00p)
1.3x
Estimated net dividend
cover for 2025
Develop further
portfolio
diversification
969MW
Operational portfolio capacity
989MWp
Proprietary development pipeline
Contribute
to global
decarbonisation
goals
1,009GWh
Renewable electricity generated
3
(31 December 2023: 1,094GWh)
0.31 tCO
2
e/£m
invested
Carbon footprint
(31 December 2023: 0.41 tCO
2
e/£m)
Strategic Report
Governance
Financial Statements
1
Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Investment proposition
Foresight Solar invests in solar and battery storage assets to build income and drive capital growth. Underpinned by a
progressive dividend, the Company can hold assets to generate cash or dispose of projects to capture the financial uplift
forits Shareholders.
Income
and growth
ș The Company has consistently met
its target of delivering steady income
with a growing dividend and regular
quarterly payments. Looking ahead,
the development pipeline offers the
potential to improve returns. As assets
progress to construction and then
to operation, they will provide the
opportunity for FSFL to realise gains
or manage them for long-term yield.
Read more on page 21
10.4%
dividend yield
(as at 31 December 2024)
Geographic
diversification
ș As nations transition to lower-carbon
economies, Foresight Solar’s strategic
focus on the UK and in mainland
Europe gives Shareholders exposure
to distinct support mechanisms,
different regulatory frameworks and
varying levels of irradiation. The
continental footprint allows FSFL to, at
the same time, maximise returns and
mitigate risks.
Read more on page 15
75%
of Foresight Solar’s installed
capacity is in the UK
Operational
excellence
ș Foresight Solar has outperformed
its production forecasts most years
since starting operations in 2013.
The Investment Manager’s dedicated
portfolio team was involved in
the initial construction efforts to
ensure asset quality and has since
tracked and overseen performance,
maintained availability and delivered
value uplifts.
Read more on page 29
£86m
of value added from active portfolio
management since IPO
1
Investment
Manager
ș Foresight Group is a leading real
assets investment manager with offices
in seven countries and more than 180
infrastructure professionals. The firm
has the international scale and the
local networks to play an important
role in the adoption of renewables,
support the energy transition and
directly contribute to Foresight Solar’s
long-term success.
Read more on page 11
£10.1bn
of infrastructure assets under
management
2
1. More details on operational value added on page 31.
2. Data accurate as per Foresight Group’s latest results.
Shotwick, UK
Strategic Report
Governance
Financial Statements
2
Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Business model
What
we do
How we
create value
Foresight Solar is a
sustainability-focused
investment trust that aims to
deliver progressive returns
alongside long-term NAV
growth by developing, building
and operating utility-scale solar
and battery storage assets.
01. Identify, acquire
02. Develop, build
The Investment Manager leverages its global footprint and local
networks to source opportunities at different stages of development.
These are screened for suitability and potential targets are subject
to due diligence to assess risks, confirm valuation assumptions and
review sustainability considerations. Investment approval is multi-level
and culminates with Board sign-off.
Sustainability considerations
Environmental, social and governance criteria are integral in any
investment assessment. The Investment Manager undertakes a
thorough analysis for every asset.
There is a focus on opportunity identification and risk mitigation
to maximise risk-adjusted returns for Shareholders. The Company
actively manages projects, employing strategic analyses to make
development, construction and maintenance determinations with
efficient balance sheet management. Foresight Solar partners with
experienced counterparties to build and manage projects, and to
secure future pipeline.
Sustainability considerations
Third-party service providers monitor and manage the day-to-day
performance, including sustainability KPIs, of each asset in the
portfolio.
03. Operate, enhance 04. Hold/exit, redeploy
The Company seeks to ensure optimal operational availability and
maximise revenue potential. The portfolio is regularly assessed for
opportunities to improve performance, both operational and financial,
and to better meet sustainability objectives. The Investment Manager
consistently seeks to capture the value identified for the benefit of
Shareholders and a strong operational track record has delivered
more than £85 million in value since listing.
Sustainability considerations
Measuring KPIs from as early as the due diligence phase, the Asset
Manager is able to continually seek and execute on improvement
opportunities across the portfolio.
Foresight Solar’s strategy involves holding assets for cash yield
and delivering long-term NAV growth by bringing projects from
development to construction and to operation. The Company may
generate additional value by selling assets at favourable prices.
TheInvestment Manager and the Board evaluate these opportunities
carefully, reviewing assets’ potential to generate returns over time.
Sustainability considerations
Sales proceeds will typically be used to repay debt or to
invest in assets with attractive risk-adjusted returns, including
development-stage options that grow the Company’s pipeline
andprovide upside potential.
1. Generation figures have been
adjusted, where relevant, for
events in which compensation
hasbeen, or will be, received.
The value
we create
Financial benefits
£100.7m
distributed from
underlyingassets in 2024
£382m
returned to Shareholders
in dividends and buybacks
sinceIPO
Environmental benefits
1,009GWh
of clean energy generated
in2024
1
367,504
UK homes powered for ayear
351,451tCO
2
e
avoided compared to
country-specific grid intensity
Social benefits
£286,671
contributed to local
communities in 2024
Strategic Report
Governance
Financial Statements
3
Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Company structure
Foresight Solar Fund Limited (FSFL) is a closed-end company
withan indefinite life. It was incorporated in Jersey
under the Companies (Jersey) Law 1991, as amended
on13August2013, with registration number 113721.
The Company’s Initial Public Offering (IPO) on
24October2013 raised £150 million, creating the
UnitedKingdom’s (UK) largest listed solar investment
company or, colloquially, investment trust, at the time.
Itsshares are traded on the London Stock Exchange’s Main
Market. TheCompany is also a constituent of the FTSE 250.
As at 31December 2024, there were 564,856,642 Ordinary
Shares in circulation.
As an investment company, Foresight Solar has no direct
employees and outsources its operations to certain key
service providers. FSFL makes its investments through
intermediate holding companies and underlying special
purpose vehicles.
Operating structure and key service providers:
Shareholders
HOLDCOs
Intermediate
Holdings
Companies
Assets
Project Special
Purpose Vehicles
Short and
long-term
debt providers
Asset Manager
Foresight Asset
Management
Limited
Equity
investment
Shareholder
loans, equity
investment
Shareholder
loans, equity
investment
Shareholder loan
repayments,
equity
distributions
Shareholder loan
repayments,
equity
distributions
Dividends,
buybacks
Investment
Manager
Foresight Group LLP
Company
Secretary &
Administrator
JTC (Jersey)
Other key service
providers and
advisors
Corporate Brokers –
Jefferies International
Limited, Singer
Capital Markets
Communications –
Sodali & Co
Auditor – KPMG
Registrar –
Computershare
Investor Services
Legal Advisors –
Dickson Minto, Ogler
Foresight Solar
Fund Limited
Advisors
Strategic Report
Governance
Financial Statements
4
Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Company structure continued
Investment objective
Foresight Solar’s objective is to provide investors with a
sustainable, progressive quarterly dividend and enhanced
capital value, whilst facilitating climate change mitigation and
the transition to a lower-carbon economy.
Investment policy and strategy
The Company pursues its investment objective by acquiring,
managing and selling solar and battery energy storage system
(BESS) assets at different stages of maturity.
FSFL’s aim is to build a diversified portfolio with majority or
minority ownership. When investing in a stake of less than
100%, Foresight Solar secures its rights through shareholder
agreements and other legal transaction documents.
Investments may be made in equity, debt or intermediate
instruments but not in securities traded on an investment
exchange. To optimise returns, the Company is permitted to
invest money held for working capital in cash deposits, gilts
and money market funds.
Operationally, each solar power plant in the portfolio enters
a power purchase agreement (PPA) with a creditworthy
offtaker. Under these contracts, the special purpose vehicles
(SPVs) sell electricity and, in some cases, green certificates
to the buyer. Not all PPAs include mechanisms such as fixed
prices or price floors, allowing the Company to retain some
exposure to merchant power prices.
Investment restrictions
To diversify its portfolio and spread risk, there are limitations
to Foresight Solar’s investment universe and approach:
ș Geography: Investments outside the UK are limited to 25%
of Gross Asset Value (GAV)
ș Leverage: Total gearing, calculated as overall Company
borrowing as a percentage of GAV, will not exceed 50%
at the time of drawdown. The Board intends to limit
long-term gearing to 40% of GAV
ș Portfolio composition: No single asset shall exceed 30%
of GAV post-acquisition. If the investment is an additional
stake in an existing asset, the combined value should not
exceed 30%
ș Stage: Foresight Solar is allowed to deploy no more than
5% of GAV in development-stage projects. These assets
are characterised as pre-construction solar or BESS
opportunities that may not yet have all necessary rights
for build-out and operation, but have a delivery plan and
reasonable viability to secure them. Similarly, projects
under construction are limited to 25% of GAV
ș Technology: The Company may only invest in utility-scale
battery storage up to a limit of 10% of GAV
Any material change to the investment policy will require
the prior approval of Shareholders by way of an ordinary
resolution, in accordance with the Listing Rules.
Alternative Investment Fund Management
Directive(AIFMD)
Although the Company is located outside the European
Economic Area, its marketing activities in the UK are subject
to regulation implemented under the AIFMD and the National
Private Placement Regime.
The AIFMD, as implemented across the European Union (EU)
and in the UK, aims to harmonise the regulation of Alternative
Investment Fund Managers (AIFMs), as well as impose
obligations on firms that manage or distribute alternative
investment funds in the EU or the UK or that market shares in
such funds to EU or UK investors.
Under the AIFMD, the Company is self-managed and acts as
its own AIFM.
Strategic Report
Governance
Financial Statements
5
Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Chair’s statement
Investors value Foresight Solar’s predictable revenues, and
we are proud that our operational performance has enabled
us to consistently deliver that income. Despite 12 months
with the lowest number of daily sun hours in the UK since
listing, the Company has achieved its 2024 target aggregate
dividend of 8.00 pence per share with a 1.4x cash dividend
cover. TheBoard has also approved an aggregate dividend
target for 2025 of 8.10 pence per share, representing a 9.9%
prospective yield to the share price on 17 March 2025. (More
information on the dividend on page 79.)
It is impossible to look forward without recognising that 2024
was a particularly difficult year for the listed investment trust
sector. Whilst macroeconomic factors, including elevated
interest rates, continued to dominate market sentiment, two
events materially impacted investor interest in renewable
energy generation and demand for listed alternative assets.
In the United Kingdom, the newly elected Labour government
set out its economic plan in the Autumn Budget. The
combination of higher taxes and increased spending reignited
concerns over higher inflation and costs of additional
borrowing amid fears of low growth.
The United States election sealed Donald Trump’s return
to the White House with policies that are expected to be
inflationary and have knock-on effects on economies around
the globe, including in the fight against climate change.
This combination resulted in bond yields rising dramatically
and pushing down the price of income-oriented stocks such
as those of renewable energy investment trusts. The share
price of companies like Foresight Solar has generally been
inversely correlated to the yield of UK 10-year government
bonds, and, in this instance, it was no different. Fund outflows
from the listed renewable investment trust sector driven by
investor redemptions exacerbated the issue.
“The continuing strength of Foresight
Solar’s performance and potential
isnot reflected by the current state
of the renewables sector”
Alexander Ohlsson
Chair
8.10pps
dividend target
for 2025
9.9%
yield as at
17March 2025
Pence
70 0
0.5
1.0
1.0
2.0
2.5
3.0
3.0
3.5
4.0
4.5
5.0
80
110
120
130
140
90
100
Oct
2013
Oct
2014
Oct
2016
Oct
2017
Oct
2019
Oct
2018
Renewables investment trust performance UK 10-year gilt yield (RHS)
Oct
2015
Oct
2024
Oct
2020
Oct
2021
Oct
2022
Oct
2023
%
Renewable investment trust performance x UK 10-year bond yield
Source: FactSet, Bloomberg. Renewables Investment Trusts: AERI, BSIF, DORE, FSFL, GRID, GRP, GSEO, GSF, JLEN, NESF, ORIT, SEIT, TRIG, UKW, USF
Strategic Report
Governance
Financial Statements
6
Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Chair’s statement continued
The share price discount relative to net asset value for
investment trusts, excluding 3iN, averaged 14% in the
29 consecutive months to February 2025. The longest
double-digit period since 1996. The gap was even bigger
among names that make up the renewable energy
infrastructure sector at 38%. Foresight Solar closed 2024
atan average discount of 24% for the year.
Operational and financial performance
The prevailing sentiment in the listed renewable sector
is not reflective of Foresight Solar’s underlying portfolio
performance. Despite the worst year for solar resource in the
Company’s history, we have achieved our target dividend of
8.00pps for 2024 with strong cash cover. (More information
on dividend and dividend cover calculation on page 79.)
In the 12 months to 31 December 2024, FSFL produced
1,009GWh of renewable energy, enough to power 367,504
UK homes for an entire year. Although this was 7.0% below
budget, it was only the third time that the core UK portfolio
underperformed expectations in 11 years of operation. (More
information on the portfolio and generation from page14.)
As the UK assets begin their second decade of operation,
operational efficiency will play a key role in cash generation
and capital preservation. The resilience of Foresight Solar’s
portfolio performance is the result of close monitoring,
institutional knowledge and operational expertise. Over the
life of the projects, the Asset Manager has added value of
some £86 million.
The impact to our operational performance of low irradiance
and lower projected power price forecasts in the British,
Australian and Spanish markets were key contributors to the
decrease in Net Asset Value that we reported over the year.
Foresight Solar’s NAV per share decreased to 112.3 pence
in 2024 from 118.4 pence in 2023. (More information on the
NAV on page 33.)
The predictability of FSFL’s revenues is something
Shareholders deeply value. Aiming to provide greater
certainty on future income, the Investment Manager has been
actively hedging production into the future and securing
advantageous prices that provide income and dividend
cover visibility. Post year end, Foresight Solar implemented
NAV-accretive hedges, increasing total contracted revenues
for 2025 to 88% and for 2026 to 69%, both at an average
price of£86/MWh.
As elevated fixes agreed during the pandemic start to
roll off in 2025 and 2026, these moves highlight Foresight
Solar’s commitment to providing steady, covered income to
Shareholders. (More information on the active price hedging
strategy on page 29.)
Capital allocation and corporate actions
During the year, the Board and the Investment Manager
worked to try and remedy the share price discount to
NAV against an increasingly challenging backdrop. We
implemented actions to confirm valuations, generate cash
and return capital.
We initiated the planned sale of the Australian portfolio in
late 2024, a key strategic priority for us. Progress has taken
longer than initially envisaged principally due to the delivery
and review of third-party inputs. Whilst advancing the
transaction is important, both the Board and the Investment
Manager are aligned on ensuring the portfolio is best
positioned in the market. Therefore, the target is now to agree
a sale during the third quarter of this year.
2025 2026 2027
Average hedged price for the UK portfolio (£/MWh) £86 £86 £77
Proportion of contracted revenues for the global portfolio 88% 69% 62%
60
40
20
0
80
100
%
2025
Contracted revenue (PPA, hedges)Contracted revenue (subsidy) Merchant revenue
2026 2027
Revenue profile breakdown
Strategic Report
Governance
Financial Statements
7
Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Chair’s statement continued
Capital allocation and corporate actions continued
To create additional liquidity, the Board and the Investment
Manager have also agreed to extend the Company’s disposal
programme by divesting of at least a further 75 MW of assets.
The Investment Manager anticipates preparing the relevant
assets and commencing the process in the second quarter
of this year, with the Board providing a hands-on role in the
decision-making process.
In accordance with our ongoing capital allocation approach,
proceeds from divestments will be prioritised for returning
capital to investors, paying down debt and reinvesting in
higher-yielding development opportunities. With certain
Shareholders seeking a material return of capital, the Board
envisages that proceeds from these additional sales should
be used to facilitate enhanced liquidity for those seeking it.
Another key initiative has been our share buyback
programme, which is one of the sector’s largest relative to
NAV. From May 2023, when it started, to December 2024,
Foresight Solar repurchased 45.1 million shares at an average
price of 92.47p per share, adding 2.2pps of value to NAV and
buying back 7.4% of the Company. Aggregating dividends and
share buybacks, FSFL returned £66.5 million to Shareholders
during 2024. Over the life of the Company, the total cash
paid to Shareholders is £382 million. (More information on the
cash position on page 123.)
We have also made a number of new investments with a view
to improving our total return. FSFL agreed a framework with
Chelion Iberia in Spain to double its proprietary development
pipeline. Combined with the work on BESS in Australia, solar
and battery storage capacity under development is now
989GWp. These early-stage projects have the potential to
drive growth, improving long-term returns for investors with
minimal capital at risk. (More information on the proprietary
development pipeline on page 22.)
In an environment in which interest rates are expected to stay
higher for longer, the Board believes this income and growth
strategy has the potential to deliver higher returns over time
with a “capital light” investment model. We expect to see
results later this year, with the first project in the Cuerva solar
pipeline coming through in Spain and the results to multiple
grid applications submitted in the Chelion BESS partnership.
(More information on the income and growth strategy on
page22.)
A priority for 2025 is securing a development pipeline in
the UK. Although the subsidy support for Foresight Solar’s
portfolio still has an average of 10 years remaining, the Board
is attuned to the end of the Renewables Obligation (RO)
scheme. The Investment Manager is, therefore, evaluating
how to rotate into Contracts for Difference (CfD) backed
projects for new investments to support the Company’s
ability to deliver reliable returns into the future.
The Directors are disciplined in relation to their capital
allocation policies and new investments will only be made
if they can offer returns in excess of those achievable from
buying back FSFL shares at the prevailing discount to NAV.
Management Fee
In light of Shareholder feedback and having reviewed changes
made by a small number of other listed investment trusts,
the Board engaged with the Investment Manager to agree
a revised fee structure with the aim of creating greater
alignment with investor interests. Following collaborative
and productive negotiations with Foresight Group, the
Board announced on 18 February a new management fee
arrangement. From 1 March 2025, the management fee will
be based on an equal weighting of market capitalisation
and NAV, with lowered tiers of 0.95% per annum up to £500
million and 0.8% p.a. over £500 million. This equates to a
19%saving (see RNS of 18 February 2025 for calculation).
Board succession
As part of the previously announced Board succession plan,
Monique O’Keefe stepped down as a Non-Executive Director
(NED) during 2024 and we welcomed Paul Masterton and
Tony Roper to the Board. I would like to take this opportunity
to thank Monique for her contribution during the five years
that she served. Monique’s wise counsel and guidance
were invaluable to the Board in its deliberations. Paul and
Tony each bring significant industry experience. They have
a close understanding of the challenges the Company and
our Shareholders face and are already making a significant
contribution in guiding its future direction.
The next step in our succession plan will be for Chris Ambler
to step down at the forthcoming Annual General Meeting
(AGM). Chris has served on the Board since Foresight Solar’s
inception. I would also like to thank Chris for his many years
of service. He has made anenormous contribution and his
experience and knowledge of the power-generating sector
has been immensely helpful. Chris will relinquish the role
of Senior Independent Director on his retirement, with Paul
Masterton taking over.
Finally, as announced in February, I will be stepping down
later this year, with the intention for Tony Roper to assume
asChair.
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Governance
Financial Statements
8
Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Chair’s statement continued
Wymeswold, UK
Shareholder engagement
The Board and the Investment Manager have sought to
engage extensively with Shareholders throughout 2024
and subsequently. The importance of this engagement
increases in circumstances when the Company’s share
price performance has been disappointing. We have also
specifically engaged with those Shareholders that voted
for change at last year’s Annual General Meeting. As
well as hosting a capital markets event and undertaking
a Shareholder perception study during 2024, we hosted
nearly 50 meetings with dozens of investors. We listened
to views, considered input and have sought to make the
necessary strategic adjustments. In cases when there have
been conflicting views, the Board has carefully weighed the
pros and cons of decisions, aiming to maximise value for
Shareholders.
In our discussions with Shareholders, we have heard a
range of opinions. It is clear that a number of investors have
been looking to withdraw capital from the listed renewable
investment trust sector over recent years. This process
remains only partially complete, with discounts remaining
wide. Insufficient liquidity in the secondary market has proved
a barrier to enable the process to conclude and discounts
tonormalise.
On 18 February 2025, the Company announced it had
received a range of views from Shareholders about our
strategic and corporate objectives. While some have
expressed a desire for a material liquidity event, others
continue to support the investment thesis and are seeking
ongoing exposure to the listed renewables sector through
a vehicle with greater secondary market liquidity and scale
to drive efficiencies. Our role is to balance these objectives
and deliver value to Shareholders in an efficient and effective
manner by considering all options available.
The Board considers that material returns of capital in the
listed renewable sector from the disposal of investments
will lead to a reduction in its size and an inevitable reduction
in the number of market participants.In addition to capital
returns, consolidation is likely to be a major feature in the
sector in the year ahead and we have seen the early signs of
this in the renewables sector. The Directors are fully aware
of the benefits that successful consolidation can deliver to
Shareholders and this forms a critical part of the Board’s
ongoing strategic considerations. Ultimately, our intention is
to explore all options available to provide the best outcome
for the majority of our Shareholders in an efficient and
effective manner. We will continue to keep you informed as
we seek anacceptable solution to these market-wide issues.
Having consulted with many investors in recent months, we
look forward to continuing this engagement ahead of the
AGM scheduled for 17 June 2025 at 9:30am. Details of how
Shareholders may participate will be set out in the Notice of
Annual General Meeting in due course.
Outlook
The Board is fully aware of the unprecedented challenges
facing the sector and the Company. Despite the market
turbulence, the Directors believe the future for investment
in renewable energy remains positive. The sector is backed
by supportive governments in the UK and in mainland
Europe. We are convinced the income and growth strategy
Foresight Solar is implementing is the right approach to drive
total shareholder returns, and we remain confident in the
portfolio’s quality.
Alexander Ohlsson
Chair
19 March 2025
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Governance
Financial Statements
9
Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
What’s in this section:
Investment Manager 11
Key investment metrics 13
Key operational metrics 14
Portfolio overview 15
Q&A with the Fund Managers 21
Market context 24
Power prices 26
Operational review 29
Net Asset Value 33
Investment
Manager’s report
£634.4m
Net Asset Value
(as at 31 December 2024)
£105.4m
Total operating
profit (EBITDA)
(as at 31 December 2024)
7.4x
EV/EBITDA ratio
(as at 31 December 2024)
Coombeshead, UK
Strategic Report
Governance
Financial Statements
10
Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Investment Manager’s report
Investment Manager
Foresight Group, the Company’s
Investment Manager, is responsible
for the acquisition and management
of assets, including the sourcing and
structuring of new transactions, as
well asadvising on the borrowing
strategy to optimise the capital
structure.
Founded in 1984, Foresight Group is a leading listed
infrastructure and private equity investment manager
authorised and regulated by the Financial Conduct Authority.
With a long-established focus on sustainability-led strategies,
it aims to provide attractive returns to institutional and retail
investors from hard-to-access private markets.
Foresight manages hundreds of infrastructure assets
with afocus on renewable energy generation, including
solar, onshore wind, bioenergy and energy-from-waste.
The firm also manages renewable energy-enabling sites,
energy efficiency management solutions, social and core
infrastructure projects, and sustainable forestry assets on
behalf of itsclients.
The infrastructure division consisted of almost 200
investment, portfolio and technical professionals as at
30September 2024 – the latest publicly available data.
Theteam is comprised of:
ș An investment management team responsible for
originating, assessing and pricing assets, managing due
diligence and executing transactions
ș An asset management team with expertise across
electrical and civil engineering, finance and legal
disciplines that oversees day-to-day portfolio operations
ș A sustainability team that contributes to every phase of
the investment and asset management processes and is
responsible for integrating and monitoring best practices
The second part of Foresight Group’s business, private
equity, manages over 20 investment vehicles across the
UK and Ireland. The division reviews approximately 3,500
business plans each year, and currently supports a portfolio
of over 250 small and medium-sized enterprises.
The third pillar, Foresight Capital Management, is responsible
for four strategies across seven investment vehicles,
answering for £1.0 billion in assets under management (AUM).
Foresight Group operates in seven countries in Europe and in
Australia with total AUM of £12.4 billion.
Foresight Group Holdings Limited listed on the London Stock
Exchange in February 2021 and was admitted to the FTSE
250 in September 2023.
£12.4bn
assets under
management
1
435
infrastructure
assets under
management
1
189
investment,
commercial
and technical
professionals
1
4.7GW
total green energy
technology
capacity
1
1. Data accurate as per Foresight Group’s latest results.
Strategic Report
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Financial Statements
11
Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Investment Manager’s report continued
Investment Manager continued
Ross Driver
Managing Director, Infrastructure
Background
Mr Driver joined Foresight Group in 2021
to oversee the delivery of Foresight Solar’s
investment mandate. He has almost 20 years of
infrastructure and renewable energy investment
experience covering deal structuring and
execution, debt financing and asset management.
Prior to Foresight, Ross spent eight years at
InfraRed Capital Partners. He also worked at John
Laing Investments and KPMG Corporate Finance.
Toby Virno
Associate Director, Infrastructure
Background
Mr Virno joined Foresight Group in 2018. With
nearly a decade’s experience in investment and
financing of renewable energy assets and projects,
particularly solar PV and BESS, he is part of the
full-time Foresight Solar team helping deliver the
Company’s investment mandate.
Gary Fraser
Partner, CFO of Foresight Group
Background
A member of Foresight Group’s Executive
Committee, Mr Fraser has more than 30 years
of experience providing or facilitating specialist
financial input into corporate, portfolio and
investment trust decisions.
Prior to Foresight, Gary worked at F&C Asset
Management as a Company Secretary, focusing
on financial, legal, tax compliance, technical and
financial reporting, and corporate finance. He also
worked at EY with audit and risk assurance.
Ricardo Piñeiro
Partner, Head of Infrastructure
Background
Mr Piñeiro joined Foresight Group in 2011, rising
to become a member of the firm’s Executive
Committee. He has 20 years of experience in
fund management, sustainable infrastructure
investment and financing in the UK and abroad.
During his time at Foresight, Ricardo led the FSFL
investment management team for almost 10 years.
Prior to joining Foresight, Ricardo worked at
Espirito Santo Investment, where he focused on
lending and advisory for the energy infrastructure
and transportation sectors.
Key members of the Foresight Solar team
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Investment Manager’s report continued
Key investment metrics
1
Foresight Solar
31 December
2024
31 December
2023
Net Asset Value (NAV) £634.4m £697.9m
NAV per share 112.3p 118.4p
Dividend declared per share for the year 8.00p 7.55p
Annualised total NAV return since IPO 7.4% 8.0%
Gross Asset Value (GAV) £1,044.7m £1,140.5m
Share price 77.0p 102.2p
Ordinary Shares in circulation
2
564,856,642 589,239,345
Market capitalisation £434.9m £602.2m
Annualised total shareholder return since IPO 3.8% 6.2%
UK portfolio valuation £1.10m/MW £1.17m/MW
Cash flow from operations £61.7m £71.3m
Total operating profit (EBITDA) £105.4m £136.1m
Net debt/EBITDA 3.2x 2.7x
Enterprise value (EV)/EBITDA 7.4x 7.7x
1. The purpose and calculation methodology of the key APMs are shown on page 81.
2. During the period, 24,382,703 shares were repurchased and are held in treasury. Further details on page 146.
Shotwick, UK
13
Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Strategic Report
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Year ended 31 December 2024 Year ended 31 December 2023
Foresight Solar
Operational
capacity
(MW)
Total
generation
(GWh)
1
Budgeted
generation
(GWh)
Generation
variance to
budget
2
Irradiation
variance to
budget
Operational
capacity
(MW)
Total
generation
(GWh)
Budgeted
generation
(GWh)
Generation
variance to
budget
2
Irradiation
variance to
budget
United Kingdom 723 630 670 (6.0)% (4.7)% 723 678 673 0.7% 2.1%
Spain 76 144 139 3.6% (2.5)% 76 179 229 (1.5)% (1.6)%
Australia 170 235 276 (14.7)% (4.8)% 170 237 260 (9.0)% 8.3%
Global operational portfolio 969 1,009 1,085 (7.0)% (4.5)% 969 1,094 1,162 (1.9)% 3.4%
1. Generation numbers include distribution network operators’ (DNOs) outages outside of Foresight Solar’s control. Removing network operators’ unforeseen stoppages, total generation for the global portfolio to 31 December 2024 would have been 0.5% higher at 1,014GWh.
2. Generation figures have been adjusted, where relevant, for events in which compensation has been, or will be, received.
Investment Manager’s report continued
Key operational metrics
Los Llanos, Spain
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Investment Manager’s report continued
Portfolio overview
As at 31 December 2024, Foresight Solar’s portfolio
comprised 61 assets with a total net peak capacity of
1,044MW and a proprietary development pipeline totalling
989MWp.
In the UK, the Company had 50 operational solar sites with
an installed capacity of 723MW. In addition, FSFL holds 50%
stakes in three battery storage projects, equivalent to 75MW,
that are currently under construction or in pre-construction.
Foresight Solar also owns four operational solar assets in
Australia, totalling 170MW of capacity, and another four
operational plants in Spain, with stakes corresponding to
76MW in installed capacity. (For more information, see the
full portfolio composition from page 16.)
The solar farms in the United Kingdom all benefit
from regulatory support and are accredited under the
RenewablesObligation (RO) scheme, except for Yardwall,
which is a Feed-in Tariff (FiT) scheme accredited asset
(representing less than 1% of the portfolio in the country).
The battery storage assets will predominantly trade on
a merchant basis, although they will also be able to bid
for fixed price service contracts under National Grid ESO
capacity auctions.
The Australian projects, meanwhile, benefit from Large-Scale
Generation Certificate (LGC) subsidies.
The Spanish sites do not rely on regulatory support.
Theyinstead have long-term power purchase agreements
(PPAs), striking production deals at determined prices
with creditworthy counterparties for certain periods. This
approach provides a high proportion of contracted income
and revenue visibility.
The Investment Manager has been successful in sourcing
those types of contracts, with Virgen del Carmen establishing
a 10-year offtake agreement with Shell in September 2020,
and the Lorca portfolio (comprising Los Llanos, Los Picos and
Las Salinas) signing a decade-long agreement with Statkraft in
December 2021.
Foresight Solar has been consistently building its proprietary
development pipeline of solar and battery storage assets
in Europe. So far, the Company has established a total of
867MWp between multiple projects of both technologies
and developed 122MWp of BESS in-house in Australia. These
well-structured, early-stage opportunities are an excellent
way to increase investment optionality, provide an avenue for
growth and improve returns for Shareholders over time.
Revenue structure
The Company generates income by producing and exporting
electricity to the grid. The revenue predominantly arises from
regulatory support mechanisms available in the markets
in which FSFL operates and from the sale of electricity to
third-party offtakers – either at fixed or merchant prices.
Foresight Solar seeks to minimise the impact of power price
volatility on future cash flows by implementing a proactive
strategy that includes fixed price arrangements for the sale
of electricity and financial instruments. The goal of this power
price hedging approach is to enhance the quality of revenues
by actively managing the market power price exposure of
forecast production in the short and medium term.
By way of example, Foresight Solar can fix the price for an
amount of electricity sales in the summer to support the
dividend policy, whilst leaving some exposure to market rates
that allow it to capture potential upside from power price
volatility in other seasons.
Income from subsidies, from fixed price power purchase
agreements and from hedges have a high degree of
receivable certainty and are, therefore, defined as
contracted. Day-ahead electricity sales, on the other hand,
are labelled merchant oruncontracted.
In 2024, approximately 40% of revenues were derived from
subsidies, with the remaining 60% from the sale of electricity.
With fixed price contracts mainly secured through PPAs,
89%of revenue in the period was considered contracted,
with the remaining 11% merchant.
On a net present value basis, as at 31 December 2024,
contracted revenues over the entire investment period
represented 48% of the total forecasted revenue.
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Investment Manager’s report continued
Portfolio overview continued
UK
Spain
Australia
Operational
Construction
Development
UK subsidy income
UK electricity sales – Fixed
UK electricity sales – Merchant
Spain electricity sales – Fixed
Spain electricity sales – Merchant
Australia electricity sales – Fixed
Australia electricity sales – Merchant
Australia subsidy – Merchant
UK
Spain
Australia
Electricity sales – Merchant
Subsidy
Electricity sales – Contracted
75% 52%
63%
39%
14%
9%
23%
48%
46%
38%
7%
17%
51%
8%
1%
1%
3%
2%
1%
2%
Countries by installed capacity
Global portfolio by peak capacity
Country by portfolio revenue
Global portfolio revenue by net present value
Countries by production
Cliveden House, UK
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Current portfolio
Type
Asset
Peak capacity
(MW) Status
Connection
date
Revenue
type
UK solar
01 Wymeswold 34 Operational March 2013 ROC/Electricity sales
02 Castle Eaton 18 Operational March 2014 ROC/Electricity sales
03 Highfields 12 Operational March 2014 ROC/Electricity sales
04 High Penn 10 Operational March 2014 ROC/Electricity sales
05 Pitworthy 16 Operational March 2014 ROC/Electricity sales
06 Hunter’s Race 10 Operational July 2014 ROC/Electricity sales
07 Spriggs Farm 12 Operational March 2014 ROC/Electricity sales
08 Bournemouth 37 Operational September 2014 ROC/Electricity sales
09 Landmead 46 Operational December 2014 ROC/Electricity sales
10 Kencot Hill 37 Operational September 2014 ROC/Electricity sales
11 Copley 30 Operational December 2015 ROC/Electricity sales
12 Atherstone 15 Operational March 2015 ROC/Electricity sales
13 Paddock Wood 9 Operational March 2015 ROC/Electricity sales
14 Southam 10 Operational March 2015 ROC/Electricity sales
15 Port Farm 35 Operational March 2015 ROC/Electricity sales
16 Membury 16 Operational March 2015 ROC/Electricity sales
17 Shotwick 72 Operational March 2016 ROC/Electricity sales
18 Sandridge 50 Operational March 2016 ROC/Electricity sales
19 Wally Corner 5 Operational March 2017 ROC/Electricity sales
20 Coombeshead 10 Operational December 2014 ROC/Electricity sales
21 Park Farm 13 Operational March 2015
ROC/Electricity sales
22 Sawmills 7 Operational March 2015
ROC/Electricity sales
23 Verwood 21 Operational February 2015
ROC/Electricity sales
24 Yardwall 3 Operational June 2015
FiT/Electricity sales
25 Abergelli 8 Operational March 2015
ROC/Electricity sales
26 Crow Trees 5 Operational February 2016 ROC/Electricity sales
27 Cuckoo Grove 6 Operational March 2015 ROC/Electricity sales
28 Field House 6 Operational March 2016 ROC/Electricity sales
Investment Manager’s report continued
Portfolio overview continued
Yardwall, UK
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Investment Manager’s report continued
Portfolio overview continued
Current portfolio continued
Type
Asset
Peak capacity
(MW) Status
Connection
date
Revenue
type
UK solar continued
29 Fields Farm 5 Operational March 2016 ROC/Electricity sales
30 Gedling 6 Operational March 2015 ROC/Electricity sales
31 Homeland 13 Operational March 2014 ROC/Electricity sales
32 Marsh Farm 9 Operational March 2015 ROC/Electricity sales
33 Sheepbridge 5 Operational December 2015 ROC/Electricity sales
34 Steventon 10 Operational June 2014 ROC/Electricity sales
35 Tengore 4 Operational February 2015 ROC/Electricity sales
36 Trehawke 11 Operational March 2014 ROC/Electricity sales
37 Upper Huntingford 8 Operational October 2015 ROC/Electricity sales
38 Welbeck 11 Operational July 2014 ROC/Electricity sales
39 Yarburgh 8 Operational November 2015 ROC/Electricity sales
40 Abbey Fields 5 Operational March 2016 ROC/Electricity sales
41 SV Ash 8 Operational March 2015 ROC/Electricity sales
42 Bilsthorpe 6 Operational November 2014 ROC/Electricity sales
43 Bulls Head 5 Operational September 2014 ROC/Electricity sales
44 Lindridge 5 Operational January 2016 ROC/Electricity sales
45 Manor Farm 14 Operational October 2015 ROC/Electricity sales
46 Misson 5 Operational March 2016 ROC/Electricity sales
47 Nowhere 8 Operational March 2015 ROC/Electricity sales
48 Pen Y Cae 7 Operational March 2015 ROC/Electricity sales
49 Playters 8 Operational October 2015 ROC/Electricity sales
50 Roskrow 9 Operational March 2015 ROC/Electricity sales
UK BESS
51 Sandridge BESS 25
1
Construction — Merchant
52 Clayfords 25
2
Pre-construction — Merchant
53 Lunanhead 25
3
Pre-construction — Merchant
Operational sub-total 723
Construction and pre-construction sub-total 75
Park Farm, UK
1. Accounts for the 50% stake the Company holds of Sandridge BESS (50MW).
2. Accounts for the 50% stake the Company holds of Clayfords (50MW).
3. Accounts for the 50% stake the Company holds of Lunanhead (50MW).
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Investment Manager’s report continued
Portfolio overview continued
Current portfolio continued
Type
Asset
Peak capacity
(MW) Status
Connection
date
Revenue
type
Spain solar
1 Virgen del Carmen
26 Operational November 2022
Long-term PPA/
Electricity sales
Lorca portfolio
2 Los Llanos 25
1
Operational August 2022
Long-term PPA/
Electricity sales
3 Las Salinas 15
1
4 Los Picos 10
1
5 Cuerva pipeline
467 Development —
Long-term PPA/
Electricity sales
Spain BESS
6 Chelion pipeline 400 Development — Merchant
Operational sub-total 76
Development sub-total 867
Type
Asset
Peak capacity
(MW) Status
Connection
date
Revenue
type
Australia solar
1 Bannerton 53
2
Operational July 2018 LGC/Long-term PPA
2 Longreach 17 Operational March 2018 LGC/Long-term PPA
3 Oakey 1 30 Operational February 2019 LGC/Long-term PPA
4 Oakey 2 70 Operational May 2019 LGC/Electricity sales
Australia BESS
5 Bannerton BESS 42
2
Development — Merchant
6 Oakey 1 BESS 80 Development — Merchant
Operational sub-total 170
Development sub-total 122
Operational total 969
Construction and pre-construction total 75
Development total 989
1. Accounts for the 50% stake the Company holds in the Lorca portfolio (100MW).
2. Accounts for the 48.5% stake the Company holds of Bannerton (110MW) and the
development BESS project.
Longreach, Australia
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Financial Statements
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Acquisitions and divestments
Australian portfolio
In October, the Company commenced a process to sell
the four operational solar plants totalling 170MW and the
two development-stage BESS projects co-located on the
Bannerton and Oakey 1 sites with a capacity of 122MWp.
The Investment Manager had to resolve outstanding
commercial issues prior to launch and, with advisors,
established a favourable time to go to market. This provided
the opportunity to progress the development of the
co-located battery storage assets using internal resources.
Allthese factors are important in maximising the potential
value of theportfolio in a sale.
Increased deal flow during 2024 has resulted in concurrent
processes, stretching on-the-ground resources required for
technical evaluations and due diligence. As such, inputs from
third-party advisors have taken longer than initially envisaged
to finalise, although they are important to preserve assets’
values. Investor engagement has nonetheless been positive
and multiple institutions have requested to review detailed
asset information. Over the following months, the Investment
Manager will oversee the process with local advisors with the
target of agreeing a sale during the third quarter of the year.
Chelion portfolio
The Company agreed a framework with Chelion Iberia in May
2024 to jointly invest in up to 400MWp of development-stage
battery storage projects in Spain. The venture nearly doubled
FSFL’s proprietary pipeline without any upfront capital and is
forecast to require less than €2 million to the end of 2026.
Under the arrangement, Foresight Solar commits funding to
develop projects it selects for the jointventure.
Once assets reach the ready-to-build stage, the Company
has the option to either construct them or sell the rights
at a mark-up. If it opts to build them, it will have another
opportunity to sell the plants at a potentially material uplift
on the invested capital once they become operational, or it
can manage and run them for cash yield.
In the second half of 2024, the JV identified more than 10
suitable projects and applied for grid connections. Thelocal
regulator is reviewing the applications and decisions are
expected in the first half of 2025.
The BESS market is developing rapidly in Spain, with
the government finalising a consultation to structure the
country’s capacity market and provide security of supply
to incorporate much-needed storage into the grid. In
anticipation, offers from investors have been so strong that
new applications are likely to move to a competitive auction
process later this year.
Development update
Cuerva portfolio
Muel, the first project from the solar development pipeline in
Spain, is expected to reach ready-to-build status bythe end
of 2025.
Once this milestone is reached, the Board will follow the
outlined capital allocation approach, choosing between
capitalising immediate returns on the invested capital –
assuming a sale at ready-to-build – or improving returns
further once the project becomes operational and the site is
held for cash yield.
The technical studies for the remaining projects in the Cuerva
pipeline are ongoing. The goal is to have applications ready
so that, once capacity auctions restart, the Company can bid
for connections and move ahead with the sites.
Unlike purchasing consented rights from developers
orhaving the right of first offer, Foresight Solar is
theholder of the rights to its development pipeline.
This means the Company can capture the full financial
benefit of projects’ evolution for its Shareholders.
Pre-construction and construction progress
Clayfords and Lunanhead
Customary pre-construction works continued to meet
planning milestones for the two BESS projects and ensure
their position in the grid queue. These efforts are important
to guarantee the assets maintain their connection dates in
light of the Office of Gas and Electricity Markets’ (Ofgem)
upcoming connections reform.
The Board and the Investment Manager are scrutinising
every investment decision in line with the Company’s capital
allocation policy – based on returning cash to Shareholders
and paying down debt. This means they are carefully
considering the best options for Clayfords and Lunanhead.
Sandridge BESS
On-site activity to finalise construction of the 50MW, one-hour
lithium-ion battery has concluded. After the local distribution
network operator (DNO) finishes the necessary infrastructure
works, energisation is expected in the second half of 2025,
after which the site will begin final commissioning and testing.
Investment Manager’s report continued
Portfolio overview continued
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Financial Statements
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Investment Manager’s report continued
Q&A with the Fund Managers: Navigating a challenging year for alternative assets investment trusts
Interviewer: Share price performance was volatile
throughout the 12 months, but it deteriorated in the fourth
quarter of 2024. What happened?
Ross Driver: It’s hard to attribute the movement to one
single development. We believe, however, that yields for
UKgovernment bonds creeping up had an outsized negative
impact on share prices across the sector – and we were
noexception. (10 year UK gilt viewed as a benchmark).
The market was nervous about the state of Britain’s finances.
There was, and remains, a general feeling that interest rates
will have to be higher for longer following the latest Autumn
Budget. Renewables trusts have historically appealed to
investors because of their relatively high yields and, because
of that, their share prices tend to move in the opposite
direction to that of gilts. That’s a key reason why the whole
sector was affected.
Ross Driver
Managing Director,
Infrastructure
Toby Virno
Associate Director,
Infrastructure
Ross and Toby discuss how a complex
macroeconomic environment and
uncertain geopolitical events in 2024
reduced investor appeal for listed
renewable energy infrastructure.
There are, however, positive signs.
Thetwoprofessionals explain how
Foresight Solar’s Board and Investment
Manager have responded, and outline the
measures taken to improve performance
in2025.
Pence
70 0
0.5
1.0
2.0
2.5
3.0
3.5
4.0
4.5
5.0
80
110
120
130
140
90
100
Oct
2019
Oct
2020
Oct
2022
Oct
2023
Renewables investment trust performance UK 10-year gilt yield (RHS)
Oct
2021
Oct
2024
1.5
%
Renewable investment trust performance x UK 10-year bond yield
Source: FactSet, Bloomberg. Renewables Investment Trusts: AERI, BSIF, DORE, FSFL, GRID, GRP, GSEO, GSF, JLEN, NESF, ORIT, SEIT, TRIG, UKW, USF
Strategic Report
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Annual Report and Financial Statements 31 December 2024
Investment Manager’s report continued
Q&A with the Fund Managers: Navigating a challenging year for alternative assets investment trusts continued
Interviewer: What have the Board and the Investment
Manager done to address the share price discount relative
to Net Asset Value?
Ross Driver: In 2024, we engaged with investors in dozens
of meetings and heard that we needed to do more. That’s
why we’re working on measures to unlock capital to return
additional cash directly to Shareholders. Last month, in
February, the Directors made it clear that they’re exploring
all options available and we’ll continue to keep the market
informed. The ultimate goal is to deliver value to investors in
an efficient and effective manner.
Tackling the discount is a big part of this. So far, we have
attempted to address it in a multi-pronged approach:
accelerating the return of capital via buybacks, implementing
a divestment process to unlock cash, and paying down our
revolving credit facility to minimise interest costs.
During the year, we increased our allocation to share
repurchases to up to £50 million, making it one of the largest
in the sector relative to NAV. Considering dividends and
buybacks, Foresight Solar distributed more than £65 million
to Shareholders in 2024.
To release capital, we also started the second phase of
our 200MW sale process. The divestment of the Australian
portfolio is targeted to close later this year. As project
leverage falls off the balance sheet, Foresight Solar’s gearing
as a proportion of GAV should settle in the low 30% range.
Additional proceeds from the disposal of another 75MW of
operational solar assets will also be deployed according to
the capital allocation strategy.
These initiatives aim to address certain Shareholder requests
and send a message to the market that the Board and the
Investment Manager have confidence in the Company’s
valuations and operational and financial prospects.
Looking ahead, we’ll continue investing small amounts into
development pipelines to recycle capital and improve returns
whilst capturing the financial benefit as the projects mature
to construction and to operation. This has the potential to
deliver additional value for Shareholders over time and is a
differentiator for Foresight Solar.
The UK government’s pro-renewables stance will also be a
driving force for the sector. With the potential for interest
rates to moderate in 2025, even if not to levels seen during
the 2010s, there should be tailwinds for investors.
Interviewer: What do you mean when you talk about income
and growth? Are you referring to cash distributions from
the operational portfolio boosted by returns from the
development pipeline?
Toby Virno: That’s right. In the past, renewable energy
investment trusts pitched themselves as “yieldcos”. For
about a decade, simply relying on cash flows from operations
provided mid-single-digit returns to Shareholders.
In the low-rate environment of the 2010s, steady cash
payouts were an attractive investment proposition.
The current macroeconomic environment, however, is
more challenging. With higher interest rates, investors are
understandably demanding higher returns.
That’s where Foresight Solar’s proprietary development
pipeline fits in. The operational portfolio will continue to
generate revenue, which will be distributed to Shareholders
in the form of quarterly dividends. On top of that, as the solar
and BESS projects evolve from development to construction
and to operation, we’ll have the opportunity to either sell
them for multiples on the invested capital, and generate extra
cash, or commit resources to finance the next phase so that
they eventually start producing and selling electricity and
growing profits.
The ownership structures of our proprietary pipelines allow
Foresight Solar to capture the full value uplift from these
development assets for Shareholders.
Proprietary development pipeline
Ready to
Build (RtB)
Commercial
Operations (COD)
Operation
Construction
Development
Realisation
Realisation
Target Development Pipeline
2500
2000
1500
1000
500
0
Current pipeline
Targeted pipeline
Up to 400MW Spanish BESS
467MW Spanish Solar
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Investment Manager’s report continued
Q&A with the Fund Managers: Navigating a challenging year for alternative assets investment trusts continued
Interviewer: The Renewables Obligation (RO) scheme is
widely regarded as a cornerstone of the green energy
growth in the UK. As the end of the 20-year timeframe
for support creeps into view, the reality is subsidies will
eventually roll off. What happens to Foresight Solar’s
portfolio when that happens?
Toby Virno: The weighted average remaining life of our
UKsubsidies is 10 years, giving us plenty of time to address
this point.
In any case, our portfolio was constructed with that in mind
from the beginning. We knew the support from the RO
scheme would end at the 20-year mark and have already
been planning to avoid a cliff-edge for subsidy revenue.
For starters, all our subsidy-backed assets have project-level
debt linked to the term of the government support. That
means when the cash from the Renewables Obligation
Certificates (ROC) stops coming in, the projects will be entirely
debt-free for the remainder of their useful economic lives. At
that point, we can refinance to unlock equity or rely on cash
flow from operations for income.
We are also considering what divesting ROC-backed assets
would mean for portfolio composition and dividend cover in
the longer term. A sale of this sort would free capital to be
returned to investors, to pay down debt or to be recycled
into new opportunities with similar revenue profiles, like
those that can bid into the UK government’s Contracts for
Difference (CfD) scheme. A rotation into CfD-backed projects
would provide revenue visibility similar to that of the ROCs
and contribute to Foresight Solar’s future.
The Investment Manager and the Board regularly analyse
options to maximise Shareholder value.
£m
0
35
25
20
10
15
5
30
0%
35.0%
25.0%
20.0%
10.0%
15.0%
5.0%
30.0%
2025 2026 2028 2029 20312030
Project level debt repayment Portfolio gearing (RHS)
2027
20362032
2033 2034 2035
2040
2037 2038 2039
%
£m
0
160
100
80
40
60
20
120
140
2025 2026 2028 2029 20312030
Fixed revenue Merchant revenue
2027
20362032
2033 2034 2035
2040
2037 2038 2039
UK portfolio gearing profile
1
UK portfolio revenue profile
1
1. Graphs show assets operating for their entire useful lives with no reinvestment into the portfolio.
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Annual Report and Financial Statements 31 December 2024
Investment Manager’s report continued
Market context
United Kingdom
Fears of all-out war in the Middle East did not materialise
and, with European countries improving their natural gas
storage capacity, electricity prices were relatively stable in
2024, trending towards patterns more similar to those seen
before Russia’s invasion of Ukraine.
The biggest development of the year was the sweeping
election of a Labour government that took office with a
strong majority on 5 July 2024 and a desire to ratify its
pro-renewables agenda.
In his first fortnight in the role, the Secretary of State for
Energy Security and Net Zero approved three nationally
significant infrastructure projects, granting consent for
1.3GWof new solar capacity. Later that same month,
he raised the budget for Allocation Round 6 (AR6) of the
Contracts for Difference scheme by as much as £1.5billion
and, consequently, grew the numbers of projects awarded
the subsidy.
The new government has fashioned a pro-growth plan but
emphasised that “tough choices” were needed to plug a
“fiscal black hole” left by the previous administration. These
challenges were laid bare in the Autumn Budget, in which the
Chancellor of the Exchequer increased levies on businesses
but did not allay fears about more tax rises in the future.
The fall-out was near immediate. The yield on UK government
bonds rose to levels not seen since the 2008 financial crisis.
In a bid to placate the market, the Bank of England reiterated
its guidance of four interest rate cuts in 2025, potentially
lowering its benchmark to 3.75% by the end of the year.
Investors, however, remained unconvinced, with mixed views
fuelling uncertainty for renewable infrastructure investment
trust shares.
The volatility did not dissuade the government and, in
December, it unveiled the Clean Power 2030 Action Plan
to cement its commitment to an electricity grid at least
95% powered by renewables. According to the projections,
solar energy and battery storage capacity will have to triple
and quintuple, respectively, if the UK is to meet its lower
emissiongoals.
This was quickly followed by declarations that Auction
Round 7 will be the “biggest and most successful” ever held.
According to government spokespeople, consultations will
start in the first quarter of 2025 ahead of a formal process
later in the year. The CfD subsidy auction rounds in 2025
and 2026 will be crucial if the government is to reach its
decarbonisation targets.
Rounding off its stimulus list, this March the Planning and
Infrastructure Bill was unveiled to facilitate the construction
of critical infrastructure including renewable generation.
The new legislation, if approved, will change how clean
power projects feed into the grid, adopting a “first ready,
first connected” process that disincentivises speculative
applications and has the potential to accelerate the roll-out
of green energy.
In this seemingly positive environment, solar generation
capacity continued to expand. Statistics from the Department
for Energy Security and Net Zero (DESNZ), relating to October
2024, revealed the UK had 17.2GW of installed panels, a 6.3%
year-on-year jump, but still shortof what is needed.
One source of uncertainty that continues, however, is
the consultation for the Review of Electricity Market
Arrangements (REMA), with potentially far-reaching
implications for the country’s energy system. A decision is
expected later in 2025, with investors seeking clarity on the
potential impacts.
The Shard, London, UK
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Annual Report and Financial Statements 31 December 2024
Spain
In September 2024, the government officially presented its
update to the National Integrated Energy and Climate Plan
(PNIEC). The document is Spain’s local implementation of
EU-wide efforts to reduce emissions and outlines how the
country intends to reach carbon neutrality by 2050.
The aggressive targets for clean power generation will lead
to renewables contributing more than 80% of electricity
supply in 2030 and result in an expected 32% reduction in
greenhouse gas emissions compared to 1990 levels.
The revised document leans heavily on solar to deliver the
decarbonisation targets. According to the estimates, energy
from the sun will provide a third of the country’s electricity
generation. For that to happen, the government set a goal
of 76GW of installed solar capacity by 2030, doubling the
39GW expected in the previous PNIEC. However, achieving
this will require streamlined permitting processes and grid
infrastructure reinforcements to avoid bottlenecks.
The expected storage capacity also grew to 22.5GW from the
previous 20GW, reinforcing the belief that BESS is a natural
complement to intermittent renewables and that it has the
potential to ensure the stability and flexibility of the country’s
electricity system.
To incentivise the roll-out of more battery storage, in
December 2024, the government kicked off a consultation on
the new mechanism to create a capacity market for BESS.
The proposals aim to:
ș Ensure supply security by compensating storage
operators for availability
ș Provide investment certainty by introducing predictable
revenue streams
ș Facilitate the full integration of renewable energy,
especially solar, into the grid
The consultation is expected to inform a ministerial order,
leading to the first capacity auctions in 2025, and full
implementation of the new capacity market by 2026.
Australia
In 2024, Australia’s electricity market experienced notable
price fluctuations. The moves were influenced by varying
fuel costs and the ongoing transition to a more renewable
energy-based grid.
East coast wholesale gas prices averaged A$12.50 per
gigajoule in the third quarter, up from A$10.41/GJ in the same
period in 2023. These elevated figures, driven by increased
demand for fossil fuel-fired generation and liquefied natural
gas exports, contributed to higher electricity prices,
especially during peak demand periods.
The market also contended with extreme weather conditions,
which compounded the price volatility. Queensland recorded
peak demand during a hot, humid summer, while storm
damage affected supply in southern states in the early
months of 2024. Unusually cold weather in May, on top of low
wind output and a drought in Tasmania, meant higher demand
for more expensive gas-powered generation.
Mirroring this complex scenario, LGC prices were equally
volatile. Spot prices for the certificates opened the second
quarter of 2024 at A$46.75 and were pushed down to
A$27.25 in November. The decline was attributed to a regular
sell-off as some market participants sought to cover their
positions, accelerating the downward momentum.
Investment Manager’s report continued
Market context continued
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Annual Report and Financial Statements 31 December 2024
Investment Manager’s report continued
Power prices
Subsidy revenues
The buy-out price for Renewables Obligation Certificates, the
United Kingdom’s main support mechanism for large-scale
renewable electricity projects, for the 2024/25 annual
compliance period increased to £64.73 (2023/24: £59.01).
The change reflected the average monthly percentage
move in the Retail Price Index (RPI), a common measure of
inflation, during 2023. On average, Foresight Solar received
1.40 ROC/MWh across the UK portfolio. Meanwhile, the
2024/25 Feed-in Tariff rate for Yardwall, the only UK asset
to which the RO scheme does not apply, was £95.30/MWh
(2023/24:£90.60/MWh). The updated ROC and FiT prices for
the 2025/26 fiscal year will be confirmed by Ofgem in April.
In Australia, the average Large-Scale Generation Certificate
price secured by the portfolio for the full year was A$18.60
per certificate, lower than the A$24.12 registered in 2023.
This was due to step-down mechanisms in the contracted
price, although, considering the timeline to 2030, they were
inline with forecasts.
United Kingdom
Wholesale power prices continued to fall in 2024 from highs
seen in 2022 and 2023. The day-ahead auction average at
N2EX, the exchange-traded marketplace in the UK, closed
at £72/MWh across 2024, a 23% decrease on the £94/MWh
registered during the previous 12 months. The drop was
driven mostly by lower commodity prices, particularly natural
gas, which traded above historical averages but well below
the levels seen following Russia’s invasion of Ukraine.
80
100
40
60
0
20
120
2025
£/MWh
2030 2035
2050
20452040
December 2023 June 2024 December 2024
UK wholesale power prices forecasts
1
70
80
30
50
0
10
90
£/MWh
40
60
20
2025 2030 2035
2050
20452040
December 2024 December 2024 Foresight Solar Capture Price Estimate
UK wholesale vs solar capture power price forecasts
1
Source: Foresight Solar Fund Limited.
1. Power price forecasts reflect real 2024 prices.
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Annual Report and Financial Statements 31 December 2024
Investment Manager’s report continued
Power prices continued
United Kingdom continued
Throughout the year, Foresight Solar benefited from its active
hedging strategy, locking in attractive power prices and
securing income to underpin the dividend. Arrangements
signed during 2022, for example, fixed prices at higher rates
than the spot wholesale market offered during 2024, resulting
in price certainty into 2026 for a considerable proportion of
assets. As a result, the average realised price across the UK
portfolio, including fixed price arrangements and merchant
exposure, was £91/MWh – 26% above the N2EX average
for2024.
Price forecasts
The Investment Manager uses forward-looking power price
forecasts to measure the portfolio’s likely future income for
valuation purposes. The UK solar assumptions are composed
of a blended average of three independent consultants’
forecasts, adjusted by the Investment Manager for the
expected capture price discounts for solar generation – the
half-hourly market pricing during production periods – as
considered appropriate.
For assets with fixed price arrangements in place, the
contracted values are used instead of the blended forecast.
For sites with subsidy arrangements in place for a period
shorter than the assumed useful economic life, the blended
forecast is used for the remaining period.
When the assumed asset life extends beyond 2050, the
Investment Manager expects no real growth in forecast
powerprices.
In the UK, power price forecasts decreased compared to
December 2023 estimates due to the fall in natural gas prices.
The most significant drop was in the near term, covering
the next three years – a period for which the Company has
already fixed a large proportion of energy sales, therefore
limiting the impact from merchant price volatility.
Over the short to medium term, power prices are expected
to fall 1.7% in real terms each year as the market reverts to
historical averages by around 2032. From that point, prices
are forecast to flatten out, with a 0.3% decline expected
per annum as solar capture price discounts become more
prominent.
Spain
Higher-than-expected hydro reserves pushed down power
prices in the first quarter of 2024, forcing them to €20/MWh
in April from €75/MWh in January. The trend reversed from
May, however, and prices started to increase, reaching
€111/MWh in December, contributing to an average of
€63/MWh across the 12 months.
70
80
30
50
0
10
90
€/MWh
40
60
20
2025 2030 2035
2050
20452040
December 2023 June 2024 December 2024
Spain wholesale power price forecasts
1
Price forecasts
Power price projections decreased in the short to
medium term due to changes in forecast natural gas
prices. The growth of renewables and the deployment
of self-consumption solar capacity continued to add
downwardpressure.
In the long term, fundamentals in the Spanish energy
marketremain strong. A significant amount of new renewable
energy capacity, particularly utility-scale solar, isexpected
to connect to the grid in the coming years. Thisislikely
to result in lower power prices, particularly forsolar
generators, although the expected addition of storage and
interconnection capacity should serve to mitigatenegative
impacts.
Source: Foresight Solar Fund Limited.
1. Power price forecasts reflect real 2024 prices
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Annual Report and Financial Statements 31 December 2024
Investment Manager’s report continued
Power prices continued
Australia
Power prices diverged in Queensland and Victoria during
2024. In the first half of the year, increased renewable
generation and stable demand kept a lid on overall prices.
The picture was different in the final six months, when
unplanned coal outages and heatwave-induced demand
spikes resulted in average prices touching A$127/MWh in
Queensland.
In contrast, Victoria recorded the lowest average price in the
National Electricity Market (NEM) at A$45/MWh in the last
quarter of 2024, supported by strong renewable output and
transmission constraints limiting exports.
Renewables supplied a record 46% of the market’s electricity,
with solar generation reaching new highs, underscoring the
growing impact of intermittent renewables on “old” dynamics.
Price forecasts
In 2025, electricity prices in the NEM are projected to decline,
particularly in Queensland and Victoria. The Australian
Energy Market Commission forecasts a 15% decrease in
electricity prices for Queensland and a 9% reduction for
Victoria. These anticipated declines are attributed to the
increasing integration of renewable energy sources and
advancements in energy technology.
Several factors support these forecasts. Renewable
energy capacity is expected to increase significantly, with
more large-scale solar, wind and battery storage projects
coming online, reducing reliance on expensive gas plants.
Additionally, the completion of network upgrades, including
the VNI West and QNI transmission projects, will improve
energy flows between Australian states, enhancing grid
reliability and reducing price volatility.
70
80
30
50
0
10
90
A$/MWh
40
60
20
2025 2030 2035
2050
20452040
December 2024June 2024December 2023
70
80
30
50
0
10
90
A$/MWh
40
60
20
2025 2030 2035
2050
20452040
December 2023 June 2024 December 2024
Queensland wholesale power price forecasts
1
Victoria wholesale power price forecasts
1
Source: Foresight Solar Fund Limited.
1. Power price forecasts reflect real 2024 prices.
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Annual Report and Financial Statements 31 December 2024
Investment Manager’s report continued
Operational review
Global portfolio performance
Across Foresight Solar’s global portfolio, poor irradiation –
4.5% below base case, contributed to electricity generation
being 7.0% lower than expected. There were challenges with
poor weather in the UK and curtailment and negative power
prices in Australia.
Status of contracted revenues
The Investment Manager monitors opportunities to enter
new arrangements to fix and to hedge prices up to five years
ahead. The goal of this active power price management
strategy is to provide more certainty over future revenue and
ensure dividend cover.
Post period, Foresight Solar secured NAV-accretive hedges
for 2025 and 2026, driving total contracted revenues to 88%
and 69%, respectively. Of the total now hedged, a portion
from 2026 is under fixed volume baseload agreements, with
the remainder being pay-as-produced.
As elevated fixes agreed during the pandemic start to roll
off, the Company maintains its attractive revenue profile with
steady, covered income for Shareholders.
The table below sets out the average hedged price for the
UK portfolio in each calendar year so far, and the proportion
of global generation that is considered contracted as at the
publication of this report.
2025 2026 2027
Average hedged price for the UK portfolio (£/MWh) £86 £86 £77
Proportion of contracted revenues for the global portfolio 88% 69% 62%
Paddock Wood, UK
60
40
20
0
80
100
%
2025
Contracted revenue (PPA, hedges)Contracted revenue (subsidy) Merchant revenue
2026 2027
Revenue profile breakdown
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Annual Report and Financial Statements 31 December 2024
United Kingdom portfolio performance
The UK operational assets performed below expectations during the year, with electricity generation 6.0% under base case after adjusting for financial compensation received, reflecting annual
irradiation that was 4.7% lower than forecast.
As explained throughout the year, historically low irradiation in the Company’s main market posed a challenge for electricity production. Data from the Department for Energy Security and Net
Zero shows that 2024 had the lowest amount of sun hours since 2013, leading to the worst period of generation in Foresight Solar’s 11 years since IPO. The Company’s regular outperformance
demonstrates the appropriateness of its budget and yield assumptions.
UK 12-month average daily sun hours 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Average 4.5 4.4 4.2 4.1 4.7 4.5 4.6 4.1 4.9 4.3 3.8
Production-weighted average 5.4 5.4 5.0 5.0 5.8 5.4 5.7 5.0 5.9 5.2 4.7
Source: Department for Energy Security and Net Zero.
Irradiation and portfolio
productionagainst budget
Year ended
31 December
2014
Year ended
31 December
2015
Year ended
31 December
2016
Year ended
31 December
2017
Year ended
31 December
2018
Year ended
31 December
2019
Year ended
31 December
2020
Year ended
31 December
2021
Year ended
31 December
2022
Year ended
31 December
2023
Year ended
31 December
2024
Irradiation +1.8% +0.6% +0.2% (2.2)% +6.4% +3.8% +8.5% +0.6% +9.4% +2.1% (4.7)%
Production +1.4% +4.5% (4.0)% (4.6)% +4.9% +3.9% +8.4% +1.0% +8.6% +0.7% (6.0)%
Source: Foresight Solar Fund Limited.
During the period, no material events occurred, but a few assets were impacted by transformer, switchgear or HV cable failures. In each instance, the Asset Manager proactively dealt with the
incidents, drawing on the spare parts inventory to minimise downtime – in line with the Company’s established strategy.
As with many in the sector, Foresight Solar continues to deal with supply chain reliability challenges, particularly with certain inverter manufacturers. Following the replacement programme executed
in 2023, the Asset Manager rolled out an improved repair service for failing inverters, which is now well established and has resulted in improved availability and better performance for the portfolio.
The Asset Manager works hard to foster good relationships with local distribution network operators, and has regularly negotiated to reduce the number of days required for planned outages or to
move them to periods of lower irradiation. Despite this proactive engagement, the country’s sites remain at risk from outages and there were stoppages throughout 2024, albeit typically in the lower
irradiance months. Excluding these interruptions, production during the year was 5.6% below estimates.
Investment Manager’s report continued
Operational review continued
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Annual Report and Financial Statements 31 December 2024
Investment Manager’s report continued
Operational review continued
United Kingdom portfolio performance continued
Health and safety
Across the portfolio, there were 10 incidents in 2024. The
Asset Manager dealt with them promptly and there were no
serious injuries or material damage to equipment.
Health and safety services to the SPVs remain in place via an
independent consultancy that provides additional support.
The Asset Manager regularly monitors incidents and uses the
feedback from these occurrences to raise awareness, drive
improvements and limit risks.
Security
There were two thefts during the year. One incident caused
minor impact on Steventon’s performance, whilst the other, at
Copley, had no meaningful consequence. The Company has
filed insurance claims to seek compensation for any material
damage and production losses.
On the digital front, work has continued to upgrade assets
and improve cyber resilience, including the replacement of
all on-site communication equipment to enhance security
provisions at the solar farms.
Asset optimisation: lease extensions Capacity (MW)
Potential NAV
uplift (£m)
Landlord discussions 214 7.3
Offer submitted 149 6.7
Offer accepted 34 0.9
Completed 68 2.3
Total 465 17.2
The Company commenced reviewing replacement options
after it discovered the potential for systemic issues in a
specific type of inverter. This process is motivated from an
abundance of caution rather than imminent risk since the
inverters were only present on sites representing a modest
proportion of portfolio capacity. It is, however, a good
example of the proactive steps a responsible asset manager
should undertake on an established operational portfolio.
Over the life of the sites, the Asset Manager has
addedvalue of some £86million by executing
Foresight Solar’s active power price hedging at
accretive figures, securing lease extensions, delivering
efficiency gains, improvements in operations and
maintenance, and renegotiating contracts with
favourable terms, among other measures.
Asset optimisation
Regardless of isolated issues, the Asset Manager pushed
forward with technical optimisation to improve performance.
This strategy has proven successful, reducing downtime and
driving operational efficiency.
Another key ongoing improvement workstream is the effort to
extend leases, which has direct, positive financial implications
as the longer periods of land use translate to higher asset
valuations. The Investment Manager is currently prioritising
lease extensions of projects with a total installed capacity of
363MW, roughly half of the UK operational portfolio.
Throughout 2024, the Company signed and completed lease
extensions on the equivalent of 8MW of assets, and a further
34MW of capacity are currently in advanced discussions with
landlords.
Prudently, the Company does not assume useful asset lives
of 40 years until the corresponding lease arrangements
aresigned.
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Annual Report and Financial Statements 31 December 2024
Investment Manager’s report continued
Operational review continued
Spain portfolio performance
Lower-than-expected irradiation and weather-related
challenges affected electricity production at Foresight Solar’s
Spanish assets. High temperatures during the summer and the
Calima, the meteorological phenomenon that brings sand and
dust from the Sahara, had direct impact on generation.
In Granada, where the three Lorca assets are located,
works to meet the projects’ environmental commitments
restarted with the planting of vegetation. The biodiversity
improvements for the portfolio also include the installation
of ponds and the construction of bird nesting houses. This is
important for nature recovery and has operational benefits
as, for example, too much dust – particularly during the dry
season – risks causing panel soiling.
Virgen del Carmen secured its Project Acceptance Certificate,
reaching a significant milestone. Despite strong operational
availability, the site faced occasional curtailment, when
electricity production is suspended, from the country’s
national grid.
Australia portfolio performance
Periods of high curtailment and transmission constraints
resulted in generation from the Australian portfolio ending
the year 14.7% below budget. Irradiation was 4.8% under
forecasts, also contributing to the underperformance.
The Queensland assets were especially affected in
September and October, when Longreach, Oakey 1 and
Oakey 2 faced up to 50% curtailment during solar hours.
TheInvestment Manager has been investigating opportunities
to improve performance and, in addition to the early-stage
batteries being developed in-house, reached an agreement
with the Solar 150 offtake operator to allow Oakey 1 and
Longreach to continue generating power during negative
price periods – with a floor of 75% of LGC prices – which has
provided some revenue relief.
Production at Bannerton, in Victoria, meanwhile, fell below
budget due to transmission constraints imposed by the
Australian Energy Market Operator (AEMO).
Bird nesting house, Lorca portfolio, Spain
32
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Net Asset Value
Valuation methodology
The Investment Manager is responsible for providing fair
value market estimates of the Company’s underlying assets
to the Board every quarter. The models incorporate a broad
range of assumptions based on long-term forecasts and are
generally unaffected by short-term fluctuations, economic
gyrations or technical performance. Material changes to
long-term expectations typically have a greater impact.
The Investment Manager determines assets’ fair value using
discounted cash flows (DCF) from the date of acquisition.
Assets in development or under construction are valued
at the lower of cost or net realisable value until the date of
commissioning and start of operations. Revenues and costs
accrued during construction or during commissioning do
not form part of the DCF calculation when arriving at a fair
valuation.
Based on the recommendation of the Investment Manager,
the Board reviews and challenges the operating and financial
assumptions, including the discount rates, used in the
valuation of the portfolio before approval.
This approach adheres to IFRS 13 accounting standards, as
well as the International Private Equity and Venture Capital
Valuation (IPEV) guidelines. (See page 125 for more details.)
Discount rates for valuation
The Investment Manager regularly reviews the discount rates
used to value the portfolio to ensure they remain in line with
the Company’s risk profile and that they reflect potential
market changes.
This analysis is based on valuation information from
transactions of comparable assets, reviews of the
risk premium above the risk-free rate, and input from
independent third parties.
When assessing climate change risk, the Investment Manager
benchmarks the discount rate against a similar asset base to
ensure the underlying climate risk exposure is factored into
considerations.
After evaluating those factors, the weighted average levered
discount rate across the Foresight Solar portfolio closed the
year at 7.88% compared to 8.03% on 31 December 2023.
The decrease reflects a reduction in the discount rates for the
Spanish assets. This was in response to strong transactional
data, including the sale of a 50% stake in the Lorca portfolio.
Discount rates were lowered by 100bps across assets in the
country to 6.25% for Virgen del Carmen and 6.75% for Lorca
to reflect the additional risk of leverage.
The discount rate used for UK asset cash flows which have
received lease extensions beyond the initial investment
period of 25 years is taken to 9.0% for subsequent years,
reflecting the merchant risk of the expected inflows beyond
the first two and a half decades.
In the Australian portfolio, assets are valued using a discount
rate which is dependent on the level of contracted revenues.
The weighted average discount rate decreased to 8.29%
(31December 2023: 8.37%).
Asset lives
The expected weighted average life of the UK portfolio at
31 December 2024 was 31.3 years (31 December 2023:
31.1 years) from the date of commissioning. This represents
a remaining portfolio useful life of 21.5 years when the
historical operational periods are taken into account.
The average useful economic life (UEL) across 41 of the 50
operational UK assets goes beyond 25 years, averaging 32.8
years from the date of commissioning. Cautious operational
and lifecycle costs are incorporated into the extended useful
life period.
The expected UEL for Spanish assets held steady at 40
years (31 December 2023: 40 years) and at 37 years for
theAustralian sites (31 December 2023: 37 years).
Inflation
Income from Foresight Solar’s portfolio, particularly in the UK,
is correlated to inflation both through subsidies and exposure
to energy prices.
For valuation purposes, the Company forecasts inflation will
be 3.5% in 2025, falling to 3% in the period between 2026 and
2030, and then dropping to 2.25% from 2031.
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Annual Report and Financial Statements 31 December 2024
Investment Manager’s report continued
Net Asset Value continued
Movements in NAV
Foresight Solar’s NAV per share decreased to 112.3 pence in
2024 from 118.4 pence in the previous year. A breakdown in
the movement is shown in the graph.
Dividends paid
The Company paid £44.7 million in dividends during the year
to 31 December 2024.
Fund costs
Total costs were £9.4 million, predominantly composed of
management fees, financing charges and corporation tax.
Other adjustments
Working capital adjustments released £5.9 million.
Share buybacks
Foresight Solar spent £21.8 million to repurchase 24.4
million shares over the course of 2024. This was accretive to
NAV due to the purchase price being below the Company’s
holding Net Asset Value.
Foreign exchange movements
Fluctuations in exchange rates over the period negatively
impacted the GBP valuations of the Australian and Spanish
assets by £5.6 million.
Time value
A value uplift of £48.5 million resulted from moving the
valuation date forward and, therefore, bringing future cash
flows closer to the present (and discounting them less).
Project actuals
Reflects the cash performance of the portfolio compared
with the modelled forecast. Low irradiance across markets
and curtailment in Australia were the key drivers of the £18.2
million underperformance.
Power price forecasts
The Company uses forward-looking power prices to assess
the likely future income of its assets for valuation purposes.
The assumptions are based on a blended average of the
forecasts provided by third-party consultants every quarter.
The £13.0 million valuation decrease during the period
includes the impact of the changes to British, Australian and
Spanish price forecasts.
Inflation forecasts
The £1.6 million increase relates to an update for actual
2024 inflation and reflects the uplift of increasing the RPI
assumption for 2025 to 3.5% from 3.0%.
Revaluation of assets
The £5.6 million reduction reflects the write-down of
the battery portfolio in the first quarter of 2024 due to
a less positive market outlook for BESS. It also includes
the revaluation of the Lorca portfolio back to the RCF
methodology from the offer value.
Other portfolio valuation adjustments
Operational and financial updates to the portfolio, including
lifecycle costs, tax modelling and interest receipts on cash
balances, resulted in a £1.3 million downside.
600
640
620
700
680
660
£m
pence per share
£697.9m
(£44.7m)
(£9.4m)
£5.9m
(£21.8m)
(£5.6m)
(£18.2m)
(£13.0m)
(£5.6m)
(£1.3m)
£48.5m
£634.4m
NAV:
December
2023
Dividends
paid
Fund
costs
Share
buybacks
Revaluations
Power
forecasts
Inflation NAV:
December
2024
Project
actuals
Forex
-7.8p
-1.6p
Other
adj
+1.0p
+1.1p
-1.0p
-3.2p
Time
value
+8.5p
-2.2p
+0.3p
-1.0p
112.3p
£1.6m
Other
-0.2p
118.4p
Movements in Net Asset Value
Strategic Report
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34
Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Investment Manager’s report continued
Net Asset Value continued
Movements in NAV continued
Valuation sensitivities
Where possible, assumptions are based on observable
market and technical data. In many cases, such as forward
power prices, independent advisors are used to provide
evidenced information, enabling the Investment Manager
toadopt a reasonable approach.
The chart on this page shows the impact per share of
changes in key valuation assumptions on NAV.
The Investment Manager has set out the inputs which it has
ascertained would have a material effect on the NAV in note
16 to the Financial Statements. All sensitivities are calculated
independently of each other.
United Kingdom portfolio valuation
The table on this page demonstrates the breakdown of
Foresight Solar’s UK portfolio valuation in £m/MW over
recent periods.
The reduction over the course of 2024 was driven by cash
movements from the portfolio and debt repayments, both of
which lowered the total enterprise value of the assets.
All amounts presented in £million
31 December
2024
30 June
2024
31 December
2023
30 June
2023
Portfolio value 543.7 584.2 584.1 620.2
Cash held 18.9 25.4 25.4 14.8
Portfolio equity valuation 524.8 558.8 558.7 605.4
Debt 271.7 283.1 290.7 301.7
Enterprise valuation 796.5 841.9 849.5 907.1
Capacity (MWp) 723.1 723.1 723.1 723.1
£m/MWp 1.10 1.16 1.17 1.25
NAV per share
-25p -20p 25p20p-10p 10p-5p 5p—
Exchange rate
(+/-20%)
Operating costs
(+/-10%)
Tax ra te
(+/-1%)
-15p 15p
Inflation rate
(-/+1.0%)
£58.3m
(£56.3m)
£16.3m
(£17.0m)
£17.8m
(£14.4m)
£3.9m(£3.2m)
Power prices
(-/+20%)
Discount rates
(+/-0.5%)
Production
(-/+10%)
£22.4m
£100.6m
£91.0m
(£21.0m)
(£109.0m)
(£108.2m)
Impact on NAV and NAV per share
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
What’s in this section:
Foreword from the Chair 37
Approach to sustainability 39
Environment 41
Local communities 44
Supply chain 45
Sustainability
“ The Company’s direct investments into solar
energy generation and battery storage support
global decarbonisation targets and countries’
sustainability agendas.”
Shotwick, UK
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Foresight Solar had another positive year contributing to
delivering a lower-carbon economy. In 2024, the global
portfolio produced 992.3GWh of clean energy, enough to
power the equivalent of 367,500 UK homes for a year.
Operating high-performing assets, however, is not the only
way in which the Company plays a fundamental part in the
roll-out of solar electricity generation and battery storage.
The growing development pipeline demonstrates FSFL’s
commitment to the future of these technologies – and to
capturing higher returns for Shareholders.
Sustainability is an integral part of our business.
Environmental, social and governance criteria are
fundamental to our investment selection process, to the
day-to-day running of our projects and to our overall risk
oversight. At every step, the Investment Manager tracks
and analyses relevant data to enable the Board to make
better-informed decisions that result in improved financial
performance for investors and positive outcomes for
stakeholders.
This drive is what led us to seek equivalence to the
Financial Conduct Authority’s (FCA) Sustainability Disclosure
Requirements (SDR). This regulation, that came into force at
the end of 2024, seeks to improve trust in and transparency
of sustainable investment products. Despite Foresight Solar
being out of scope because of its Jersey domicile, the
Company’s inherent sustainability features, its London listing
and the characteristics of its Shareholders were reasons to
seek equivalence.
Sustainability performance
The strength of our sustainability performance provides
comfort as the Investment Manager works to refinance
Foresight Solar’s sustainability-linked revolving credit facility.
The chance to lower our interest costs depending on how
well we perform on environmental and social measures is
another strong connection between the business and positive
outcomes for society. We expect the new facility to be in
place by the second half of 2025.
Biodiversity net gain
In 2024, Foresight Solar started a project to register existing
qualities and identify potential biodiversity improvements
across its UK portfolio. This initiative came on the back of the
approval of the Environment Act 2021, which established a
market for biodiversity net gain credits in England.
As part of the research, an independent consultancy
conducted desktop analysis of the 50 UK projects, prioritising
13 locations for on-site surveys after the initial investigation
showed those were the ones with the most potential for
financial upside.
The next step is to plan and execute the necessary works.
This will be a thorough process, involving landowners,
ecological experts and local authorities to secure approvals
and implement the initiatives that will allow Foresight Solar to
generate tradeable biodiversity units.
Sustainability
Foreword from the Chair
Alexander Ohlsson
Chair
1.79kWh/
share
of energy generated
from renewable sources
622.2 gCO
2
e/
share
avoided compared to
country-specific grid
intensity
Strategic Report
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37
Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Sustainability continued
Foreword from the Chair continued
Regulatory update
The Investment Manager has been closely monitoring the
implementation of the UK Sustainability Reporting Standards
(UK SRS) and the Company awaits the results of the FCA’s
consultation and the government’s subsequent guidelines to
reflect these in its publications.
A similar approach is being taken in relation to information
needed under the Taskforce on Nature-related Financial
Disclosures (TNFD). As the UK regulator formalises its
guidance and provides clarity on what is required, Foresight
Solar will provide decision-useful data to investors.
Governance
The Board understands the importance of fostering a
culture that is diverse and inclusive. Studies have shown
the link between workplace diversity and positive financial
performance. Since Foresight Solar has no employees, a
direct measure of that diversity is Director representation.
As Lynn Cleary, the Chair of the Nomination Committee,
outlines in her report (see page 97 for details), one of her
role’s key responsibilities is to promote diversity of gender,
social and ethnic backgrounds, cognitive and personal
strengths among Board members. We recognise there is work
to be done and will continue searching for the most capable
and diverse candidates to fill positions as we follow through
with our succession plan.
Board gender diversity
67% male
(2023: 40% male)
33% female
(2023: 60% female
1
)
1. This is due to increase to 40% once Chris Ambler steps down at the next AGM.
Looking ahead
We are excited to continue learning and implementing
measures that lead to improved financial results and positive
societal outcomes.
We’re content the Investment Manager collaborated with
an independent consultant to provide limited assurance of
Foresight Solar’s sustainability data. This process aims to
verify the inputs and outputs of our environmental, social and
governance reporting and ensure the information is accurate,
reliable, and consistent. Going forward, we plan to do this
at full year results, demonstrating our commitment to the
highest standards of disclosure.
As part of the initiatives planned for 2025 are a series
of lifecycle assessments (LCAs) to better understand
the portfolio’s carbon footprint from manufacturing and
transportation of panels to operations and decommissioning.
In conversation with investors, this is something we have
heard is a useful exercise and we plan to update you in due
course.
In the next pages, you will find sustainability metrics, including
KPIs related to the United Nations Sustainable Development
Goals (SDGs) and greenhouse gas (GHG) emissions numbers.
We also update the disclosures from the interim results,
allowing stakeholders to track our progress in developing and
operating renewable infrastructure, alongside key data on the
Company’s environmental and social benefits – including on a
per share basis.
The Directors, the Investment Manager and the Company’s
service providers are focused on achieving Foresight Solar’s
sustainability commitments and will continue working to do
so. We look forward to updating you on how matters have
developed in the next Annual Report.
Alexander Ohlsson
Chair
19 March 2025
Strategic Report
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Sustainability and environmental considerations are at the
centre of Foresight Solar’s strategy, informing its investment
process and its asset management activities.
FSFL aims to contribute to climate change mitigation – whilst
seeking to identify risks and opportunities for the portfolio.
Akey component of this is the ability to quantify, measure
and enhance the impact of the Company’s operations.
To track and evaluate progress, the Investment Manager’s
Sustainable Infrastructure Investment Strategy is based on:
ș Establishing strategies informed by sustainable investment
principles and considering climate risks and nature-related
opportunities
ș Incorporating sustainability into processes using
proprietary systems to help assess projects’ sustainability
credentials and performance
ș Ongoing monitoring and management of sustainability
performance through the collection and analysis of
portfolio metrics, driving optimisation
ș Reporting transparently to all relevant stakeholders
Tracking progress
The nature of Foresight Solar’s operations means it is well
positioned to serve the needs of investors seeking to achieve
positive environmental and social outcomes alongside
attractive financial returns.
The inherent sustainability features, in addition to the
Company’s London listing and its Shareholder characteristics,
led the Board to seek equivalency to the Sustainability Focus
label – even though the Sustainability Disclosure Requirements
currently apply only to UK-domiciled funds. FSFL has
voluntarily sought to demonstrate alignment as a matter of
best practice and has made available pre-contractual and
consumer-facing disclosures on its website.
To secure a label, the FCA calls for investment trusts to
have clear and measurable KPIs to substantiate assets’
contributions to sustainability objectives.
Foresight Solar invests only in solar and battery storage
assets, both of which are eligible under the EU Taxonomy
for sustainable activities. The Company’s alignment with the
Taxonomy, reported below, is based on internal assessment
after analysing each project against the technical screening
criteria, inclusive of the Do No Significant Harm and Minimum
Safeguards elements.
At the portfolio level, the metrics quantify Foresight Solar’s
contribution to a lower-carbon electricity system. The
Company aims to grow its operating solar and BESS capacity
over time and, as its proprietary development pipeline
matures, FSFL will enable more assets that produce green
energy on the grid.
In addition to the key performance indicators that show
progress against the Company’s investment objective, to
demonstrate its commitment to achieving environmental
and social benefits, Foresight Solar presents quantitative
reporting against the UN’s Sustainable Development Goals
and their underlying targets.
The SDGs are a set of 17 objectives to mobilise the
international community to deliver sustainable development
by 2030. They represent a key driver of the Company’s
investment activities.
The tables on this and the following page demonstrate FSFL’s
performance against the KPIs of its investment objective and
the Company’s contribution to the relevant SDGs and their
underlying targets.
Sustainability continued
Approach to sustainability
Company
Maintain a minimum 70% alignment with an authoritative taxonomy
which will demonstrate the sustainability of the underlying assets 100%
Portfolio
Operational (total renewable energy capacity added)
United Kingdom 723MW
Australia 170MW
Spain 125MW
Total 1,018MW
Developed (total renewable energy capacity enabled)
United Kingdom —
Spain —
Total —
Investment objective KPIs
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39
Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Sustainability continued
Approach to sustainability continued
Good health
and well-being
Affordable and
cleanenergy
Industry, innovation and
infrastructure
Climate
action
Life
on land
Target: Substantially reduce the
number of deaths and illnesses from
hazardous chemicals and air, water
and soil pollution and contamination.
Contribution: Achieved through the
reduction of pollution and emissions
by the installation and management
ofclean energy generation assets.
Target: Increase the share of
renewable energy in the global
energymix.
Contribution: Achieved by reducing
reliance on fossil fuels via investment
in renewable energy generation.
Target: Develop reliable, sustainable
infrastructure to support economic
development and human wellbeing,
with a focus on affordable and
equitable access for all.
Contribution: Achieved by
future-proofing energy systems through
investment in generation assets using
the latest technologies to maximise
electrical output.
Target: Improve education, awareness
and human and institutional capacity
on climate change mitigation,
adaptation, impact reduction and
earlywarning.
Contribution: Achieved by raising
awareness and improving institutional
knowledge on climate change
mitigation.
Target: Take urgent and significant
action to reduce the degradation
of natural habitats, halt the loss of
biodiversity and protect and prevent
the extinction of threatened species.
Contribution: Achieved by preserving
the integrity of land through investment
in low-polluting technologies, and
introducing environmental initiatives
through active asset management that
improves biodiversity.
535,820kg
NOx (nitrous oxide) avoided
vs energy generation from gas
(2023: 649,711kg)
992.2GWh
renewable energy generated
(2023: 1,088GWh)
969MW
of renewable energy capacity
connected to the electricity grid
(2023: 969 MW)
351,451 tCO
2
e
emissions avoided compared to
country-specific grid intensity
(2023: 378,486 tCO
2
e)
85,319 TOE
avoided
tonnes of oil equivalent
contributing to the avoidance
offossil fuel use
(2023: 103,454 TOE)
9,327kg
PM10 (μm10 particulate matter)
avoided
(2023: 11,310kg)
367,504
UK homes powered for a year
(2023: 402,754)
392,935kg
SOx (sulphur dioxide) avoided
(2023: 476,455kg)
4,266kg
PM2.5 (μm2.5 particulate matter)
avoided
(2023: 5,174kg)
Sustainable impact reporting
Foresight Solar’s contributions to the SDGs are correlated to the Company’s portfolio and the amount of renewable energy generated in any given period. Variations in those factors and inputs will
have a direct effect on the KPIspresented below. In other words, higher electricity output translates into higher impact figures and vice-versa.
Strategic Report
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Financial Statements
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
In July 2024, diesel reserved for the on-site generator at
Yardwall leaked. The Asset Manager quickly took action to
blacklist the service provider responsible for the accident;
hired a specialist to remediate the soil; and, as is required
in these instances, contacted the Environment Agency for
awareness. The spill was fully remediated and the site has
been operating as expected.
Emissions reporting
Although Foresight Solar’s assets make a significant and
quantifiable contribution to the energy transition, to
decarbonising industry and to enhancing nature recovery,
there are still emissions associated with the operation and
maintenance of the portfolio.
To minimise its carbon footprint, the Company has continued
efforts to limit Scope 1 and Scope 2 emissions, over which it
has direct control. The lower Scope 1 emissions contributed
to Foresight Solar’s reduced carbon footprint.
The numbers would have been more impactful if electricity
consumption had been more efficient at Bannerton, which
does not rely on a renewable tariff for on-site supply.
Data assurance
The Investment Manager 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.
Sustainability continued
Environment
Key sustainability metrics
GHG emissions
4.56 tCO
2
e
Scope 1
(2023: 118.56 tCO
2
e)
194.81 tCO
2
e
Scope 2
(2023: 164.88 tCO
2
e )
102,567.54 tCO
2
e
Scope 3
1
(2023: 122,049 tCO
2
e)
Share of non-renewable energy consumption and production
98%
of assets with a renewables
tariff for on-site consumption
(2023: 97%)
85%
of overall portfolio consumption
from renewablesources
(2023: 94%)
100%
% of energy generated
fromrenewable sources
(2023: 100%)
1. Data quality is assessed to be Data Quality 4.
Environmental footprint
0.31 tCO
2
e /£m invested
Carbon footprint
(2023: 0.41)
1.03 tCO
2
e /£m revenue
weighted average carbon intensity
(WACI) of investee companies
(2023: 1.51)
Sustainability metrics per outstanding share
1.79 kWh/share
(2023: 1.86 kWh/share)
622.2 gCO
2
e avoided/share
(2023: 642.3 gCO
2
e avoided/share)
Strategic Report
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41
Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Sustainability continued
Case study
Measuring potential for biodiversity units
In 2024, Foresight Solar started a baselining assessment to
gauge the potential for creation of biodiversity net gain (BNG)
units across its UK projects.
The initiative came on the back of the approval of the
Environment Act in England, establishing a strategy to
develop land and contribute to the recovery of nature. The
legislation mandates new infrastructure needs to deliver a
minimum 10% biodiversity net gain. Those that are not able to
do so have to buy units to compensate, creating a mechanism
like the already established carbon credit market.
The first step of the assessment was a comprehensive
desktop study to identify the locations with the highest
potential for enhancements and creation of BNG units.
The filter identified 13 sites that were highly suitable for more
in-depth analysis. The selected projects then underwent
detailed, in-person ecological investigations to determine
the feasibility and impact of potential interventions. These
reviews focused on existing habitat quality, surrounding
ecosystem connectivity, and the capacity for improvements
that could be captured as units.
The 13 locations deemed most suitable for on-site surveys
are shown on the map on the next page.
With site data to hand, planning can now begin to implement
the necessary works across locations at the optimum time of
year, maximising chances of success – and subsequent unit
creation.
Among the outlined enhancements are:
ș Wildflower meadow, hedgerow and woodland buffer
creation and restoration to improve biodiversity
ș Grassland enhancement, supporting native flora and fauna
by seeding a diverse plant mix that appeals to pollinators
and wildlife
ș Hedgerow and tree planting, strengthening ecological
corridors to facilitate wildlife movement
ș Native whip planting, introducing species such as field
maple, hazel, dogwood, hawthorn, spindle and dog rose
toenhance habitat variety
ș Woodland creation and scrub enhancement, maintaining
habitat diversity to support a range of species
ș Diverse scrub species introduction, increasing plant
variety to enhance ecological resilience
ș Pond and wetland creation, improving water retention and
supporting diverse aquatic ecosystems
ș Ditch enhancements, improving connectivity and water
quality across sites
Foresight Solar’s asset management and sustainability teams
are already involving key stakeholders, such as landowners,
to secure permissions and ensure alignment with land
management practices; ecological experts, to validate and
refine proposed enhancements; and local authorities to
navigate regulatory approvals and compliance requirements.
The planned enhancements, supported by a robust
assessment and stakeholder engagement plan, position
this baselining project as a model for integrating renewable
energy development and operation and nature-positive
recovery.
As implementation progresses, regular monitoring and
adaptive management will be key to optimising ecological
and financial outcomes.
Shotwick, UK
Strategic Report
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
[Page title] continued
[Underhead]
Sustainability continued
Case study continued
Measuring potential for biodiversity units continued
Sustainability continued
Case study continued
1
9
7
8
10
2
5
3
6
11
13
12
4
1
Abergelli
Capacity (MW)
8
Location
West Glamorgan
Potential BNG
units
1
37
7
Pen Y Cae
Capacity (MW)
7
Location
Carmarthenshire
Potential BNG
units
1
24
10
Trehawke
Capacity (MW)
11
Location
Cornwall
Potential BNG
units
1
20
9
Shotwick
Capacity (MW)
72
Location
Flintshire
Potential BNG
units
1
28
8
Playters
Capacity (MW)
9
Location
Devon
Potential BNG
units
1
10
2
Field House
Capacity (MW)
6
Location
Hampshire
Potential BNG
units
1
7
5
High Penn
Capacity (MW)
10
Location
Wiltshire
Potential BNG
units
1
10
3
Gedling
Capacity (MW)
6
Location
Nottinghamshire
Potential BNG
units
1
8
6
Nowhere
Capacity (MW)
8
Location
Lincolnshire
Potential BNG
units
1
12
12
Wymeswold
Capacity (MW)
34
Location
Leicestershire
Potential BNG
units
1
9
11
Welbeck
Capacity (MW)
11
Location
Nottinghamshire
Potential BNG
units
1
13
13
Yarburgh
Capacity (MW)
8
Location
Lincolnshire
Potential BNG
units
1
9
4
Highfields
Capacity (MW)
12
Location
Essex
Potential BNG
units
1
51
1. Biodiversity units consist of habitat, hedgerow and watercourse units.
Strategic Report
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43
Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Sustainability continued
Local communities
Local impact with community benefits payments
Across geographies, in 2024, Foresight Solar contributed
almost £300,000 to local communities. This money is used in
myriad ways by regional authorities to improve the lives of
residents near the Company’s operational sites.
During the year, the cash was invested in infrastructure to
combat speeding, enhance local infrastructure, be it of bus
shelters or community centres, acquire equipment for new
playgrounds and for emergency care, among others.
Melksham Without Parish Council, Wiltshire
Verwood Town Council, Dorset Different towns and villages across the UK
Foresight Solar’s contributions were put towards different
initiatives, including the surface cleaning of a local area to
allow children to play safely. Part of the funds was also
used to extend the path of a local park, as well as for
the purchase of street furniture, making green areas and
streets more pedestrian-friendly and accessible.
A substantial grant was dedicated towards several
infrastructure developments and improvements in the
community.
Renovation projects included the replacement of floors
at both the Verwood Road Evangelical Church and the
Three Legged Cross Village Hall. Additionally, the money
contributed to the rehearsal costs and subsequent
hosting of a digital sound mixer at the Verwood
PantomimeSociety.
During the 2023/24 school year, FSFL’s partnership with
Earth Energy Education, a consultancy, resulted in more
than 1,000 children from 16 different schools attending 12
site visits and participating in 21 in-school workshops.
The pupils were offered the opportunity to see how
solar farms work and how they can contribute to a
lower-carbon future – as well as to local communities.
Atthe same time, they learned about biology and physics.
Bournemouth, UK
Financial Statements
Governance
Strategic Report
44
Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Sustainability continued
Supply chain
There is no “one-size-fits-all” answer to solving supply chain
issues. To try and address the challenge, the Investment
Manager takes a layered approach to mitigate sustainability
risks. The combination of actions includes:
ș Selected geographies – Setting investment strategies
focused on locations with strong regulatory frameworks
ș Robust internal due diligence – Interrogating key
counterparties and their governance frameworks at the
project level
ș Supplier Code of Conduct – Referencing directly the
UN Guiding Principles on Business and Human Rights
and the OECD Guidelines for Multinational Enterprises,
and contractually binding counterparties to uphold the
guidelines set out in the document
ș Direct engagement – Interacting with primary, secondary
and tertiary suppliers to interrogate their approaches to
risk mitigation within their own supply chains
ș Enhanced due diligence – Using specialist third parties to
conduct in-person audits of higher-risk counterparties and
their facilities
ș Collaboration – Working with industry partners and peers
to deliver more effective engagement with key suppliers
ș Ethixbase – Enabling indirect interrogation of suppliers
across regulatory and sustainability risk via this
specialised service
As an investment trust managed by Foresight Group, the
Company’s policy and practices in relation to modern
slavery and human trafficking are covered by the Investment
Manager’s Modern Slavery Act statement.
The document sets out Foresight Group’s approach to
matters such as services and supply chain due diligence,
training, recruitment and welfare of employees and can
befound on the firm’s website.
Hunters Race, Chichester
Click or scan to
readthe statement
Strategic Report
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Risk and risk management
Shotwick, UK
Foresight Solar is exposed to multiple risks that can
affect its valuation, reputation and financial or operational
performance. The nature and levels of risk are identified
according to the investment objectives and existing policies,
with the Directors determining the acceptable risk tolerance.
The Investment Manager and the Administrator have a
comprehensive risk management framework to reduce the
likelihood and the potential impact of principal and emerging
risks. The Company relies on the Investment Manager’s
internal systems and controls and on external providers, such
as the Administrator, to effectively manage risk across the
portfolio and maintain an up-to-date risk register.
The Company has a detailed risk management framework,
which the Audit and Risk Committee reviews regularly along
with the risk register and overall risk management practices.
Key changes to the register are reported quarterly to the
Board and the Directors consider the risk framework at least
once per year.
Principal risks
Market sentiment towards the real assets investment trust
sector and its implications for the Company’s access to
capital continue to be the primary concern. With high interest
rates and increased appeal of fixed income products,
Foresight Solar’s shares have been trading at a discount to
the Net Asset Value for roughly 24 months. Whilst the Board
is comfortable with the underlying portfolio’s valuation, the
persistent discount indicates investors are demanding higher
returns. Elevated interest rates also result in more expensive
financing, although this is limited to FSFL’s revolving credit
facility.
Risks are identified according to the Company’s investment objectives and
existingpolicies, with the levels of risk tolerance ultimately defined by the Board.
The Directors have sought to mitigate potential impacts
through a capital allocation strategy that prioritises returning
cash to Shareholders and de-leveraging.
Meanwhile, the prospect of significant government
intervention in energy markets also remains a key risk. In
2022, the UK government launched a consultation for the
Review of Electricity Market Arrangements, with potentially
far-reaching implications for the country’s energy system.
A second consultation on the transition to Fixed Price
Certificates for projects accredited under the Renewables
Obligation scheme, which may impact FSFL revenues, was
launched in 2023 and is still finalising results.
The regulatory changes may threaten the future of energy
markets. The government’s decision following REMA is
expected in the first half of 2025, with locational pricing
seemingly gaining traction based on comments from the
Ofgem CEO. A radical transformation of the network has the
potential to lower bills for consumers but will come with a
long implementation period and at the expense of investors
looking to deploy capital in the country. Ofgem has also
outlined reforms to streamline the connection queue to
the grid. The revised approach would practically eliminate
speculative projects from the process, accelerating the
roll-out of renewable capacity and benefiting those with
capital available to be deployed immediately.
46
Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Financial Statements
Governance
Strategic Report
Risk and risk management continued
Principal risks continued
The Board has paid close attention to risks associated with
the electricity price outlook as forecasts have been mixed.
Whilst the portfolio is well hedged against near-term adverse
price movements, the Company continues to proactively
hedge its exposure at levels that support dividend cover in
years ahead.
The potential impact of supply chain risks, meanwhile, has
reduced as construction is completed and the distribution
network operator set a date for the energisation of Sandridge
BESS. Challenges with the manufacture and delivery of
certain inverters, however, persist. As the Investment
Manager and the Board consider options for Clayfords and
Lunanhead, exposure to construction projects is limited.
In any case, some risk to the valuation of the proprietary
development pipeline and to the supply of components for
lifecycle investments remains, which meant there were no
changes to these two risks.
Set out on the next pages are the most relevant principal
risks and uncertainties, along with their mitigants.
Access to capital
Regulatory change, including changes to subsidies
—
Near and long-term energy prices
—
Fund performance
—
Portfolio performance
—
Financial gearing
—
Counterparty risk
—
Supply chain
—
Development and construction
—
Changing climate patterns
—
More information on the risks that should be considered
before investing in the Company are in the Prospectus,
available at: https://fsfl.foresightgroup.eu/shareholder-
centre#KeyDocuments
Click or scan to
read our Prospectus
Emerging risks
Emerging risks have a greater degree of uncertainty.
TheBoard regularly reviews them with the support of
theInvestment Manager, the Administrator and other
relevantadvisors.
In a fast-changing world, the US election catapulted Donald
Trump back to the White House with potentially inflationary
policies. His administration’s “America first” approach risks
heightening geopolitical tensions, taxing global production
with trade wars and, consequently, increasing costs for those
developing and building renewable energy projects.
The uncertainty caused by Trump’s executive orders have
aggravated the complex macroeconomic environment in the
United Kingdom that affects not only real assets investment
trusts, but the entire asset class. In December 2024, an
activist hedge fund announced large positions in seven
equity-focused investment companies and started agitating
for change. Although the campaign was unsuccessful, it was
broadly understood to be the first push in a lengthier battle.
As steep discounts to NAV afflict the asset class and market
volatility remains, the threat from activists is likely to persist.
As the Board continues to integrate climate risk reporting,
it has monitored increasingly relevant concerns for the
portfolio. Evidence of evolving climate patterns is apparent
and these changes may have a direct impact on operational
and financial performance. (See the Task Force on
Climate-related Financial Disclosures section, from page 56,
for more detail on climate-related risks and opportunities.)
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Risk and risk management continued
Principal risk outline
Access to capital Change in the latest period: Increase
Risk summary Mitigation Trend and outlook
The risk: The challenging macroeconomic backdrop continued in 2024, with deteriorating
investor sentiment leading to further widespread de-rating of the renewable infrastructure
investment trust market. Share prices across the sector touched all-time lows and there is
no immediate route to narrow the discount in the near term. Investment trusts are effectively
locked out from raising new equity.
Why it exists: Markets experienced the sharpest period of fiscal tightening in a generation
between 2021 and 2023 as central banks significantly increased interest rates. This led to a
dislocation between fair asset prices and investors’ return expectations when compared to
the risk-free rate and returns from fixed income options.
Potential impact: The risk of reduced appetite for its shares is that the Company may
struggle to raise capital for new investments and be unable to grow, which would result in
long-term NAV decline.
The Company adheres to a disciplined capital allocation
approach and has taken a raft of actions aimed at
addressing the discount to NAV at which its shares have
traded.
The Board paused meaningful capital investment into new
projects to focus on paying down debt and returning capital
to Shareholders via buybacks.
The Investment Manager has also implemented a capital
recycling programme. Proceeds from the first phase were
used to repay the RCF. Cash from future divestments will be
used to further pay debt and returned to investors, as per
the stated allocation strategy.
Comparable transactions have taken place to confirm asset
valuations, but this has not had an impact on the Company’s
or the sector’s ratings.
Market sentiment towards listed renewable trusts remains
depressed with limited appetite from buyers of shares.
The protracted downturn has made this risk acute. Central
bank rates remain high and share price discounts to NAVs
have persisted.
Foresight Solar is sensitive to these external forces and must
position itself favourably in relation to peers. Reductions in
the UK benchmark interest rates would likely have a positive
impact on performance, but the Bank of England will weigh
cuts against existing inflationary pressures.
Regulatory change, including changes tosubsidies Change in the latest period: No change
Risk summary Mitigation Trend and outlook
The risk: Changes in political support for renewable energy have the potential to adversely
impact the subsidies available for renewable generation, whether on a prospective or
retrospective basis.
Why it exists: Whilst subsidies are underwritten by government support, they are open
to prevailing political pressures. There are well-known examples when they have been
retrospectively reduced, albeit with subsequent legal challenge, as was the case in Spain.
The UK government intervened in energy markets in 2022 with the implementation of the
Electricity Generator Levy. Since then, longstanding consultations on REMA and a transition
of ROC-backed projects to fixed price contracts remain open.
Potential impact: Any changes with retrospective effects may adversely impact the
Company’s valuation and its ability to meet return targets.
The Investment Manager monitors relevant regulatory
developments and political statements on an ongoing basis
across all markets the Company operates in.
The Investment Manager’s ability to influence political
decision-making on its own is limited, and it has, therefore,
become a member of investor groups and trade
associations which lobby on behalf of the industry.
The Investment Manager continues to liaise with industry
representatives and peers and takes part in direct
discussions with governments to understand the direction of
travel for policy and, as far as possible, mitigate downside
risk for the Company.
Energy prices remain a key political issue. Progress to
Net Zero and energy security are also key themes, with
substantial public and private investment required to reach
lower emissions goals.
The UK government, elected in July 2024, has been
supportive of renewable deployment and, to encourage
further investment into new clean energy generation,
appears less inclined to radically change electricity markets.
A challenging economic outlook, however, could pressure
leadership to find ways to reduce energy prices, centring on
unappealing measures from REMA.
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Annual Report and Financial Statements 31 December 2024
Risk and risk management continued
Principal risk outline continued
Near-term energy prices Change in the latest period: No change
Risk summary Mitigation Trend and outlook
The risk: The price at which a solar plant sells its electricity is determined by market
forces. Fluctuations in short-term prices may negatively affect the Company’s revenues and
dividend payments.
Why it exists: Electricity prices can be broadly affected by supply-side, demand-side and/
or regulatory risks. A decline in market price could adversely affect the value of electricity
generated by solar assets and, consequently, the Company’s financial position.
Potential impact: A sudden fall in unhedged power prices could result in Foresight Solar not
generating sufficient cash to pay its dividends.
In the short and medium term, the Company manages
energy price risk by actively hedging its production. FSFL
has adopted a strategy to minimise the impact of power
price volatility on future cash flows by entering fixed price
arrangements for the sale of the energy it produces and by
using financial instruments. The goal is to achieve:
ș A minimum percentage of fixed revenues representing
60% of expected total annual revenue
ș A target percentage of annual fixed revenues
representing 75% of expected total annual revenue on
atwo-year rolling basis
The Company has fixed more than the minimum 60% target
for total annual revenue for a few years ahead and the
Board does not perceive there to be significant risk in fixing
further amounts at attractive rates.
Forward wholesale electricity prices in the UK have mostly
stabilised, settling closer to the long-term average after
volatility caused by Russia invading Ukraine.
The market is, however, susceptible to external shocks and
geopolitical tensions may lead to higher electricity prices.
Long-term energy prices Change in the latest period: No change
Risk summary Mitigation Trend and outlook
The risk: Downward adjustments to long-term power forecasts have the potential to
significantly impact NAV and Foresight Solar’s ability to meet its future obligations and
dividend payments.
Why it exists: Power curve forecasters generally assume that the mass deployment of
renewable energy producers with a low marginal cost of generation will limit real price
increases in the long term. The potential for energy market redesign also presents a risk
if it results in lower-than-expected long-term power prices.
Potential impact: A greater reduction in future power curves than currently forecast may
have a significant negative downside effect on the Company’s NAV in the short term and
reduce dividend cover in the medium to long term.
Whilst the Company can readily fix power prices using PPA
agreements for up to five years ahead, it becomes more
challenging further into the future due to falling liquidity.
Financial hedges provide access to deeper, more liquid
markets under a variety of structures. There is also a
developing corporate PPA market, offering longer-term
offtake agreements of up to 15 years.
Notwithstanding the above, the risk remains that long-term
power curves drop significantly. That would then be
reflected on the long-term PPA market as well.
FSFL uses a blended rate of three specialist power price
forecasters that estimate market prices to 2050.
The long end of the power price curve, which has been
mostly stable, has begun to tick up since the second half of
2024. Regardless, long-term power prices remain difficult
to predict as they are a function of supply and demand and
changes to the market.
The outcome of REMA, which could have a profound effect
on energy prices, is expected in the first half of 2025.
Positive price signals will continue to be required to
encourage the scale of renewable energy deployment
needed to meet Net Zero targets.
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Annual Report and Financial Statements 31 December 2024
Risk and risk management continued
Principal risk outline continued
Fund performance Change in the latest period: No change
Risk summary Mitigation Trend and outlook
The risk: The Company performs materially below its peer group in terms of its stated
investment objective, leading to a loss of confidence from investors.
Why it exists: Meeting the investment objective in a dynamic and competitive marketplace
is a challenge that requires the Investment Manager and the Board to implement good
strategic decisions and stay on top of key market developments.
Challenging market conditions have made comparisons between funds starker, with
increased scrutiny on corporate actions. There are calls for consolidation and heightened
takeover risk.
Potential impact: Risk of reduced appetite for its shares means Foresight Solar may struggle
to raise capital for new investments and be unable to grow. This would, in turn, result in
long-term NAV decline.
It is the Investment Manager’s role to deliver the Company’s
mandate with oversight from the Board. Foresight Group
continuously monitors performance and, with the assistance
of the brokers and the Administrator, analyses peers’
performance, reporting regularly to the Directors.
The Board oversees the Investment Manager’s delivery
on an ongoing basis and specifically via the Management
Engagement Committee.
The current challenging macroeconomic environment is
affecting the entire asset class. Setting FSFL apart, the Board
and the Investment Manager have followed through on a
series of proactive measures, demonstrating disciplined
capital allocation, delivering on asset disposals, reducing
leverage with debt repayments, and returning capital to
Shareholders via buybacks.
Investor sentiment towards the asset class has not
improved. Share prices touched all-time lows and discounts
to NAVs persist with no obvious route to a narrowing in the
near term. This situation impacts the entire peer group,
with renewable energy investment trusts trading at steep
discounts. Investors are demanding more action and
activism is gaining prominence.
The Directors have extended the divestment programme to
sell more than the Australian portfolio and are exploring all
options available to provide the best outcome for investors.
The Company will face another discontinuation vote at the
June AGM after trading at a discount of more than 10%
during the 2024 financial year. If Shareholders favour a
change in status quo, the Board will have to put forward a
proposal for change within three months of the result.
Portfolio performance Change in the latest period: No change
Risk summary Mitigation Trend and outlook
The risk: Foresight Solar’s operating portfolio meaningfully underperforms in comparison to
budgeted expectations.
Why it exists: There are multiple factors that could result in asset underperformance,
including poor technical operation, network issues, low irradiation or overly optimistic initial
assumptions.
Issues in specific geographies have the potential to cause an outsized impact.
Potential impact: Underperformance of a significant proportion of the portfolio or systemic
issues resulting in excessive downtime may threaten the Company’s ability to meet its
obligations to Shareholders and to creditors.
Diversification is a primary mitigant to systematic
underperformance. This comes in many forms, including
geographical and technological, but also of revenue streams,
equipment manufacturers and electricity offtakers.
The Company’s portfolio is sufficiently diversified that
no one single issue should be large enough to threaten
Foresight Solar’s financial resilience.
The Asset Manager also closely monitors O&M contractors’
performance to ensure a high quality of service. The
portfolio has a variety of providers, and services are
periodically re-tendered.
The active portfolio management also includes a spare parts
strategy and engagement with DNOs to minimise downtime.
As the UK portfolio reaches its second decade, Foresight
Solar enters a key phase of lifecycle works when major
components like inverters require replacement.
A robust lifecycle plan and a credible spare parts strategy
act to mitigate the expected downtime from works.
Remaining on top of key lifecycle works in an ageing
portfolio will continue to require active asset management.
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Risk and risk management continued
Principal risk outline continued
Financial gearing Change in the latest period: No change
Risk summary Mitigation Trend and outlook
The risk: Foresight Solar’s subsidiaries and its investments have in place third-party
debt facilities that can create greater potential for losses if cash is insufficient to meet
repayments. The Company may not be able to refinance existing borrowing on equal terms,
or at all.
Why it exists: The yield payable to Shareholders relies partly on banks making project
finance facilities available on normal terms. Any change to lender appetite or significant
alterations to terms would impact the yield to Shareholders.
The significant rise in interest rates in 2022 and 2023 carries the risk of placing greater
pressure on FSFL finances due to higher variable payments and/or refinancing risk.
Thevariable interest rate payable on revolving credit facilities linked to SONIA, for example,
isunpredictable.
Higher discount rates reduces portfolio valuation, which, in turn, increases the level of
gearing as a percentage of GAV/NAV.
Potential impact: A reduction in available cash flow at borrower level can impact the ability
to cover debt service obligations on a periodic basis and affect the Company’s capacity
to pay dividends. There is also the risk that a significant rise in interest rates would make
short-term facilities like the RCF materially more expensive at the point ofrefinancing.
The Investment Manager enters interest rate hedging
arrangements for a minimum of 80% of the outstanding debt
balances to reduce exposure to benchmark rates and limit
the risk of cash flow volatility from interest rate movements.
The Company’s long-term debt is fully hedged. In respect of
short-term, variable rate debt, Foresight Solar extended the
term of its RCF to 2026 and is in the process of renegotiating
the facility, with a resolution expected in the second quarter
of 2025.
The Investment Manager carried out a detailed restructuring
analysis and concluded that its existing debt terms are
favourable. It is unlikely to secure better rates in a higher for
longer environment.
Once the debt is arranged, the Investment Manager
continually monitors the covenants on the various facilities
to flag and mitigate risks.
Whilst interest rates began to fall in late 2024, there is no
expectation they will return to the record lows seen during
the 2010s.
The Investment Manager, therefore, reflects this in its
assumptions when refinancings fall due.
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Risk and risk management continued
Principal risk outline continued
Counterparty risk Change in the latest period: No change
Risk summary Mitigation Trend and outlook
The risk: The Company’s main contractual counterparties either fail or perform poorly,
resulting in them being unable to fulfil their obligations.
Why it exists: Foresight Solar outsources key services, such as construction, operations and
maintenance, and offtake arrangements, via PPAs, as well as financial hedges to third-party
specialists.
Elevated interest rates resulted in higher debt payments for many businesses, putting
greater strain on balance sheets. It is important to more actively monitor for signs that
counterparties on which the Company relies may be struggling.
Potential impact: If the counterparty fails, without sufficient protections the Company is left
with the responsibility of continuing the services and the potential associated additional
costs.
Counterparty risk is a key consideration in how the
Investment Manager structures its procurement and
contracting arrangements on the Company’s behalf.
When selecting contractors, for example, their credit
rating, balance sheet strength and payment record are all
taken into consideration. Parent company guarantees or
performance bonds are also typically sought to provide
downside protection. However, if a contractor failed during
construction, it would inevitably lead to delays.
The Investment Manager regularly reviews the opportunity
to benchmark key providers or tender for services such
as O&M and PPA offtakes. Contracts include termination
provisions for insolvency or poor performance and will
typically not be signed for more than five years without a
review point.
Replacement risk is relatively well mitigated by a
competitive landscape. For example, in the event of a PPA
offtaker failing, the Company would be able to quickly
replace the agreement in a liquid market. The risk, however,
could then be lower prices than those originally contracted.
The Company also maintains a diversified pool of suppliers
such that it does not become overly reliant on a single
counterparty.
The impact of higher borrowing costs will have started
to filter through to counterparties as existing debt
arrangements expire. Tax rises in the UK, including those
on employment, will likely be passed on to consumers via
higher prices.
The risk will be heightened if interest rates remain higher
for longer. In this case, balance sheet weaknesses may only
become evident in the next year or two.
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Risk and risk management continued
Principal risk outline continued
Supply chain Change in the latest period: No change
Risk summary Mitigation Trend and outlook
The risk: The challenge is essentially two-fold: i) access to key equipment and resources
shipped internationally is delayed or becomes increasingly expensive due to supply and
demand imbalances; and ii) the Company inadvertently acquires equipment required for a
solar park or BESS project that has had input from forced labour or modern slavery.
Why it exists: Global supply chains have been placed under significant strain following
geopolitical developments and international conflicts. The macroeconomic environment has
also impacted supply and demand dynamics.
In terms of ethical concerns, the solar supply chain has been under increased scrutiny in
recent years following articles about the use of forced labour and modern slavery in China.
Potential impact: Strained supply chains can lead to volatile pricing for components such as
solar panels and battery cells. This uncertainty can make investment decisions challenging
since these costs make up a significant proportion of project expenditure.
As a leading renewables investor, there are serious reputational and share price risks of
connection to firms suspected of using forced labour. That’s why the Investment Manager
is seeking to shed greater light on the supply chain that manufactures the components and
provides services used in its projects.
Significant fluctuations in the supply chain resulting in volatile
prices and/or shipping delays will happen periodically,
typically at times of market stress. The Investment
Manager not only maintains strong relationships with head
contractors but also key component manufacturers to
closely track pricing and supply dynamics. This supports the
decision-making when seeking contracts for construction
and timing of entry into arrangements.
In response to labour market and ethical concerns in the
solar and BESS supply chains, the Investment Manager has
developed its own strategy, building on UK trade association
advice.
To understand the existing supply chain, the Investment
Manager engaged a consultant for the following services:
ș Due diligence and ESG reports on suppliers
ș Analytics that can be split between assets and locations
ș Ongoing monitoring and remediation service
ș Modern slavery questionnaire and analytics
ș Follow-up service on suppliers’ questionnaire responses
Whilst there are limitations to the consultant’s ability to
cover the full supply chain, their services improve the
Company’s capability to identify risks, map suppliers that
may require support, and work to ensure processes are
more robust.
The Investment Manager continues to observe a positive
trend of engagement with the major solar panel and BESS
cell manufacturers, which recognise the risk of failing to
address concerns over working practices in their own
supply chains.
Whilst Foresight Solar is not currently procuring new
components given the reduction in capital spend, it is
continually refining this process.
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Risk and risk management continued
Principal risk outline continued
Development and construction Change in the latest period: No change
Risk summary Mitigation Trend and outlook
The risk: Challenges to secure the necessary rights for build-out; delays to construction
timetables, which may result in projects not being able to commence generating power and,
therefore, revenues; the risk of bad workmanship in constructing plants; and delays in the
connection of solar and BESS projects to the grid.
Why it exists: The Company invests in development and construction-stage projects that
are inherently riskier than those already operational.
Potential impact: Failing to secure permits may deem a development project unviable.
Meanwhile, if protracted, delays to generating revenue could negatively impact returns.
Projects may also have debt obligations that they are required to service, or a PPA, which
could place an investment in financial difficulties.
The Company has deployed limited capital to secure
its proprietary development pipeline. The deals are
back-dated, contingent on success and cross-collateralised
to minimise risks for Shareholders. The Investment Manager
has also taken a reasonable approach to how many projects
will effectively evolve through the pipeline and does not
expect a 100% success rate.
The use of third parties for development and construction
exposes the Company to risks associated with the
delegation of responsibility. This is mitigated through the
negotiation of contracts that shift delivery responsibility to
the contractor. Contractual risks will typically be mitigated
by performance bonds and milestone payments, with
funds transferred only once certain conditions are met.
Protections do not, however, apply to delays with grid
connections, which are the responsibility of the DNO.
In addition, the Investment Manager employs experienced
in-house construction professionals to oversee processes,
with support from independent advisors to ensure
milestones are achieved on schedule and in line with
specifications.
Given the increased focus on development and construction
assets for the portfolio, the Investment Manager has
strengthened its teams with additional resources.
Governments in the UK and in mainland Europe are
supporting renewable energy generation to meet
decarbonisation goals. This has led to increased supply of
development-stage projects, even if prices have also risen
due to higher demand.
There has been a notable increase in the number
of contractors returning to the UK market given the
government’s support for new renewable generation. This is
welcome competition as deployment increases.
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Risk and risk management continued
Principal risk outline continued
Changing climate patterns Change in the latest period: No change
Risk summary Mitigation Trend and outlook
The risk: Unprecedented changes to weather patterns affect the provision of sunlight due
to, for example, excessive cloud cover and storms or because of smoke from more regular
wildfires.
Why it exists: A consequence of global warming and climate change appears to be that
many regions of the world are experiencing changes to long-established climate patterns.
Potential impact: These are long-term patterns, and their impacts will be measured over
many years. The direct effect, however, is that solar irradiation in certain regions may end
up being materially different to that forecast at the time of a project’s development. With
financial projections based on historic data, if actual sunshine hours are lower than forecast,
less revenue will be generated.
The Investment Manager monitors and assesses the impact
of climate and weather-related risks on an ongoing basis.
Whilst there are limited actions the Company can take to
address climatic shifts, there are preventative measures that
can be put in place to mitigate their effects.
Before any investment decision is made, the Investment
Manager maps sustainability risks and opportunities.
Asset construction takes into consideration geographical
diversity – among other factors – to limit exposure to any
one market. If chronic patterns persist, the Investment
Manager can update its models and review the Company’s
presence in problematic areas.
The Investment Manager regularly monitors the portfolio’s
actual generation, comparing it to the base case assumption.
If there is a divergence, the Investment Manager investigates
the reasons and, if appropriate, updates the forecasts – the
change is also reflected in the underlying valuation.
Technological advancements are making modules more
effective and will help improve productivity. The Investment
Manager is monitoring this evolution and factors it into its
proposals for repowering and revamping plants.
2024 was a poor year for solar generation in the UK. Despite
being one of the hottest years on record, it recorded the
lowest amount of daily sun hours since at least 2013.
It is hard to foresee exactly what these impacts will be in the
long term, but the Company has tried to map the potential
financial outcomes and included a climate-related scenario
analysis from page 63.
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Risk and risk management continued
Task Force on Climate-related Financial Disclosures
Climate change-related risk
Risks traditionally considered non-financial, such as climate
change, have the potential to impact long-term returns.
Foresight Solar’s investments make a meaningful contribution
towards decarbonisation efforts, and the Investment Manager
is working to assess climate-related risks and opportunities
within the portfolio.
The consideration of climate-related matters is
embeddedthroughout FSFL’s governance, strategy
and riskmanagement processes. The Company has
responded tothe recommended disclosures for the year to
31December 2024, whilst also recognising that its reporting
will continue toevolve.
The Task Force on Climate-related Financial Disclosures
(TCFD) disbanded in January 2024, transferring monitoring
responsibilities to the International Sustainability
Standards Board (ISSB). This brings certainty to companies
and stakeholders, streamlining the sustainability and
climate-related disclosures landscape.
With the ISSB’s standards already outlined, it is up to
local regulators to make the guidance mandatory in their
jurisdictions. In the UK, the government is developing the UK
Sustainability Reporting Standards. The objective of the new
standards is to help companies publish consistent information
for the 2025 financial year.
Until the new regulatory framework is fully implemented, it is
considered best practice to follow the original TCFD format.
Governance
Board governance
Along with the Investment Manager, the Directors shape
Foresight Solar’s strategy, review performance and authorise
new initiatives. A key aspect of the Board’s role is to ensure
that sustainability considerations, along with the frameworks
to manage them, are incorporated in investment and
operational processes.
Ultimately, the Directors have responsibility and
accountability for FSFL’s climate-related risks and
opportunities. They set the risk appetite for new investments
and provide oversight for the management of the existing
portfolio. Foresight Group’s tracking of climate-related risks
and opportunities, for example, is part of the Management
Engagement Committee’s yearly review of the Investment
Manager’s performance.
Meeting at least once a quarter, the Board and the Investment
Manager discuss strategic risks and opportunities, ensuring
they are monitored and managed. Specific climate-related
risks are incorporated in the Business Risk Assessment,
tracked on an ongoing basis, and considered in the
Company’s strategy, as well as on the day-to-day operations
of its assets.
Role of the Investment Manager
In targeting new opportunities, the Investment Manager’s
Investment Committee (IC) is responsible for considering
market, regulatory and physical issues pertaining to
climate-related risks, as well as the opportunities open to
that investment. The IC will formally consider and review
each proposed transaction during a series of meetings that
apply increasing scrutiny as a deal progresses towards
approval.
It is the Investment Manager’s responsibility to track
all sustainability and climate change-related issues and
empower its deal teams to ensure that material concerns
are integrated into the investment, asset management and
reporting processes. Foresight Group’s in-house sustainability
function supports the due diligence process, liaising with
third-party consultants to undertake supply chain auditing,
and feeding into the final decision.
The Investment Manager assesses material sustainability
topics at the asset level for all potential infrastructure
investments. Pre-investment due diligence and ongoing
requirements for monitoring of sustainability factors are
structured around both regulatory requirements and key
frameworks.
Governance Strategy Risk management Metrics andtargets
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Foresight Solar Fund Limited
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Governance continued
Role of the Asset Manager
The asset management team is responsible for monitoring
the performance of, and the risks relating to, Foresight
Solar’s assets. They also review climate-related factors that
may present new opportunities or pose threats to long-term
project forecasts. This includes regular inspections of the
assets and, where specific issues become more frequent, the
escalation of potential systemic risk.
The Asset Manager also acts to proactively mitigate risks.
On certain sites, for example, it has overseen the installation
of cooling systems to transformers in response to changing
irradiation patterns and higher average temperatures.
Another responsibility of the asset management team is to
collect sustainability performance indicators for the portfolio,
including data for Scope 1 and Scope 2 emissions. This
tracking enables the Company to monitor aspects of its
impact on climate change.
At this stage, more work is required to better understand
Scope 3 emissions and the ability to reduce them. Since
this type of emissions is created by third-party providers,
such as operations and maintenance suppliers, it requires
working with partners to measure their carbon footprints
and gauge their plans to reduce them. Due to its complexity,
Scope 3 emissions in this report have been calculated
using the Partnership for Carbon Accounting Financials
(PCAF) methodology and the associated sector and
geography-specific emissions factors.
Strategy
Impacts of climate-related risks and opportunities
Climate change presents risks and opportunities. Foresight
Solar seeks to capitalise on the positives created by the
deployment of renewable energy technology and energy
efficiency, specifically in the solar and battery storage
markets.
The table on the following pages sets out a non-exhaustive
list of the strategic climate-related risks and opportunities
the Company has identified over the short, medium and long
term.
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Strategy
In the short to medium term, renewable energy is likely to
continue benefiting from political and societal support in the
drive to transition economies away from fossil fuels. The
regulatory and planning environments for solar and battery
storage in Foresight Solar’s target European markets are
expected to continue to develop favourably.
The need to limit emissions and transition to a lower-carbon
economy create an environment supportive of potential
growth if the Company can continue to source investment
opportunities with attractive returns and acceptable
risk profiles. Assuming that will be the case, this positive
environment should assist FSFL’s future growth prospects.
There can, however, be too much renewable generation.
Excess deployment of solar and wind can lead to congested
networks and curtailment or to price cannibalisation, when
increasing penetration of renewables drives down wholesale
electricity prices, undermining the profitability of those very
technologies. Foresight Solar’s active power price hedging
strategy can provide some protection, but this is a relevant
trend for the future.
Financial planning
Increasing power price volatility is a key example of how
climate-related changes and the energy transition present
both opportunities and challenges for the Company’s
finances. A prolonged fall in electricity prices and the
associated merchant revenue from the generating solar
portfolio is a significant risk. An active power price hedging
strategy, however, allows Foresight Solar to manage it. In
practice, FSFL secures a significant proportion of income
with fixed price agreements up to five years ahead, retaining
a level of merchant exposure to make sure it can capture the
upside if prices rise.
Significant deployment of renewable energy generation
in a short period of time could lead to power price
cannibalisation. Forecasters currently estimate a stagnation
of real power price growth in the medium to long term, and
a significant build-out of renewable generation at marginal
cost may push those assumptions below expected levels.
However, if this indeed happens, it will likely result in a
reduction in the number of new projects, as many would
become economically unviable, and thus a re-balancing
ofdevelopment.
The Company has entered a sustainability-linked credit
facility which provides the opportunity to achieve savings
on margins if specific criteria are met. Enhanced disclosure
of sustainability metrics presents an opportunity for clean
energy generators to differentiate their offering to current and
prospective Shareholders. It is reasonable to assume that
investors will increasingly screen opportunities and allocate
capital based on sustainable criteria, including compliance
with sustainability requirements, and to assume that the
companies that score well on those standards will be more
successful in attracting capital.
Existing portfolio
The possibility of extreme weather conditions becoming more
commonplace poses a risk to Foresight Solar’s assets, as well
as the markets in which the Company operates.
The UK, for example, has experienced more frequent severe
flooding. Severe droughts are expected to affect Spain more
often. To stay ahead of this, the Asset Manager continues to
carry out flood risk assessments and cautious geolocation
analyses across sites as part of its operational due diligence
and management.
Regular occurrences of extreme heat will also pose an issue
since the efficiency of solar panels falls at high temperatures.
Even in more moderate climates, higher temperatures can
lead to heat stress on equipment. This reality has already
started impacting the Company’s sites, and fans have been
fitted to cool inverters and transformers at Spriggs Farm and
High Fields. The expectation is that heat stress will become
more prominent in the future, and the Asset Manager is
preparing to adapt other sites.
On the other hand, the retirement of coal and nuclear
baseload generation, substituted by intermittent renewable
power, will likely lead to more wholesale power price
volatility in markets around the globe. These higher peaks
and lower lows are beneficial to the arbitrage trading
strategies of battery storage projects, and will be an
increasingly relevant component of their revenue profile.
Over the longer term, the Company monitors innovations to
ensure its core assets are not displaced. Solar is currently
well placed, offering one of the most cost-effective,
quick-to-deploy sources of energy production, but
recognising generating technologies will continue to evolve.
Risk and risk management continued
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Risk and risk management continued
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Climate-related risks
Risk
Warmer winters lead to lower power prices and pressure
generating assets’ revenue streams
Desire to meet governmental decarbonisation goals drives
competition and increases costs
Over-deployment of renewables causes challenges for electricity
networks
Description
ș Climate-driven changes in prevailing seasonal temperatures
may result in permanent fluctuations in electricity demand for
heating, for example, reducing demand across seasons and
impacting prices at times of the year.
ș This could result in less predictable, more volatile market
pricing.
ș Regulatory environment restricts fossil fuel consumption and
fosters the growth of renewables, raising commodity prices
and increasing costs to build assets.
ș More interest from investors and corporates in solar assets
leads to greater competition and higher acquisition and
construction costs.
ș Favourable policy and regulatory support leads to overbuild
of renewable capacity, resulting in a backlog of projects
waiting for connection to the grid and, later, lower electricity
prices.
ș Low power prices might affect investor appetite because of
insufficient returns, limiting capital available to continue the
build-out of renewables.
ș Regulators and policymakers may intervene in markets,
changing the established pricing structures due to new
dynamics (e.g. REMA in the UK).
Category
Transition – Market Transition – Market Transition – Market; Policy and legal
Likelihood
Likely Likely Likely
Time period
M
L
S
M
L
Impact
S
F
E S
F S
F
E
Investment
Manager
response
ș The portfolio’s geographic diversification, with a footprint
in the UK and Europe, and strategic composition, with two
technologies, provides some resilience to changing power
prices.
ș Increased market volatility promotes the case for flexible
storage assets, such as batteries, which realise greater
trading revenues during periods of heightened volatility.
ș Foresight Solar has changed its investment mandate to
include a modest level of development exposure, enabling it
to minimise the threat of competition by investing in assets at
an earlier stage.
ș The revised investment mandate also enables the Company
to take advantage of enhanced risk-adjusted returns by
bringing assets from development to ready-to-build to
operations.
ș The portfolio’s composition, which includes battery storage,
and its geographic dispersion reflect a diversified set of solar
assets by location and points of connection.
ș Foresight Solar actively participates in regulatory discussions
to try to influence policy and minimise potential negative
effects.
S S F EM L
Short term (0-3 years) Strategy Financial planning Existing portfolioMedium term (3-10 years) Long term (10+ years)
Governance Strategy Risk management Metrics andtargets
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Risk and risk management continued
Task Force on Climate-related Financial Disclosures continued
Climate-related risks
Risk
More frequent extreme weather events
cause damage to assets or negatively impact
production
Changing climate patterns fundamentally alter
the availability of renewable resource
Climate change places greater strain on natural
resources required for the construction and
operation of solar and battery assets
Technological developments displace existing
renewables assets
Description
ș Climate change is making extreme
weather events, such as storms, floods,
droughts, bush fires and high heat, more
frequent, potentially causing delays to
site construction, leading to downtime or
resulting in damage that reduces generation
at operational plants.
ș Unpredictable and unprecedented changes
to weather patterns affect the provision of
sunlight because of, for example, excessive
cloud cover or because of smoke from more
wildfires.
ș A positive regulatory environment, increased
climate focus and popularity of renewables
may lead to supply challenges and price
pressures on raw materials used in module
production and storage components, such
as silicon and lithium, respectively.
ș Scarcity of commodities in case of
production or supply disruptions after more
frequent natural disasters.
ș Government and philanthropic incentives
drive breakthrough innovation and cause
existing assets to be outdated or displaced
because of obsolescence or inefficiency.
Category
Physical – Acute Physical – Chronic Transition – Market; Technology Transition – Technology; Policy and legal;
Reputation
Likelihood
Very likely Likely Possible Unlikely
Time period
S
M
L
S
M
L
S
M M
L
Impact
S
F
E S
F S
F S
E
Investment
Manager
response
ș The Investment Manager assesses the full
range of acute physical weather risks during
sustainability-focused due diligence prior to
the closing of transactions and during the
acquisition process.
ș Site topography and a location’s
susceptibility to impacts from weather
events are taken into consideration during
the investment process to, for example,
minimise flood risks and limit the impact
from extreme wind.
ș Before any investment decision is made, the
Investment Manager applies its proprietary
methodology to map sustainability risks and
opportunities.
ș Construction decisions take into
consideration geographical diversity, which
ensures the portfolio’s exposure to any one
market is limited. If chronic patterns persist,
models can be updated and markets can be
reviewed.
ș The Company procures and stocks spare
parts crucial for operations, limiting
downtime in case of maintenance and
securing savings on procurement.
ș Foresight Group’s global network and its
management of other renewables funds
provide the Company with scale benefits
inprocurement and purchases.
ș Innovations would take time to deploy
at sufficient scale to render the portfolio
obsolete. The Investment Manager follows
these advances closely and would be able
to explore updated opportunities in that
period.
ș New, more efficient renewable generation
or storage systems also present an
opportunity. The Company has the
experience to invest in these technologies
once they are market proven.
Governance Strategy Risk management Metrics andtargets
S S F EM L
Short term (0-3 years) Strategy Financial planning Existing portfolioMedium term (3-10 years) Long term (10+ years)
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Climate-related opportunities
Opportunity
Capital directed to renewable investments
continues to grow
Continued build-out of renewables leads to
mature battery storage markets
Carbon tax implementation and/or GHG
emissions prices rise
Political and societal support for the energy
transition intensifies
Description
ș Regulatory support, investor and lender
pressure maintain momentum for fossil fuel
disinvestment and shift to renewable energy
infrastructure, increasing capital flow to
solar to meet Net Zero goals.
ș Need for infrastructure to help balance the
intermittent generation profile of renewables
and offer more grid flexibility may drive
demand for battery storage systems.
ș Increased penetration of renewable
generation leads to more volatility in
electricity markets, resulting in the need
for more battery storage to balance and
stabilise the grid.
ș Carbon prices rise, leading to greater
demand for renewables as governments,
corporates and individuals look to lower
costs and offset environmental footprints.
ș Emissions reporting obligations create a
more transparent market and investors shift
more aggressively to low-carbon funds.
ș Government policies aimed at facilitating
the transition to a Net Zero economy may
lead to subsidies for certain technologies to
increase uptake or build-out.
Category
Transition – Market Resource efficiency; Products and services;
Markets; Resilience
Markets Markets; Products and services
Likelihood
Likely Very likely Likely Likely
Time period
S
M
L
S
M
M
L S
M
Impact
S
F
E S
F S
F S
F
Investment
Manager
response
ș Higher flows into the sector are likely to
make fundraising easier and potentially
reduce Foresight Solar’s cost of capital.
ș Increased competition for assets may
drive up prices for the portfolio, increasing
benefits from the Company’s capital
recycling programme.
ș More demand for solar and battery storage
could spark competition among lenders,
lowering interest rates.
ș More volatile wholesale energy prices may
provide additional revenue opportunities via
arbitrage trading for BESS.
ș Growth will result in more established
business models and reliable revenues
around the globe.
ș Foresight Solar operates in markets where
solar is an established technology and
electricity demand is still growing.
ș The Company’s small environmental
footprint may appeal to
sustainability-focused investors.
ș Government-backed incentives create
further opportunities for investment and
accelerate the Company’s growth.
Governance Strategy Risk management Metrics andtargets
S S F EM L
Short term (0-3 years) Strategy Financial planning Existing portfolioMedium term (3-10 years) Long term (10+ years)
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Risk and risk management continued
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Climate-related opportunities
Opportunity
Technological developments complement the
existing portfolio
UK and European PPA markets mature further Climate emergency sparks more supportive
regulatory and planning frameworks
Electrification of the economy happens faster
than expected
Description
ș Advances in new and existing technologies,
both in solar generation and battery storage,
improve scale and/or efficiency of current
installed capacity.
ș Driven by the international communities’
focus on climate action, a stronger
competitive market for offtakers emerges,
offering more opportunities and selection.
ș A favourable regulatory environment
with lower barriers to building renewable
infrastructure may facilitate optimisations
and extensions of existing assets and open
the door to even more opportunities for
newprojects.
ș Regulatory support and technological
developments accelerate the electrification
of industrial processes and of residential
infrastructure, increasing the demand for
renewable electricity.
Category
Energy source; Resource efficiency Markets; Resilience Markets; Resilience Energy source; Markets
Likelihood
Likely Possible Possible Unlikely
Time period
M
L
S
M
M
L M
Impact
S
E S
F
E S
E S
E
Investment
Manager
response
ș Innovations may have a direct effect on
existing projects, improving revenues,
extending asset lives and/or lowering costs.
ș The Company could also benefit from
improvements for future projects, realising
better returns for Shareholders.
ș The Company would enter new,
advantageous PPA contracts to sell its
electricity production and capitalise on
demand for corporate power purchase
agreements – as has been done with the
Spanish assets.
ș Countries are growing their solar
capabilities. The Investment Manager
has strong presence, deep expertise and
extensive networks to help the Company
capitalise on these opportunities.
ș Initiatives such as BESS co-location, lease
extensions and plant updates can lead to
NAV growth and lengthen asset life.
ș Ultimately, making these easier to deliver
can provide more resilience, and ensure
longevity for the Company.
ș A reliable installed portfolio with a strong
track record in multiple geographies is a
competitive advantage for the Company to
capitalise on increased demand.
ș The Investment Manager’s experience with
power purchase agreements and other
offtake structures is also apositive factor.
Governance Strategy Risk management Metrics andtargets
S S F EM L
Short term (0-3 years) Strategy Financial planning Existing portfolioMedium term (3-10 years) Long term (10+ years)
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Climate-related scenarios and resilience
Overview
Since the 2022 Annual Report, the Company has been
working with S&P Global Climanomics to analyse different
potential scenarios in the future. The platform offers the most
comprehensive analysis across four options, integrating not
only physical and transitional risks, but also climate-related
opportunities.
The basis for Climanomics’ analysis is the Shared
Socioeconomic Pathways (SSPs) generated by the
Intergovernmental Panel on Climate Change (IPCC). The SSPs
represent a range of possible outcomes not only in future
anthropogenic greenhouse gas emissions and their effects on
atmospheric concentrations of CO
2
, but also their potential
societal, demographical and economical impacts.
The scenarios are best summarised as:
ș SSP 1 assumes aggressive mitigation and total GHG
emissions reducing to Net Zero by 2050, resulting in a
global average temperature increase of 1.3°C to 2.4°C by
2100
ș SSP 2 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 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 4 assumes low mitigation, total GHG emissions tripling
by 2075 and global average temperatures increasing by
3.3°C to 5.7°C
Methodology
Climanomics integrates econometric assumptions driven by
high resolution geographic, climate, socioeconomic, business
and sector-specific data to the SSPs to quantify climate risk.
The models assess both the risks and the opportunities
associated with each scenario and generate outputs
dependent on asset type. These results can then be applied
to Foresight Solar’s valuation model to estimate the potential
financial impact.
In terms of categorisation of risks and opportunities, the
Climanomics platform fully aligns with the TCFD framework:
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. Transitional risk – Incorporating modelling of hazards
associated with a global transition to a low-carbon
economy via litigation, reputational, technology and
market risk
1
3. Opportunity modelling – Calculating opportunities derived
from resource efficiencies, energy sourcing, changing
markets and resilience
Climanomics’ methodology estimates direct financial impacts
that the hazards are expected to incur on each asset type.
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” is comprised of these individual impact pathways.
The platform has developed an extensive library of detailed
impact functions for a variety of sectors, all of which are
based on peer-reviewed and government-published research.
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.
Governance Strategy Risk management Metrics andtargets
1. Due to the immaterial emissions associated with the portfolio’s business activities (disclosed on page 41), carbon pricing has been excluded.
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Climate-related scenarios and resilience continued
Estimates
Assuming SSP 2 as the most likely outcome due to the current global emissions trajectory, the chart below shows the assessed
central case and the potential financial impact of the variations between the three remaining scenarios
1
:
1.0%
0.0%
0.5%
-2.5%
-2.0%
-1.0%
-0.5%
1.5%
2024 2029 2034 2039 2044 2049
2054
+1.60pps
+0.64pps
(2.67)pps
Net Impact Delta SSP1-2.6 vs Central Net Impact Delta SSP3-7.0 vs Central Net Impact Delta SSP4-8.5 vs Central Central case
Projected climate change-related impact on Foresight Solar’s portfolio
Source: Foresight Solar Fund Limited.
The central case, SSP 2, assumes global temperatures will rise by more than 2°C by 2100. The consequences, with rising oceans
and alternate climate patterns, could be devastating for humanity. In this analysis, however, the risks and the opportunities could
lead to a net positive financial impact on the Company’s portfolio. A less severe SSP 1 scenario, which now appears unlikely,
would result in a positive impact to NAV of 0.64pps. A more drastic SSP 3, in which temperatures rise by almost 3°C by 2100,
would initially have a negative impact, but consequences would turn positive with an increase of up to 1.60pps to Net Asset Value.
The most critical assumptions, SSP 4 would have strictly negative impacts and could result in a 2.67pps downside.
The analysis for 2024 contrasts with the previous year’s results, when the calculated impact was limited to a much narrower
band. This latest work shows more pronounced consequences for the portfolio, both to the upside and to the downside,
depending on the speed with which global temperatures rise. Climate-related scenario modeling is an evolving discipline and
Climanomics recalibrates its platform based on the latest science. A review of asset types led to a reduced estimation in the
projected impact of extreme temperatures on solar assets, which resulted in the wider dispersion presented in the study related
to the 2024 financial year.
1. The opportunity scenario analysis results tend to be less variable than the risk data results, so using the latest Coupled Model Intercomparison Project 5 information will not have
materially influenced estimates.
Risk management
Risk framework
The Investment Manager is responsible for creating and
managing the framework that ensures the systematic
integration and assessment of climate-related risks and
opportunities.
This process is based on a detailed three lines of
defence model to ensure that a given asset’s resilience
is considered from the earliest stages of due diligence:
ș First line: The Investment Manager’s Infrastructure
team monitors risks regularly, identifying,
assessingand mitigating potential issues through
established controls
ș Second line: Foresight Group’s risk function
oversees risk management, maintaining the risk
taxonomy and register, determining material risks
and managing risk events via the Risk Committee
ș Third line: The Investment Manager is creating
an internal audit function, which is expected to
become operational in 2025. In the meantime, the
existing framework remains effective for identifying,
monitoring and reporting risks
Risks are also regularly tracked in the Business Risk
Assessment and reviewed by the Company’s Audit and
Risk Committee.
The relevant physical risks are plotted onto a risk
heatmap. A suite of tools can then be employed to
assess the severity of an asset’s susceptibility to the
most material risks and identify mitigation measures to
reduce the overall score.
Governance Strategy Risk management Metrics andtargets
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Transition risks: Related to the transition to a lower-carbon economy
Policy and legal Technology Market Reputation
Description
ș Increased
pricing of
greenhouse
gas (GHG)
emissions
ș Enhanced
emissions
-
reporting
obligations
ș Mandates on,
and regulation
of, existing
products and
services
ș Exposure to
litigation
ș Substitution
of existing
products
and services
with lower
emissions
options
ș Costs to
transition
to lower
emissions
technology
ș Changing
customer
behaviour
ș Uncertainty in
market signals
ș Increased
cost of raw
materials
ș Increased
competition
for solar and
battery assets
ș Shifts in
consumer
preferences
ș Stigmatisation
of sector
ș Increased
stakeholder
concern or
negative
stakeholder
feedback
Physical risks: Related to the physical impacts of climate change
Temperature
related
Wind related Water related Solid mass related
Chronic
ș Changing
temperatures
ș Heat stress
ș Changing wind
patterns
ș Changing
precipitation
patterns
ș Landslide
Acute
ș Heat wave
ș Wildfire
ș Storm ș Heavy
precipitation/
flood
Probability
5 Almost
certain
4
Likely
Changing
precipitation
patterns
Changing
temperatures
Heat wave
Heat stress
3
Possible
Storm Changing wind patterns
2
Unlikely
Heavy
precipitation
Wildfire
Flood
1
Rare
Landslide
1
Negligible
2
Minor
3
Major
4
Hazardous
5
Catastrophic
Impact
Risk management continued
Risk framework continued
Governance Strategy Risk management Metrics andtargets
As is industry standard, Foresight Solar’s climate-related risks can be categorised in two
principal ways:
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Risk management continued
Managing climate risk
All potential investments are evaluated to ensure they
meet the Investment Manager’s definition of sustainable
infrastructure and that climate-related risks are identified,
assessed and managed.
Every solar or battery asset Foresight Solar invests in
must be justified as contributing to a set of measurable
sustainability goals and must demonstrate how its resilience
to climate change-related risk has been assessed.
This was previously done using Foresight Group’s proprietary
Sustainability Evaluation Tool (SET). From inception, the
tool was designed as a means of aggregating different
sustainability frameworks, allowing the Investment Manager
to interrogate material environmental, social and governance
factors across prospective investments and the existing
portfolio.
As climate risk analysis matures and the investor and
sustainability landscapes start to coalesce around a narrower
and more universal set of frameworks, the Company’s
processes around sustainability continuouslyevolve. As a
result, the SET has been redesigned to act primarily as a
portfolio managementtool.
Pre-investment due diligence is structured around more robust regulatory requirements and key frameworks, such as the SASB
Standards, EU Taxonomy and Paris Agreement.
During the investment stage the Investment Manager establishes an asset’s sustainability credentials. Crucially, risks need to be
accurately assessed and satisfactorily addressed in the final submission to the Investment Committee, with an accompanying risk
re-profiling or mitigation measures, if necessary.
Once the investment has been made, the asset undergoes a comprehensive handover to the asset management team, which
takes over the responsibility for identifying, managing and assessing climate-related risks and opportunities.
Metrics and targets
TCFD core metrics
The Company reports its quantitative exposure to climate-related risk using the universally accepted core metrics, including:
ș Weighted average carbon intensity
ș Total carbon emissions
ș Carbon footprint
ș Carbon intensity
ș Exposure to carbon-related assets
In line with guidance from the Financial Conduct Authority, the calculation of these metrics is performed using Scope 1 and Scope
2 emissions. In using these core metrics, the Company can compare performance amongst its assets and against those of its
wider peer group. The full results are available on page 41 of the Sustainability section of this report.
Absolute emissions
The Greenhouse Gas Protocol separates emissions into the following categories:
Scope 1 Scope 2 Scope 3
ș All direct emissions from the activities of
a company under its control.
ș Includes fuel combustion on site such
as gas boilers, fleet vehicles and
air-conditioning leaks.
ș Indirect emissions from electricity
purchased and used by the Company.
ș Emissions generated in the production of
the energy the Company uses.
ș All other indirect emissions, occurring
from sources that are not owned or
controlled.
ș Includes purchased goods and services,
business travel, employee commuting,
waste disposal, use of sold products,
transportation, distribution and
investments.
Governance Strategy Risk management Metrics andtargets
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Metrics and targets continued
Absolute emissions continued
The portfolio sustainability metrics, collected quarterly at
the asset level, enable accurate calculation of Scope 1 and 2
emissions.
Separately, the Investment Manager continues to develop
its relationships with suppliers to gain more granular
understanding of its Scope 3 impact. In this report, the
PCAF methodology and the associated geographic and
sector-specific emissions factors are used to estimate the
Company’s Scope 3 footprint.
The calculations of Foresight Solar’s full Scope 1, 2 and 3
emissions are outlined on page 41.
Sustainable impact reporting
Tracked against the UN SDGs, the sustainable impact
reporting metrics – as published on page 40 of this report –
demonstrate the positive environmental and social benefits
created by Foresight Solar’s investments.
The analysis includes the Investment Manager’s estimates
for the portfolio’s decarbonisation benefit, which is aligned
to the IFI’s Harmonised GHG Accounting methodology.
The process also factors in lifecycle emissions intensity
figures, drawing on the data presented in the IPCC’s Special
Report on Renewable Energy¹. Thedocument uses a variety
of peer-reviewed papers to establish median figures for
the lifecycle CO
2
intensities of different renewable energy
technologies, measured in kgCO
2
e/MWh.
The Company intends to continue delivering sustainable
impact in line with its growth to ensure it is regularly moving
the decarbonisation agenda forward.
Targets
Foresight Solar regularly evaluates assets’ sustainability
performance, tracking changes over time and acting to
improve operational factors when needed. This constant
analysis helps develop an understanding of the sustainability
characteristics of the portfolio.
Short-term targets
In 2024, the Investment Manager had targets to:
ș Conduct Scope 3 emissions calculations
ș Undertake a full scenario analysis with support from
external consultants (the results from this exercise are
available on page 63)
Both goals were achieved and the results are being used to
better understand Foresight Solar’s environmental footprint
and the potential climate change impacts on its portfolio.
Theconclusions are also likely to feed into the development
of specific targets aimed at managing climate-related risks
and opportunities.
1. Annex III: https://www.ipcc.ch/site/assets/uploads/2018/02/ipcc_wg3_ar5_annex-iii.pdf
Governance Strategy Risk management Metrics andtargets
Strategic Report
Governance
Financial Statements
67
Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Going concern
The Directors are confident that the Company will have
sufficient funds to continue to meet its liabilities as they fall
due for the going concern assessment period and have,
therefore, prepared the Financial Statements on a going
concern basis. The Directors can also confirm no material
uncertainties in relation to going concern exist.
The Directors have considered the discontinuation vote to
be proposed at the Company’s AGM in June 2025, triggered
by the shares trading at an average discount to NAV greater
than 10% for the year, in line with the Company’s Articles
of Association. The Directors have listened to Shareholder
feedback and assessed the possible outcomes of the vote
and as a result are satisfied with the basis of preparation
of the Financial Statements. The Directors continue to
actively engage with Shareholders and regardless of the
discontinuation vote outcome will continue to engage with
Shareholders beyond the AGM in June 2025. The Directors
will continue to refine the strategy of the Company to deliver
results to Shareholders, while targeting a reduction to the
trading discount to NAV.
The Directors have decided the going concern assessment
period should extend to 30 June 2026. Due to the nature
of the fixed price, subsidised revenues and the long-term
debt in place across the portfolio, the Director’s believe it
is appropriate to evaluate a period longer than the typical
requirement of 12 months.
Foresight Solar’s business activities, together with the
factors likely to affect its future development, performance
and position, are set out in this report. The Company’s
financial position, including its financial performance, cash
flows, liquidity and borrowing facilities, are referred to in the
Chair’s statement (from page 6), Investment Manager’s report
(starting on page 10) and Notes to the Financial Statements
(see page 124). The Financial Statements (from page 120) also
include Foresight Solar’s objectives, policies and procedures
for managing its capital, its financial risk management
objectives and its exposure to credit and liquidity risks.
A detailed evaluation of the cash flow impact for the going
concern assessment period took into consideration the
following individual scenarios:
1) All investments consistently generate a P90 level (90%
probability of exceeding expected production over a
10-year period) of electricity output. The Directors deem
this is an appropriate, market standard stress test, with a
relevant example being historically low irradiation in the
UK throughout the year. This is corroborated by data from
the Department of Energy Security and Net Zero showing
that 2024 had the lowest number of sun hours since the
Company’s IPO in 2013.
2) Power prices reduce by 20% across the portfolio. This
downside scenario represents decreasing merchant power
prices and historic oil, gas and electricity price volatility.
3) The PPA provider that the Group is most exposed to fails
to settle merchant revenue under the PPA contract. This
downside scenario represents the risk of insolvencies of PPA
counterparties in response to the high number of energy
company insolvencies during the last three years because of
the high power price market.
4) The inclusion of the maximum forecast project lifecycle
outflows and the associated lost revenues, as a result of the
downtime during the lifecycle works.
5) The removal of the sales proceeds from the divestment of
the Australia portfolio. This is an unlikely downside scenario
in which the Australia portfolio of assets are not sold in the
going concern assessment period.
If any of these sensitivities or scenarios were to materialise,
the Company could still meet its target dividend per share
for 2025 and a progressive dividend for the remaining going
concern assessment period. However, the Directors would
continue to periodically review whether paying the dividend
would be appropriate considering the potential for reduced
cash flow.
The sensitised forecasts show that operating costs would still
be covered, but the cash balance would fall gradually during
the going concern assessment period, albeit without causing
any operational issues.
Going concern and viability statement
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Financial Statements
68
Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Going concern and viability statement continued
Going concern continued
The Directors have also considered the refinancing of the
revolving credit facility which matures in February 2026. The
Board are confident the facility will be refinanced ahead of
the maturity date.
The evaluation demonstrated that Foresight Solar would
be able to meet its liabilities without breaching any debt
covenants and could continue to satisfy the dividend target
for 2025 and a progressive dividend thereafter during the
going concern assessment period.
Viability statement
The Directors confirm that they have a reasonable
expectation the Company will be able to continue operating
and meet its liabilities as they fall due through 2029. In
accordance with the UK Corporate Governance Code,
the Board has assessed Foresight Solar’s viability over a
five-year period to 31 December 2029 on the basis that it
has significant long-term fixed and subsidised revenues and
long-term debt in place.
This is the period the Directors focused on during the
strategic planning process and is considered reasonable for a
business of the Company’s size and nature. Whilst the Board
has no reason to believe the Company will not be viable over
a longer period, they believe this presents readers of the
Annual Report with a reasonable degree of confidence whilst
still providing a longer-term perspective.
The Board considers the Company’s ability to raise debt
and equity and deploy capital. As part of this process, the
Directors have considered the ongoing viability of Foresight
Solar’s long-term and short-term debt strategies.
As discussed in the going concern assessment on the prior
page, the Board have considered the refinancing of the
revolving credit facility which matures in February 2026.
The Board are confident the facility will be refinanced
ahead of the maturity date. The current macroeconomic
environment in which the Company operates has challenged
the long-term sustainability of the traditional business model.
Specifically, high interest rates and access to capital. Due to
the Company’s shares trading at a discount to NAV, there is
an inability to raise capital due to unacceptable dilution of
existing Shareholders. As such, it is no longer viable to apply
the business model of using the RCF to fund acquisitions and
subsequently repay the RCF with raised equity. To address
the lack of access to capital, one strategy the Company
deploys is a development pipeline to bring projects through
to construction or completion, in order to generate cash upon
sale. The intention is to use the development portfolio to fund
future developments or acquisitions without the reliance on
issuing shares and raising debt.
The Directors’ 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 and liquidity. The Directors
have considered the emerging and principal risks, identified
from page 46, in relation to the Company’s resilience over
a five-year period. In doing so, the Board believes the key
direct principal risks to Foresight Solar’s financial viability
are: changes to the level of political support for subsidies
across the Company’s markets, energy prices and the impact
of climate and changes to weather patterns.
In addition to these principal risks, the Directors have
also specifically reviewed the share price performance
of Foresight Solar, which could trigger further
discontinuation votes during the five-year period, as well as
sustainability-related risks that consider environmental, social
and governance factors in line with the recommendations
of the Task Force on Climate-related Financial Disclosures
(TCFD), discussed in detail from page 56.
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Financial Statements
69
Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Going concern and viability statement continued
Viability statement continued
Government-backed subsidy revenue comprises 47% of the
portfolio’s turnover for the period to 31 December 2029.
Whilst this is a considerable proportion, the subsidies are
split across two different jurisdictions (United Kingdom
and Australia), with the majority coming from the United
Kingdom. It is expected the respective governments, in
light of considering commitments to tackling the climate
emergency and the renewable energy sector’s crucial
contribution to decarbonisation, will continue to meet their
obligations. In terms of prospective regime changes, such
as the closure of the Renewables Obligation scheme for
projects commissioned after 31 March 2017, these are not
expected to affect the viability of the Company. In the UK, the
government has been considering more fundamental changes
to energy markets with the Department for Energy Security
and Net Zero (DESNZ) publishing its consultation on the
Review of Electricity Market Arrangements (REMA).
Any potential change will develop over the five-year period,
and the outcome remains unclear. However, the Directors do
not expect this process or related outcomes to materially
weaken the existing subsidy regime as this would significantly
undermine investment in the UK renewable energy market.
Whilst changes are possible, they are not expected to
threaten the viability of the Company.
For the period to 31 December 2029, 66% of the portfolio
revenue is contracted through government subsidies or
forward electricity sales at a fixed price, leaving 34% of
revenues exposed to power price volatility. The Directors
believe this risk is sufficiently mitigated through the
Company’s price fixing strategy, which is reviewed on a
regular basis by the Investment Manager.
Foresight Solar owns assets across three international
markets and therefore considers short and medium-term
changes in localised weather patterns to be a risk. A good
example being historically low irradiation in the UK throughout
the year. This is corroborated by data from the Department
of Energy Security and Net Zero showing that 2024 had the
lowest number of sun hours since the Company’s IPO in 2013.
Whilst very limited action can be taken by the Company
to address weather and broader climate shifts, aside from
specific, local protective measures at each asset, the Directors
and the Investment Manager continue to monitor and assess
the potential impacts on an ongoing basis.
In making this statement, the Directors have reviewed
Foresight Solar’s summary five-year cash projections,
including cash balances, dividend cover and debt covenants.
Sensitivity analysis covered the potential impact of the
Company’s principal risks occurring and how those risks
would threaten its business model, future performance,
solvency or liquidity. A summary of key valuation sensitivities
is set out earlier in the Annual Report (see page 35 for
full details). These forecasts are based on the Investment
Manager’s view of future asset performance, income and
costs, and are consistent with the methodology applied to
produce the valuation of the investments.
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Financial review
Foresight Solar applies IFRS 10 and Investment Entities:
Amendments to IFRS 10, IFRS 12 and IAS 28, which state
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 Solar (UK Hold Co) Limited as
aninvestment at fair value through profit or loss.
The primary impact of this application, in comparison to
consolidating subsidiaries, is that the balances, the working
capital balances and the borrowings in the intermediate
holding companies are presented as part of the Company’s
fair value of investments.
Foresight Solar’s intermediate holding companies provide
services that relate to FSFL’s investment activities on behalf
of the parent which are incidental to the management of the
portfolio.
The Company and its intermediate holding companies
(the “Group”) hold investments in 61 assets which make
distributions in the form of interest on loans and equity
dividends, as well as loan repayments and equity
redemptions.
For the Company’s detailed Financial Statements, including
the profit and loss and the cash flow statements, refer to the
section from page 120 of this report.
For more information on the basis of accounting and
Company structure, please refer to the Notes to the Financial
Statements starting on page 124.
Net assets
Net assets at 31 December 2024 decreased 9.1% to £634.4 million from £697.9 million at 31 December 2023. This was primarily
due to a reduction in power price forecasts, project actuals, the reduction in cash through the share buyback programme,
reducing the NAV by £22.5 million during the year, and foreign exchange movements on the RCF. The NAV movements are
detailed in the Investment Manager’s report from page 34.
The net assets of £634.4 million comprise the £981.2 million portfolio of UK, Australian and Spanish solar and UK battery storage
investments and the Group’s cash balance of £68.3 million, offset by £336.9 million long-term debt, £73.4 million of outstanding
RCF debt and other net liabilities of £4.8 million.
Analysis of the Group’s net assets at 31 December 2024
All amounts presented in £million (except as noted)
Year ended
31 December
2024
Year ended
31 December
2023
Gross portfolio value¹ 981.2 1,061.9
Intermediate holding companies’ cash 66.3 79.2
Intermediate holding companies’ long-term debt (336.9) (367.6)
Intermediate holding companies’ revolving credit facility (73.4) (75.0)
Intermediate holding companies’ other liabilities (4.6) (1.7)
Fair value of the Company’s investment in portfolio
2
632.6 696.8
Company’s cash 2.0 2.0
Company’s other net liabilities (0.2) (0.9)
Net Asset Value 634.4 697.9
Ordinary Shares in circulation 564,856,642 589,239,345
Net Asset Value per share 112.3p 118.4p
1. Classified as the gross fair value of the underlying assets in the portfolio.
2. Equal to investments held at fair value through profit or loss and interest receivable as per the statement of financial position on page 121.
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Financial Statements
71
Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Financial review continued
Third-party debt arrangements and gearing position
Total outstanding debt including the RCF was £410.3 million,
representing 39.3% of GAV (31 December 2023: £442.6
million or 38.8% of GAV).
The Company’s net debt position, after deducting existing
cash balances, was £342.0 million, representing 32.7% of
GAV(31 December 2023: £361.4 million or 31.7% of GAV).
Long-term facilities
As at 31 December 2024, outstanding long-term debt was
£336.9 million, representing 32.3% of GAV (31 December
2023: £367.6 million and 32.2%). Of that total, £84.7 million
was linked to inflation (31 December 2023: £88.1 million).
As at 31 December 2024, the average cost of long-term debt
was 4.08% per annum, including the inflationary increase
of the nominal balances of the indexed-linked facilities
(31 December 2023: 4.15%). The cost of these facilities is
expected to increase over time assuming the Company’s
long-term annual Retail Price Index expectations of 3% in the
medium term and 2.25% post-2030.
Following the final repayment of the variable-rate loan for FS
Holdco in March 2024, the Company’s long-term debt is fully
hedged against interest rate exposure through interest rate
swaps.
Revolving credit facility
As at 31 December 2024, the Company had used £73.4
million of its RCF (31 December 2023: £75.0 million), with
£76.6 million remaining undrawn. Ofthe undrawn balance,
£1.3 million was allocated to letters of credit.
The RCF is due to mature in February 2026, but the Board
intends to refinance in advance of this date.
During the year, £43.2 million of the RCF facility was repaid
and, on the same day, redrawn as €50.3 million. This was
completed to reduce the exposure to SONIA and save interest
expenditure on the spread between SONIA charged on the
GBP tranche of the loan and Euribor charged on the Euro
tranche of the loan. The Euro tranche was sized to align with
the valuation of the Spanish operational portfolio, and in
doing so, a natural hedge was created to offset the currency
exposure.
This treasury management initiative lowered the weighted
expected cost of the interest payable on the revolving credit
facility by 90 basis points and, on a profit or loss basis, has
saved approximately £440,000 of interest expense to the end
of the year.
Favourable movements in currency exchange rates, led to a
£1.1 million reduction of the RCF balance in comparison to
31December 2023.
At the year end, the weighted average cost of the RCF was
6.56% per annum (31 December 2023: 6.62%), including seven
months of savings from the change to drawing in EUR instead
of GBP.
Foreign exchange
The Company is exposed to foreign exchange movements
in respect of its investments in Australia and Spain. As such,
the Company implements a hedging strategy to reduce the
possible impact of currency fluctuations and to minimise the
volatility of equity returns and cash flow distributions.
Foreign exchange hedging will not be applied to the cost of
the equity investments, considering the Company’s long-term
investment strategy, although a natural hedge is in place
with the Euro denominated tranche of the RCF, mitigating
FXexposure.
For the Australian assets, the Company has entered a
rolling two-year forward contracts strategy for an amount
equivalentto approximately 75% of its expected distributable
foreign currency cash flows at project level. For the Spanish
projects, there are currently no cash flow hedges in place
due to the Euro distribution cash flows being available
to service Euro RCF interest. The Company reviews its
hedging strategy on a regular basis to limit the short-term
volatility insterling-distributable cash flows caused by
foreign exchange fluctuations and to optimise the costs
ofthehedging instruments.
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Financial Statements
72
Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Financial review continued
Debt structure
Foresight Solar Fund Limited (Jersey)
Foresight Solar (UK Hold Co) Limited
RCF Debtco
Includes £150 million RCF
FS Holdco 1
Project Investments
Includes first 16 UK
asset acquisitions.
Original long-term debt
facility of £160 million
FS Holdco 3
Project Investments
Includes six assets.
Original long-term debt
facilities of £45.1 million
FS Holdco 4
Project Investments
Includes Australian
and Spanish assets
and respective debt at
project level
FS Holdco 2
Project Investments
Includes 28 assets
following refinancing in
August 2019.
Original long-term debt
facility of £170 million at
FS Debtco
Note: simplified for illustrative purposes. For outstanding debt balances please refer to the table on the following page.
Shotwick, UK
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Financial Statements
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Debt structure continued
The following table summarises the debt position of the Company as at 31 December 2024.
Borrower Holding vehicle Provider Facility type
Outstanding
(m) Maturity Interest rate hedge Applicable rate
FS Holdco FS Intermediate Holdco
MIDIS Fixed rate, fully amortising £49.4 Mar-34 100% 3.78%
MIDIS Inflation linked, fully amortising £60.4
1
Mar-34 N/A RPI Index + 1.08%
Total £109.8
FS Debtco FS Holdco 2 SMBC/Helaba Term loan, fully amortising £134.8 Mar-36 100% SONIA + 1.30% (margin
step to 1.35% in 2029)
Total £134.8
2
Second Generation
Portfolio 1
FS Holdco 3
MIDIS Fixed rate, fully amortising £2.8 Aug-34 100% 4.40%
MIDIS Inflation linked, fully amortising £24.3
1
Aug-34 N/A RPI Index + 1.70%
Total £27.1
Global Solar Energy 27 SL (Lorca) FS Holdco 4 BayernLB Term loan €11.53
3, 6
Dec-31 100% Double tranche: €9.5m
at 1.61% fixed rate, €2.8m at
Euribor + 2.10%
Foresight Solar Australia Pty Ltd
FS Holdco 4
CEFC Term loan A$35.5
4
Jun-26 100% Base rate (0.96375%) + 2.00%
Longreach ANZ/Deutsche Term loan A$18.2 Apr-27 100% BBSY Base rate + 1.20%
Oakey
1 ANZ/Deutsche Term loan A$29.5 Apr-27 100% BBSY Base rate + 1.20%
Oakey 2 Finco Pty Ltd CEFC Term loan A$29.6 Sep-25 100% Base rate (4.30%) + 2.25%
Total A$112.8
5
Total long-term debt £336.9
3, 5
Financial review continued
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Financial Statements
74
Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Financial review continued
Borrower Holding vehicle Provider Facility type
Outstanding
(m) Maturity Interest rate hedge Applicable rate
FS RCF Debtco UK Hold Co
AIB, Barclays,
Lloyds, NatWest
Revolving credit
£31.8 Feb-26 0% SONIA + 1.9%
€50.3 Feb-26 0% Euribor + 1.9%
Total short-term debt £73.4
Total outstanding debt £410.3
1. Nominal loan balance as at 31 December 2024 with the applicable RPI applied.
2. Interest rate swap for 100% of the outstanding debt.
3. EUR/GBP exchange rate of 0.8265 as at 31 December 2024.
4. Bannerton project debt prorated for Company’s share of asset ownership.
5. AUD/GBP exchange rate of 0.4942 as at 31 December 2024.
6. Lorca portfolio debt prorated for Company’s share of asset ownership.
The Company has no exposure to benchmark interest rate movements in the UK, Australia or Spain as a result of the interest rate swaps in place for the £336.9 million of long-term debt.
Theshort-term £73.4 million RCF, equivalent to 17.9% of total debt, is subject to interest rate volatility.
The sterling-denominated long-term debt facility priced over SONIA benefits from an interest rate swap hedging 100% of the outstanding debt during the term of the loan.
In Australia, debt facilities with CEFC have no exposure to the Bank Bill Swap Bid Rate (BBSY), as the interest rate was fixed at financial close or upon loan extension. The remaining debt facilities have
interest rate swaps in place on a decreasing nominal amount for a notional tenor of 20 years.
In Spain, the debt facility priced over Euribor benefits from interest rate swaps hedging 100% of the outstanding balance during the term of the loan.
Debt structure continued
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Financial review continued
Combined profit and loss of underlying investments
The underlying investments in the UK, Spain and Australia
generated an operating profit, a measure of earnings before
interest, tax, depreciation and amortisation (EBITDA), of
£105.4 million for the year to 31 December 2024. Falling
merchant power prices in all markets, combined with
below-budget global production, resulted in revenue 9.7%
below expectations for the year and total operating profit
10.8% under forecasts.
During the year, on a combined basis, the underlying assets
earned £133.0 million of revenues (2023: £162.2 million).
UK subsidised revenue was consistent with production.
Wholesale revenue was impacted by lower global irradiance
in 2024, as well as economic curtailment in Australia.
Operating expenditure of £27.6 million (2023: £26.1 million)
was consistent with contractual arrangements, some of which
were renegotiated during the year. This resulted in combined
operating profit for the year of £105.4 million (2023: £136.1
million).
For the year ended 31 December 2024
Dividend
cover
reference
UK
£m
Australia
A$m¹
Spain
€m²
Combined
£m
2023
Combined
£m
Revenue of underlying investments
Wholesale revenue 57.4 10.8 4.6 66.9 93.5
Subsidised revenue³ 62.4 1.9 — 63.3 64.1
Other income 2.5 0.4 — 2.8 4.6
Total revenue of underlying investments 122.3 13.1 4.6 133.0 162.2
Operating expenditure
O&M fixed (5.9) (1.3) (0.2) (6.7) (6.9)
O&M variable (1.2) (0.5) — (1.5) (1.4)
Other operating expenditure (15.2) (5.7) (1.5) (19.4) (17.8)
Total operating expenditure (22.3) (7.5) (1.7) (27.6) (26.1)
Total operating profit (EBITDA) A 100.0 5.6 2.9 105.4 136.1
1. The profit and loss accounts of the Australian assets are combined based on the Company’s ownership, using an average AUD/GBP exchange rate of 0.5163.
2. The profit and loss accounts of the Spanish assets are combined based on the Company’s ownership, using an average EUR/GBP exchange rate of 0.8465.
3. Subsidised revenue consists of ROCs, ROC recycle, Feed-in Tariff, embedded benefits and LGCs.
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Financial review continued
Bridging EBITDA to cash distributions
The table in this section links the total operating profit
(EBITDA) to the cash distributions paid by the underlying
SPVs, by adjusting for cash movements and timings of
working capital.
Working capital movements relate to delayed prior year
revenue received within the financial reporting year and cash
generated in the previous year but not distributed as a result
of debt facility requirements for the Australian projects.
Movements in retained cash for lifecycle and capital
expenditure are a result of a standalone exercise undertaken
at the end of 2023 and in early 2024 to review and
subsequently reprofile the portfolio’s expected lifecycle
requirements and the potential capital expenditure for future
years. The new profile was verified by a third-party technical
advisor, which signed off on its appropriateness.
As per project debt service, this is tied to principal and
interest payments made by SGP1, Lorca and the Australian
assets.
It was considered appropriate to release cash previously
ringfenced during the year in relation to lifecycle, capital
expenditure and working capital. The balance of ringfenced
cash is consistent throughout this Annual Report.
Dividend
cover
reference
2024
£m
2023
£m
Total operating profit (EBITDA) A 105.4 136.1
Adjustments:
Corporation tax (6.4) (0.5)
Interest earned 0.8 0.2
Working capital 3.1 6.0
Movement in retained cash for lifecycle and capex 6.5 (4.6)
Other 0.8 (0.3)
Free cash before project debt service 110.1 137.0
Project debt service (9.4) (16.6)
Cash distributions from underlying investments B 100.7 120.4
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Financial review continued
Company and intermediateholdings cash flows
It may take up to two months between earning revenue and
receiving the cash from the SPVs. Consequently, working
capital produces variations between earnings measures and
cash measures. In periods of rising prices, these working
capital balances are expected to grow, increasing the
differences, and vice-versa in periods of falling prices.
During the year to 31 December 2024, the underlying
investments paid £100.7 million of distributions to the
intermediate holding companies. Distributions were received
from entities in the UK and Spain.
Cash received from underlying solar investments covers
the long-term debt repayments, financing costs and the
operating and administrative expenses of the Company and
the intermediate holding companies, as well as the dividends
declared to Shareholders.
The £4.1 million acquisition costs relate to the investments
in the UK BESS assets in construction and the Spanish
Development pipeline.
A total of £4.1 million was paid in early 2024 to reduce the
loan principal for Oakey 1 and Longreach in Australia. The
payment was needed to support compliance with lender
covenants. Economic curtailment and grid outages in late
2023 and early 2024 put pressure on the projects’ near-term
revenues, requiring the prepayment.
During the year, Foresight Solar also repurchased 24.4 million
of its shares through its £50 million buyback programme. The
process delivered NAV accretion to the tune of 1.1 pence per
share. FSFL has deployed more than £41.7 million of its initial
allocation, resulting in a cumulative 2.2 pence per share NAV
uplift since the Company began repurchasing its own shares
in May 2023. The adjacent table includes £0.7m of cash in
relation to shares purchased in 2023.
Cash flows of the Group for the year to 31 December 2024
Dividend
cover
reference
Year ended
31 December
2024
Year ended
31 December
2023
Cash distributions from underlying investments B 100.7 120.4
Electricity generator levy — (7.8)
Administrative expenses (2.7) (2.3)
Directors’ fees and expenses (0.3) (0.3)
Investment management fees (6.3) (7.0)
Financing costs (10.3) (13.5)
Repayments of long-term debt facilities (19.4) (18.2)
Cash flow from operations C 61.7 71.3
Acquisition and disposals of assets (4.1) 13.2
Debt arrangement and refinancing fees (4.1) (0.5)
Net drawings and repayments of RCF — (40.0)
Share buyback (22.5) (19.2)
Other 0.8 (0.4)
Dividends paid in cash to Shareholders D (44.7) (44.4)
Cash movement in the year (12.9) (20.0)
Opening Group cash balance 81.2 101.2
Closing Group cash balance 68.3 81.2
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Financial review continued
Dividend cover
Total dividends of £44.7 million were paid during the year
ended 31 December 2024. Compared with the relevant net
cash flows from operations of the Company and underlying
investments of £61.7 million, these dividends were covered
1.38 times (31 December 2023: 1.61 times).
Dividends
The Company has declared dividends of 8.00 pence for the
year ended 31 December 2024, representing a 6.0% increase
to the dividends paid relative to 2023.
Foresight Solar has met all target dividends since IPO and
adopts a progressive dividend policy, aiming to grow its
payouts sustainably over time. With the distributions made
in2024, FSFL has paid out £340.6 million to Shareholders
since listing on the London Stock Exchange in2013.
Dividend cover
Dividend
cover
reference
2024
£m
2023
£m
Cash flow from operations C 61.7 71.3
Dividend paid in cash to Shareholders D (44.7) (44.4)
Dividend cover C/-D 1.38 1.61
Dividend timetable for the 2024 financial year
Dividend Amount Status Payment date
Interim 1 2.00p Paid 20 August 2024
Interim 2 2.00p Paid 18 November 2024
Interim 3 2.00p Paid 21 February 2025
Interim 4 2.00p Declared 23 May 2025
Total 8.00p
On 18 February 2025, the Company announced its final interim dividend of 2.00 pence per share.
Dividend timetable – Final Date
Ex-dividend date 24 April 2025
Record date 25 April 2025
Dividend payment date 23 May 2025
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Financial Statements
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Financial review continued
Ongoing charges
The ongoing charges ratio for the year to 31 December
2024 was 1.17% (31 December 2023: 1.15%). This has been
calculated using methodology as recommended by the
Association of Investment Companies.
Asset management fees charged by Foresight Group LLP on
an arm’s length basis at project level are excluded from the
ongoing charges ratio.
Ongoing charges
FSFL
£’000
UK Hold Co
£’000
Total
£’000
Investment management fees 6,348 — 6,348
Directors’ fees 315 — 315
Administration fees 226 17 243
Audit and tax fees 192 27 219
Other legal and professional fees 244 15 259
Other ongoing expenses 226 — 226
Total 7,611
Ongoing charges ratio 1.17%
Net Asset Value (NAV) £m
31 March 2024 665.0
30 June 2024 656.8
30 September 2024 639.9
31 December 2024 634.4
Average 649.0
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Financial Statements
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
APM Purpose Calculation APM value Reconciliation to IFRS (where applicable)
Annualised total NAV
return since IPO
Annualised measure of financial performance
indicating the movement of the value of the
Company’s assets since IPO and expressed
as a percentage
Closing NAV per Ordinary Share as at
31December 2024 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
7.4% The calculation uses the closing NAV per
Ordinary Share as per the Statement of
Financial Position on page 121
Annualised total
Shareholder return
sinceIPO
Annualised measure of financial performance
indicating the total return derived from
holding the stock since IPO and expressed as
a percentage
Closing share price as at 31 December
2024 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
3.8% The calculation does not have an IFRS
equivalent, but uses the closing share price
asper the key investment metric table on
page 13
Cash distributions from
underlying investments
A measure of financial performance from the
underlying portfolio
Total cash received from investments in the
period
£100.7 million The calculation uses combined cash flows
of the Company and Group entities and,
therefore, does not have an IFRS equivalent
Dividend cover A measure of excess cash generated by the
Company after payment of the dividend
Net operating cash flow divided by dividend
paid within the period, including potential
scrip dividend impact
1.38x The calculation uses the dividend paid as
shown in the Statement of Changes in Equity
divided by cash flow from operations. The
calculation uses cash flows from of the
Company and Group entities and, therefore,
does not have an IFRS equivalent
Earnings before interest,
taxes, depreciation and
amortisation (EBITDA)
A measure to indicate cash flow and business
performance, allowing for a comparable
figure between businesses
Operating revenue minus operating expenses,
with total operating profit as a proxy for
EBITDA
£105.4 million The calculation uses total combined revenue
of underlying investments and subtracts total
expenditure, as per the Combined Profit
and Loss of the Underlying Investments on
page76
Alternative Performance Measures (APMs)
The Directors assess Foresight Solar’s performance using a number of APMs that are not defined under IFRS. The APMs are not always comparable with similar
companies, and therefore, the table below signposts to relevant GAAP measures in the Financial Statements, from page 120.
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Financial Statements
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Alternative Performance Measures (APMs) continued
APM Purpose Calculation APM value Reconciliation to IFRS (where applicable)
Enterprise value (EV) A metric to determine a company’s total
value, a more comprehensive alternative to
market capitalisation
The sum of market capitalisation and total
outstanding debt minus cash (and cash
equivalents).
£776.9 million The calculation uses Group entities’ debt and
Group wide cash balances and, therefore,
does not have an IFRS equivalent. The
calculation uses market capitalisation from
page 13, the total outstanding debt on page
75 and the closing cash balance on page 78
Gearing A measure of financial risk on the balance
sheet of the Company
Total third party debt of the Group entities as
shown on page 75 as a percentage of GAV
39.3% The calculation uses the Net Asset Value as
per the Statement of Financial Position on
page 121. It also uses the total outstanding
debt on page 75, which does not have an IFRS
equivalent.
Gross Asset Value (GAV) A measure of the value of the Company’s
total assets
The sum of Net Asset Value of the Company
as shown on the Statement of Financial
Position and the total debt of the Group and
underlying investments as shown on page 75
£1,044.7 million The calculation uses the Net Asset Value as
per the Statement of Financial Position on
page 121. It also uses the total outstanding
debt on page 75, which does not have an IFRS
equivalent.
Market capitalisation Provides an indication of the size of the
Company
Closing share price as at 31 December 2024
multiplied by the closing number of Ordinary
Shares in circulation
£434.9 million The calculation uses the closing share price
as per the key investment metric table on
page 13 and closing number of Ordinary
Shares as per note 17 to the Financial
Statements on page 146
NAV per Ordinary Share A measure of the value of one Ordinary Share The net assets divided by the number of
Ordinary Shares
112.3p As per the closing NAV per Ordinary Share
and as per the Statement of Financial Position
on page 121
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
APM Purpose Calculation APM value Reconciliation to IFRS (where applicable)
Ongoing charges ratio A measure of the annual reduction in
Shareholder returns because of operational
expenses based on historical data
Total ongoing expenses including Investment
Manager fees, legal and professional fees,
administration fees, Directors’ fees and audit
fees expressed as a percentage of average
NAV through the year shown on page 80
1.17% The calculation does not have an IFRS
equivalent. Detailed calculation on page 80
Total NAV return Measure of financial performance indicating
the movement of the value of the value of the
Company’s assets in the year and expressed
as a percentage
Closing NAV per share as at 31December
2024 plus all dividends in the year
assumed reinvested, divided by the
NAVat31December 2023, expressed as
apercentage
(2.7)% The calculation uses the Net Asset Value as
per the Statement of Financial Position on
page 121 and the cash dividends paid as
perthe Statement of Changes in Equity on
page 122
Total shareholder return Annualised measure of financial performance,
indicating the total return derived from
holding the stock in the year and expressed
as a percentage
Closing share price as at 31 December
2024 plus all dividends in the year assumed
reinvested, divided by the share price
at 31December 2023, expressed as a
percentage
(20.3)% The calculation uses the closing share price
as per the key investment metric table on
page 13 and the cash dividends paid as
per the Statement of Changes in Equity on
page122
Alternative Performance Measures (APMs) continued
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
What’s in this section:
Board of Directors 85
Corporate Governance report 86
Management Engagement Committee report 95
Nomination Committee report 97
Audit and Risk Committee report 101
Directors’ Remuneration report 105
Directors’ report 107
Statement of Directors’ responsibilities 111
Governance
Board meeting, St. Helier, Jersey
84
Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Financial Statements
Strategic Report
Governance
Board of Directors
The Directors are responsible for determining the Company’s investment policy,
have overall responsibility for its activities, and oversee performance.
Alexander Ohlsson
Chair
Background
Mr Ohlsson is Group Managing
Partner of the international
offshore law firm Carey Olsen.
He is recognised as a leading
expert in corporate and
finance law in Jersey and is
regularly instructed by financial
institutions.
External directorships
GCP Asset Backed Income
Fund Limited (public).
Committees
M N
Chris Ambler
Senior Independent
Director
Background
Mr Ambler has been the Chief
Executive of Jersey Electricity
since 1 October 2008. He has
extensive experience from
several senior positions in the
global industrial, energy and
materials sectors, where he
worked for major corporations.
External directorships
Jersey Electricity plc (public).
Committees
A M N R
Ann Markey
Non-Executive
Director
Background
Ms Markey is an experienced
business leader and NED. She
has more than 25 years as a
senior executive and a strong
financial background. She has
deep expertise in the electricity
industry, particularly in thermal
and renewable generation.
External directorships
Land Development Agency,
Sustainable Energy Authority
of Ireland.
Committees
M
A
N
Lynn Cleary
Non-Executive
Director
Background
Ms Cleary is an experienced
senior executive with vast
financial knowledge. The
former CFO of the Royal Bank
of Scotland International, she
is an influential member of
the Channel Islands’ business
community.
External directorships
Treasury Advisory Panel for
theGovernment of Jersey,
Board of the Ports of Jersey.
Committees
A M RN
Anthony (Tony) Roper
Non-Executive
Director
Background
Mr Roper has 30 years of
experience making and
managing infrastructure
investments. He was part of
the team that created InfraRed
Capital Partners and oversaw
the launch of TRIG on the
London Stock Exchange.
External directorships
abrdn European Logistics
Income plc, (public), SDCL
Energy EfficiencyIncome Trust
plc (public).
Committees
M
Paul Masterton
Non-Executive
Director
Background
Mr Masterton has nearly 20
years’ experience as a non-
executive director and chair
covering finance, infrastructure,
property development and
insurance, including a decade
with 3iInfrastructure.
External directorships
Insurance Corporation of the
Channel Islands.
Committees
A R
Click or scan to read the
full Board biographies
A
Audit and Risk Committee
M
Management Engagement Committee
N
Nomination Committee
R
Remuneration Committee Chair
Strategic Report
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Financial Statements
85
Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Corporate
Governance report
Board leadership and company purpose
On behalf of the Board, I am pleased to introduce Foresight
Solar’s Corporate Governance Statement for the reporting
year ended 31 December 2024.
Board leadership
The Board has overall responsibility for the management of
the Company’s affairs and is responsible for its long-term
sustainable success.
FSFL’s Board is made up of six Independent Non-Executive
Directors. (Their profiles are set out on page 85). The
Nomination Committee has considered the Board’s
independence in detail and is confident of its autonomy.
Moredetail on this analysis can be found from page 97.
The Board evaluates its effectiveness annually and, as part
of that analysis, the Directors have confirmed they have
adequate time to commit to their roles and responsibilities.
Further details of this assessment are set out in the
Nomination Committee report from page 97.
The Directors believe that they have an appropriate balance
of skills, experience and knowledge to oversee Foresight
Solar’s affairs and act in the best interest of its stakeholders.
Diversity of experience and approach amongst members is
important, and it is the Company’s policy to considerer Board
representation and diversity when making new appointments.
(Details of the succession plan and recruitment initiatives are
set out in the Nomination Committee report from page 97.)
Board operation
The Board is responsible to Shareholders for the effective
management of the Company. Meetings are held at least
quarterly, with further ad hoc sessions scheduled as required.
In the year under review, eight ad hoc meetings were held in
addition to the usual four quarterly sessions.
As part of its responsibilities, at each meeting, the Board
monitors Foresight Solar’s investment performance in
comparison to its objectives. The Directors also review
FSFL’s activities since the previous gathering to ensure the
Investment Manager adheres to the agreed investment policy
and to the approved investment guidelines and, if necessary,
approves changes to such policy and guidelines.
At the Company’s quarterly Board meetings, the Directors
typically consider the following business:
ș Update from the Investment Manager, including:
ș Market commentary
ș Company portfolio overview
ș Portfolio performance reports
ș Independent power price forecasts
ș Financial performance review, including cash flow
analysis and dividend cover forecasts
ș Pipeline, acquisitions and disposals
ș Health and safety
ș Gearing and debt compliance
ș Shareholder and analyst feedback and reports
ș Sustainability reporting
ș Changes to the risk register
“A successful company is led by an
effective board. Foresight Solar’s
Directors promote its long‑term
sustainable success, generating
value for Shareholders and
contributing to society.”
Alexander Ohlsson
Chair
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Financial Statements
86
Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Corporate Governance report continued
Board leadership and company purpose continued
Board operation continued
ș Commentary from the Company’s brokers, including:
ș Market update
ș Share price performance against peers
ș Sales and trading report
ș Contribution from the Compliance Officer and Company
Secretary, including:
ș Compliance monitoring
ș Regulatory and governance updates
The Investment Management Agreement between Foresight
Solar and Foresight Group sets out the matters over which
the Investment Manager has authority, such as monitoring
and managing the existing investment portfolio and the limits
above which Board approval must be sought.
Full details of the Directors’ duties and obligations are
provided at the time of appointment and supplemented by
further details as requirements change.
A formal induction programme for all new appointees is in
place. The Board has also implemented an ongoing annual
training programme for Directors on topics relevant to the
business.
Purpose and culture
Foresight Solar’s purpose is to provide investors with a
sustainable, progressive quarterly dividend and enhanced
capital value whilst facilitating climate change mitigation and
the transition to a lower-carbon economy.
To achieve this, the Company’s culture fosters openness,
integrity and transparency in all business relationships,
creating an environment of proactive engagement between
Directors and stakeholders, a place for constructive
challenge of the Investment Manager, and holding key service
providers accountable.
The Board has sustainability responsibilities and aims,
with the support of the Investment Manager, to continually
improve the Company’s ability to deliver attractive financial
returns to investors alongside strong environmental and
social benefits.
Governance
The Board’s governance framework continues to improve.
The Directors work closely with the Company Secretary to
review and refresh policies and procedures, ensuring they
remain up to date and fit for purpose.
Statement of compliance with the AIC Code
Foresight Solar is a member of the Association of Investment
Companies (AIC) and the Board has considered the principles
and provisions of the AIC Corporate Governance Code.
The AIC Code addresses the relevant requirements set out
in the UK Corporate Governance Code (UK Code), as well
as setting out additional provisions on issues of specific
relevance to investment trusts, such as Foresight Solar.
The Board considers that reporting against the principles
andprovisions of the AIC Code, which has been endorsed
by the Financial Reporting Council and is supported by
the Jersey Financial Services Commission, provides more
relevant information to Shareholders than if the Company
applied the UK Code.
Therefore, FSFL has applied the principles and
compliedwiththe provisions of the AIC Code, available on
www.theaic.co.uk/aic-code-of-corporate-governance
AIFM Directive
The Company is categorised as a self-managed non-EEA
AIF for the purposes of the Alternative Investment Fund
Managers Regulation 2013 and the AIFM Directive. As such,
neither it nor the Investment Manager are required to seek
authorisation under the AIFM Directive. The Board retains
responsibility for most of the Company’s risk management
and portfolio management functions and performs various
management functions through its various committees.
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Annual Report and Financial Statements 31 December 2024
Corporate Governance report continued
Board leadership and company purpose continued
Governance framework:
The role of the Board and division of responsibilities
Foresight Solar’s Board of Directors oversees the Investment Manager in delivering the Company’s purpose, engages with
keystakeholders to understand how it can best represent their interests, and works closely with the main service providers
tomaintain strong operational performance.
Whilst meeting their statutory responsibilities, Directors seek to balance scrutiny, challenge and support of the Investment
Manager to deliver exceptional performance.
Board roles Role overview
Chair Leads the Board and is responsible for its overall effectiveness.
Senior Independent Director (SID) Provides a sounding board for the Chair and serves as an intermediary for
the other Directors and Shareholders.
Non-Executive Director (NED) Offers constructive challenge and strategic guidance, as well as delivering
specialist advice and holding service providers to account.
Company Secretary Supports the Board and ensures the Company has the policies, processes,
information, time and resources needed to function effectively and efficiently.
Foresight Solar’s governance structure supports its purpose and creates
a framework to bolster its culture and sustainability initiatives.
Board meeting, St. Helier, Jersey
Governance
88
Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Strategic Report
Financial Statements
Corporate Governance report continued
Board leadership and company purpose continued
Board committees
The Board has four standing committees: Audit and Risk, Management Engagement,
Remuneration, and Nomination. Each committee has adopted formal terms of reference, which
dictate how tomake recommendations to the Board. (Individuals interested in viewing these
terms can request a copy by writing to the Company Secretary at Foresight Solar’s registered
office.)
The role of each committee, along with its membership, is set out below:
Audit and Risk Management Engagement
Ensures Foresight Solar maintains the
highest standards of integrity, financial
reporting, internal and risk management
systems, sustainability and corporate
governance.
Reviews the performance of the Investment
Manager, as well as evaluating other key
service providers.
Composition:
Ann Markey (Chair)
Chris Ambler
Lynn Cleary
Paul Masterton
Composition:
Alexander Ohlsson (Chair)
Ann Markey
Chris Ambler
Tony Roper
Lynn Cleary
Nomination Remuneration
Leads the process for appointments,
evaluation, succession planning, and
ensuring a diverse candidate pipeline.
Develops remuneration policies and
practices that support the Company’s
strategy and promote its long-term success.
Composition:
Lynn Cleary (Chair)
Alexander Ohlsson
Ann Markey
Chris Ambler
Composition:
Paul Masterton (Chair)
Chris Ambler
Lynn Cleary
Reports from the Company’s committees are available from page 95.
Directors’ attendance at Board and committee meetings:
Board Audit and Risk
Management
Engagement Remuneration Nomination
Alexander Ohlsson 4/4 — 2/2 — 4/4
Ann Markey 4/4 5/5 2/2 — 4/4
Lynn Cleary 4/4 5/5 1/2
1
1/1 4/4
2
Paul Masterton
3
1/1 — — — —
Tony Roper
4
1/1 — — — —
Monique O’Keefe
5
3/4 3/5 1/2 1/1 4/4
Chris Ambler
6
4/4 5/5 2/2 1/1 4/4
1. Lynn Cleary was appointed to the Management Engagement Committee on 29 February 2024, after the year’s first meeting.
2. Although not a member of the Committee in 2024, Lynn Cleary attended every meeting as a Director.
3. Paul Masterton was appointed to the Board with effect from 21 November 2024. He became the Chair of the Remuneration
Committee following the resignation of Monique O’Keefe, and joined the Audit and Risk Committee.
4. Tony Roper was appointed to the Board with effect from 21 November 2024 and joined the Management Engagement Committee.
5. Monique O’Keefe stepped down from the Board on 21 November 2024.
6. Chris Ambler will step down from the Board on 17 June 2025.
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Corporate Governance report continued
Board leadership and company purpose continued
Stakeholders
Directors are required to act in good faith and to behave in
a way that promotes Foresight Solar’s long-term success
for the benefit of all its stakeholders. Fostering healthy and
constructive relationships with the Company’s different
audiences and taking their interests into consideration as part
of the decision-making process should result in increased
Shareholder value over the long term.
Whilst Foresight Solar is an investment company with no
employees, the Board has identified its key stakeholders
and dedicated resources to interact with them, collect and
process their views before making relevant decisions.
It does so by relying on the Investment Manager, the joint
brokers and the Company Secretary as the main points of
contact. They are tasked with interacting with the different
stakeholders, gathering input, communicating concerns and,
ultimately, delivering the Directors’ decisions to achieve the
best possible outcomes.
As part of its regular course of business, the Board receives
updates on matters relevant to stakeholders and discusses
those topics in depth during meetings and throughout the
year, taking into consideration:
ș The likely consequences of any decision in the long term
ș The need to act fairly towards and ensure equal treatment
of Shareholders
ș The need to foster and retain business relationships with
suppliers, customers and other stakeholders
ș The impact of the Company’s operations on local
communities and the wider environment
ș The importance of maintaining a reputation for high
standards of business conduct
A description of Foresight Solar’s main stakeholder groups,
their interests and how the Directors have taken these
into account when making determinations is set out on the
following pages.
Engaging with Shareholders
Shareholders are the Company’s primary stakeholders, and
Board decisions are carefully considered with their long-term
interests in mind. With the support of its Investment Manager
and brokers, Foresight Solar maintains regular communication
with them and always welcomes their views.
During the year, the Board, the Investment Manager and the
brokers held multiple sessions with existing Shareholders
representing at least 40% of the Company’s issued share
capital, as well as prospective investors.
The main topics of interest were the complex macroeconomic
environment, its effects on the business, and the actions being
taken to reduce the share price discount to the Net Asset
Value. Shareholders were concerned about FSFL’s business
model in a higher interest rate environment, especially as
the discount has widened in the past 24 months. This led to
thorough explanations of the Company’s phased divestment
plan, with the sale of Australia progressing and its expanded
buyback programme, one of the largest in the sector.
Company representatives also touched on the approach to
capital recycling to position Foresight Solar for growth once
equity markets reopen, and the diversification provided by its
international footprint.
Post period, the Board also announced a revised Investment
management fee structure, better aligning the Investment
Manager’s remuneration with Shareholder interests.
The average share price discount of more than 10%
during the 2023 financial year triggered the Company’s
first discontinuation vote at the following Annual General
Meeting. The results made clear the dissatisfaction of some
Shareholders who demand the Board find a faster solution
to return capital. The Directors have since intensified the
analysis of their options and plan to have more details for
themarket soon.
In addition to asking for and collecting feedback in every
meeting, in 2024 Foresight Solar once again engaged an
independent consultant to gather investors’ views in a
perception audit. Questions covered a range of topics, from
performance to governance and brand to sustainability.
The Board believes these studies are an important
planning tool because they offer an unbiased channel for
Shareholders to provide views and opinions, resulting in
improved communication with the market and an impartial
measure of the understanding of the Company’s investment
proposition. The survey’s conclusions will be used to inform
decision-making and strategy development.
The Board seeks to encourage a culture that promotes integrity and openness, that
values diversity, and that is responsive to the views of the Company’s stakeholders.
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Corporate Governance report continued
Board leadership and company purpose continued
Stakeholder group Engagement and communication Results and decisions
Shareholders
ș Institutional and retail
Shareholders.
ș Hosted the Annual General Meeting.
ș Held regular conversations, attended ad hoc investor meetings and
conducted roadshows.
ș Addressed current and prospective retail investors with exclusive meetings
and ad hoc messages.
ș Responded to queries on financial, strategic and sustainability topics.
ș Organised the first capital markets event to update investors on Foresight
Solar’s strategy.
ș Commissioned an independent investor survey to assess opinions of
current and prospective Shareholders.
ș Presented financial updates, including Annual and Interim Reports and
factsheets.
ș Published announcements via RNS.
ș Updated the dedicated Foresight Solar website.
ș Maintained the Company’s LinkedIn page to foster two-way,
digitalcommunication.
ș Declared dividend target of 8.00pps for 2024.
ș Expanded a share buyback programme of up to £50 million.
ș Announced a new asset management fee structure, delivering significant
savings for investors and more closely aligning interests with Shareholders.
ș Returned £67 million to Shareholders between dividends and stock
repurchases.
ș Continued to analyse options to address Shareholder concerns, return
capital and improve liquidity.
ș Progressed the phased divestment programme of more than 200MW of
solar and BESS projects.
ș Doubled the development-stage pipeline with a framework agreement for
BESS in Spain and in-house conception of co-located BESS in Australia.
40
meetings with institutional
investors
Foresight Solar’s first capital
markets event
3
group events dedicated
toretail investors
Lenders
ș Banks.
ș Updated regularly on covenant compliance and cash flow positioning. ș Started negotiations to refinance and reduce the size of the
sustainability-linked revolving credit facility.
ș Delivered positively on the existing RCF’s sustainability metrics.
11
debt providers to the
Company and its SPVs
Stakeholders continued
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Corporate Governance report continued
Board leadership and company purpose continued
Stakeholder group Engagement and communication Results and decisions
Investment Manager
ș Foresight Group.
ș Communicated the need for a revised fee agreement to reflect market
conditions and further align interests with Shareholders.
ș Assessed the Investment Manager’s contractual relationship and its
performance.
ș Monitored the effectiveness of the parameters for delegated authority
tomake investment decisions.
ș Oversaw internal controls arrangements.
ș Held regular and ad hoc meetings to discuss Company business.
ș Hosted a Strategy Day to discuss and agree Foresight Solar’s position
andmeasures to further its competitiveness.
ș Debated the potential impacts of government measures, such as the
Review of Electricity Market Arrangements and the proposed new
planningapproval process.
ș Post period, agreed a revised fee arrangement to lower costs for
Shareholders.
ș Established the Investment Manager maintains robust internal controls.
ș Confirmed the continued appropriateness of the Investment Manager’s
delegated authority to make investment decisions.
ș Determined the continued appointment of Foresight Group was in the
bestinterest of Shareholders.
11‑year
partnership with the
Investment Manager
Commercial service
providers
ș Administrator and
Company Secretary.
ș Joint corporate brokers.
ș Legal advisors.
ș Public relations agency.
ș Tax advisors.
ș Held regular meetings, calls and interactions on strategic actions.
ș Consulted on regulatory, governance, accounting and taxation matters.
ș Monitored the internal controls of the Administrator and of the Company
Secretary.
ș Engaged with journalists, built brand awareness and enhanced Foresight
Solar’s reputation.
ș Highlighted the Company’s resilient operational and financial performance
to incentivise investors to buy shares.
ș Conducted annual service provider performance reviews.
ș Retained services of all key service providers.
5
service provider reviews
Stakeholders continued
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Corporate Governance report continued
Board leadership and company purpose continued
Stakeholder group Engagement and communication Results and decisions
Regulators
ș Jersey Financial Services
Commission.
ș Oversaw service providers to ensure successful operations and regulatory
reporting.
ș Interacted with the JFSC to ensure legal and financial compliance.
ș Took appropriate measures and guaranteed compliance.
24
interactions with the JFSC
Asset-level
counterparties
ș Supply chain
counterparties.
ș Landowners.
ș O&M contractors.
ș PPA counterparties.
ș Focused engagement on value enhancement opportunities, including
rationalisation of service provision for cost savings and/or improved
services.
ș Hosted calls with O&M providers to ensure adequate oversight of portfolio
operations.
ș Maintained regular contact with the owners of the land on which Foresight
Solar’s assets operate.
ș Kept emphasis on internal control frameworks to ensure they are robust
and effective.
ș Maintained scrutiny of, and resources allocated to, emerging risks.
ș Re-evaluated contracts to improve service levels and reduce costs.
ș Implemented value enhancement projects to improve portfolio operations.
ș Engaged with select landowners to extend asset leases.
ș Grew commercial relationships through new acquisitions and development
opportunities.
60+
different providers
Stakeholders continued
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Corporate Governance report continued
Board leadership and company purpose continued
Stakeholder group Engagement and communication Results and decisions
Local communities
ș Local authorities and
agencies.
ș Area residents.
ș Interacted with local authorities to ensure safe and compliant asset
operations.
ș Conducted educational site visits for schools and colleges.
ș Contributed £286,671 to local community funds.
£286,671
contributions made to local
communities
Alexander Ohlsson
Chair
19 March 2025
Stakeholders continued
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Introduction
Meeting at least once per year, the Management Engagement
Committee’s main responsibility is to assess the Investment
Manager’s performance in the context of the Investment
Management Agreement with Foresight Group.
The Directors evaluate the Investment Manager’s ability to
provide income and growth, deliver financial performance
for the desired risk profile, manage the Company’s assets
effectively, and distribute a sustainable, progressive dividend.
In addition to its main task, the Committee is also charged
with analysing the delivery of key service providers’ work.
Management
Engagement
Committee report
“The Committee is responsible for
reviewing the performance of key
service providers, especially the
Investment Manager, to ensure the
Company is effectively supported.”
Alexander Ohlsson
Chair of the Management Engagement Committee
Membership:
Alexander Ohlsson
Ann Markey
Chris Ambler
Tony Roper
Lynn Cleary
Roles and responsibilities:
ș Review the terms of appointment and fees paid to the
Investment Manager
ș Oversee the performance of and hold the Investment
Manager accountable for its service delivery
ș Review the terms of appointment and fees paid to key
service providers, including the Company Secretary,
Administrator, registrar, legal and public relations
advisors, and brokers
ș Oversee the performance of and hold key service
providers accountable for their work
Performance of the Investment Manager
To analyse the Investment Manager’s overall performance,
the Committee investigates:
The Company’s results relative to its peers
The Investment Manager’s remuneration for services
rendered for the period
Foresight Group’s ability to support the Board in delivering
Foresight Solar’s purpose
The Committee conducted a detailed review and concluded
that whilst the Board should continue to challenge the
Investment Manager, the ongoing retention of Foresight Group
remained in the Company’s best interest.
Given the challenging macroeconomic environment,
however, the Committee believed it was crucial to review the
Investment Manager’s fees, particularly as they pertain to
aligning stakeholder interests and helping deliver Shareholder
value. The Directors had discussions with Foresight Group
about the appropriateness of the remuneration structure
and, post period, agreed a new arrangement effective from
1March 2025. The revised management fee will be applied to
an equal weighting of market capitalisation and NAV.
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Management Engagement Committee report continued
Performance of the Investment Manager continued
During its meetings with investors in 2024, the Board heard
Shareholders’ demands for the Company to exit Australia
and re-focus operations in the UK and Europe. The sale of
that part of the portfolio was always a key component of
the announced 200MW divestment process. The target is to
agree a sale by the third quarter of 2025 and proceeds will
be used in accordance with the capital allocation approach.
The Directors are acutely aware of some investors’ desire for
further returns of capital and, in response, have announced
the start of at least another 75MW of asset disposals.
Proceeds from these sales, once complete, are intended to
provide enhanced liquidity for those Shareholders seeking it.
Another crucial topic for investors is the persistent share
price discount to Net Asset Value. Consulting with the
Investment Manager and its other advisors, the Board
has announced several measures to return capital to
Shareholders, pay down debt and pave the way to potential
future growth. The Directors understand, however, that
these initiatives have not been enough to attract investors
reacting to a complex macroeconomic environment. So, the
Investment Manager and the brokers continue to develop
other ideas as the Board considers all options available to
reduce the share price discount.
Performance of key service providers
The Committee also conducted a review of other key
service providers, including the Company Secretary and
Administrator, brokers, legal and public relations advisors,
and registrar. It concluded that it would continue to work
with them to address potential performance concerns and to
ensure that the fees paid remained in line with the stipulated
budget and the contractual agreements.
Overall, the Committee was comfortable that the dues
paid were broadly in line with market rates for comparable
services.
Conclusion
Following these reviews, the Committee determined that it
was in the Company’s and its Shareholders’ best interests for
the Investment Manager’s appointment to continue, and the
Board has since ratified this decision.
Alexander Ohlsson
Chair of the Management Engagement Committee
19 March 2025
Bournemouth, UK
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Annual Report and Financial Statements 31 December 2024
Introduction
The Nomination Committee is responsible for ensuring
Foresight Solar sets formal, rigorous and transparent
procedures to select new Directors. The succession pipeline
is fostered using objective selection criteria to promote
diversity of gender, social and ethnic backgrounds, cognitive
and personal strengths.
To ensure overall balance, the Board reviews its effectiveness
and its combination of skills, experience and knowledge at
least once per year.
Appointments and succession planning
Monique O’Keefe decided to step down in November 2024
after more than five years as a NED. In that time, she made a
significant contribution to the Company’s oversight and to its
strategy. We wish her all the best in her endeavours.
“The Committee is responsible for
ensuring rigorous and transparent
procedures, along with objective
selection criteria for Board
appointments and succession plans.”
Lynn Cleary
Chair of the Nomination Committee
Nomination
Committee report
Composition, succession and evaluation
Membership:
Lynn Cleary
Alexander Ohlsson
Ann Markey
Chris Ambler
Roles and responsibilities:
ș Lead the process for new Board appointments
ș Ensure plans are in place for orderly succession
ș Oversee the development of a diverse candidate
pipeline
ș Lead annual Board effectiveness review
As part of the Board’s phased succession plan, we welcomed
Paul Masterton and Tony Roper as Non-Executive Directors.
Following a detailed process, which included reviews of
long and short lists, as well as interviews with Directors and
with the Investment Manager, the two were recognised as
strong candidates with complementary skills and experience.
Longwater Partners, an independent advisory and search
firm, supported in their selection.
Messrs Masterton and Roper bring a wealth of investment
trust knowledge and infrastructure expertise that will be
invaluable to oversee the execution of Foresight Solar’s
income and growth approach and to support its development
over time. In the short term, their input will be invaluable as
FSFL navigates a complex environment.
The Committee proceeded to make its recommendation and
the two were appointed with effect from 21 November 2024.
They were also named to the Remuneration and Audit and
Risk, and Management Engagement committees, respectively.
They will stand for election by Shareholders at the next
Annual General Meeting in June 2025.
Another step in the Board’s orderly succession is Chris
Ambler deciding not to stand for re-election at the AGM.
He will, therefore, be resigning his roles as Independent
Non-Executive Director and Senior Independent Director.
Mr Ambler has been a member of the Board since the
Company’s IPO in 2013 and has added enormous value with
his energy markets experience and executive knowledge. Mr
Masterton will be appointed SID with effect from Mr Ambler’s
resignation.
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Nomination Committee report continued
Composition, succession and evaluation continued
Appointments and succession planning continued
Having also been in his position since listing, Alexander Ohlsson’s independence and performance was scrutinised and the Committee is satisfied that he remains independent and continues to
perform well. The Board also has checks in place to ensure the highest standards of governance, such as having a new Senior Independent Director from 2025 and conducting an annual review of
the Chair’s performance. As outlined in an announcement to the market in February, Mr Ohlsson intends to retire in September 2025, when Mr Roper is expected to take over as Chair. Mr Ohlsson’s
retention in the meantime is beneficial to support this phased rotation and to ensure an orderly handover to new members and to the future Chair.
The Committee will re-engage Longwater Partners to select another NED, but not before the third quarter of 2025, and will make an announcement in due course.
Board and committee composition
The Committee reviewed the composition of the current Board and concluded that the Directors work effectively together and possess the desired balance of skills, experience and expertise.
TheCommittee will continue to pursue the Company’s succession plan with due regard to maintaining the current effective working dynamic.
Directors’ and Investment Manager’s skills matrix
Skills and expertise
Strategy
Listed
investment
companies
Capital markets
and corporate
finance
Renewable
energy industry
Infrastructure
transactions and
investments
Development
and construction
Risk
management
Health
and safety Sustainability
Stakeholder
engagement
Alexander Ohlsson
Ann Markey
Lynn Cleary
Paul Masterton
Tony Roper
Chris Ambler
Foresight Group
Expertise Experience Limited experience
The composition of the Company’s committees was also analysed and the Committee recommended that Lynn Cleary be a member and, following Monique O’Keefe’s resignation, become the Chair
of the Nomination Committee. It was also recommended that Paul Masterton be a member and Chair of the Remuneration Committee and a member of the Audit and Risk Committee, and that Tony
Roper be a member of the Management Engagement Committee. The committees’ needs will continue to be reviewed against the skills, experience and workload of the Directors to ensure they
remain appropriately supported.
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Nomination Committee report continued
Composition, succession and evaluation continued
Board performance review
The Board undertakes an annual review of its own performance and of its committees through a
questionnaire. The Chair then discusses the results with the Board and its committees and takes
appropriate action to address any potential issue.
The Board conducted an internally facilitated evaluation in 2024. The analysis was managed by
the Company Secretary and involved every Director completing a questionnaire based on the
actions from the internal Board performance review held in 2023.
The key development points identified during the 2023 review were met:
ș Continued implementation and evolution of the Company’s succession plan to ensure
appropriate Board rotation
ș Ongoing training and support on the evolving Anti-Money Laundering and Counter Financing
of Terrorism regulations in Jersey
ș Development of the Board’s review of the Company’s risk management framework and
internal controls, in line with corporate governance requirements
There were no major development points identified in 2024. The Directors’ conclusions were
centred on the favourable completion of the succession plan, with the appointment of a
new NED in 2025, and a stronger focus on training to further enhance the Board’s skills and
expertise.
The Committee will continue to support the implementation and review of these actions, and
the Board will consider conducting another externally facilitated performance review in 2025,
when the new members have had time to settle into their roles.
Overall, the Board, the Chair, the Directors and the committees have performed well during the
year. The Board continues to work well with the Investment Manager in developing Foresight
Solar’s income and growth strategy and promoting its long-term success.
Directors’ professional development
Directors are provided with full details of duties and obligations at the time of appointment
and receive additional information as requirements evolve. The Board is advised of changes
affecting Directors’ responsibilities as they arise.
A formal induction programme for new appointees is in place, helping bring them up to speed
on Company developments and accelerate competency-building. In any case, Directors
are provided with key information on Foresight Solar’s policies, regulatory and statutory
requirements, and internal controls on a regular basis.
Directors also attend industry seminars, as well as participating in an ongoing annual training
programme on topics relevant to Company business. This helps augment necessary skills and
creates opportunities for exchanges of experience between Board members.
Further, as Directors of a Regulated Fund in Jersey, the members of the Board are required
to undertake a minimum of 25 hours’ continuous professional development per year. Most
Directors met this requirement in 2024. Due to his appointment in November, Tony Roper did
not have able time to complete the entire prerequisite. A former asset management senior
executive with extensive real assets experience, Mr Roper has had extensive industry-relevant
training and will dedicate himself to completing the full allocation in 2025.
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Nomination Committee report continued
Composition, succession and evaluation continued
Diversity
The Board adopted a Diversity Policy to support Foresight Solar’s commitment to improve
representation. Thispolicy is reviewed by the Nomination Committee each year to ensure it
remains fit for purpose. Diversity among Board members is taken into consideration and the
Chair of the Audit and Risk Committee, a senior position, is held by a female Director.
With the resignation of Ms O’Keefe and appointment of Messrs Masterton and Roper, the
Company had 33% female representation – due to increase to 40% from June as Mr Ambler
steps down – but had no ethnic diversity. The Committee is aware of this imbalance and, subject
to availability of qualified candidates, will seek to address it in the next recruitment window.
For the first phases of the succession plan, the Committee considered candidates primarily
from the UK and Europe. For the next round, it will look to secure a Jersey resident to support
JFSC Code of Practice requirements. In this subsequent step, and despite a more limited group
of potential candidates, the Board is committed to run a process targeted at attracting the most
qualified, most diverse applicant pool possible.
Board member diversity
Number of
Board members
Percentage of
the Board
Number of
senior
positions
1
Male 4 66% 2
Female 2 33%
2
1
Number of
Board members
Percentage of
the Board
Number of
senior
positions
1
White British or other White
(including minority-white groups) 6 100% 3
1. Chair, Senior Independent Director and Chair of the Audit and Risk Committee.
2. This is due to increase to 40% once Chris Ambler steps down at the next AGM.
Conflicts of interest
The Directors are obligated 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
Company’s interests, are considered when appointing Directors and are monitored on a regular
basis. The terms of each NED’s appointment letter require that they seek prior approval from
the Board before taking other external positions.
The Board acknowledges Directors’ holdings of Ordinary Shares in the Company, details of
which are set out on page 106. The Board considers these interests at each scheduled meeting
and remains satisfied that they do not affect members’ objectivity or their ability to exercise
independent judgement.
Re-election of Directors
Mr Ohlsson and Ms Markey were reappointed and Ms Cleary was elected at the Annual General
Meeting held on 12 June 2024. The Committee was pleased to see strong Shareholder support,
with each of them receiving more than 95% of votes in favour.
Votes for the re-election of Mr Ambler and Ms O’Keefe were lower than those for the other
Directors. Although Ms O’Keefe is no longer a member of the Board and Mr Ambler will step
down at the next AGM, the Committee acknowledges the reasons that led some Shareholders
to vote against their reappointments. Both at the Board and at the Committee level we will
continue working to address investor feedback related to Board composition and succession.
Messrs Masterton and Roper, who were appointed to the Board in November 2024, will stand
for election at the AGM in June 2025. All other Directors, except for Mr Ambler, will offer
themselves for re-election at the same meeting.
Lynn Cleary
Chair of the Nomination Committee
19 March 2025
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“The Committee ensures
Foresight Solar maintains the
highest standards of integrity,
financial reporting, internal and
risk management systems, and
corporate governance.”
Ann Markey
Chair of the Audit and Risk Committee
Audit and Risk
Committee report
Audit, risk and internal control
Introduction
The Audit and Risk Committee operates within clearly defined
terms of reference approved by the Board. These parameters
are reviewed annually and updated for changes in the UK
Corporate Governance and AIC Codes, as appropriate. The
Committee Chair is a Chartered Accountant and the Board is
satisfied that she has recent and relevant financial experience.
All members are independent and none of them have any
involvement in the preparation of the Company’s Financial
Statements.
Membership:
Ann Markey
Chris Ambler
Lynn Cleary
Paul Masterton
Roles and responsibilities:
ș Monitor the integrity of the Financial Statements and
recommend their approval
ș Review Foresight Solar’s internal control and risk
management systems
ș Recommend the appointment of an external Auditor
totheBoard
ș Oversee the external Auditor and its performance and
monitor its independence
ș Implement and review the policy on the engagement
oftheexternal Auditor to supply non-audit services
ș Review the Company’s sustainability practices and
reporting
Meetings are scheduled to coincide with Foresight Solar’s
reporting cycle. The Committee met five times during 2024.
Regular attendees at meetings include non-Committee Board
members, representatives of the Investment Manager, the
external auditor and the Administrator.
The Committee reports directly to the Board, which retains
ultimate responsibility for the Annual and Interim Financial
Statements.
During the year, the Committee enhanced its framework
on risk management and internal controls. As part of a
continual improvement process, the Committee is considering
the impact from the recent changes to the UK Corporate
Governance and AIC Codes and is working with the
Investment Manager, Administrator and Compliance Officer to
advance reporting and assurance on risks and controls.
The Committee is charged with maintaining an open and
effective relationship with the Company’s Auditor. The Chair
of the Committee maintains regular contact with the Auditor
during the audit process and the Auditor attends meetings in
which the Annual Financial Statements are considered.
KPMG LLP (KPMG) has completed the Company’s external audit
for 2024. It has not performed any non-audit services during
the year. JTC (Jersey) Limited (JTC) prepares all necessary
tax returns following approval of the Financial Statements.
Significant issues considered
The Committee has identified and considered the following
principal key risk in relation to Foresight Solar’s activities and
to the Annual Financial Statements:
Valuation of unquoted investments. This issue was discussed
with the Investment Manager and the Auditor at the
planning and conclusion of the audit of the Annual Financial
Statements. (It is also considered by the Committee in relation
to the Interim Financial Statements.)
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Audit and Risk Committee report continued
Audit, risk and internal control continued
Significant issues considered continued
As in previous years, it also considered the Going Concern
basis for preparation of the Financial Statements, as well as
the Viability Statement.
Valuation of unquoted investments
The unquoted investment is a 100% controlling interest in
Foresight Solar (UK Hold Co) Limited, a non-consolidated
subsidiary company which is measured at fair value.
The majority of UK Hold Co’s total assets (by value) are
in companies in which no quoted market price is readily
available.
The total controlling interests of the Company’s assets are
held through its subsidiary, Foresight Solar (UK Hold Co)
Limited: FS Top Holdco 1 Limited (FS Topco 1), FS Top Holdco
2 Limited (FS Topco 2), FS Holdco 3 Limited (FS Holdco 3)
(through RCF Debtco Limited), FS Holdco 4 Limited (FS Holdco
4) and 50% interest in Foresight Battery Storage Holdings
Limited (FBSHL). (See note 1 to the Financial Statements on
page 124 for details.)
FS Topco 1, in turn, holds an indirect 100% controlling interest
in FS Holdco Limited (FS Holdco), FS Topco 2 has an indirect
100% controlling interest investment in FS Debtco Limited (FS
Debtco) and FS Holdco 3 has an indirect 100% controlling
interest in Second Generation Portfolio 1 Limited (SGP1).
These are all non-consolidated subsidiary companies which
are also measured at fair value, established by using the fair
value of their net assets.
The assets of FS Holdco, FS Debtco, SGP 1 and FS Holdco
4 are held in investments in which no quoted market price is
available and are valued by using discounted cash flow models.
FBSHL’s investments in construction are held at cost as they
are not yet operational, and the pre-construction investments
are held at the lower of cost or net realisable value.
The valuations of underlying investments are an area of
inherent risk and judgement. There is also a potential risk
of the Investment Manager unfairly valuing the assets due
to its fee being linked to Foresight Solar’s Net Asset Value.
There is now better alignment between the Investment
Manager and Shareholders following a change to the
investment management fee. With effect from 1 March 2025,
the calculation is based on an equal weighting of market
capitalisation and NAV. The fee was previously based entirely
on Net Asset Value.
During the valuation process, the Board, the Committee and
the Investment Manager follow the valuation methodologies
for unlisted investments as set out in the International Private
Equity and Venture Capital Valuation Guidelines, as well as
appropriate industry benchmarks. These policies are set out
in note 2 to the Financial Statements, from page 125.
The Committee reviews the Investment Manager’s valuations,
including the determination of and changes in assumptions.
The Investment Manager employs three independent
energy consultants to provide forward-looking power price
forecasts, which are a key input into portfolio valuations.
TheInvestment Manager confirmed the underlying valuations
had been calculated on a consistent basis throughout the
year and in accordance with industry guidelines, taking
account of the latest available information about investee
companies and current market data. The Investment Manager
also held discussions regarding the investment valuations
with the Auditor.
The Investment Manager has agreed the valuation
assumptions with the Committee. Key assumptions used
in the valuation forecasts are detailed in note 16 to the
Financial Statements. The Investment Manager has provided
sensitivities around those assumptions, which are also
detailed in note 16.
Annual Financial Statements
The Investment Manager confirmed to the Committee
that it was not aware of any material misstatements in the
Company’s financial reporting.
Having reviewed the reports from the Investment Manager
and from the Auditor, the Committee is satisfied that the
key areas of risk and judgement have been addressed
appropriately in the Annual Financial Statements and that
the significant assumptions used in determining the value of
assets and liabilities have been properly appraised and are
sufficiently robust.
The Committee reviewed the Annual Report, including the use
of Alternative Performance Measures, with the objective of
improving presentation for greater ease of understanding.
The Committee has concluded that the Annual Report and
Financial Statements are fair, balanced and understandable,
and that they provide the information necessary for
Shareholders to assess Foresight Solar’s position,
performance, business model and strategy.
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Audit and Risk Committee report continued
Audit, risk and internal control continued
External Auditor
During the year, the Committee judged the effectiveness of
thecurrent external audit process by assessing and discussing
specific documentation presented to it in accordance with
therelevant guidance. It discussed the key issues the Auditor
identified in the planning phase in detail, examined what work
they planned to carry out on these focus areas during the
audit and debated the level of challenge on these matters,
aswell as considering the outcome of their work.
The Committee also assessed the quality and effectiveness
of the engagement between the Auditor, the Investment
Manager and the Administrator. It concluded the interactions
were professional, constructive and appropriate to deliver an
efficient and effective audit.
The Committee considered the performance of the Auditor
and agreed that KPMG provided a high level of service and
maintained a good knowledge of the market, ensuring audit
quality. Overall, KPMG has carried out its duties in a diligent
and professional manner.
The Committee also conducted a review of KPMG’s
independence and objectivity, which included an analysis
of the firm’s own objectivity and independence assessment,
and was satisfied that it was objective and independent. The
Committee also noted that KPMG did not provide non-audit
services to any other entities in the Group.
The Board, on the Committee’s recommendation, will
recommend the reappointment of KPMG as the Company’s
Auditor at the Annual General Meeting in June 2025.
Audit partner rotation
During 2024, the Company was informed that Fang Fang Zhou
would not continue as KPMG’s audit partner due to a conflict
with another mandate. Ms Zhou had supported Foresight
Solar’s audit since overseeing the process for the Annual
Financial Statements relating to the year ended 31December
2020. On behalf of the Committee and the Board, I would like
to thank Ms Zhou for her work on thelast four audits.
Rahim Butt, the audit partner for the 2024 audit, replaced Ms
Zhou before the start of the audit planning process.
The Investment Manager’s finance team and the Committee
Chair spent time with both Ms Zhou and Mr Butt to ensure
there was a smooth handover, continuity of service and
consistent quality. Mr Butt confirmed there would be minimal
change to the key members of the audit team to facilitate the
seamless transition, reassuring the Committee of its quality.
Internal control and risk management
The Directors have responsibility for Foresight Solar’s internal
controls and for the review of their effectiveness. The internal
controls system is designed to manage, rather than eliminate,
the risks of failure to achieve business objectives. The system
is designed to meet the Company’s needs and its risks. By its
nature, however, it can provide reasonable but not absolute
assurance against misstatement or loss.
The Board has appointed JTC as Accountant and
Administrator, effectively delegating the Company’s financial
management. There is an established system of controls in
place to ensure proper records are maintained and financial
information is accurate and reliable, and that Foresight
Solar’s assets are safeguarded.
Directors have access to the advice and services of the
Company Secretary, who is responsible for ensuring
compliance with procedures and applicable rules and
regulations.
Pursuant to the terms of its appointment, the Investment
Manager provides the Board with a pipeline of potential
investment opportunities for it to consider and has
physical custody of documents of title relating to the equity
investments involved.
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Audit and Risk Committee report continued
Audit, risk and internal control continued
Internal control and risk management continued
The Investment Manager confirmed that there is a continuous
process for identifying, evaluating and managing the
Company’s risks. This has been in place for the year under
review and up to the date of approval of the Annual Report
and Financial Statements. This process is also regularly
reviewed by the Audit and Risk Committee and the Board.
The risk management process uses a risk-based approach
to internal control whereby a Business Risk Assessment is
maintained with a risk matrix that identifies the key functions
carried out by the Investment Manager and by other service
providers; the individual activities undertaken within those
functions; the risks associated with each activity; and the
controls employed to minimise those risks.
The Board receives regular reports highlighting all material
changes to the risk ratings and confirming the actions that
have been or are being taken. This process covers Foresight
Solar’s key strategic, business, operational, compliance
and financial risks, and includes consideration of the risks
associated with its arrangements with professional advisors.
It also considers emerging risks and the potential for
mitigation.
The Audit and Risk Committee reviewed the effectiveness
of the system of internal controls, along with a review of the
operational and compliance controls and risk management.
The Committee reported its conclusions to the Board, which
was satisfied with the overall outcome and with the quality
of the internal controls. As part of its workplan for 2025 the
Committee is engaging with the Investment Manager, the
Administrator and the Compliance Officer to further enhance
reporting and assurance on risks and controls.
The Audit and Risk Committee also analysed the need for
an internal audit function and decided that the systems
and procedures employed by the Investment Manager,
theAccountant and Administrator, the Audit and Risk
Committee and other third-party advisors provide sufficient
assurance to safeguard Shareholders’ investment and the
Company’s assets.
Other matters
In 2023, the Committee investigated the benefit of having the
Company’s Interim Report and Financial Statements reviewed
by the external Auditor and concluded that, on balance,
there was limited advantage. The position was reconsidered
in 2024 and it was again concluded that a review was
unnecessary. The decision will be revisited annually to ensure
it remains appropriate.
Ann Markey
Chair of the Audit and Risk Committee
19 March 2025
Board meeting, St. Helier, Jersey
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Strategic Report
“The Committee has responsibility
for reviewing and establishing
Directors’ remuneration, specifically
reflecting the responsibilities and
time commitment of their roles.”
Paul Masterton
Chair of the Remuneration Committee
Directors’
Remuneration report
Remuneration
Introduction
The Board has prepared this report in line with the AIC
Code. An ordinary resolution to approve it will be put to
Shareholders at the forthcoming Annual General Meeting in
June 2025.
Remuneration policy
Remuneration for Non-Executive Directors should be
transparent, reflect the complexity of the Company’s
operations, and be proportionate to the time spent, as well
as the responsibilities borne for the Company’s affairs. It
should also be sufficient to enable the recruitment of high
calibre candidates that, at a minimum, maintain the Board’s
high standards .
It is the Remuneration Committee’s responsibility to
recommend to the Board a policy for NED remuneration, to
monitor its implementation and to ensure that all payments
to Non-Executive Directors are made in accordance with the
agreed policy.
Membership:
Paul Masterton
Chris Ambler
Lynn Cleary
Roles and responsibilities:
Set remuneration policies and practices to
supportstrategy
Determine the remuneration policy
Decide compensation for the Directors
It is considered appropriate that no aspect of Director
remuneration should include share options or should be
performance-related due to their non-executive status.
Directors’ annual fees are set in accordance with Foresight
Solar’s Articles of Association, which establishes a limit of
£400,000 in aggregate. The Company also holds liability
insurance for Directors.
The Company pays Directors personally, every quarter,
inarrears.
None of the Directors have a service contract but, under their
individual letters of appointment, may resign at any time by
mutual consent. No compensation is payable to Directors
leaving office. As they are not appointed for a fixed length
of time, there is no unexpired term to their appointment.
The Directors are also entitled to be reimbursed for their
reasonable expenses incurred whilst engaged on Company
business.
Foresight Solar’s remuneration approach is that smaller,
incremental increases to fees are preferable to larger, more
infrequent raises. In considering any changes, the Committee
takes into account the macroeconomic environment, inflation
and impacts of an increasingly complex regulatory landscape,
together with benchmarks on Director remuneration for FTSE
250 firms and, especially, other investment trusts.
Shareholders approved the previous remuneration policy at
the Annual General Meeting held on 12 June 2024 for the
financial year to 31 December 2024. The Committee has
reviewed and proposed minor updates to the remuneration
policy to ensure it is wholly transparent and aligned with
the updated AIC Code. This new remuneration policy
will be tabled for approval at the 2025 AGM to apply
tosubsequentyears.
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Directors’ Remuneration report continued
Remuneration continued
Remuneration considerations
The Committee considers the Board’s fees at least once per year, undertaking external
comparisons to ensure remuneration is in line with industry standards and market practice.
During 2024, the Committee considered seeking guidance from an independent consultant but
concluded that, due to peer information analysis provided by the Investment Manager and the
extensive availability of appropriate benchmark data, a third-party report was not required.
The Committee considered the benchmark data, which indicates that the level of Board fees
is at, or close to, the mid-point for the peer group. The Committee further considered wider
sectorial challenges, Shareholder returns and fee discussions, together with the challenging
macroeconomic environment. Following these deliberations, the Committee recommended to
the Board that fees should remain unchanged for 2025.
Individual Directors’ fees
Director fees for the year and those forecast for 2025 are shown below. No other remuneration
was paid or payable during the period.
Anticipated fees for the
year ending
31 December
2025
(Unaudited)
Fees for the
year ended
31 December
2024
(Audited)
Fees for the
year ended
31 December
2023
(Audited)
Alexander Ohlsson (Chair) £82,992 £82,992 £79,800
Ann Markey £65,520 £65,520 £63,000
Lynn Cleary £53,508 £53,508 £14,801
Paul Masterton
1
£53,508 £5,966 —
Tony Roper
2
£53,508 £5,966 —
Chris Ambler
3
£26,754 £53,508 £51,450
Monique O’Keefe
4
— £47,692 £51,450
Peter Dicks
5
— — £23,322
Total £335,790 £315,152 £283,823
1. Paul Masterton was appointed to the Board with effect from 21 November 2024. He became the Chair of the Remuneration
Committee following the resignation of Monique O’Keefe, and joined the Audit and Risk Committee.
2. Tony Roper was appointed to the Board with effect from 21 November 2024 and joined the Management Engagement Committee.
3. Chris Ambler will step down from the Board on 17 June 2025.
4. Monique O’Keefe stepped down from the Board on 21 November 2024.
5. Peter Dicks stepped down from the Board on 14 June 2023.
Company interest
Directors who had interests in the shares of the Company on 31 December 2024 are shown
below. As previously noted, they do not have any options over shares as part of their roles.
Shares held on
31 December
2024
Shares held on
31 December
2023
Alexander Ohlsson (Chair)
1
275,000 75,000
Ann Markey 10,000 10,000
Lynn Cleary 15,000 —
Paul Masterton — —
Tony Roper
2
49,725 —
Chris Ambler 92,910 51,691
1. Shares legally and beneficially owned by a personal pension company.
2. 15,000 shares held directly, and 34,725 shares held via a family investment company. While Mr Roper controls the decision-making
of the latter shares, the economic benefit is solely for his children.
Approval of report
The Board will propose a resolution at the forthcoming AGM that this Remuneration Report be
approved, including the Directors’ fees for the year to 31 December 2025.
Paul Masterton
Chair of the Remuneration Committee
19 March 2025
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Directors’ report
The Company
Foresight Solar Fund Limited is a closed-end company with an indefinite life. It was incorporated
in Jersey under the Companies (Jersey) Law 1991, as amended on 13August2013, with
registration number 113721. The Company is a collective investment fund under the Collective
Investment Funds (Jersey) Law 1988, and, as such, is regulated as a Jersey listed fund in
accordance with the JFSC’s Listed Fund Guide.
The registered office’s address is: 28 Esplanade, St. Helier, Jersey, JE4 2QP.
Share capital and voting rights
The Company’s capital structure and details of share movements during the year are shown in
note 17 to the Financial Statements.
As at 19 March 2025 there were 609,958,720 Ordinary Shares in issue of nil par value.
The shares are quoted on the Main Market of the London Stock Exchange.
Investment objective
The Company’s objective is to provide investors with a sustainable, progressive quarterly
dividend and enhanced capital value, whilst facilitating climate change mitigation and the
transition to a lower-carbon economy.
Investment policy
The Company pursues its investment objective by investing in a diversified portfolio of
ground-based, solar power plants and utility-scale battery energy storage systems (BESS)
predominantly located in the UK, contributing to the growth of renewable energy generation
capacity available and the production of more clean power over the long term.
The Company is permitted to invest in BESS up to a limit of 10% of the GAV of the Company and
its subsidiaries, calculated at the time of investment, supporting the transition to low-carbon
electricity networks.
The Company will invest in operational ground-based solar power plants and BESS but will
also be able to invest in pre-operational assets which are either in the development stage or
the construction stage of their lifecycle, enabling the Company to contribute to the deployment
of new renewable energy generation capacity and flexible electricity storage over time whilst
supporting its financial objectives.
Investments in assets which are in the development stage of their lifecycle, which have not
yet secured all necessary project rights for construction and operation but have a delivery
plan and have established reasonable viability to secure such necessary project rights, will be
limited to 5% of the GAV of the Company and subsidiaries, calculated at the time of investment.
Investments outside the UK and in assets which are, when acquired, still under construction, will
be limited to 25% respectively of the GAV of the Company and subsidiaries, calculated at the
time of investment.
The Company will seek to acquire majority or minority stakes in individual ground-based solar
assets. When investing in a stake of less than 100% in a solar power plant special purpose
vehicle (SPV), the Company will secure its shareholder rights through shareholders’ agreements
and other legal transaction documents.
Power purchase agreements (PPAs) will be entered into between each of the individual solar
power plant SPVs in the portfolio and creditworthy offtakers. Under the PPAs, the SPVs will sell
solar-generated electricity and, if applicable, green benefits to the designated offtaker. The
Company may retain exposure to power prices through PPAs that do not include mechanisms
such as fixed prices or price floors.
Investment may be made in equity, debt or intermediate instruments but not in instruments
traded on any investment exchange.
The Company is permitted to invest cash held for working capital purposes and awaiting
investment in cash deposits, gilts and money market funds.
In order to spread risk and diversify its portfolio, at the time of investment, no single asset shall
exceed 30% of the Company’s GAV post-acquisition.
The Directors present their report and the audited Financial Statements
of the Company for the year ended 31 December 2024.
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Directors’ report continued
Investment policy continued
If the investment is an additional stake in an existing investment, the combined value of both
the existing stake and the additional stake acquired should also not exceed 30%. The GAV of
the Company will be calculated based on the last published gross investment valuation of the
Company’s portfolio, including cash, plus acquisitions made since the date of such valuation at
their cost of acquisition. The Company’s portfolio will provide diversified exposure through the
inclusion of not less than five individual solar power plants and the Company will also seek to
diversify risk by ensuring that a significant proportion of its expected income stream is derived
from regulatory support (which will consist of, for example, without limitation, ROCs and FiTs
for UK assets). Diversification will also be achieved by the Company using a number of different
third-party providers such as developers, engineering, procurement and construction (EPC)
contractors, operations and maintenance (O&M) contractors, panel manufacturers, landlords
and distribution network operators.
The Articles provide that gearing, calculated as Group borrowing (including any asset-level
gearing) as a percentage of the Company’s GAV, will not exceed 50% at the time of drawdown.
Itis the Board’s current intention that long-term gearing (including long-term, asset-level
gearing), calculated as Group borrowings (excluding intra-group borrowings (i.e. borrowings
between members of the Group) and revolving credit facilities) as a percentage of the
Company’s GAV will not exceed 40% at the time of drawdown.
Significant Shareholders
The Company’s Shareholders include a mix of institutional and retail investors. Those with a
holding of more than 5% as at 31 December 2024 were:
Investor
% shareholding
as at
28 February
2025
% shareholding
as at
31 December
2024
BlackRock 8.88% 10.75%
Gravis Capital Management 6.09% 6.05%
Schroder Investment Management 5.76% 5.50%
Hargreaves Lansdown 5.27% 4.97%
Charles Stanley 4.88% 5.01%
Total 30.88% 32.28%
Allotment of shares
The Shareholders have authorised Directors to issue new shares equivalent to up to 10% of
Foresight Solar’s share capital. It is the Directors’ intention to seek the renewal of this authority
by Shareholder resolution, which will be set out in the notice of the forthcoming AGM.
The Shareholders also authorised Directors to allot shares without application of the
pre-emption rights, as set out in Article 10.2 of the Company’s Articles of Association and
in the Financial Conduct Authority’s Listing Rules under Part VI of the Financial Services and
Markets Act 2000 (as amended), equivalent to 10% of the Company’s issued share capital until
the conclusion of the forthcoming AGM. The Directors will also seek to renew this authority by
proposing a special resolution be passed at the Annual General Meeting.
No shares were allotted under this authority during the year.
Purchase of own shares
The Company has been authorised to make market purchases of its own Ordinary Shares of up
to 14.99% of its issued Ordinary Share capital immediately prior to the passing of the resolution
(excluding treasury shares) on such terms and in such manner as the Directors shall from time
to time determine, subject always to the terms of any class rights in the Articles and provided
that:
a. The maximum aggregate number of Ordinary Shares hereby authorised to be purchased
shall be such number as represents 14.99% of the aggregate number of Ordinary Shares in
issue as at 24 May 2024, equivalent to 86,060,637
b. The minimum price which may be paid for an Ordinary Share shall be £0.01
c. The maximum price, exclusive of any expenses, which may be paid for an Ordinary Share is
an amount equal to the higher of (i) 14.99% of the average of the middle market quotations
for an Ordinary Share (as derived from the Daily Official List of the London Stock Exchange
plc) for the five business days immediately preceding the date on which such Ordinary Share
is contracted to be purchased; and (ii) the higher of the last independent trade and the
highest current independent bid on the trading venue on which the purchase is carried out
d. The authority hereby conferred is in addition to all and any authorities in place in respect
of market purchases by the Company and shall expire at the conclusion of the Company’s
next Annual General Meeting or on the date falling 18 months from the date of the passing
of this resolution, whichever is earlier, unless previously revoked, varied or renewed by the
Company in general meeting
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Directors’ report continued
Purchase of own shares continued
e. The Company may at any time prior to the expiry of
such authority make a contract or contracts to purchase
Ordinary Shares under such authority which will or might
be completed or executed wholly or partly after the
expiration of such authority and may make a purchase
of Ordinary Shares in pursuance of any such contract or
contracts
f. The Directors of the Company provide a statement of
solvency in accordance with Articles 55 and 57 of the Law
Any repurchase of Ordinary Shares will only be made through
the market for cash at prices below the estimated prevailing
Net Asset Value per Ordinary Share. These transactions will
only happen in the instances in which the Directors believe
such purchases will result in an increase in the NAV per
Ordinary Share and where the Board believes such purchases
are in Shareholders’ interests because they are addressing an
imbalance in the demand and supply of shares available in
the market.
On 4 May 2023, the Company announced a £10 million share
buyback programme to address the disconnect between
asset values inferred by the share price and the asset pricing
supported by third-party transactions. The programme was
extended twice to a total of up to £40 million. On 8 August
2024, the Directors increased the allocation to up to £50
million. The Board will keep buybacks under review to ensure
its continuation remains in Shareholders’ best interests.
As at the date of this report, 50,205,813 Ordinary Shares had
been repurchased under this authority, which will expire on
the earlier of 4 September 2025 or the Company’s next AGM.
Treasury shares
Jersey Company Law allows companies to hold shares
acquired in the market as treasury shares, rather than having
to cancel them.
Up to 10% of the issued shares may be held in treasury
and may be subsequently cancelled or sold for cash in the
market. This gives Foresight Solar the ability to reissue shares
quickly and cost efficiently, improving liquidity and providing
additional flexibility in the management of its capital base.
As at the date of this report, 50,205,813 shares were held
intreasury.
Dividends
Under the Articles, the Board is authorised to sign off
the payment of interim dividends without the need for
Shareholder approval. However, having regard to best
practice, the Company seeks permission from Shareholders,
at each Annual General Meeting, for its dividend policy to
pay four interim dividends per year. This authority was duly
approved at the AGM on 12 June 2024.
Scrip dividend option
At the Company’s Annual General Meeting held on 25 June
2019, Shareholders granted approval for Directors to offer
Shareholders the opportunity to take dividends in the form
of new Ordinary Shares rather than cash. Foresight Solar was
also authorised to offer an ongoing Scrip Dividend Scheme
for a period of three years. This authority was renewed for
another three years at the AGM held on 15 June 2022.
To date, approximately 6.1 million new Ordinary Shares
have been allotted to existing Shareholders under the Scrip
Dividend Scheme, and this has resulted in a cash saving, net
of admission fees, of £5.9 million.
Whilst the Scrip Dividend Scheme has been suspended,
the Directors keep it under review with the objective of
reinstating it as soon as it is appropriate to do so.
Share dealing code, policy and manual
In accordance with the UK Market Abuse Regulations,
Foresight Solar has adopted a share dealing code, policy and
manual to ensure compliance when Directors, being Persons
Discharging Managerial Responsibilities, deal in its shares.
Financial risk management
Information about the Company’s financial risk management
objectives and policies is set out in note 19 to the Financial
Statements.
Bribery Act 2010
Foresight Solar is committed to carrying out business
fairly, honestly and openly. The Investment Manager has
established policies and procedures to prevent bribery within
its organisation.
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109
Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Directors’ report continued
Criminal Finances Act 2017
The Company has committed to conduct all its business in
an honest and ethical manner. FSFL takes a zero-tolerance
approach to facilitation of tax evasion, whether under UK law
or under the law of any foreign country.
It is committed to acting professionally, fairly and with
integrity in all its business dealings and relationships,
wherever it operates, and implementing and enforcing
effective systems to counter tax evasion facilitation.
Foresight Solar will uphold all laws relevant to countering tax
evasion, including the Criminal Finances Act 2017, in all the
jurisdictions in which it operates.
Requirements of the Listing Rules
Listing Rule 6.6.4 requires the Company to include specified
information in a single identifiable section of the Annual
Report or a cross-reference table indicating where the
information is set out. The Directors confirm that there are no
disclosures required in relation to Listing Rule 6.6.4.
Directors’ indemnity
The Company has procured a directors’ and officers’ liability
insurance policy on behalf of Directors, indemnifying them in
case of certain liabilities which may be incurred in connection
with its business activities. This policy, however, does not
provide cover for fraudulent or dishonest actions.
Articles of Association
Foresight Solar’s Articles of Association are available upon
request from the Company Secretary and at the AGM.
Website publication
The Board is responsible for publishing the Company’s
audited Annual Report and Financial Statements on the
website, in accordance with applicable legislation governing
their preparation and dissemination.
The Directors are responsible for the maintenance and
integrity of the website, as well as the information published
therein, including the Financial Statements.
Legislation in Jersey governing the preparation and
dissemination of financial statements may differ from that in
other jurisdictions.
Post balance sheet events
Further details on these events can be found in note 25 to
theFinancial Statements.
Annual General Meeting
The AGM is expected to be held on 17 June 2025 at the
Company’s registered office at 28 Esplanade, St. Helier,
Jersey, JE2 3QA.
Further details on how Shareholders can participate will be
set out in the Notice of Annual General Meeting that will be
published in due course.
By order of the Board.
Alexander Ohlsson
Chair
For and on behalf of
Foresight Solar Fund Limited
19 March 2025
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Statement of Directors’ responsibilities
In respect of the Annual Report and Financial Statements
Jersey Company Law requires directors to prepare financial
statements that give a true and fair view of a company’s
affairs and of its profit or loss for each financial year. Under
that law, and as permitted by UK Disclosure Guidance
and Transparency Rules, these Financial Statements have
been prepared in accordance with standards issued by the
International Accounting Standards Board and applicable law.
In preparing the 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,
relevant and reliable
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
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
ș The Directors are responsible for keeping sufficient
accounting records that disclose the Company’s financial
position with reasonable accuracy at any time, and to
enable them to ensure that the Financial Statements
comply with the Companies (Jersey) Law 1991
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 assets and to prevent and detect irregularities.
The maintenance and integrity of the corporate and financial
information included on Foresight Solar’s website is the
Directors’ responsibility; the Auditor’s work carried out does
not involve consideration of these matters and, accordingly,
KPMG LLP accepts no responsibility for any changes that
may have occurred to the Financial Statements or its audit
report since 19 March 2025. KPMG LLP has carried out no
procedures of any nature subsequent to 19 March 2024
which in any way extends this date.
Legislation in Jersey governing the preparation and
dissemination of financial statements may differ from
legislation in other jurisdictions. The Directors shall remain
responsible for establishing and controlling the process for
doing so, and for ensuring that the Financial Statements are
complete and unaltered.
The Board has voluntarily decided to prepare a Directors’
Remuneration Report in accordance with Schedule 8 of
the Large and Medium-sized Companies and Groups
(Accounts and Reports) Regulations 2008, made under the
UK Companies Act 2006, as if those requirements applied to
Foresight Solar.
Responsibility statement of the Directors in respect
of the annual financial report
We confirm that to the best of our knowledge:
ș The Financial Statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair
view of the assets, liabilities, financial position and profit or
loss of the Company
ș The Annual Report includes a fair review of the
development and performance of the business and the
position of the issuer, together with a description of the
principal risks and uncertainties they face
ș We consider the Annual Report and Financial Statements,
taken as a whole, are fair, balanced and understandable
and provide the information necessary for Shareholders
to assess Foresight Solar’s position and performance,
business model and strategy
Alexander Ohlsson
Chair
For and on behalf of
Foresight Solar Fund Limited
19 March 2025
The Directors are responsible for preparing the Financial Statements
inaccordance with applicable law and regulations.
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
What’s in this section:
Independent Auditor’s report 113
Statement of profit and loss and other
comprehensive income 120
Statement of financial position 121
Statement of changes in equity 122
Statement of cash flows 123
Notes to the Financial Statements 124
AIFMD disclosures (unaudited) 157
Advisors 158
Glossary of terms 159
Financial
Statements
Paddock Wood, UK
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
1. Our opinion is unmodified
We have audited the financial statements of Foresight Solar Fund Limited (“the Company”)
for the year ended 31 December 2024, which comprise the Statement of Profit and Loss and
Other Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity,
Statement of Cash Flows and the related notes, including the accounting policies in note 2.
In our opinion the financial statements:
ș give a true and fair view, in accordance with International Financial Reporting Standards
adopted pursuant to Regulation (EC) No. 1606/2002 as it applies in the European Union, of
the state of the Company’s affairs as at 31 December 2024, and of its profit and cash flows
for the year then ended; and
ș have been properly prepared in accordancewith the Companies (Jersey) Law, 1991.
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 ethical
responsibilities under, and are independent of theCompany in accordance with, UK ethical
requirements including the FRC Ethical Standard as applied to listed public interest entities.
Webelieve that the audit evidence we have obtained is a sufficient and appropriate basis for
our opinion.
Independent Auditor’s report
To the members of Foresight Solar Fund Limited
2. Key audit matters: our assessment of 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. We summarise below the key audit
matter (unchanged from 2023), in arriving at our audit opinion above, together with our key
audit procedures to address that matter and our findings from those procedures in order that
the Company’s members, as a body, may better understand the process by which we arrived
at our audit opinion. This matter was addressed, and our findings are based on procedures
undertaken, in the context of, and solely for the purpose of, our audit of the financial statements
as a whole, and in forming our opinion thereon, and consequently are incidental to that opinion,
and we do not provide a separate opinion on this matter.
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Independent Auditor’s report continued
To the members of Foresight Solar Fund Limited
Valuation of unquoted investments Subjective valuation: Our procedures included:
(£632.3million; 2023:
£683.1 million)
Refer to page 101 (Audit and Risk
Committee Report), page 125
(accounting policy) and page 120
(financial disclosures).
Risk level remains unchanged
fromprior year.
As at 31 December 2024, 99% (December 2023:
98%) of the Company’s total assets (by value) were
held in investments where no quoted market price is
available.
The unquoted investment held at fair value through
profit or loss represents a 100% holding in Foresight
Solar (UK Holdco) Ltd. This entity in turn makes its
investments through intermediate holding companies
and underlying Special Purpose Vehicles.
As these investments are unquoted and illiquid, in
order to determine the fair value, the Company
has made a number of assumptions which are
unobservable in the market.
These included:
Significant assumptions: The discount rate and power
price curve assumptions have a high degree of
complexity and subjectivity.
Non-significant assumptions and data points: We do
not consider other assumptions and data points to
be at a significant risk of material misstatement due
to lower complexity and subjectivity. However, these
assumptions are important as they can have a material
impact on the overall valuation.
ș Useful economic life assumption
ș Inflation assumption
ș Production and operating costs data
The effect of these matters is that, as part of our risk
assessment, we determined that the valuation of
unquoted investments has a high degree of estimation
uncertainty, with a potential range of reasonable
outcomes greater than our materiality for the financial
statements as a whole, and possibly many times that
amount. The financial statements (note 16) disclose the
sensitivity estimated by the Company.
We performed the procedures below rather than seeking to rely on any of the Company’s controls because the
nature of the balance is such that we would expect to obtain audit evidence primarily through the detailed procedures
described.
Our procedures included:
Involvement of our valuation specialists:
ș With the assistance of our valuation specialists, we critically evaluated and challenged significant assumptions
affecting the valuation of the underlying assets, specifically discount rates and power price curves (including the
capture discount curve) and non-significant assumptions (useful economic life and inflation rates)
Our procedures for significant assumptions included:
Benchmarking assumptions:
ș We assessed whether the discount rates and power price curves are within a reasonable range based on relevant
market data
ș We agreed the subsidy and wholesale power price to agreements in place, such as Power Purchase Agreements
Our procedures in respect of the non-significant assumptions and data points included:
Test of detail:
ș We agreed production data to due diligence reports prepared by third-party engineers. We evaluated the
competence, objectivity and independence of the third-party engineers
ș We assessed the reasonableness of forecast operating costs with reference to historic actual operating costs and,
where possible, underlying agreements for leases, asset management and operations and maintenance contracts
ș We evaluated the appropriateness of the useful economic life for individual assets, taking into consideration factors
such as the life cycle of the asset and length of the leases
ș We compared the inflation rates assumption to relevant external forecasts
Historical comparison:
ș We compared actual to previously budgeted production and considered this in our challenge of future production
forecasts
Assessing transparency:
ș We considered the appropriateness, in accordance with relevant accounting standards, of the disclosures in
respect of unquoted investments and the effect of changing one or more inputs to reasonably possible alternative
valuation assumptions
Our findings:
We found the Company’s valuation of unquoted investments to be mildly optimistic (2023: balanced).
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
3. Our application of materiality and an overview of the scope of our audit
Materiality for the financial statements as a whole was set at £6.5 million (2023: £6.9 million),
determined with reference to a benchmark of net assets (2023: total assets), of which it
represents 1% (2023: 1% of total assets). The benchmark in the previous year was total assets.
We selected Company net assets as the benchmark in the current year owing to the focus of
the users of the financial statements on the net assets as a measure of performance of the
underlying renewable energy infrastructure assets.
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 to
an 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 was set at 75% (2023: 75%) of materiality for the financial statements
as a whole, which equates to £4.87million (2023: £5.10m). We applied this percentage in our
determination of performance materiality because we did not identify any factors indicating an
elevated level of risk.
We agreed to report to the Audit and Risk Committee any corrected or uncorrected identified
misstatements exceeding £0.32 million (2023: £0.35 million), in addition to other identified
misstatements that warranted reporting on qualitative grounds.
Our audit of the Company was undertaken to the materiality and performance materiality levels
specified above and was performed by a single audit team.
Impact of controls on our audit
As disclosed within the Audit and Risk Committee Report on page 101, administrative
and accounting operations of the Company are provided by JTC (Jersey) Limited (the
‘Administrator’). We therefore identified that the financial reporting system operated by the
Company’s Administrator to be the main IT system relevant to our audit. We obtained and read
the Administrator’s type two service organisation controls report to assist us in evaluating the
design of the general IT controls of the main finance system.
Consistent with our approach noted within the key audit matter in section 2 of our report, we
did not plan to rely on any of the Company’s controls in relation to any areas of our audit.
This is because the nature of the majority of the Company’s balances (including cash and cash
equivalents, interest income and receivable and management fees) is such that we would expect
to obtain audit evidence primarily from external confirmations (for cash and cash equivalents)
and independent recalculations based on the contractual arrangements (for interest income
and receivable and management fees). This is considered more efficient and therefore the scope
of the audit work performed was fully substantive in all aspects of the audit for the year ending
31December 2024.
4. The impact of climate change on our audit
In planning our audit, we have considered the potential impacts of climate change on the
Company’s business and its financial statements.
Climate change impacts the Company principally through the valuation of investments and
through potential reputational risk associated with the Company’s strategy. The Company’s
exposure to climate change is primarily through its indirect investment in the underlying
renewable energy infrastructure assets, as the key valuation assumptions and estimates could
be impacted by climate risks, for example where a new legislation on solar farms is introduced
and have an impact on the forecast cash flows.
Given the nature of the current investment portfolio, the impact of climate change is inherently
built in the valuations of the solar farms of the Company. We have performed a risk assessment
of how the impact of climate change may affect the financial statements and our audit, in
particular over the valuation of unquoted investments and our related key audit matter in
section 2 above.
We have read the disclosure of climate related information in the front half of the Annual Report
and considered consistency with the Financial Statements and our audit knowledge.
Independent Auditor’s report continued
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In relation to the valuation of the assets and the liquidity of the investment portfolio, we
considered whether these risks could plausibly affect the liquidity and covenant compliance
of the Company and its subsidiaries in the going concern period by comparing severe but
plausible downside scenarios that could arise from these risks individually and collectively
against the level of available financial resources and covenants indicated by the Company’s
financial forecasts.
We assessed the likelihood of the execution of the new revolving credit facility (currently due in
February 2026) based our inquiry of Company and the status of their discussions with lenders
and inspection of draft term sheets being negotiated.
We considered whether the going concern disclosure in note 2.2 to the Financial Statements
gives a full and accurate description of the Directors’ assessment of going concern, including
the identified risks and related sensitivities.
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, a
material uncertainty related to events or conditions that, individually or collectively, may
cast significant doubt on the Company’s ability to continue as a going concern for the going
concern period; and
ș we have nothing material to add or draw attention to in relation to the Directors’ statement
in note 2 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 we found the going concern disclosure in note 2 to
be acceptable.
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 in
operation.
5. Going concern
The Directors have prepared the financial statements on the going concern basis as they do not
intend 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
(“thegoing concern period”).
We used our knowledge of the Company, its industry, and the general economic environment to
identify the inherent risks to its business model and analysed how those risks might affect the
Company’s financial resources or ability to continue operations over the going concern period.
The risks that we considered most likely to adversely affect the Company’s available financial
resources, metrics relevant to debt covenants and its ability to operate over this period were:
ș The discontinuation vote at the Annual General Meeting in June 2025, which is triggered by
the level of discount between the Company’s Net Asset Value and its share price
ș The impact of a significant reduction in the valuation of the assets in the portfolio, driven
predominately by decreases in revenue and production, which impacts the Company and its
subsidiaries’ ability to meet the covenants in place; and
ș The Revolving Credit Facility reaching maturity in February 2026, with the refinancing
agreement currently being negotiated, which will impact the Company and its subsidiaries’
ability to meet their liabilities as they fall due.
In relation to the discontinuation vote, we considered the likely outcome of the discontinuation
vote with reference to the following information:
ș The outcome of the recent survey of investors commissioned by the Company and
conducted by an independent third party;
ș The performance of the Company, with reference to the performance of the underlying
assets considering the current macroeconomic conditions and compared to comparable
asset funds in the same sector;
ș The voting history in the Company’s Annual General Meetings;
ș The profile of the Shareholders; and
ș Our knowledge of the industry and market the Company operates in.
Independent Auditor’s report continued
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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 potential effect of these laws and regulations on the financial statements varies
considerably.
Firstly, the Company is subject to laws and regulations that directly affect the financial
statements including financial reporting legislation (including related Companies legislation) and
distributable profits legislation, and we assessed the extent of compliance with these laws and
regulations as part of our procedures on the related financial statement items.
Secondly, the Company is subject to many 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. We identified the following
areas as those most likely to have such an effect: anti-bribery, data protection, anti-money
laundering, market abuse regulations and certain aspects of Company legislation recognising
the financial and 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 the Directors and the Administrator 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. For
example, the further removed non-compliance with laws and regulations is from the events
and 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 remained a higher risk of non-detection of fraud, as fraud
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.
6. 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 the Directors and Administrator as to the Company’s high-level policies and
procedures to prevent and detect fraud, as well as whether they have knowledge of any
actual, suspected or alleged fraud;
ș Assessing the segregation of duties in place between the Directors, the Administrator and
theCompany’s Investment Manager; and
ș Reading Board minutes and Audit & Risk Committee minutes.
We communicated identified fraud risks throughout the audit team and remained alert to any
indications of fraud throughout the audit.
As required by auditing standards, we perform procedures to address the risk of management
override of controls, in particular to the risk that management may be in a position to make
inappropriate accounting entries. We evaluated the design of the controls over journal entries
and other adjustments and made inquiries of the Administrator as to whether they were aware
of any inappropriate or unusual activity relating to the processing of journal entries and other
adjustments.
Based on these risk assessment procedures, we assessed the opportunities for management
override of controls in the context of this Company. We compared all material post-closing
entries and, to incorporate an element of unpredictability, a haphazard selection of other
entries to supporting documentation. On this audit we do not believe there is a fraud risk
related to revenue recognition because revenue, which in this context is interest income, is
non-judgemental and straightforward, with limited opportunity for manipulation. We did not
identify any additional fraud risks.
Identifying and responding to risks of material misstatement related to compliance
with 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 general commercial and sector experience
and through discussion with the Directors and the Administrator (as required by auditing
standards) and discussed with the Directors the policies and procedures regarding compliance
with laws and regulations.
Independent Auditor’s report continued
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Annual Report and Financial Statements 31 December 2024
ș the Directors’ explanation in the viability statement of how they have assessed the prospects
of the Company, over what period they have done so and why they considered 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.
Our work is limited to assessing these matters in the context of only the knowledge acquired
during our financial statements audit. 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 absence of anything to report on these statements
is not a guarantee as to the Company’s longer-term viability.
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 and Risk Committee,
including the significant issues that the Audit and Risk 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 the Corporate Governance Statement relating to the
Company’s compliance with the provisions of the UK Corporate Governance Code specified
bythe Listing Rules for our review.
We have nothing to report in this respect.
7. We have nothing to report on the other information in the Annual Report
The Directors are responsible for the other information presented in the Annual Report together
with the financial statements. Our opinion on the financial statements does not cover the other
information and, accordingly, we do not express an audit opinion or, except as explicitly stated
below, any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether, based
on our financial statements audit work, the information therein is materially misstated or
inconsistent with the financial statements or our audit knowledge. Based solely on that work
wehave not identified material misstatements in the other information.
Directors’ remuneration report
In addition to our audit of the financial statements, the Directors have engaged us to audit the
information in the Directors’ Remuneration Report that is described as having been audited,
which the Directors have decided to prepare as if the Company were required to comply
with the requirements of Schedule 8 to The Large and Medium-sized Companies and Groups
(Accounts and Reports) Regulations 2008 (SI 2008 No. 410) made under the UK Companies
Act2006.
In our opinion the part of the Directors’ Remuneration Report to be audited has been properly
prepared in accordance with the UK Companies Act 2006, as if those requirements applied to
the Company.
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.
Based on those procedures, we have nothing material to add or draw attention to in relation to:
ș the Directors’ confirmation within the viability statement on page 69 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 and liquidity;
ș the Principal and Emerging risks disclosures describing these risks and how emerging risks
are identified, and explaining how they are being managed and mitigated; and
Independent Auditor’s report continued
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The purpose of our audit work and to whom we owe our responsibilities
This report is made solely to the Company’s members, as a body, in accordance with Article
113A of the Companies (Jersey) Law 1991 and the terms of our engagement by the Company.
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 the further matters we
are required to state to them in accordance with the terms agreed with the Company, 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,
forour audit work, for this report, or for the opinions we have formed.
Rahim Butt
for and on behalf of KPMG LLP
Chartered Accountants and Recognised Auditor
15 Canada Square
Canary Wharf
London
E14 5GL
19 March 2025
8. We have nothing to report on the other matters on which we are required to
report by exception
Under the Companies (Jersey) Law 1991 we are required to report to you if, in our opinion:
ș proper accounting records have not been kept by the company, or
ș proper returns adequate for our audit have not been received from branches not visited
byus; or
ș the financial statements are not in agreement with the accounting records and returns; or
ș we have not received all the information and explanations we require for our audit.
We have nothing to report in these respects.
9. Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on page 111, the Directors are responsible
for: the preparation of financial statements that 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.
Independent Auditor’s report continued
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Notes
31 December
2024
£’000
31 December
2023
£’000
Revenue
Interest earned on cash in bank 60 54
Interest income 4 31,368 31,820
Loss on investments held at fair value through profit or loss 14 (20,311) (32,838)
Total revenue 11,117 (964)
Expenditure
Administration fees 6 (251) (208)
Directors’ fees 7 (315) (284)
Management fees 5 (6,348) (7,037)
Other expenses 8 (1,197) (791)
Total expenditure (8,111) (8,320)
Profit/(loss) before tax for the year 3,006 (9,284)
Taxation 2.7 — —
Profit/(loss) for the year 3,006 (9,284)
Other comprehensive income — —
Profit/(loss) and other comprehensive income for the year 3,006 (9,284)
Earnings/(loss) per Ordinary Share (pence per share) 9 0.52 (1.54)
All items above arise from continuing operations, there have been no discontinued operations during the year.
The accompanying notes on pages 124 to 156 form an integral part of these Financial Statements.
Statement of profit and loss and other comprehensive income
For the year ended 31 December 2024
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Statement of financial position
As at 31 December 2024
Notes
31 December
2024
£’000
31 December
2023
£’000
Assets
Non-current assets
Investments 14 632,329 683,104
Total non-current assets 632,329 683,104
Current assets
Interest receivable 10 197 13,651
Trade and other receivables 11 304 290
Cash and cash equivalents 12 2,018 2,041
Total current assets 2,519 15,982
Total assets 634,848 699,086
Notes
31 December
2024
£’000
31 December
2023
£’000
Equity
Retained earnings 4,470 67,997
Ordinary Share capital and treasury shares 17 629,892 629,892
Total equity 634,362 697,889
Liabilities
Current liabilities
Trade and other payables 13 486 1,197
Total current liabilities 486 1,197
Total liabilities 486 1,197
Total equity and liabilities 634,848 699,086
Net Asset Value per Ordinary Share 18 112.3 118.4
The Financial Statements on pages 120 to 123 were approved by the Board of Directors and
signed on its behalf on 19 March 2025 by:
Alexander Ohlsson
Chair
The accompanying notes on pages 124 to 156 form an integral part of these Financial Statements.
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Statement of changes in equity
For the year ended 31 December 2024
Notes
Issued
Ordinary
Shares
1
£'000
Treasury
shares
2
£'000
Retained
earnings
£'000
Total
£'000
Balance as at 1 January 2024 609,983 19,909 67,997 697,889
Total comprehensive profit for the year:
Profit for the year — — 3,006 3,006
Transactions with owners, recognised directly in equity:
Dividends paid in the year 21 — — (44,734) (44,734)
Purchase of treasury shares
2
17 (21,799) 21,799 (21,799) (21,799)
Balance as at 31 December 2024 588,184 41,708 4,470 634,362
For the year ended 31 December 2023
Notes
Issued
Ordinary
Shares
1
£'000
Treasury
shares
2
£'000
Retained
earnings
£'000
Total
£'000
Balance as at 1 January 2023 629,892 — 141,575 771,467
Total comprehensive loss for the year:
Loss for the year — — (9,284) (9,284)
Transactions with owners, recognised directly in equity:
Dividends paid in the year 21 — — (44,385) (44,385)
Purchase of treasury shares
2
17 (19,909) 19,909 (19,909) (19,909)
Balance as at 31 December 2023 609,983 19,909 67,997 697,889
1. The stated capital of the Company comprises of issued Ordinary Shares, share premium and treasury shares.
2. Represents the cash payments made to Jefferies International Limited during the year.
The accompanying notes on pages 124 to 156 form an integral part of these Financial Statements.
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Statement of cash flows
For the year ended 31 December 2024
Notes
31 December
2024
£’000
31 December
2023
£’000
Profit/(loss) for the year after tax 3,006 (9,284)
Adjustments for:
Unrealised loss on investments 14 20,311 32,838
Operating cash flows before changes in working capital 23,317 23,554
Decrease in interest receivables 10 13,454 31,080
Increase in trade and other receivables 11 (14) (11)
(Decrease)/increase in trade and other payables 13 (711) 660
Net cash inflow from operating activities 36,046 55,283
Investing activities
Repayment of Shareholder loan 30,464 —
Net cash inflow from investing activities 30,464 —
Financing activities
Purchase of treasury shares (21,799) (19,909)
Dividends paid 21 (44,734) (44,385)
Net cash outflow from financing activities (66,533) (64,294)
Net decrease in cash and cash equivalents (23) (9,011)
Cash and cash equivalents at the beginning of the year 2,041 11,052
Cash and cash equivalents at the end of the year 12 2,018 2,041
The accompanying notes on pages 124 to 156 form an integral part of these Financial Statements.
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Structure chart
The following chart shows the Group structure as at 31 December 2024:
Notes to the Financial Statements
For the year ended 31 December 2024
1. Company information
Foresight Solar Fund Limited (the “Company”) is a closed-ended public company with an
indefinite life and was incorporated in Jersey under the Companies Law (Jersey) 1991, as
amended, on 13 August 2013, with registered number 113721. The address of the registered
office is: 28 Esplanade, St Helier, Jersey, JE4 2QP.
The Company has one investment, Foresight Solar (UK Hold Co) Limited (“UK Hold Co”).
Theprincipal activity of the Company through its direct and indirect subsidiaries, as per the
structure chart, is investing in operational and development-stage ground-based solar power
plants and battery storage systems in the UK, Australia and Spain.
UK Hold Co has three investments: FS RCF Debtco Limited (“RCF Debtco”), FS Holdco 4 Limited
(“FS Holdco 4”) and Foresight Battery Storage Holding Limited (“FBSHL”).
RCF Debtco has three investments: FS Top Holdco 1 Limited (“FS Topco 1”), FS Top Holdco 2
Limited (“FS Topco 2”) and FS Holdco 3 Limited (“FS Holdco 3”).
FS Topco 1 has one investment in FS Intermediate Holdco Limited (“FIHC”). FIHC in turn has one
investment in FS Holdco Limited (“FS Holdco”).
FS Topco 2 has one investment in Foresight Intermediate Solar Holdings Limited (“FISH”). In turn,
FISH has one investment in FS Holdco 2 Limited (“FS Holdco 2”) which has one investment in
FSDebtco Limited (“FS Debtco”).
FS Holdco 3 has one investment in Second Generation Portfolio 1 Holdings Limited (“SGP
Holdings 1”). SGP Holdings 1 in turn invests in Second Generation Portfolio 1 (“SGP 1”) which
invests directly into underlying solar investments.
FS Holdco, FS Debtco and FS Holdco 4 invest in further holding companies (the “SPVs”) which
then invest in the underlying solar and battery storage investments.
Foresight Solar Fund Limited
UK Hold Co
RCF Debtco
FS Topco 1 FS Holdco 3 FBSHL 50% FS Topco 2
SPVs SPVs SPVs SPVsSPVs
FS Holdco SGP 1 FS Holdco 4FS Debtco
FS Holdco 2
FIHC SGP Holdings 1FISH
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Notes to the Financial Statements continued
For the year ended 31 December 2024
2. Summary of significant accounting policies
2.1 Basis of presentation
The Financial Statements for the year ended 31 December 2024 (the “Financial Statements”)
have been prepared in accordance with International Financial Reporting Standards as
adopted by the European Union (IFRS) which comprise standards and interpretations issued
by the International Accounting Standards Board (IASB). The Financial Statements have been
prepared on the historical cost convention as modified for the measurement of certain financial
instruments at fair value through profit or loss and in accordance with the provisions of the
Companies (Jersey) Law 1991. The investment in UK Hold Co is held at Net Asset Value on the
statement of financial position in line with the International Private Equity and Venture Capital
2022 (IPEV) Valuation Guidelines.
2.2 Going concern
Discontinuation vote:
As set out in the Company’s Articles of Association, as the Company’s share price traded
at more than a 10% discount to NAV during 2023, Shareholders had the opportunity to vote
on a special resolution at the AGM of the Company on whether the Company should cease
to continue in its present form. The Company’s shares traded at a 16% discount to NAV, on
average during 2023. Despite actively addressing the discount to NAV during 2024, wider
macroeconomic and geopolitical factors have continued to impact the entire renewable
infrastructure sector, causing the Company to trade at an average discount of approximately
24% during the year to 31 December 2024.
Shareholders will have the opportunity to vote once more at the June 2025 AGM of the
Company on whether the Company should cease to continue in its present form. The Directors
acknowledge that the discount to NAV is wider now than it was at the same time last year and
this has emphasised the need to further engage with Shareholders.
Recent interactions with Shareholders have not indicated that the special resolution in respect
to discontinuation will pass. During December 2024 and January 2025, the Investment Manager
commissioned an independent specialist consultancy to survey Shareholders representing
37% of Ordinary Shares outstanding. The objective was to understand views on the Company,
covering many topics, including the views on the upcoming vote.
The poll was conducted through meetings and direct conversations. The results showed that
a minority of individual respondents indicated they intend to vote for the discontinuation of
the Company. A minority of individual respondents would not openly share their intentions,
but suggested that, if Foresight Solar delivered on its stated goals, they saw clear reasons for
continuance. The Board is comfortable that the 75% vote required for discontinuation will not
succeed. Events after year end, such as Investment Manager fee restructuring and the results of
planned divestments, have the potential to affect Shareholder sentiments.
The Board continues to actively engage with Shareholders and is considering a range of
strategic options while continuing to deliver on the Company’s near-term objectives. The
Directors are focused on balancing the objectives expressed by Shareholders in order to
deliver value to Shareholders in an efficient and effective manner by exploring all options
available. Actions taken to date have responded promptly to the market environment and
further strategic action will be taken to reduce the trading discount to NAV. The Directors are
keen to engage further with Shareholders up until the AGM and beyond.
The Directors have considered the comfortable result against discontinuation in June 2024 and
the Board’s and the Investment Manager’s efforts to address the discount to NAV the shares
trade at through a disciplined capital allocation strategy. Furthermore, from 1 March 2025,
arevised investment management fee was agreed, delivering cost savings to Shareholders.
Based on the most recent assessment of the Shareholders’ sentiment, the Directors are
confident of a successful result against discontinuation.
Background:
The Company’s exposure to wholesale energy prices is reduced in the medium term by
maintaining a significant proportion of electricity generation on fixed price arrangements in the
going concern assessment period. This provides protection if merchant power prices continue
to decline. As the Company’s power purchase agreements are all contracted across a pool
of five UK, five Australian and two Spanish energy suppliers. Recent insolvencies of UK energy
suppliers that provide PPAs to renewable energy generators are a key risk for the Company due
to the high proportion of revenues that are contracted with these energy suppliers. Accordingly,
the Investment Manager periodically monitors the counterparty risk on the Company’s energy
suppliers and will consider new PPAs if the counterparty risk of existing energy suppliers is of
concern.
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Notes to the Financial Statements continued
For the year ended 31 December 2024
2. Summary of significant accounting policies continued
2.2 Going concern continued
In December 2024, the UK government provided an update in relation to the ongoing Review of
Electricity Market Arrangements scheme. They advised no decision has been made on whether
to use reformed national pricing or zonal pricing when considering wholesale market reform,
but has clarified details in relation to each option. It was confirmed that the policy development
phase of REMA is due to be finalised by mid-2025, but amendments to the Contracts for
Difference scheme will not be implemented until 2027 at the earliest.
Despite more clarity on the REMA initiative, the changes required to the UK wholesale power
market are still uncertain in terms of timing and impact on corporate power price agreements.
The Investment Manager expects any market changes will take years to implement and will
therefore fall outside of the going concern assessment period.
Cash flow analysis:
Cash flow analysis was prepared for the going concern assessment period. The going concern
assessment period contemplated for these accounts is until 30 June 2026.
An evaluation of going concern was prepared by the Company’s Investment Manager, then
approved by the Audit and Risk Committee and subsequently by the Board.
Cash flow analysis was completed to consider the following individual downside scenarios:
1. All investments consistently generate a P90 level (90% probability of exceeding expected
production over a 10 year period) of electricity output. The Directors deem this is an
appropriate, market standard stress test, with a relevant example being historically low
irradiation in the UK throughout the year. This is corroborated by data from the Department of
Energy Security and Net Zero showing that 2024 had the lowest number of sun hours since the
Company’s IPO in 2013.
2. Power prices were reduced by 20% across the portfolio. This downside scenario represents
decreasing merchant power prices and historic oil and electricity price volatility.
3. The PPA provider that the Group is most exposed to fails to settle revenue under the PPA
contract. This downside scenario represents the risk of insolvencies of PPA counterparties
in response to the high number of energy company insolvencies during the last three years
because of the high power price market.
4. The inclusion of the maximum forecasted project lifecycle outflows and the associated lost
revenues, as a result of the downtime during the lifecycle works.
5. The removal of the sales proceeds from the divestment of the Australia portfolio.
Severe but plausible cash flow analysis was also completed to consider the following scenarios:
1. The three highest yielding project companies in the portfolio simultaneously have operational
restrictions and reduced capacity and pay reduced distributions (12% less than base case) in
the going concern assessment period
2. A combination of individual scenarios 1, 2, 4 and 5 occur simultaneously
If any of the scenarios described above were to materialise, the Company could still settle all
liabilities falling due and there would be no instances of non-compliance of debt covenants,
during the going concern assessment period.
The Board would continue to review on a periodic basis whether the dividend paid per share
is appropriate considering the reduced cash flow. The cash flow forecasts show that operating
costs would be settled as they fall due, but the cash balance would reduce gradually during the
going concern assessment period.
RCF refinancing:
Further qualitative analysis in relation to going concern has been undertaken on the risk of the
Company’s ability to refinance the revolving credit facility which is due to expire in February
2026. The RCF was £73.4m drawn as at 31 December 2024. The Investment Manager is in
advanced discussions with potential lenders and the refinanced RCF term-sheet was discussed
in March 2025. The Directors are satisfied the facility will be refinanced.
Covenant compliance:
Three Group subsidiaries, FS Holdco, FS Debtco and RCF Debtco, are all required to complete
semi-annual debt compliance reporting. The covenants that FS Holdco and FS Debtco are
required to report on are the look-back debt service cover ratio, the look-forward debt service
cover ratio and the loan life cover ratio. The debt service cover ratio (DSCR), calculated at
investment entity subsidiaries level, is a measure of how each portfolio can use its generated
cash to repay its debt obligations in any given six-month calculation period. It is calculated
as the cash generated from operations and available to pay debt service divided by the debt
principal and interest in any given six-month period.
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Annual Report and Financial Statements 31 December 2024
Notes to the Financial Statements continued
For the year ended 31 December 2024
2. Summary of significant accounting policies continued
2.2 Going concern continued
RCF Debtco is required to report an interest cover ratio (ICR) and a Loan to Value (LtV) ratio.
These must be compliant semi-annually to permit the movement of UK project company
distributions to UK Hold Co and FSFL. Without these project distributions, FSFL would be
unlikely be able to pay quarterly dividends to investors at the current dividend per share.
1) A breach at RCF Debtco would restrict more cash moving up the structure than a breach at
either FS Holdco or FS Debtco. While the Investment Manager considers non-compliance of the
RCF covenants as unlikely, it was considered prudent to investigate this via two reverse stress
tests:
The base case SONIA and Euribor interest rates were gradually increased until the increased
finance costs caused the ICR threshold to be breached. Variable interest rates would have to
increase approximately 10-times by June 2026 to lead to a breach of the ICR, which is deemed
highly unlikely.
2) The valuation of the RCF Debtco qualifying portfolio was gradually decreased until the
LtV covenant was breached. This investigation has been deemed necessary considering
falling merchant energy prices, rising discount rates and associated falling project valuations.
UK project valuations would need to fall by 86% to lead to a breach of the LtV ratio, which
represents a severe decrease deemed highly unlikely.
The Directors are pleased to confirm that there were no instances of non-compliance of debt
covenants throughout the going concern assessment period in any of the scenarios.
Basis of Preparation:
The Directors and the Investment Manager do not consider the prospects of the discontinuation
vote or refinancing of the RCF will impact the Company’s ability to continue as a going concern
or give rise to a material uncertainty.
Consequently, the Directors are confident that the cash flows have been appropriately
challenged and therefore the Company will have sufficient funds to continue to meet its
liabilities as they fall due for the going concern assessment period and has therefore prepared
the Financial Statements on a going concern basis.
2.3 Changes in accounting policies and disclosures
New and revised IFRSs adopted by the Company
The accounting policies adopted are consistent with those of the previous financial
year. Management have assessed all new standards and amendments to standards and
interpretations that are effective for annual periods after 1 January 2024 and considered none
to be applicable to the Company.
The following standards have been issued but are not effective for this accounting period and
have not been adopted early:
ș IAS 21 (amended) Lack of Exchangeability – These amendments clarify when a currency
is exchangeable into another currency and how a company estimates a spot rate when a
currency lacks exchangeability – effective from 1 January 2025
ș Amendments to IFRS 9 and IFRS 7 Classification and Measurement of Financial Instruments
– The amendments clarify the timing for recognising and derecognising certain financial
assets and liabilities, introduce additional guidance for the solely payments of principal and
interest (SPPI) criterion, add new disclosure requirements for instruments with cash flow
changes linked to ESG targets, and update disclosures for equity instruments designated at
fair value through other comprehensive income (FVOCI) – effective 1 January 2026
ș IFRS 18 Presentation and Disclosure in Financial Statements – The new standard introduces
updates to the presentation and disclosure in financial statements, particularly focusing on
the statement of profit or loss. Key concepts include restructuring the statement of profit
or loss, mandatory disclosures for management-defined performance measures reported
outside the financial statements, and enhanced principles for aggregation and disaggregation
in primary financial statements and notes – effective from 1 January 2027
There are no standards, amendments or interpretations in issue at the reporting date which
are effective and not yet adopted that are deemed to have a material impact on the Financial
Statements.
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Annual Report and Financial Statements 31 December 2024
Notes to the Financial Statements continued
For the year ended 31 December 2024
2. Summary of significant accounting policies continued
2.4 Consolidation
Subsidiaries
Subsidiaries are entities over which the Company has control. The Company controls an entity
when the Company is exposed to, or has the rights to, variable returns from its involvement
with the entity and has the ability to affect those returns through its power over the entity.
Associates
Associates are entities over which the Company has significant influence, being the power to
participate in the financial and operating policy decisions of the investee (but not control or joint
control).
Investment entity exemption
Qualifying entities that meet the definition of an investment entity are not required to produce a
consolidated set of financial statements and instead account for subsidiaries, joint ventures and
associates at fair value through profit or loss.
Under the definition of an investment entity, the entity should satisfy all three of the following tests:
ș Obtains funds from one or more investors for the purpose of providing those investors with
investment management services
ș Commits to its investors that its business purpose is to invest funds solely for returns
from capital appreciation, investment income, or both (including having an exit strategy for
investments)
ș Measures and evaluates the performance of substantially all its investments on a fair value
basis
In assessing whether the Company meets the definition of an investment entity set out in IFRS
10, the Directors note that:
ș The Company is an investment company that invests funds obtained from multiple investors
in a diversified portfolio of solar energy infrastructure assets and related infrastructure
assets and has appointed the Investment Manager to manage the Company’s investments
ș The Company’s purpose is to invest funds for investment income and potential capital
appreciation and will exit its investments at the end of their economic lives or when their
planning permissions or leasehold land interests expire (unless it has repowered their sites)
and may also exit investments earlier for reasons of portfolio balance or profit
ș The Board evaluates the performance of the Company’s investments on a fair value basis
as part of the quarterly management accounts review. The Company values its investments
on a fair value basis twice a year for inclusion in its Annual and Interim Financial Statements
with the movement in the valuations taken to the income statement and, therefore, is
measured within its earnings
Taking these factors into account, the Directors are of the opinion that the Company has all the
typical characteristics of an investment entity and meets the definition set out in IFRS 10.
The Directors believe the treatment outlined above provides the most relevant information to
investors.
As UK Hold Co is not consolidated, its subsidiaries – plus their underlying investments – are
not separately presented at fair value through profit or loss in the Company’s accounts. The
Directors have evaluated whether the subsidiaries are investment entities and have concluded
that they meet the definition set out in IFRS 10. Should subsidiaries fail to meet the definition of
an investment entity, the Company would have to consolidate its subsidiaries.
2.5 Revenue
Revenue comprises interest income (loan interest) and income in the form of realised and/
or unrealised gains on investments held at fair value through profit or loss. Interest income is
recognised when it is probable that the economic benefits will flow to the Company and the
amount of revenue can be measured reliably. Loan interest income is recognised on an accruals
basis by reference to the principal outstanding and at the effective interest rate applicable.
Bank interest income on cash deposits is recognised on an accruals basis using the effective
interest rate method. Unrealised gains arising from changes in the fair value of the investments
held at fair value through profit or loss are recognised in the period in which they arise.
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Annual Report and Financial Statements 31 December 2024
Notes to the Financial Statements continued
For the year ended 31 December 2024
2. Summary of significant accounting policies continued
2.6 Expenses
Operating expenses are the Company’s costs incurred in connection with the ongoing
management of the Company’s investments and administrative costs. Operating expenses are
accounted for on an accruals basis.
The Company’s operating expenses are charged through the statement of profit and loss and
other comprehensive income.
Acquisition costs of assets are capitalised on purchase of assets. Costs directly relating to
the issue of Ordinary Shares are charged to the Company’s share capital and share premium
reserve.
2.7 Taxation
The Company is currently registered in Jersey. The Company is taxed at 0%, which is the
general rate of corporation tax in Jersey. No tax has been charged in the current year
(2023:£nil).
2.8 Treasury shares
The Company recognises the purchase of its own equity instruments in treasury shares, which
are deducted from retained earnings. No gain or loss is recognised in profit or loss on the
purchase, sale, issue or cancellation of the Company’s own equity instruments.
2.9 Functional and presentational currency
The Directors consider the Company’s functional currency to be pounds sterling (GBP) as this
is the currency in which the majority of the Company’s assets and liabilities and significant
transactions are denominated. The Directors have selected GBP as the Company’s presentation
currency.
Indirect subsidiaries of the Company may have assets and liabilities relating to foreign
operations which will impact the investment value on the Company’s balance sheet. The assets
and liabilities relating to these foreign operations, including fair value adjustments arising on
investments, are translated into GBP at the exchange rates at the reporting date. The income
and expenses relating to foreign operations are translated into GBP at the exchange rates at the
dates of the transactions.
2.10 Financial instruments
Recognition and initial measurement
Financial assets and financial liabilities are initially recognised when the Company becomes a
party to the contractual provisions of the instrument.
A financial asset or financial liability is initially measured at fair value plus, for an item not at fair
value through profit or loss, transaction costs that are directly attributable to its acquisition or
issue.
Classification and subsequent measurement
Investments held at fair value through profit or loss
The investments held at fair value through profit or loss consist of one investment in UK Hold
Co. The asset in this category is classified as non-current.
Fair value is defined as the amount for which an asset could be exchanged between
knowledgeable willing parties in an arm’s length transaction.
The fair value of UK Hold Co is made up of the fair value of its net assets, which are in turn
determined by the fair value of its underlying assets. The subsidiaries of UK Hold Co are
disclosed in note 1 Company information. FS Holdco and FS Debtco are fair valued using
their Net Asset Value as reported at year end, with adjustments to their long-term external
debt to reflect the fact that the carrying value at amortised cost is not considered to be the
best approximation of its fair value. FS Holdco 3, FS Holdco 4, FS Topco 2, FISH, FS Holdco
2, FSTopco 1, FIHC, FBSHL and RCF Debtco are fair valued using their Net Asset Value as
reported at year end.
The fair values of the underlying investments held by the Company’s subsidiaries, which impact
the value of the Company’s subsidiaries, are determined by using valuation techniques. The
Directors calculate the fair value of the investments based on information received from the
Investment Manager. In accordance with IFRS 13 the Investment Manager’s assessment of
fair value of investments is determined in accordance with the International Private Equity
and Venture Capital 2022 (IPEV) Valuation Guidelines, using a discounted cash flow valuation
methodology.
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Notes to the Financial Statements continued
For the year ended 31 December 2024
2. Summary of significant accounting policies continued
2.10 Financial instruments continued
Classification and subsequent measurement continued
The Board and the Investment Manager consider that the discounted cash flow valuation
methodology used in deriving a fair value of the underlying assets is in accordance with the fair
value requirements of IFRS 9. Investments not yet operational are measured at cost less any
impairment as this is considered the best approximation of fair value. Gains or losses arising
from changes in the fair value of the “investments held at fair value through profit or loss” are
presented in the statement of profit and loss and other comprehensive income within “gains/
(losses) on investments held at fair value through profit or loss” in the period in which they arise.
Other financial instruments at amortised cost
The financial instruments at amortised cost are non-derivative financial assets and liabilities
with fixed or determinable payments that are not quoted in an active market. They comprise
trade and other receivables, interest receivable, cash and cash equivalents and trade and other
payables.
Trade and other receivables are rights to receive compensation for goods or services that
have been provided in the ordinary course of business to customers. Accounts receivable are
classified as current assets if receipt is due within one year or less. If not, they are presented as
non-current assets.
Interest receivable is the right to receive payments at fixed or variable interest rates on loans
issued by the Company. Interest receivable is classified as current if the receipt is due within
one year or less. If not, it is presented as a non-current asset.
Cash and cash equivalents comprise cash on hand.
Trade and other payables are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. Accounts payable are classified as current
liabilities if payment is due within one year or less. If not, they are presented as non-current
liabilities.
Derecognition
The Company derecognises a financial asset when the contractual rights to the cash flows from
the financial asset expire. The Company also derecognises a financial asset when it transfers
the rights to receive the contractual cash flows in a transaction in which substantially all of the
risks and rewards of ownership of the financial asset are transferred.
Lastly, the Company also derecognises the financial asset when it neither transfers nor retains
substantially all of the risks and rewards of ownership and it does not retain control of the
financial asset.
The Company derecognises a financial liability when its contractual obligations are discharged
or cancelled or expire. The Company also derecognises a financial liability when its terms are
modified and the cash flows or the modified liability are subsequently different, in which case a
new financial liability based on the modified terms is recognised at fair value. Any gain or loss
on derecognition is recognised in profit or loss.
Impairment of financial assets
The Company applies the simplified approach to measuring expected credit losses, as
permitted by IFRS 9, which uses a 12-month expected loss allowance for all trade receivables
and interest receivable.
2.11 Share capital
Ordinary Shares are classified as equity. Incremental costs directly attributable to the issue
of new Ordinary Shares are shown in equity as a deduction, net of tax, from the proceeds.
Ordinary Shares have a nil par value.
2.12 Dividend distribution
Dividend distributions to the Company’s Shareholders are recognised through equity in the
Company’s Financial Statements in the period in which the dividends are approved by the
Company’s Shareholders.
Under Jersey law, the Company can pay dividends in excess of its retained earnings provided
it satisfies the solvency test prescribed under the Companies Law (Jersey) 1991. The solvency
test considers whether the Company is able to pay its debts when they fall due, and whether
the value of the Company’s assets is greater than its liabilities. The Company satisfied the
solvency test in respect of all dividends declared or paid in the year.
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Annual Report and Financial Statements 31 December 2024
Notes to the Financial Statements continued
For the year ended 31 December 2024
3. Critical accounting estimates and judgements
The preparation of financial statements in conformity with IFRS requires the use of certain
critical accounting estimates. It also requires management to exercise its judgement in the
process of applying the Company’s accounting policies.
The Board considers that the only areas where management make critical estimates that
may have a significant effect on the Financial Statements are in relation to the valuation of
investments held at fair value through profit and loss; the most significant judgement is related
to the determination that the Company meets the definition of an investment entity.
The estimates and associated assumptions are based on historical experience and various
other factors that are believed to be reasonable under the circumstances, the results of which
form the basis of making judgements about the carrying value of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these estimates and
underlying assumptions are reviewed on an ongoing basis.
Key judgements
The Board considers that the determination that the Company meets the definition of an
investment entity involves significant judgement. The Board has concluded that the Company
continues to meet the definition of an investment entity, as its strategic objective of investing
in portfolio investments and providing investment management services to investors for the
purpose of generating returns in the form of investment income and capital appreciation
remains unchanged.
Key source of estimation uncertainty: Investments at fair value through profit or loss
The Company recognises its investment in UK Hold Co at fair value, which requires the
determination of fair value of the underlying investments. The Board considers that determining
the fair value of the underlying investments not quoted in an active market involves critical
accounting estimates. The discount rate, power price curve, inflation and useful economical life
of assets are considered the most significant unobservable inputs through which an increase or
decrease would have a material impact on the fair value of the investments at fair value through
profit or loss.
The discount rates are subjective and therefore it is feasible that a reasonable alternative
assumption may be used, resulting in a different value. The discount rates applied to the cash
flow are reviewed by the Investment Manager and approved by the Board on a quarterly basis,
taking into consideration market transactions with similar nature.
Independent advisors are used to provide forward power price curves and therefore it is
feasible that a reasonable alternative assumption may be used, resulting in a different value.
Thepower price curves are reviewed by the Investment Manager and approved by the Board
on a quarterly basis. Inflation forecasts, such as that of the Office for Budget Responsibility,
are used alongside in-house views of the Investment Manager to determine this assumption
and therefore it is feasible that a reasonable alternative assumption may be used, resulting
in a different value. The inflation assumptions are reviewed by the Investment Manager and
approved by the Board on a quarterly basis.
Useful economic lives (UELs) of assets are based on the Investment Manager’s estimates of
the period over which the assets will generate revenue, which are periodically reviewed for
continued appropriateness. The UELs of the assets are based on the underlying lease contract
of the individual assets. The Investment Manager fully expects to be able to renew any lease
contracts of the underlying investments. The expected weighted average life of the UK portfolio
as at 31 December 2024 is 31 years from the date of commissioning. The UEL of the Australian
portfolio is 36 years. The UEL of the Spanish portfolio is 40 years.
These key assumptions used in determining the fair value of underlying investment and the
associated sensitivities are disclosed in note 16.
4. Interest income
31 December
2024
£’000
31 December
2023
£’000
Interest on loan notes 25,430 25,649
Interest on Shareholder loans 5,938 6,171
31,368 31,820
Loan notes were issued by the Company to UK Hold Co for the purchase of investments.
Interest accrues at 9% per annum in arrears on each Interest Payment Date (28/29 February
and 31 August each year).
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Annual Report and Financial Statements 31 December 2024
Notes to the Financial Statements continued
For the year ended 31 December 2024
4. Interest income continued
Where interest is not paid on the payment date, it will compound and future interest shall
accrue at 11% per annum from the due date up to the date of actual payment, compounding on
each Interest Payment Date. The loan notes balance at year end on which interest is charged
is £250,000,000 (2023: £250,000,000), due to be repaid on 1 November 2038. These loans
form part of the fair value of the investments as per note 14. On 7 March 2024, UK Hold Co
had unpaid interest which therefore compounded and changed the interest rate to 11%. On
31August 2024, all outstanding interest up to date was paid resulting in no compounding
interest. Subsequently, the interest rate was changed back to9%.
A Shareholder loan is created when the total amount paid by the Company on behalf of UK
Hold Co to acquire the underlying investments is more than the total loan notes issued by
the Company to UK Hold Co. Interest accrues at 2% per annum and is repayable on demand.
TheShareholder loan balance at year end is £273,852,906 (2023: £304,316,450). These loans
form part of the fair value of the investments as per note 14.
5. Management fees
The Investment Manager of Foresight Solar is Foresight Group LLP.
The Investment Manager of the Company receives an annual fee of 1% of the Net Asset
Value (NAV) of the Company up to £500 million – NAV in excess of this is charged at 0.9%
per annum. This is payable quarterly in arrears and is calculated based on the published
quarterly NAV. Forthe year ended 31 December 2024, the Investment Manager was entitled
to a management fee of £6,347,915 (2023: £7,036,782) of which £69,094 was outstanding as
at31December2024 (2023: £nil).
6. Administration fees
Under an Administration Agreement, the Administrator of the Company, JTC (Jersey) Limited,
is entitled to receive minimum annual administration and accountancy fees of £200,000
(2023: £182,000) payable quarterly in arrears. For the year ended 31 December 2024, total
administration and accountancy fees, including disbursements, were £251,363 (2023: £207,526)
of which £50,000 was outstanding as at 31 December 2024 (2023: £45,000).
7. Staff costs and Directors’ fees
No members of staff were employed during the year (2023: nil).
Total Directors’ fees were £315,152 (2023: £283,823).
8. Other expenses
31 December
2024
£’000
31 December
2023
£’000
Legal and professional fees 793 626
Other expenses 404 165
1,197 791
Included within legal and professional fees is £192,250 (2023: £173,189) relating to the accrual
of the 2024 audit fees. Audit fees paid to KPMG LLP in relation to the audit of the Group are
£375,765 for the year ended 31 December 2024 (2023: £338,943). There were no other fees
paid to the Auditor for non-audit services during the year (2023: £nil).
9. Earnings/(loss) per Ordinary Share ― basic and diluted
The basic and diluted profit per Ordinary Share for the Company is 0.52 pence per share
(2023: basic loss of 1.54 per share). This is based on the profit for the year of £3,005,954 (2023:
£9,284,495 loss) and on 573,946,152 (2023: 603,598,450) Ordinary Shares, being the weighted
average number of shares in issue during the year, excluding treasury shares.
10. Interest receivable
31 December
2024
£’000
31 December
2023
£’000
Interest receivable on loan notes 197 10,973
Interest receivable on Shareholder loans — 2,678
197 13,651
Information about the Company’s exposure to credit and market risk and impairment losses for
interest receivable is included in note 19.
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Annual Report and Financial Statements 31 December 2024
Notes to the Financial Statements continued
For the year ended 31 December 2024
11. Trade and other receivables
31 December
2024
£’000
31 December
2023
£’000
Prepaid expenses 47 35
Other receivables 257 255
304 290
Information about the Company’s exposure to credit and market risk and impairment losses for
trade and other receivables is included in note 19.
12. Cash and cash equivalents
31 December
2024
£’000
31 December
2023
£’000
Cash at bank 2,018 2,041
2,018 2,041
Information about the Company’s exposure to credit and market risk and impairment losses for
cash and cash equivalents is included in note 19.
13. Trade and other payables
31 December
2024
£’000
31 December
2023
£’000
Accrued expenses 211 238
Amounts due to subsidiaries
1
187 187
Unsettled treasury shares 88 772
486 1,197
1. Amounts due to subsidiaries are unsecured, interest free and repayable on demand.
14. Investments held at fair value through profit or loss
The following table presents the Company’s investments held at fair value through profit
orloss:
31 December 2024
£’000
31 December 2023
£’000
Equity Loan
Total
Investment Equity Loan
Total
Investment
Opening balance 128,789 554,315 683,104 161,627 554,315 715,942
Additions — — — — — —
Repayments — (30,464) (30,464) — — —
Loss on investments held
at fair value through
profit or loss (20,311) — (20,311) (32,828) — (32,838)
Investments held at fair
value through profit or
loss 108,478 523,851 632,329 128,789 554,315 683,104
The Company measures its investment in UK Hold Co at fair value through profit or loss. This
investment consists of both debt and equity and is not quoted in an active market.
The fair value of the Company’s interests in UK Hold Co is derived from the net assets of
UK Hold Co which holds the underlying investments at fair value. The debt portion of the
investment is measured at principal plus accrued interest (as these approximate the fair value
of the debt). The full terms of the debt are included in note 4. The fair value of the equity
portion is based on the net assets of UK Hold Co and reflects the fair value of underlying solar
assets plus working capital less the borrowings in the structure. The underlying investments are
valued using a discounted cash flow methodology used, if operational. Assets in construction
are valued at cost or cost less impairment.
The accrued interest on the debt at the year ended of £197k (2023: £13.6m), is shown
separately as a current asset on the balance sheet as it reflects earnt interest that will be
recovered in the next 12 months.
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Annual Report and Financial Statements 31 December 2024
Notes to the Financial Statements continued
For the year ended 31 December 2024
14. Investments held at fair value through profit or loss continued
In turn, UK Hold Co has three investments in RCF Debtco, FS Holdco 4 and FBSHL. RCF
Debtco has three investments in FS Topco 1, FS Topco 2 and FS Holdco 3. FS Topco 1 has one
investment in FIHC. FIHC has one investment in FS Holdco. FS Topco 2 has one investment in
FISH. FISH has one investment in FS Holdco 2. FS Holdco 2 has one investment in FS Debtco.
FS Holdco 3 has one investment in SGP Holdings 1 which in turn has one investment in Second
Generation Portfolio 1 (“SGP 1”). These investments also consist of both debt and equity and are
not quoted in an active market. FS Holdco and FS Debtco are fair valued using their Net Asset
Value as reported at year end, with adjustments to their long-term external debt to reflect the
fact that the carrying value at amortised cost is not considered to be the best approximation
of their fair value. FS Topco 1, FS Topco 2, FS Holdco 4, FIHC, FS Holdco 3 and FISH are fair
valued using their net assets.
FS Holdco, FS Debtco, SGP Holdings 1 and FS Holdco 3’s investment portfolios consist of
unquoted investments in solar projects, the valuations of which are based on a discounted cash
flow methodology (as set out in note 16) for solar projects that are operational. FS Holdco 4
consists of operational Australian and Spanish assets, the valuations of which are also based
on a discounted cash flow methodology, and also a development pipeline of Spanish solar and
BESS projects, which are held at cost less impairment to reflect current fair value based on
market pricing.
FBSHL is held at cost less impairment to reflect current fair value based on market pricing.
Fair value hierarchy
IFRS 13 Fair Value Measurement requires disclosures relating to fair value measurements
using a three-level fair value hierarchy. The level within which the fair value measurement is
categorised in its entirety is determined on the basis of the lowest level input that is significant
to the fair value measurement.
Assessing the significance of a particular input requires judgement, considering factors specific
to the asset or liability. The following table shows investments recognised at fair value,
categorised between those whose fair value is based on:
(a) Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities
(b) Level 2 – Valuation techniques for which the lowest level input that is significant to the fair
value measurement is directly or indirectly observable
(c) Level 3 – Valuation techniques for which the lowest level input that is significant to the fair
value measurement is unobservable
All investments held at fair value through profit or loss are classified as level 3 within the fair
value hierarchy.
As UK Hold Co’s Net Asset Value is not considered observable market data, the investment in
UK Hold Co has been classified as level 3. There were no movements between levels during the
year, categorised between those whose fair value is based on:
As at 31 December 2024:
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Investments held at fair value
through profit or loss — — 632,329 632,329
— — 632,329 632,329
As at 31 December 2023:
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Investments held at fair value
through profit or loss — — 683,104 683,104
— — 683,104 683,104
Sensitivity analysis
Due to the nature of the Group structure and the underlying valuation basis of UK Hold Co,
RCF Debtco, FS Topco 1, FIHC, FS Holdco, FS Topco 2, FS Debtco, FS Holdco 3, FS Holdco 4
and the underlying solar project investments, the valuation of the Company’s investment at
fair value through profit or loss is directly linked to the valuation of the underlying solar and
battery storage investments. Therefore, the unobservable inputs driving the valuation of the
Company’s investments in UK Hold Co are directly attributable to the valuation of the unquoted
investments in FS Holdco, FS Debtco, FS Holdco 3 and FS Holdco 4, which are discussed further
in note 16.
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Annual Report and Financial Statements 31 December 2024
Notes to the Financial Statements continued
For the year ended 31 December 2024
Name
Direct or
indirect holding
Country of
incorporation Principal activity
Proportion
of shares
and voting
rights held
Foresight Solar (UK Hold Co) Limited (UK Hold Co) Direct UK Holding Company 100%
FS Holdco Limited (FS Holdco) Indirect UK Holding Company 100%
FS Top Holdco 2 Limited (FS Topco 2) Indirect UK Holding Company 100%
Foresight Intermediate Solar Holdings Limited (FISH) Indirect UK Holding Company 100%
FS Holdco 2 Limited (FS Holdco 2) Indirect UK Holding Company 100%
FS Debtco Limited (FS Debtco) Indirect UK Holding Company 100%
FS Holdco 3 Limited (FS Holdco 3) Indirect UK Holding Company 100%
FS Holdco 4 Limited (FS Holdco 4) Indirect UK Holding Company 100%
FS RCF Debtco Limited (RCF Debtco) Indirect UK Holding Company 100%
FS Top Holdco 1 Limited (FS Topco 1) Indirect UK Holding Company 100%
FS Intermediate Holdco Limited (FIHC) Indirect UK Holding Company 100%
FS Wymeswold Limited Indirect UK SPV Holding Company 100%
FS Castle Eaton Limited Indirect UK SPV Holding Company 100%
FS Pitworthy Limited Indirect UK SPV Holding Company 100%
Foresight Solar Germany Holding GmbH Indirect Germany SPV Holding Company 100%
FS Highfields Limited Indirect UK SPV Holding Company 100%
FS High Penn Limited Indirect UK SPV Holding Company 100%
FS Hunter’s Race Limited Indirect UK SPV Holding Company 100%
FS Spriggs Limited Indirect UK SPV Holding Company 100%
FS Bournemouth Limited Indirect UK SPV Holding Company 100%
15. Subsidiaries and associates
Investments in subsidiaries
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Notes to the Financial Statements continued
For the year ended 31 December 2024
Name
Direct or
indirect holding
Country of
incorporation Principal activity
Proportion
of shares
and voting
rights held
FS Landmead Limited Indirect UK SPV Holding Company 100%
FS Kencot Limited Indirect UK SPV Holding Company 100%
FS Copley Limited Indirect UK SPV Holding Company 100%
FS Port Farms Solar Limited Indirect UK SPV Holding Company 100%
FS Membury Limited Indirect UK SPV Holding Company 100%
FS Southam Solar Limited Indirect UK SPV Holding Company 100%
FS Atherstone Solar Limited Indirect UK SPV Holding Company 100%
FS Paddock Wood Solar Farm Limited Indirect UK SPV Holding Company 100%
Southam Holdco Limited Indirect UK SPV Holding Company 100%
Atherstone Holdco Limited Indirect UK SPV Holding Company 100%
Paddock Wood Holdco Limited Indirect UK SPV Holding Company 100%
FS Shotwick Limited Indirect UK SPV Holding Company 100%
FS Sandridge Limited Indirect UK SPV Holding Company 100%
FS Wally Corner Limited Indirect UK SPV Holding Company 100%
FS Holdco 5 Limited Indirect UK SPV Holding Company 100%
FS Welbeck Limited Indirect UK SPV Holding Company 100%
FS Trehawke Limited Indirect UK SPV Holding Company 100%
FS Homeland Limited Indirect UK SPV Holding Company 100%
FS Marsh Farm Limited Indirect UK SPV Holding Company 100%
FS Steventon Limited Indirect UK SPV Holding Company 100%
15. Subsidiaries and associates continued
Investments in subsidiaries continued
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Annual Report and Financial Statements 31 December 2024
Notes to the Financial Statements continued
For the year ended 31 December 2024
Name
Direct or
indirect holding
Country of
incorporation Principal activity
Proportion
of shares
and voting
rights held
FS Fields Farm Limited Indirect UK SPV Holding Company 100%
FS Gedling Limited Indirect UK SPV Holding Company 100%
FS Sheepbridge Limited Indirect UK SPV Holding Company 100%
FS Cuckoo Limited Indirect UK SPV Holding Company 100%
FS Field House Limited Indirect UK SPV Holding Company 100%
FS Upper Huntingford Limited Indirect UK SPV Holding Company 100%
FS Abergelli Limited Indirect UK SPV Holding Company 100%
FS Crow Trees Limited Indirect UK SPV Holding Company 100%
FS Yarburgh Limited Indirect UK SPV Holding Company 100%
FS Nowhere Solar Limited Indirect UK SPV Holding Company 100%
FS Bilsthorpe Solar Limited Indirect UK SPV Holding Company 100%
FS Bulls Head Solar Limited Indirect UK SPV Holding Company 100%
FS Roskrow Solar Limited Indirect UK SPV Holding Company 100%
FS Abbeyfields Solar Limited Indirect UK SPV Holding Company 100%
FS Lindridge Solar Limited Indirect UK SPV Holding Company 100%
FS Misson Solar Limited Indirect UK SPV Holding Company 100%
FS Playters Solar Limited Indirect UK SPV Holding Company 100%
FS PS Manor Farm Solar Limited Indirect UK SPV Holding Company 100%
FS SV Ash Solar Park Limited Indirect UK SPV Holding Company 100%
FS Pen Y Cae Solar Limited Indirect UK SPV Holding Company 100%
15. Subsidiaries and associates continued
Investments in subsidiaries continued
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Annual Report and Financial Statements 31 December 2024
Notes to the Financial Statements continued
For the year ended 31 December 2024
Name
Direct or
indirect holding
Country of
incorporation Principal activity
Proportion
of shares
and voting
rights held
Second Generation Portfolio Holdings 1 (SGP Holdings 1) Indirect UK SPV Holding Company 100%
Second Generation Portfolio 1 (SGP 1) Indirect UK SPV Holding Company 100%
Foresight Solar Spain Holding S.L (FSSH) Indirect Spain SPV Holding Company 100%
Wymeswold Solar Farm Limited (Wymeswold) Indirect UK Investment 100%
Castle Eaton Solar Farm Limited (Castle Eaton) Indirect UK Investment 100%
Pitworthy Solar Limited (Pitworthy) Indirect UK Investment 100%
Highfields Solar Limited (Highfields) Indirect UK Investment 100%
High Penn Solar Limited (High Penn) Indirect UK Investment 100%
Hunter’s Race Solar Limited (Hunter’s Race) Indirect UK Investment 100%
Spriggs Solar Limited (Spriggs Farm) Indirect UK Investment 100%
Bournemouth Solar Limited (Bournemouth) Indirect UK Investment 100%
Landmead Solar Farm Limited (Landmead) Indirect UK Investment 100%
Kencot Hill Solar Farm Limited (Kencot) Indirect UK Investment 100%
Copley Solar Limited (Copley) Indirect UK Investment 100%
Port Farms Solar Limited (Port Farms) Indirect UK Investment 100%
Membury Solar Limited (Membury) Indirect UK Investment 100%
Atherstone Solar Farm Limited (Atherstone) Indirect UK Investment 100%
Southam Solar Farm Limited (Southam) Indirect UK Investment 100%
Paddock Wood Solar Farm Limited (Paddock Wood) Indirect UK Investment 100%
Shotwick Solar Limited (Shotwick) Indirect UK Investment 100%
15. Subsidiaries and associates continued
Investments in subsidiaries continued
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Annual Report and Financial Statements 31 December 2024
Notes to the Financial Statements continued
For the year ended 31 December 2024
Name
Direct or
indirect holding
Country of
incorporation Principal activity
Proportion
of shares
and voting
rights held
Sandridge Solar Power Limited (Sandridge) Indirect UK Investment 100%
Wally Corner Solar Limited (Wally Corner) Indirect UK Investment 100%
Second Generation Yardwall Limited (Yardwall) Indirect UK Investment 100%
Second Generation Verwood Limited (Verwood) Indirect UK Investment 100%
Second Generation Park Farm Limited (Park Farm) Indirect UK Investment 100%
Second Generation Coombeshead Limited (Coombeshead) Indirect UK Investment 100%
Second Generation Sawmills Limited (Sawmills) Indirect UK Investment 100%
Welbeck Solar Limited (Welbeck) Indirect UK Investment 100%
Trehawke Solar Limited (Trehawke) Indirect UK Investment 100%
Homeland Solar Limited (Homeland) Indirect UK Investment 100%
Marsh Farm Solar Limited (Marsh Farm) Indirect UK Investment 100%
Steventon Solar Limited (Steventon) Indirect UK Investment 100%
Fields Farm Solar Limited (Fields Farm) Indirect UK Investment 100%
Gedling Solar Limited (Gedling) Indirect UK Investment 100%
Sheepbridge Solar Limited (Sheepbridge) Indirect UK Investment 100%
Tengore Solar Limited (Tengore) Indirect UK Investment 100%
Cuckoo Solar Limited (Cuckoo) Indirect UK Investment 100%
Field House Solar Limited (Field House) Indirect UK Investment 100%
Upper Huntingford Solar Limited (Upper Huntingford) Indirect UK Investment 100%
Abergelli Solar Limited (Abergelli) Indirect UK Investment 100%
15. Subsidiaries and associates continued
Investments in subsidiaries continued
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Financial Statements
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Annual Report and Financial Statements 31 December 2024
Notes to the Financial Statements continued
For the year ended 31 December 2024
Name
Direct or
indirect holding
Country of
incorporation Principal activity
Proportion
of shares
and voting
rights held
Crow Trees Solar Farm Limited (Crow Trees) Indirect UK Investment 100%
Yarburgh Solar Limited (Yarburgh) Indirect UK Investment 100%
Nowhere Solar Limited (Nowhere) Indirect UK Investment 100%
Bilsthorpe Solar Limited (Bilsthorpe) Indirect UK Investment 100%
Bulls Head Solar Limited (Bulls Head) Indirect UK Investment 100%
Roskrow Solar Limited (Roskrow) Indirect UK Investment 100%
Lindridge Solar Limited (Lindridge) Indirect UK Investment 100%
Misson Solar Limited (Misson) Indirect UK Investment 100%
Playters Solar Limited (Playters) Indirect UK Investment 100%
PS Manor Farm Solar Limited (PS Manor Farm) Indirect UK Investment 100%
SV Ash Solar Park Limited (SV Ash) Indirect UK Investment 100%
Pen Y Cae Solar Limited (Pen Y Cae) Indirect UK Investment 100%
Bailey Solar Limited Indirect UK Investment 100%
True Blue Solar Limited Indirect UK Investment 100%
Shotton Grid Company Limited Indirect UK Investment 100%
Abbeyfields Solar Limited (Abbeyfields) Indirect UK Investment 100%
Virgen del Carmen Solar S.L (Virgen del Carmen) Indirect Spain Investment 100%
Foresight Energy Storage Spain 1 S.L.U Indirect Spain Investment 100%
Foresight Energy Storage Spain 2 S.L.U Indirect Spain Investment 100%
Foresight Energy Storage Spain 3 S.L.U Indirect Spain Investment 100%
15. Subsidiaries and associates continued
Investments in subsidiaries continued
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Annual Report and Financial Statements 31 December 2024
Notes to the Financial Statements continued
For the year ended 31 December 2024
Name
Direct or
indirect holding
Country of
incorporation Principal activity
Proportion
of shares
and voting
rights held
Foresight Energy Storage Spain 4 S.L.U Indirect Spain Investment 100%
Foresight Energy Storage Spain 5 S.L.U Indirect Spain Investment 100%
Foresight Energy Storage Spain 6 S.L.U Indirect Spain Investment 100%
San Isidro Solar 10 S.L Indirect Spain Investment 100%
Longreach New Holdco Pty Limited Indirect Australia SPV Holding Company 100%
Oakey 1 New Holdco Pty Limited Indirect Australia SPV Holding Company 100%
FS Oakey 2 Pty Limited Indirect Australia SPV Holding Company 100%
RE Oakey Pty Limited Indirect Australia Investment 100%
Oakey Networks Pty Limited Indirect Australia SPV Holding Company 100%
Longreach Asset Company Pty Limited Indirect Australia SPV Holding Company 100%
RE Oakey Pty Limited Indirect Australia SPV Holding Company 100%
Oakey Networks Pty Limited Indirect Australia SPV Holding Company 100%
Oakey 1 Hold Company Pty Limited Indirect Australia SPV Holding Company 100%
Longreach Hold Company Pty Limited Indirect Australia SPV Holding Company 100%
Oakey 1 Asset Company Pty Limited Indirect Australia SPV Holding Company 100%
Oakey 1 FinCo Pty Limited Indirect Australia SPV Holding Company 100%
Oakey 1 Op Hold Company Pty Limited Indirect Australia SPV Holding Company 100%
Oakey 1 Op Company Pty Ltd Indirect Australia Investment 100%
Longreach FinCo Pty Limited Indirect Australia SPV Holding Company 100%
Longreach Op Hold Company Pty Limited Indirect Australia SPV Holding Company 100%
15. Subsidiaries and associates continued
Investments in subsidiaries continued
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Annual Report and Financial Statements 31 December 2024
Notes to the Financial Statements continued
For the year ended 31 December 2024
Name
Direct or
indirect holding
Country of
incorporation Principal activity
Proportion
of shares
and voting
rights held
Longreach Op Company Pty Ltd Indirect Australia Investment 100%
Kiamco Hanwha Foresight Bannerton Pty Limited Indirect Australia SPV Holding Company 48.50%
Foresight Solar Australia Pty Limited Indirect Australia Investment 48.5%
Lunanhead Energy Storage Limited Indirect UK SPV Holding Company 50%
Clayfords Energy Storage Limited Indirect UK SPV Holding Company 50%
Sandridge Battery Storage Limited Indirect UK SPV Holding Company 50%
Global Solar Energy Veintisiete, S.L Indirect Spain Investment 50%
Solar de la Contraviesa 5 S.L.U Indirect Spain Investment 50%
Solar de la Contraviesa 6 S.L.U Indirect Spain Investment 50%
Solar de la Contraviesa 7 S.L.U Indirect Spain Investment 50%
Foresight Battery Storage Holding Limited (FBSHL) Indirect UK Holding Company 50%
16. Fair value of the investments in unconsolidated entities
Valuation process
Valuations are the responsibility of the Board of Directors. The Investment Manager is responsible for submitting fair market valuations of Group assets to the Directors. The Directors review and
approve these valuations following appropriate challenge and examination. Valuations are carried out quarterly. The current portfolio consists of non-market traded investments and valuations
are based on a discounted cash flow methodology. The Investment Manager’s assessment of fair value of investments is determined in accordance with the revised International Private Equity
and Venture Capital 2022 (IPEV) Valuation Guidelines, using levered and unlevered discounted cash flow principles. The Investment Manager and Directors consider that the discounted cash flow
methodology used in deriving a fair value is in accordance with the fair value requirements of IFRS 13. The assets in construction were valued at cost or cost less impairment at 31 December 2024
and have therefore been omitted from the sensitivity analysis on the following pages.
15. Subsidiaries and associates continued
Investments in subsidiaries continued
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Annual Report and Financial Statements 31 December 2024
Notes to the Financial Statements continued
For the year ended 31 December 2024
16. Fair value of the investments in unconsolidated entities continued
Sensitivity analysis of significant changes in unobservable inputs within level
hierarchy of underlying investments
The majority of the Company’s underlying investments (indirectly held through its
unconsolidated subsidiaries FS Holdco, FS Debtco, FS Holdco 3 and FS Holdco 4) are
valued with reference to the discounted value of future cash flows. The Directors consider
the valuation methodology used, including the key assumptions and discount rate applied,
to be appropriate. The Board reviews, at least annually, the valuation inputs and, where
possible, makes use of observable market data to ensure valuations reflect the fair value
of the investments. A broad range of assumptions are used in the valuation models. These
assumptions are based on long-term forecasts and are not affected by short-term fluctuations
in inputs, be it economic or technical. The Investment Manager has adjusted the sensitivities
calculation methodology from an asset-level cash flows only basis to a calculation based on
asset-level cash flow less holding company level debt cash outflows. This has resulted mainly in
a reduction of the discount rate sensitivity disclosed below.
The base valuation of £603.6 million represents the levered discounted value of future cash
flows of the underlying operational assets with assets under construction held at cost, less the
discounted cash flows of the long-term debt held at holding company level. The valuation of
the Australian assets is net of debt. The base valuation of £603.6 million is equal to the NAV
of£634.4 million adjusted by items deemed not subject to the sensitivities applied.
Investment in associates
31 December
2024
£m
Base case for sensitivities 603.6
Items not subject to sensitivities:
Cash in underlying assets 21.9
Assets in construction valued at cost or net realisable value 19.0
Company and intermediate holding companies’ cash 68.3
RCF outstanding (73.4)
Company and intermediate holding companies’ net liabilities (4.8)
Net Asset Value at 31 December 2024 634.4
The Directors consider the following to be the most significant inputs to the discounted cash
flows (DCF) calculation.
Discount rate
The weighted average discount rate used is 7.88% (2023: 8.03%). The Directors do not expect
to see a significant change in the discount rates applied within the solar infrastructure sector.
Therefore, a variance of +/-0.5% is considered reasonable factored into the analysis. In terms of
the climate change risk, the discount rate is benchmarked against a similar asset base to ensure
the underlying climate risk exposure is factored into the analysis.
-0.50% -0.25% Base +0.25% +0.50%
Portfolio valuation (£m) 625.9 614.6 603.6 592.9 582.5
Change in portfolio valuation (£m) 22.4 11.0 — (10.7) (21.0)
NAV per share change (pence) 4.0 2.0 112.3 (1.9) (3.7)
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Notes to the Financial Statements continued
For the year ended 31 December 2024
16. Fair value of the investments in unconsolidated entities continued
Power price
Power price DCF models assume power prices that are consistent with the power purchase
agreements currently in place. At the PPA end date, the model reverts to the power price
forecast. The power price forecasts are updated quarterly and based on power price forecasts
from relevant independent sources, adjusted by the Investment Manager for the expected
capture price discounts for solar generation as considered appropriate.
The forecast assumes an average annual decrease in adjusted power prices in real terms of
approximately 0.7% (2023: decrease of 2.1%). During the period, c.47% of the investments’
operational revenues came from regulatory support mechanisms. The remaining c.53% of
revenue is derived from electricity sales which are partially subject to power price movements.
On a net present value basis, future electricity sales which are subject to price movements
represent c.52% of total revenues.
-20.0% -10.0% Base +10.0% +20.0%
Portfolio valuation (£m) 495.3 549.0 603.6 647.4 694.6
Change in portfolio valuation (£m) (108.2) (54.5) — 43.9 91.0
NAV per share change (pence) (19.2) (9.7) 112.3 7.8 16.1
Inflation
A variable of 0.5% to 1.0% is considered reasonable given the long-term inflation rate of
3.00% for 2024, 3.00% from 2025 to 2030, after which it is 2.25% (2022: 3.00% and 2.25%,
respectively).
-1.0% -0.5% Base +0.5% +1.0%
Portfolio valuation (£m) 547.3 575.5 603.6 632.1 661.8
Change in portfolio valuation (£m) (56.3) (28.1) — 28.5 58.2
NAV per share change (pence) (10.0) (5.0) 112.3 5.0 10.2
Useful economic lives (UELs)
The valuation of the Company’s investments is determined based on the discounted value
of future cash flows of those investments over their UELs. The UEL of individual assets is
determined by reference to a fixed contractual lease term. However, the Board notes that if
extended contractual lease terms were negotiated for individual assets, this would increase
the value of those assets. Similarly, if the assets did not operate for the duration of the fixed
contractual period, this would reduce the value of those assets.
-1 year Base +1 year
Portfolio valuation (£m) 598.1 603.6 607.9
Change in portfolio valuation (£m) (5.5) — 4.4
NAV per share change (pence) (1.0) 112.3 0.8
The Directors also consider the following to be important inputs to the discounted cash flows
calculation.
Production
Base case production is a function of a number of separate assumptions including irradiation
levels, availability of the sites and technical performance of the equipment. A sensitivity of +/-
10% is considered reasonable given historic stable levels of irradiation, contractual availability
guarantees and understanding of future performance levels of the equipment.
-10.0% Base +10.0%
Portfolio valuation (£m) 494.6 603.6 704.1
Change in portfolio valuation (£m) (109.0) — 100.5
NAV per share change (pence) (19.3) 112.3 17.8
Operating costs (investment level)
Operating costs include operations and maintenance (O&M), insurance and lease costs. Other
costs are fixed and are therefore not considered to be sensitive to changes in unobservable
inputs. Base case costs are based on current commercial agreements. The Directors would not
expect these costs to fluctuate widely over the life of the assets and are comfortable that the
base case is appropriate. A variance of +/-5.0% is considered reasonable, a variable of 10.0% is
shown for information purposes.
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Notes to the Financial Statements continued
For the year ended 31 December 2024
16. Fair value of the investments in unconsolidated entities continued
-10.0% -5.0% Base +5.0% +10.0%
Portfolio valuation (£m) 619.9 611.8 603.6 595.1 586.6
Change in portfolio valuation (£m) 16.3 8.2 — (8.5) (17.0)
NAV per share change (pence) 2.9 1.5 112.3 (1.5) (3.0)
Tax rate
From 1 April 2023, the UK corporation tax rate increased from 19% to 25%. The impact of this
change is reflected in the current year and prior year valuations. On that basis, a variable of
1.0% is considered reasonable given historic information.
-1.0% Base +1.0%
Portfolio valuation (£m) 607.4 603.6 600.3
Change in portfolio valuation (£m) 3.9 — (3.2)
NAV per share change (pence) 0.7 112.3 (0.6)
Exchange rate
The Company’s investments are directly exposed to fluctuations in foreign currency due to its
investments in Australian dollar and euro denominated assets. Whilst the Group mitigates its
exposure to fluctuations in Australian dollars through the use of forward contracts, and in euros
through the natural hedge of Spanish distributions offsetting with the euro debt service, the
valuations of these assets will be directly impacted.
The DCF valuations of the Spanish assets may vary as a result of exchange rates, however, this
is offset by the exchange rate movements in the equivalent balance of the euro denominated
RCF loan, as shown on page 75. The EUR/GBP table below does not consider the offsetting
exchange rate movements on the RCF.
Whilst the Directors would not expect to see fluctuations quite this large, a variable of 20% is
considered appropriate.
AUD/GBP -20.0% -10.0% Base +10.0% +20.0%
Portfolio valuation (£m) 596.0 599.8 603.6 607.4 611.1
Change in portfolio valuation (£m) (7.6) (3.8) — 3.8 7.5
NAV per share change (pence) (1.3) (0.7) 112.3 0.7 1.3
EUR/GBP -20.0% -10.0% Base +10.0% +20.0%
Portfolio valuation (£m) 596.7 599.8 603.6 608.1 613.8
Change in portfolio valuation (£m) (6.9) (3.8) — 4.5 10.2
NAV per share change (pence) (1.2) (0.7) 112.3 0.8 1.8
Interest rate
The Group’s interest rate received on UK bank deposits is subject to reassessment in respect
of fluctuations in the Bank of England base rate. The valuations of the assets will be directly
impacted by any changes to the UK bank deposit rate. Whilst the Directors would not expect to
see fluctuations quite this large, a variable of 1% is considered appropriate.
-1.0% -0.5% Base +0.5% +1.0%
Portfolio valuation (£m) 602.7 603.1 603.6 604.0 604.4
Change in portfolio valuation (£m) (0.8) (0.4) — 0.4 0.8
NAV per share change (pence) (0.1) (0.1) 112.3 0.1 0.1
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Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Notes to the Financial Statements continued
For the year ended 31 December 2024
17. Stated capital and share premium
The Company issued shares of nil par value and therefore the stated capital relates only to
share premium. The stated capital of the Company consists of Ordinary Shares and treasury
shares. At any General Meeting of the Company each Shareholder will have, on a show of
hands, one vote and on a poll one vote in respect of each Ordinary Share held. As at the year
end the total number of voting rights in the Company is 564,856,642 which excludes 45,102,078
Ordinary Shares held in treasury.
Stated capital is the net proceeds received from the issue of Ordinary Shares (net of issue
costscapitalised). The holders of the Ordinary Shares are entitled to receive dividends from
time to time.
Authorised Ordinary Shares
31 December
2024
Shares
31 December
2023
Shares
Ordinary Shares – nil par value Unlimited Unlimited
Ordinary Shares in circulation
31 December 2024
31 December
2023
Ordinary
Shares
Treasury
shares
Ordinary
Shares
Opening balance 589,239,345 20,719,375 609,958,720
Purchase of treasury shares (24,382,703) 24,382,703 (20,719,375)
Closing balance 564,856,642 45,102,078 589,239,345
Issued Ordinary Share capital and treasury shares
31 December 2024
31 December
2023
Ordinary
Shares £’000
Treasury
shares £’000
Ordinary
Shares £’000
Opening balance 609,983 19,909 629,892
Less: Purchase of treasury shares
1
(21,799) 21,799 (19,909)
Closing balance 588,184 41,708 609,983
1. This figure represents the cash payments made to Jefferies International Limited during the year.
On 4 May 2023, the Company announced a share buyback programme and allocated an initial
£10,000,000 from its available cash reserves to the programme. On 16 November 2023, the
Company announced that this allocation of available cash would be increased to a potential
£40 million. On 8 August 2024, the Company announced that this allocation of available cash
would further be increased to a potential £50 million. There is no certainty that the full buyback
allocation will be utilised.
Share buybacks under the engagement will be made pursuant to the authority granted to the
Company at its General Meeting held on 12 June 2024 which limits purchases of Ordinary
Shares by the Company in the market to up to 14.99% of its issued capital.
18. NAV per Ordinary Share
The Net Asset Value (NAV) per redeemable Ordinary Share for the Company is 112.3 (2023:
118.4) pence per Ordinary Share. This is based on the Net Asset Value at the reporting date
of £634,362,015 (2023: £697,888,983) and on 564,856,642 (2023: 589,239,345) redeemable
Ordinary Shares, being the number of Ordinary Shares in issue at 31 December 2024 excluding
Ordinary Shares held in treasury.
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146
Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Notes to the Financial Statements continued
For the year ended 31 December 2024
19. Financial instruments and risk profile
The Company holds cash and liquid resources as well as having receivables and payables that
arise directly from its operations. The underlying investments of the Company’s investment
activities indirectly expose it to various types of risk associated with solar power. The main
risks arising from the Company’s financial instruments are market risk, liquidity risk, credit risk
and interest rate risk.
The Directors regularly review and agree policies for managing each of these risks and these
are summarised below:
19.1 Market risk
(a) Foreign currency risk
Foreign currency risk, as defined in IFRS 7, arises as the values of recognised monetary assets
and monetary liabilities denominated in other currencies fluctuate due to changes in foreign
exchange rates. Transactions in foreign currency are translated at the foreign exchange rate
ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign
currencies at the balance sheet date are translated to GBP at the foreign exchange rate ruling
atthat date. Foreign exchange differences arising on translation are recognised in income.
The Company has no direct exposure to foreign currency risk, however through its underlying
investment in FS Holdco 4 and RCF Debtco it has indirect exposure.
FS Holdco 4 is directly exposed to fluctuations in foreign currency due to its investments in
assets and cash denominated in EUR and AUD. The relevant holding companies mitigate the
exposure to fluctuations in foreign currency through the use of forward exchange contracts.
The carrying amount of FS Holdco 4’s foreign currency exposure at the reporting date is as
follows:
31 December
2024
£’000
31 December
2023
£’000
AUD Investments 40,677 47,898
EUR Investments 44,333 46,577
AUD Cash 1 44
EUR Cash 2,099 2,027
The RCF Euro denominated tranche of €50,320,596 was chosen to align with the valuation of
the operational Spanish portfolio of projects. The distributions of these operational projects act
as a hedge to offset the currency exposure of the EUR RCF debt service.
The carrying amount of RCF Debtco’s foreign currency exposure at the reporting date is as
follows:
31 December
2024
£’000
31 December
2023
£’000
EUR Loan 41,591 —
EUR Cash 57 —
The FX rate applied at 31 December 2024 was AUD/GBP 0.4942 (2023: 0.5353) and EUR/GBP
0.8265 (2023: 0.8666).
The sensitivities linked to the assets denominated in AUD and EUR are set out in note 16 as
these assets are held in the underlying investment.
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Financial Statements
147
Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Notes to the Financial Statements continued
For the year ended 31 December 2024
19. Financial instruments and risk profile continued
19.1 Market risk continued
(b) Price risk
The Company’s investments are susceptible to market price risk arising from uncertainties
about future values of the instruments. The Investment Manager provides the Company with
investment recommendations. The Investment Manager’s recommendations are reviewed
and approved by the Board before the investment decisions are implemented. To manage the
market price risk, the Investment Manager reviews the performance of the investments on a
regular basis and is in regular contact with the management of the non-current investments for
business and operational matters.
Price risk is the risk that the fair value or cash flows of a financial instrument will fluctuate
due to changes in market prices. At 31 December 2024, the Company’s only investment
was valued at net assets excluding the outstanding loans issued by the Company. Were this
value to increase or decrease by 10%, the increase or decrease in net assets attributable to
Shareholders for the year would be £63,232,907 (2023: £68,310,349). The impact of changes
inunobservable inputs to the underlying investment is considered in note 16.
(c) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market interest rates. The Company’s exposure to the risk of
changes in market interest rates relates primarily to the Company’s long-term borrowing to
its subsidiary. At the year end the Company had no long-term borrowings with third parties
(2023:£nil).
Total portfolio
31 December
2024
£’000
Weighted
average
interest rate
31 December
2024
%
Weighted
average time
for which rate
is fixed
31 December
2024
Days
Loan notes 250,000 9.00 2,238
Shareholder loans 273,853 2.00 3,470
Cash 2,018 0.05 —
525,871
Total portfolio
31 December
2023
£’000
Weighted
average
interest rate
31 December
2023
%
Weighted
average time
for which rate
is fixed
31 December
2023
Days
Loan notes 250,000 10.03 1,872
Shareholder loans 304,315 2.00 3,104
Cash 2,041 0.05 —
556,356
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Financial Statements
148
Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Notes to the Financial Statements continued
For the year ended 31 December 2024
19. Financial instruments and risk profile continued
19.1 Market risk continued
(c) Interest rate risk continued
The Company is also indirectly exposed to interest rate risk through its investment in UK Hold
Co. Details of the indirect interest rate risk exposure are as follows:
Total
indirect
exposure
2024
£’000
Weighted
average
interest rate
2024
%
Weighted
average time
for which
rate is fixed
2024
Days
Investments – RCF Debtco
1
642,105 7.09 1,096
Investments – FS Holdco 4
1
93,401 5.64 3,147
Cash and cash equivalents 4,446 0.05 —
Total indirect exposure interest rate risk 739,952
Total
indirect
exposure
2023
£’000
Weighted
average
interest rate
2023
%
Weighted
average time
for which
rate is fixed
2023
Days
Investments – RCF Debtco
1
642,105 7.09 730
Investments – FS Holdco 4
1
93,401 5.64 2,781
Cash and cash equivalents 21,584 0.05 —
Total indirect exposure interest rate risk 757,090
1. Although interest is charged on the loan portion of the investments, the risk is low as the loans are inter-group and therefore not
subject to significant fluctuations. These loans do not have a repayment date and are repayable on demand. However, the Directors
do not intend to demand repayment within at least 12 months after year end.
19.2 Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as
they fall due as a result of the maturity of assets and liabilities not matching. An unmatched
position potentially enhances profitability but can also increase the risk of losses. Liquidity
could be impaired by an inability to access secured and/or unsecured sources of financing
to meet financial commitments. The Board monitors the Company’s liquidity requirements to
ensure there is sufficient cash to meet the Company’s operating needs.
The following are the expected maturities of the financial assets and liabilities at the year end
based on contractual undiscounted payments:
31 December 2024
Carrying
amount
£’000
Contractual
total
£’000
Less than
6 months
£’000
6 to
12 months
£’000
Greater than
12 months
£’000
Financial assets
Investments 632,329 632,329 — — 632,329
Trade and other receivables 304 304 17 65 222
Interest receivable 197 197 — 197 —
Cash and cash equivalents 2,018 2,018 2,018 — —
Total financial assets 634,848 634,848 2,035 262 632,551
Financial liabilities
Trade and other payables 486 486 269 — 217
Total financial liabilities 486 486 269 — 217
Net position 634,362 634,362 1,766 262 632,334
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Financial Statements
149
Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Notes to the Financial Statements continued
For the year ended 31 December 2024
19. Financial instruments and risk profile continued
19.2 Liquidity risk continued
31 December 2023
Carrying
amount
£’000
Contractual
total
£’000
Less than
6 months
£’000
6 to
12 months
£’000
Greater than
12 months
£’000
Financial assets
Investments 683,104 683,104 — — 683,104
Trade and other receivables 290 290 — 290 —
Interest receivable 13,651 13,651 — 13,651 —
Cash and cash equivalents 2,041 2,041 2,041 — —
Total financial assets 699,086 699,086 2,041 13,941 683,104
Financial liabilities
Trade and other payables 1,197 1,197 1,197 — —
Total financial liabilities 1,197 1,197 1,197 — —
Net position 697,889 697,889 844 13,941 683,104
19.3 Credit risk
(a) Exposure to credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations
resulting in financial loss to the Company. The Company places cash with authorised deposit
takers and is therefore potentially at risk from the failure of such institutions.
In respect of credit risk arising from other financial assets and liabilities, which mainly comprise
of cash and cash equivalents, exposure to credit risk arises from default of the counterparty
with a maximum exposure equal to the carrying amounts of these instruments. In order to
mitigate such risks, cash is maintained with major international financial institutions. During
the year and at the reporting date, the Company maintained relationships with the following
financial institutions:
Moody’s
credit rating
31 December
2024
£’000
Cash in bank:
Royal Bank of Scotland International Limited P2 2,018
Total cash and cash equivalents 2,018
Moody’s
credit rating
31 December
2023
£’000
Cash in bank:
Royal Bank of Scotland International Limited P2 2,041
Total cash and cash equivalents 2,041
Strategic Report
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Financial Statements
150
Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Notes to the Financial Statements continued
For the year ended 31 December 2024
19. Financial instruments and risk profile continued
19.3 Credit risk continued
(a) Exposure to credit risk continued
The Company is also indirectly exposed to credit risk through its investment in UK Hold
Co. TheBoard of UK Hold Co has determined that the maximum exposure to credit risk in
relation to investments is £735,506,149 (2023: £765,269,357), being the portion of UK Hold
Co investments that are made up of loans as at 31 December 2024. Included within this are
the related party loans as disclosed within note 22 as well as debt facilities entered into by
FS Holdco, FS Debtco and RCF Debtco with Santander UK plc, NatWest Group plc, Allied
Irish Banks plc, Lloyds Bank plc, Macquarie Group Limited, Landesbank Hessen-Thuringen
Girozentrale, Sumitomo Mitsui Banking Corporation, London Branch and Barclays plc
respectively. The balance of the external debt facilities as at year end amounted to
£297,759,940 (2023: £317,419,968).
As per the debt structure in the Financial review section, the RCF Debtco RCF is due to mature
in February 2026.
The Group’s ability to meet the debt covenants described in note 2.2 is directly impacted by
power prices. If the debt covenants were not met, the Company may not be able to repatriate
cash through the structure. On the debt calculation date before the date of this report, the
DSCR for FS Holdco was 3.12:1 and for FS Debtco it was 3.98:1. The ratios must higher than
1.20:1 and 1.10:1, respectively, to be compliant.
On the debt calculation date for RCF Debtco, the interest cover ratio was 25.61:1. This ratio
must remain higher than 3.00:1 to be compliant.
(b) Expected credit loss assessment
Investments held at fair value through profit or loss are not subject to IFRS 9 impairment
requirements.
The Company applies the simplified approach to measuring expected credit losses, as
permitted by IFRS 9, which uses a lifetime expected credit loss allowance for all trade
receivables. The expected credit loss on trade receivables and the balance at year end was
deemed by management to be not material and therefore no impairment adjustments were
accounted for.
19.4 Other risks
The value of Ordinary Shares may be affected by uncertainties such as political or diplomatic
developments, social and religious instability, changes in government policies, taxation or
interest rates, currency repatriation and other political and economic developments in law
or regulations and, in particular, the risk of expropriation, nationalisation, and confiscation of
assets and changes in legislation relating to the level of foreign ownership.
Governmental authorities are actively involved in the promulgation and enforcement of
regulations relating to taxation, land use and zoning, planning restrictions, environmental
protection, safety and other matters. The introduction and enforcement of such regulations
could have the effect of increasing the expense and lowering the income or rate of return from,
as well as adversely affecting the value of, the Company’s assets.
Specific risks to the value of Ordinary Shares, as per the Risk and Risk Management section of
this report are set out below:
Regulatory change, including changes to subsidies
In 2022, the UK government started the REMA consultation process on the future of the
electricity market. Changes required to the UK wholesale power market are still uncertain in
terms of timing and impact on corporate power price agreements.
In 2023, the UK government launched a consultation into the Renewables Obligation Certificate
(ROC) scheme which is seeking views on introducing Fixed Price Certificates (FPCs) to help
provide price stability as the ROC scheme came to an end. This was envisaged in the latter
years of the ROC scheme. The Investment Manager is engaging with the process and responding
via industry representatives to minimise any perceived risks for the sector.
Changes to the level of political support for renewable energy generation may result in
adjustments to the levels of subsidy and incentives, whether on a prospective or retrospective
basis. The Directors continue to monitor and review this risk under the risk management
framework.
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Financial Statements
151
Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Notes to the Financial Statements continued
For the year ended 31 December 2024
19. Financial instruments and risk profile continued
19.4 Other risks continued
Access to capital
Due to a period of fiscal tightening, the real assets investment market experienced wide
discounts to NAV and were unable to raise equity. There is a risk of reduced appetite for the
Company’s shares as it may struggle to raise additional capital for new investments and be
unable to grow, which would result in a long-term decline in NAV.
To address this risk, the Company adheres to a disciplined capital allocation approach and
continues actions to address the discount to NAV that its shares have traded at.
Energy prices
Power curve forecasters generally assume that the mass deployment of renewable energy
producers with a low marginal cost of generation will limit power price increases. Downward
adjustments to power forecasts have the potential to significantly impact NAV and the ability to
meet its future obligations and dividend payments.
The Investment Manager addresses this risk by fixing power prices under its current PPA
agreements and by actively hedging electricity prices.
Fund performance
In challenging market conditions, the Company’s performance, investment objectives and the
strategic decisions of the Board, in respect of the Company’s mandate, are closely scrutinised
against its peer group.
Should performance be below that of peers, investor confidence may be lost leading
to a reduction in appetite for shares and long term NAV decline, in addition to a greater
takeoverrisk.
The Directors oversee the Investment Manager’s delivery of the Company’s mandate by closely
monitoring performance on an ongoing basis.
Portfolio performance
There is a risk of the operating portfolio underperforming due to operational, technical or
economic factors. These can lead to downtime and threaten the ability for the Company to
meet obligations to creditors or Shareholders.
Diversification is a mitigant to the risk of systematic underperformance by reducing the effect
ofany individual issue on the financial resilience of Foresight Solar.
Financial gearing
Rises in interest rates have meant third party debt facilities with variable interest rate exposure
have the potential to cause cash flow restrictions and pose a risk that refinancings will not
be achieved at equal terms. Furthermore, increasing discount rates could reduce portfolio
valuations, increasing the gearing percentage and threatening Investment Policy gearing
thresholds.
The Investment Manager enters interest rate hedges and closely monitors debt covenant
compliance to mitigate this risk. Restructuring analysis is also carried out to give options to
reduce gearing pressure.
Counterparty risk
The high interest environment has put pressure on counterparties with debt arrangements.
This could have various financial impacts on the Company, if the counterparty cannot fulfil
their obligations. This is especially important with key services such as financial hedging,
construction, operations and maintenance and PPA offtake arrangements.
The Investment Manager periodically benchmarks key counterparties and performs credit
rating checks to mitigate the risks of counterparty defaults.
Supply chains
Due to geopolitical developments and international conflicts, supply chains have been strained.
There is a risk that resources shipped internationally are delayed or become increasingly
expensive due to supply and demand imbalances. Additionally, there are ethical concerns in
relation to forced labour and modern slavery in the supply chain.
To mitigate this risk, the Investment Manager maintains strong relationships with key contractors
and engages consultants who conduct due diligence on the supply chain.
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Financial Statements
152
Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Notes to the Financial Statements continued
For the year ended 31 December 2024
19. Financial instruments and risk profile continued
19.4 Other risks continued
Development and construction
Delays to construction in the development pipeline could push back connection of projects to
the grid and therefore pose a risk to future revenues and project distributions. This could also
lead to difficulties in servicing debt.
This is mitigated through the negotiation of contracts with third parties that shift delivery
responsibility to the contractor. Contractual risks will typically be mitigated by performance
bonds and milestone payments, with funds transferred only once certain conditions are met.
In addition, the Investment Manager conducts due diligence on third parties and employs an
experienced in-house construction management team to oversee the development process.
Changing climate patterns
Global warming and climate change pose a risk to electricity generation due to changes
in weather patterns, which affect the provision of sunlight. Long-term reductions to solar
irradiation may change forecasts, reducing long-term revenues and the underlying valuation
ofthe portfolio.
The Investment Manager regularly monitors the portfolio’s actual generation and updates the
forecasts for the asset where necessary.
In the Investment process, the Investment Manager monitors and assesses the impact of climate
and weather-related risks on an ongoing basis.
20. Capital management
The Company’s objectives when managing capital are to safeguard the Group’s ability to
continue as a going concern in order to provide returns for Shareholders and benefits for other
stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Company may adjust the amount of
dividends paid to Shareholders, return capital to Shareholders, issue new shares (up to its
authorised number of shares) or sell assets to reduce debt. The Company is permitted to
purchase up to 14.99% of its own issued share capital.
21. Dividends
2024 2023
£’000
Pence/Ordinary
Share £’000
Pence/Ordinary
Share
Quarter 1 11,027 1.880 10,857 1.780
Quarter 2 10,942 1.895 10,857 1.780
Quarter 3 11,412 2.000 11,367 1.880
Quarter 4 11,353 2.000 11,304 1.895
44,734 44,385
On 22 November 2024, the Company announced the third interim dividend, in respect of the
period 1 July 2024 to 30 September 2024, of 2.000 pence per Ordinary Share. The shares
went ex-dividend on 23 January 2025 and the dividend was paid on 21 February 2025 to
Shareholders on the register as at the close of business on 24 January 2025.
No shares were issued in lieu of cash dividends during the year.
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Financial Statements
153
Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Notes to the Financial Statements continued
For the year ended 31 December 2024
22. Related party disclosures
For the purposes of these Financial Statements, a related party is an entity or entities who are
able to exercise significant influence directly or indirectly on the Company’s operations.
As noted in note 2, the Company does not consolidate its subsidiaries. However, the Company
and its subsidiaries (direct and indirect) are a Group and, therefore, are considered to be
related parties.
Transactions with UK Hold Co
For the year ended 31 December 2024:
Opening
balance as at
1 January 2024
£’000
Movements
during
the year
£’000
Closing
balance as at
31 December
2024
£’000
Interest bearing loans and outstanding interest 567,966 (44,113) 523,853
Non-interest bearing loans 187 — 187
For the year ended 31 December 2023:
Opening
balance as at
1 January 2023
£’000
Movements
during
the year
£’000
Closing
balance as at
31 December
2023
£’000
Interest bearing loans and outstanding interest 599,050 31,084 567,966
Non-interest bearing loans 187 — 187
Transactions between UK Hold Co and its underlying subsidiaries
There were no transactions between UK Hold Co, FISH, FS Topco 1, FIHC and SGP Holdings 1
during the current or prior year.
Transactions with RCF Debtco
For the year ended 31 December 2024:
Opening
balance as at
1 January 2024
£’000
Movements
during
the year
£’000
Closing
balance as at
31 December
2024
£’000
Interest bearing loans and outstanding interest 638,828 1,689 640,517
Non-interest bearing loans (306,279) 45,278 (261,001)
For the year ended 31 December 2023:
Opening
balance as at
1 January 2023
£’000
Movements
during
the year
£’000
Closing
balance as at
31 December
2023
£’000
Interest bearing loans and outstanding interest 589,262 49,566 638,828
Non-interest bearing loans (300,459) (5,820) (306,279)
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Governance
Financial Statements
154
Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Notes to the Financial Statements continued
For the year ended 31 December 2024
22. Related party disclosures continued
Transactions between UK Hold Co and its underlying subsidiaries continued
Transactions with FS Holdco
For the year ended 31 December 2024:
There were no transactions between UK Hold Co and FS Holdco during the year.
For the year ended 31 December 2023:
There were no transactions between UK Hold Co and FS Holdco during the year.
Transactions with FS Topco 2
For the year ended 31 December 2024:
There were no transactions between UK Hold Co and FS Topco 2 during the year.
For the year ended 31 December 2023:
There were no transactions between UK Hold Co and FS Topco 2 during the year.
Transactions with FS Debtco
For the year ended 31 December 2024:
There were no transactions between UK Hold Co and FS Debtco during the year.
For the year ended 31 December 2023:
There were no transactions between UK Hold Co and FS Debtco during the year.
Transactions with FS Holdco 3
For the year ended 31 December 2024:
There were no transactions between UK Hold Co and FS Holdco 3 during the year.
For the year ended 31 December 2023:
There were no transactions between UK Hold Co and FS Holdco 3 during the year.
Transactions with FS Holdco 4
For the year ended 31 December 2024:
Opening
balance as at
1 January 2024
£’000
Movements
during
the year
£’000
Closing
balance as at
31 December
2024
£’000
Interest bearing loans and outstanding interest 147,778 (24,023) 123,755
Non-interest bearing loan (15,152) 38,384 23,232
For the year ended 31 December 2023:
Opening
balance as at
1 January 2023
£’000
Movements
during
the year
£’000
Closing
balance as at
31 December
2023
£’000
Interest bearing loans and outstanding interest 147,725 53 147,778
Non-interest bearing loan (9,665) (5,487) (15,152)
Transactions with FBSHL
For the year ended 31 December 2024:
Opening
balance as at
1 January 2024
£’000
Movements
during
the year
£’000
Closing
balance as at
31 December
2024
£’000
Interest bearing loans and outstanding interest 8,040 7,630 15,670
Strategic Report
Governance
Financial Statements
155
Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Notes to the Financial Statements continued
For the year ended 31 December 2024
22. Related party disclosures continued
Transactions between UK Hold Co and its underlying subsidiaries continued
Transactions with FBSHL continued
For the year ended 31 December 2023:
Opening
balance as at
1 January 2023
£’000
Movements
during
the year
£’000
Closing
balance as at
31 December
2023
£’000
Interest bearing loans and outstanding interest 2,699 5,341 8,040
Transactions between FS Holdco, FS Debtco, FS Holdco 3, FS Holdco 4 and their SPVs
All of the SPVs are cash-generating solar farms (except for the non-operational Spanish
investments). On occasion, revenues are received and expenses are paid on their behalf by FS
Holdco, FS Holdco 2, FS Debtco, FS Holdco 3 and FS Holdco 4. All of these transactions are
related party transactions.
For the year ended 31 December 2024:
Opening
balance
receivable/
(payable)
as at
1 January
2024
£’000
Amounts paid
on behalf
of SPV
2024
£’000
Amounts
received
from SPV
2024
£’000
Net amount
(payable)/
receivable
as at
31 December
2024
£’000
FS Holdco and its SPVs (68,508) 11 (48,428) (116,925)
FS Debtco and its SPVs (80,776) 26 (47,973) (128,723)
For the year ended 31 December 2023:
Opening balance
receivable/
(payable)
as at
1 January
2023
£’000
Amounts paid
on behalf
of SPV
2023
£’000
Amounts
received
from SPV
2023
£’000
Net amount
(payable)/
receivable
as at
31 December
2023
£’000
FS Holdco and its SPVs (50,577) 10,467 (28,398) (68,508)
FS Debtco and its SPVs (48,927) — (31,849) (80,776)
Transactions with the Investment Manager
The Investment Manager of Foresight Solar is Foresight Group LLP.
During the year the year the Investment Manager charged marketing service fees of £15,000
(2023: £nil) to the Company. The Investment Manager, through its asset management subsidiary,
Foresight Asset Management Limited, charged asset management fees to the underlying
projects of £2,923,000 during the year (2023: £2,662,700). The Investment Manager also
charged asset management fees of €167,400 through its Spanish subsidiary Foresight Group
Iberia, S.L (2023: €136,900).
23. Commitments and contingent liabilities
There are no commitments or contingent liabilities (2023: £nil).
24. Controlling party
In the opinion of the Directors, there is no controlling party as no one party has the ability to
direct the financial and operating policies of the Company with a view to gaining economic
benefits from its direction.
25. Post balance sheet events
There were no post balance sheet events requiring disclosure.
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Financial Statements
156
Foresight Solar Fund Limited
Annual Report and Financial Statements 31 December 2024
Overview of investment activities
The Company’s investment activities during the year are disclosed in full in the Investment
Manager’s Report from page 10.
The performance of Foresight Solar’s portfolio during the year is also disclosed in full in the
Operational Review from page 29.
Meanwhile, a list of FSFL’s portfolio investments is included from page 17.
Leverage and borrowing
Leverage is defined as any method by which the Company increases its exposure through debt,
borrowed capital or the use of derivatives.
The Company and its subsidiaries’ leverage position and third-party debt arrangements are
disclosed in full in the Financial Review from page 71.
“Exposure” is defined in two ways – “gross method” and “commitment method” – and the
Company must not exceed maximum exposures under both methods.
The Directors are required to calculate and monitor Foresight Solar’s leverage, expressed as
a ratio between the exposure of the Company and its Net Asset Value (Exposure/NAV), under
both the gross method and the commitment method.
“Gross method” exposure is calculated as the sum of all Company positions (both positive and
negative), that is, all eligible assets, liabilities and derivatives, including derivatives held for risk
reduction purposes.
“Commitment method” exposure is also calculated as the sum of all Company positions (both
positive and negative), but after netting off derivative and security positions as specified by the
Directive.
For the “gross method”, the following has been excluded:
ș The value of any cash and cash equivalents which are highly liquid investments held in the
Company’s local currency that are readily convertible to a known amount of cash, subject to
an insignificant risk of changes in value and which provide a return no greater than the rate
of the three-month high quality government bond
ș Cash borrowings that remain in cash or cash equivalents as defined above and where the
amounts of that payable are known
The total amount of leverage calculated as at 31 December 2024 is:
ș Gross method: 33%
ș Commitment method: 43%
Liquidity
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as
they fall due because of the maturity of assets and liabilities not matching. An unmatched
position potentially enhances profitability but can also increase the risk of losses. Liquidity
could be impaired by an inability to access secured and/or unsecured sources of financing to
meet financial commitments. The Board monitors Foresight Solar’s liquidity requirements to
ensure there is sufficient cash to meet operating needs.
The Company’s financial position, its cash flows, liquidity position and borrowing facilities are
referred to in the Chair’s Statement (see page 6), Strategic Report (see page 1) and Notes to the
Financial Statements (see page 124). In addition, the Financial Statements (see page 120) include
the Company’s objectives, policies and processes for managing its capital, its financial risk
management objectives, and its exposures to credit risk and liquidity risk.
Foresight Solar has sufficient financial resources together with investments and income
generated. Consequently, the Directors believe it is able to manage its business risks.
Risk management policy note
Please refer to the principal risks section from page 46.
Remuneration
As an AIFM, the Company is subject to a remuneration code which is consistent with the
requirements of the Financial Conduct Authority. The remuneration policy is designed to ensure
that any relevant conflicts of interest can be always managed appropriately and that the
remuneration of the Directors and of senior management are in line with the risk policies and
objectives of the funds managed by the AIFM.
The Company does not directly employ any staff members. These services are provided by
Foresight Group LLP employees.
In accordance with the AIFMD, information in relation to the remuneration of the Company’s
AIFM is required to be made available to investors. In accordance with the Directive, the AIFM’s
remuneration policy and the numerical remuneration disclosures in respect of the AIFM’s
relevant reporting period (year ended December 2024) are available from the AIFM on request.
AIFMD disclosures (unaudited)
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Administrator & Company Secretary
JTC (Jersey) Limited
JTC House
28 Esplanade
St. Helier
Jersey JE4 2QP
Corporate Brokers
Jefferies
100 Bishopsgate
London EC2N 4JL
Singer Capital Markets
1 Bartholomew Lane
London EC2N 2AX
Independent Auditor
KPMG LLP
15 Canada Square
London E14 5GL
Investment Manager
Foresight Group LLP
The Shard
32 London Bridge Street
London SE1 9SG
Legal Advisors to the Company
as to the acquisition of solar assets
Osborne Clarke
One London Wall
London EC2Y 5EB
Legal Advisors to the Company
as to English Law
Dickson Minto W.S.
Broadgate Tower
20 Primrose Street
London EC2A 2EW
Legal Advisors to the Company
as to Jersey Law
Ogier
Ogier House
The Esplanade
St. Helier
Jersey JE4 9WG
Public Relations
Sodali & Co
122 Leadenhall Street
London
EC3V 4AB
Registrar
Computershare Investor Services (Jersey)
Queensway House
Hilgrove Street
St. Helier
Jersey JE1 1ES
Advisors
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Glossary of terms
AEMO Australian Energy Market Operator
AGM Annual General Meeting
AIC The Association of Investment Companies
AIC Code The Association of Investment Companies Code of Corporate
Governance
AIFs Alternative Investment Funds
AIFMs Alternative Investment Fund Managers
AIFMD The Alternative Investment Fund Managers Directive
APMs Alternative Performance Measures
Asset Manager The Company’s underlying investments have appointed Foresight
Group LLP, a subsidiary of Foresight Group CI, to act as Asset
Manager
BBSY Bank Bill Swap Bid Rate
BESS Battery energy storage system
CEFC The Clean Energy Finance Corporation
CfD Contracts for Difference
Company Foresight Solar Fund Limited
CPI Consumer Price Index
DCF Discounted cash flow
DESNZ Department for Energy Security and Net Zero
DNO Distribution network operator
DSCR Debt service cover ratio
EBITDA Earnings before interest, taxes, depreciation, and amortisation,
a measure of business performance
EEA European Economic Area
EGL Electricity Generator Levy
EPC Engineering, Procurement and Construction
EV Enterprise Value
ESG Environmental, Social and Governance
FCA Financial Conduct Authority
FiT Feed-in Tariff. The Feed-in Tariff scheme is the financial mechanism
introduced on 1 April 2010 by which the UK government incentivises
the deployment of renewable and low-carbon electricity generation
of up to 5MW of installed capacity
GAV Gross Asset Value on investment basis including debt held at
SPVlevel
GHG Greenhouse gas
Group borrowing Group borrowing refers to all third-party debt by the Company and
its subsidiaries
GWh Gigawatt hour
IAS International Accounting Standard
IC IC Investment Committee
IFRS International Financial Reporting Standards issued by the
International Accounting Standards Board
Investment Manager Foresight Group LLP
IPCC Intergovernmental Panel on Climate Change
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Glossary of terms continued
IPEV International Private Equity and Venture Capital
IPO Initial Public Offering
ISSB International Sustainability Standards Board
KPI Key performance indicator
KPMG LLP KPMG is the Company’s Auditor
LGC Large-Scale Generation Certificate
Listing Rules The set of FCA rules which must be followed by all companies listed
in the UK
Main Market The main securities market of the London Stock Exchange
MIDIS Macquarie Infrastructure Debt Investment Solutions
MWh Megawatt hour
NAV Net Asset Value
NEM National Electricity Market
NSW New South Wales
Official List The Premium Segment of the UK Listing Authority’s Official List
O&M Operation and maintenance
P90 90% probability of exceeding expected production over a
ten-year period
PCAF Partnership for Carbon Accounting Financials
PNIEC Plan Nacional Integrado de Energía y Clima
PPA Power purchase agreement
PV Photovoltaic
QLD Queensland
RCF Revolving credit facility
RCPs Representative Concentration Pathways
REMA Review of Electricity Market Arrangements
ROC Renewables Obligation Certificates
RPI The Retail Price Index
SDGs Sustainable Development Goals
SDR Sustainability Disclosure Requirements
Solar capture
price discount The half-hourly market pricing during periods of solar generation
SPVs The Special Purpose Vehicles which hold the Company’s investment
portfolio of underlying operating assets
SSPs Shared Socioeconomic Pathways
TCFD Task Force on Climate-related Financial Disclosures
TNFD Taskforce on Nature-related Financial Disclosures
UEL Useful economic life
UK The United Kingdom of Great Britain and Northern Ireland
VIC Victoria
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Foresight Solar Fund Limited
The Shard
32 London Bridge Street
London
SE1 9SG
fsfl.foresightgroup.eu