2024-09-30 08:00:00
Bluefield Solar Income Fund Limited
Annual Report and
Financial Statements
FOR THE YEAR ENDED 30 JUNE 2024
Company Registration Number: 56708
Table of Contents
General Information 3
Highlights 4
Corporate Summary 6
Chair’s Statement 7
The Company's Investment Portfolio 11
Analysis of the Company's Investment Portfolio 12
Report of the Investment Adviser 13
Environmental, Social and Governance Report 33
Task Force for Climate-related Financial Disclosures (TCFD) 52
Strategic Report 61
Report of the Directors 81
Board of Directors 87
Directors’ Statement of Responsibilities 89
Responsibility Statement of the Directors in Respect of the Annual Report 90
Corporate Governance Report 91
Report of the Audit and Risk Commitee 101
Independent Auditor's Report to the Members of Bluefield Solar Income Fund Limited 107
Statement of Financial Position 114
Statement of Comprehensive Income 115
Statement of Changes in Equity 116
Statement of Cash Flows 117
Notes to the Financial Statements for the year ended 30 June 2024 118
Glossary of Defined Terms 142
Alternate Performance Measures 148
Annex – SFDR Periodic Disclosures 151
3
General Information
Board of Directors
(all non
-
executive)
John Scott (Chair and Chair of Nomination Committee)
Elizabeth Burne (Chair of Audit and Risk Committee)
Michael Gibbons CBE (Senior Independent Director and Chair of Remuneration Committee)
Meriel Lenfestey (Chair of Environmental, Social and Governance Committee)
Paul Le Page (retired 30 September 2023)
Chris Waldron (appointed 1 December 2023) (Chair of Management Engagement and Service Providers
Committee)
Registered Office
PO Box 286
Floor 2, Trafalgar Court
Les Banques, St Peter Port
Guernsey, GY1 4LY
Administrator, Company Secretary and
Designated Manager
Ocorian Administration (Guernsey) Limited
Floor 2, Trafalgar Court
Les Banques, St Peter Port
Guernsey, GY1 4LY
Independent Auditor
KPMG Channel Islands Limited
Glategny Court, Glategny Esplanade
St Peter Port
Guernsey, GY1 1WR
Registrar
Computershare Investor Services (Guernsey) Limited
13 Castle Street
St Helier
Jersey, JE1 1ES
Investment Adviser
Bluefield Partners LLP
6 New Street Square
London, EC4A 3BF
Sponsor, Broker and Financial Adviser
Deutsche Numis
45 Gresham Street
London, EC2V 7BF
Legal Advisers to the Company
(as to English law)
Norton Rose Fulbright LLP
3 More London Riverside
London, SE1 2AQ
Legal Advisers to the Company
(as to Guernsey law)
Carey Olsen
PO Box 98, Carey House
Les Banques, St Peter Port
Guernsey, GY1 4BZ
Principal Bankers
NatWest International plc
35 High Street
St Peter Port
Guernsey, GY1 4BE
4
Highlights
As at 30 June 2024 / 30 June 2023
1. Underlying earnings is an alternative performance measure employed by the Company to provide insight to the Shareholders by
linking the underlying financial performance of the operational projects to the dividends declared and paid by the Company. It is
defined in the Alternative Performance Measure appendix.
2. Total Shareholder Return is based on share price movement and dividends paid in the year. It is defined in the Alternative
Performance Measure appendix.
3. Total Return is based on the NAV movement and dividends paid in the year. It is defined in the Alternative Performance Measure
appendix.
4. Performance relates to the Company’s 100% owned portfolio.
5. Based on Ofgem’s Typical Domestic Consumption Values (TDCV). The TDCV has reduced, hence this metric has increased despite
a decrease in generation compared with the previous year.
6. Based on generation data aligned with the relevant 2024 Government CO2e conversion factor. In the current Year, the Company
reported avoided emissions on a gross basis, reflecting its equity share in investments but without allocating any avoided emissions
to debt finance providers
5
Highlights (continued)
Results Summary:
For the year ended
30 June 2024
For the year ended
30 June 2023
Total operating income (£7,410,520)
£49,069,809
Total comprehensive income before tax (£9,600,983)
£46,793,621
Total underlying earnings (pre amorti
s
ation of
debt)
1
£94,580,146
£108,367,331
Earnings per share (per page 66) (1.57p)
7.65p
Total underlying EPS available for distribution
2
12.00p
18.13p
Total declared dividends per share for year 8.80p
8.60p
Underlying e
arnings per share carried forward
(See Page 24)
3.40p
9.53p
NAV per share 129.75p
139.70p
Share price at 30 June 105.60p
120.00p
Total return
3
(0.83)%
5.45%
Total Shareholder Return
4
(4.67)%
(2.03)%
Total Shareholder Return since inception
5
84.19%
89.79%
Dividends per share paid since inception 78.59p
69.79p
1. Underlying earnings is an alternative performance measure employed by the Company to provide insight to the
Shareholders by linking the underlying financial performance of the operational projects to the dividends declared
and paid by the Company. It is defined in the Alternative Performance Measure appendix.
2. Total underlying EPS is calculated using underlying earnings available for distribution, including unutilised prior
year underlying earnings per share carried forward, divided by the average number of shares.
3. Total return is based on NAV per share movement and dividends paid in the year.
4. Total Shareholder Return is based on share price movement and dividends paid in the year.
5. Total Shareholder Return since inception is based on share price movement and dividends paid since the IPO.
6
Corporate Summary
Investment Objective
The investment objective of the Company is to provide Shareholders with an attractive return, principally
in the form of regular income distributions, by being invested primarily in solar energy assets located in the
UK. The Company also invests a minority of its capital into other renewable assets including wind and
energy storage.
Structure
The Company is a non-cellular company limited by shares incorporated in Guernsey under the Law on 29
May 2013. The Company’s registration number is 56708, and it is regulated by the GFSC as a registered
closed-ended collective investment scheme and as a Green Fund after successful application under the
Guernsey Green Fund Rules to the GFSC on 16 April 2019. The Company’s Ordinary Shares were admitted
to the Premium Segment of the Official List and to trading on the Main Market of the LSE following its IPO
on 12 July 2013. On 29 July 2024, the UK Listing Rules were updated and as a result, the Company is now
a member of the Equity Shares in Commercial Companies (“ESCC”) category. The issued capital during the
year comprises the Company’s Ordinary Shares denominated in Sterling.
The Company makes its investments via its wholly owned subsidiary (Bluefield Renewables 1 Limited) and
has the ability to use long term and short term debt at the holding company level, as well as having long
term, non-recourse debt at the SPV level.
Investment Adviser
The Investment Adviser to the Company during the year was Bluefield Partners LLP which is authorised
and regulated by the UK FCA under the number 507508.
In May 2015, Bluefield Services Limited (BSL), a company with the same ownership as the Investment
Adviser, commenced providing asset management services to the investment SPVs held by the Company’s
wholly owned UK subsidiary, Bluefield Renewables 1 Limited (BR1).
In August 2017 Bluefield Operations Limited (BOL), a company with the same ownership as the Investment
Adviser, commenced providing operation and maintenance services to the Company and provides services
to approximately 80% of the capacity of the investment portfolio held by the Company as at year-end.
In December 2020, Bluefield Renewable Developments Limited (BRD), a company with the same
ownership as the Investment Adviser, commenced providing BSIF with new build development
opportunities in addition to arrangements in place with the Company’s other development partners.
In October 2023, Bluefield Construction Management Limited (BCM), a company with the same ownership
as the investment adviser, commenced providing BSIF with construction management services on the new
build portfolio.
7
Chair’s Statement
Introduction
The year ended 30 June 2024 (the “Year”) has produced many challenges for your Company and its
Investment Adviser. Despite a political environment which is strongly supportive of renewable electricity,
our shares – along with all others in our sector - have traded at a persistent discount to underlying NAV,
effectively preventing us from raising fresh capital in the stock market, a strategy which has served us and
our Shareholders well for the first ten years of our existence. This is a problem to which I referred last year,
and I am sorry to report that, with discounts widening across the sector, in the intervening twelve months
the issue has become more acute; at one point, BSIF’s discount exceeded 25%. We have therefore adopted
a fresh approach to the twin questions of: from where do we access the funds needed to finance our growth;
and what is the optimum allocation of the capital resources available to us?
BSIF’s operating performance, which saw generation fall by 3%, was hampered by two factors. We suffered
from a number of planned outages as inverters were replaced by newer and more reliable designs. The other
factor was the weather, the Year in question seeing irradiation levels which were some 4.3% below
expectations. Those who can remember the water-logged months of July/August 2023 and May/June 2024
will probably be surprised that the shortfall is not greater.
The most important development for BSIF, announced in December 2023, is our broad partnership with
GLIL Infrastructure (“GLIL”), whereby we agreed under Phase One to co-invest in the acquisition of a
247MW portfolio of UK solar assets; and, in Phase Two, to sell to GLIL a 50% stake in one of our existing
portfolios of operating solar assets, a transaction that was concluded in September 2024. As well as
providing the Company with capital to invest in new developments, it has also allowed us to reduce our
floating rate debt.
In light of the discount at which our shares have been trading, in February 2024 we announced a share
buyback programme. Between the beginning of March and 30 June 2024, BSIF bought back over 9 million
of its own shares at a cost of approximately £9.4 million. Buying at a discount to NAV added 0.4 pps to the
Company’s net asset value and the shares repurchased are held in treasury. Since Year end, we have
continued to buy back shares and as at 26 September we have repurchased over 14 million shares and the
discount stands at approximately 18%.
Although we did not complete any new solar projects during the Year, two of our largest solar investments
– Mauxhall Farm (44.4MW) and Yelvertoft (48.4MW) - were energised at the end of July 2024 and the
beginning of August 2024, respectively. Currently, our total generating capacity (including our 50% share
in the assets which were the subject of Phase Two of our strategic partnership with GLIL) stands at 883MW,
comprising 824.7MW of solar and 58.3MW of wind.
Highlights of the year
Total generation of the 100% owned portfolio, at 811GWh, fell by 3% as compared with the 836GWh
generated in the year ended 30 June 2023;
Total declared dividends for the Year increased to 8.80pps, in line with our previously declared
target (30 June 2023: 8.60pps) and with dividends covered 1.36 times by current earnings;
Irradiation was 4.3% below expectations and we suffered from significant plant downtime, largely
on account of planned inverter replacements;
Our income rose 3.1%, despite spot electricity prices falling - thanks to contracts struck earlier and
to our high proportion of regulated and inflation-linked revenues;
On 25 January 2024, the Company announced the completion of Phase One of its strategic
partnership with GLIL, which was an investment of £20 million of equity, alongside £200 million
from GLIL, to fund the acquisition of a 246.6MW portfolio of UK solar assets.
Subsequent to our Year end, we have completed Phase Two of our partnership with GLIL,
comprising the sale of a 50% stake in a 112.2MW portfolio of operating solar assets, resulting in a
payment to BSIF of circa £70 million, of which £50.5 million was used to repay the Company’s
Revolving Credit Facility (‘RCF’). Following completion, the Company’s equity stake in the
combined portfolios increased to approximately 25%;
8
Chair’s Statement (continued)
Highlights of the year (continued)
Work on the Company's development pipeline continued, with planning consents being secured on
223MW of solar projects and 90MW of battery projects, while the wider pipeline grew to 954MW
of solar and 603MW of battery storage;
The NAV per share fell to 129.75pps (30 June 2023: 139.70pps), the reduction reflecting lower long
term electricity prices and lower inflation expectations;
BSIF's shares traded at a persistent discount to NAV, the closing price on 30 June 2024 being 19%
below the NAV (30 June 2023: 14% discount);
Subsequent to 30 June 2024, two major solar plants, with a combined capacity of 92.8MW, were
energised.
At the Year end, the Group's total outstanding debt stood at £607 million, with leverage at 43% of GAV
(30 June 2023: 41% of GAV).
Underlying Earnings and Dividends
The Underlying Earnings for the Year, before amortisation of long-term debt, were £94.6 million, or
15.5pps, and underlying earnings available for distribution, post debt repayments of £30.1m (4.9pps), were
£64.5. million (10.6pps). Thus, the Company has earned comfortably in excess of its total dividend of
8.80pps for the Year.
This has enabled the declaration of a fourth interim dividend of 2.20pps, bringing the total dividend for the
Year to 8.80pps (Prior Year: 8.60pps); the yield on our shares - based on a share price of 106.40pps on 26
September 2024 - is 8.3%. The Board has set a target dividend for the year ended 30 June 2025 of not less
than 8.90pps. This extends our record of progressive increases, and reflects our intention to repay
borrowings and continue a programme of share buybacks, while also investing in the development of our
pipeline to generate and store electric energy.
Valuation and Discount Rate
There has been considerable activity in the secondary market for renewable electricity projects; demand for
solar portfolios remains strong, providing ample evidence to validate the asset values adopted by BSIF.
Prices seen in the market over the past two years range between £1.20m/MW and £1.45m/MW and over
1GW of operational capacity has been brought to market in the Year.
Some of this activity involves BSIF as a seller of operating solar investments; by entering into its partnership
with us, GLIL acquired a 50% stake in a selection of BSIF’s solar assets in Phase Two of the strategic
partnership, for a price which values the 112MW portfolio at circa £140 million. The financial assumptions
underlying this transaction are consistent with those used by the Company in publishing its latest NAV of
129.75pps as at 30 June 2024. The portfolio discount rate is unchanged at 8% for the valuation and the
enterprise value of the Company’s operational portfolio is £1,136.5m, representing £1.24m/MW for the
solar assets (30 June 2023: £1.35m/MW).
Inflation
UK inflation has abated in the past year; in June 2023 RPI inflation was running at 10.7%, whereas this fell
to 2.9% for June 2024. On a CPI basis, the figures were 7.9% and 2.0%, respectively. Sterling interest rates,
however, have been slower to fall. In August 2024 the Bank of England reduced Base Rate by just 0.25%, to
5.00%, and the UK 5 year gilt rate is now below 4%, down from approximately 4.5% one year ago.
BSIF is a net beneficiary of inflation, since our regulated income is index-linked, boosting our revenues
from ROCs and FiTs faster than the increase in our operating costs. The Company also adopts a prudent
approach to leverage, with most of our debt being fixed at the historically low interest rates which prevailed
until 2022; lower interest rates assist BSIF by reducing the cost of our revolving credit facility.
9
Chair’s Statement (continued)
Power Prices
Spot electricity prices have softened considerably in the Year, but the Company's PPA strategy of fixing
power prices for between one and three years in advance has allowed the Company to benefit from power
contracts which are insulating the Company from short term price weakness. The average weighted prices
for these contracts were £149/MWh for June 2024 (June 2023: £230/MWh).
Environmental, Social and Governance ("ESG")
I am pleased to say that our significantly enhanced ESG reporting has been well received by Shareholders
and other commentators. We continue to build on our approach and once again I express BSIF’s
appreciation for the work done by the Investment Adviser to align the Company with best practice in this
field. This year is the Company's second year of implementing and monitoring its ESG performance against
its KPIs and further information is available on page 47.
Capital allocation and gearing
As noted earlier, with BSIF’s shares trading at a significant discount, we continue to buy back our own
shares on a regular basis and, since the commencement of this programme in February, total buybacks now
exceed 14 million shares, all held in treasury. At the same time, we are steadily reducing the balance on our
RCF and it is the Board’s intention, within the constraints of the resources available to the Company, to
persevere with both programmes.
The Board
As noted in our Interim Report, in November 2023 Chris Waldron joined the BSIF Board as a non-executive
director.
Having been a member of this Board since the flotation of the Company in 2013, I intend to retire in 2025.
Thus, the forthcoming AGM will be the final time I shall be seeking re-election to the Board. The Board is
at an advanced stage of an exercise, involving an external search agency, to identify an additional director
to be appointed during our current financial year.
The AGM
The Company's Annual General Meeting will take place at 10.30am on 6 December 2024 at Floor 2,
Trafalgar Court, Les Banques, St Peter Port, Guernsey. Shareholders who are unable to be present in person
are encouraged to submit questions in advance of the meeting.
Conclusion
BSIF is required every five years to give Shareholders the opportunity to vote for the continuation or
otherwise of the Company. Your Board was delighted when the vote held at the 2023 AGM resulted in a
98.56% vote in support of the continuation of the Company and we interpret this as a strong vote of
confidence in our business and in our Investment Adviser, Bluefield Partners.
It is clear from their early weeks in office that the incoming Labour Government regards the expansion of
indigenously produced renewable energy as one of its priorities and recent announcements regarding
investment in significantly increased grid capacity suggest to us that they are entirely serious about
fostering a three-fold increase in solar power by 2030 and that the opportunities for our business are legion.
Our main constraint remains accessing the capital that is needed to develop the opportunities that exist. As
well as our operating portfolio of nearly 900MW of wind and solar capacity, BSIF has a significant
development pipeline, comprising nearly 1GW of solar projects and over 600MW of batteries.
10
Chair’s Statement (continued)
Conclusion (continued
Your Company is currently responsible for the generation of some 5% of all solar power in the UK and it is
our intention to participate fully in the planned expansion of this resource. The recently established publicly
owned energy company, Great British Energy, has been designed to accelerate clean energy deployment
and we welcome this, as well as the other initiatives announced to date which will support the path to both
net zero emissions and greater energy security and independence. At the same time, the Government
recognises the need to reform electricity market arrangements to deliver the pace and scale of change
required to meet its target of decarbonisation of the electricity system and continues to assess its options
following a second round of consultations in May 2024. We are active participants in this debate.
Our primary objective for the current year is to progress those investments which meet our investment
return criteria and which can be built and grid connected soonest, while working forensically on our existing
portfolio to improve and update what is there, all with the objective of maximising the operating
performance. We are fortunate to have a very significant volume of index-linked regulated revenue which,
combined with our Investment Adviser’s successful strategy of fixing medium term power sales contracts,
gives us confidence in the prospects for BSIF and our ability to continue to provide our Shareholders with
a rising dividend.
John Scott
Chair
27 September 2024
11
The Company’s Investment Portfolio
12
Analysis of the Company’s Investment Portfolio
13
Report of the Investment Adviser
Introduction from the Managing Partner of the Investment Adviser
In the year to 30 June 2023, the Company delivered the strongest earnings in its 10 year history and whilst
records cannot be broken every year, the financial performance for the period to 30 June 2024 has once
again been strong with the dividend target of 8.80pps comfortably covered by in period earnings (net of
debt and taxes).
The Company’s highly successful power price strategy has once again delivered material value to
shareholders, but for the first time in its operating history the portfolio has suffered the twin effects of below
budget irradiation (-4.3%) and below budget operational performance (-5.1%).
Whilst the Board and the Investment Adviser have no control over the amount of irradiation and wind
speed, it is important to note the operational challenges faced by the portfolio are principally the result of
one-off DNO outages and isolated challenges with particular inverter models.
The Investment Adviser, Bluefield Services and Bluefield Operations, have addressed this with a targeted
inverter replacement programme, investing over £3.6m to June 2024 and the results of which are already
delivering performance back towards expectations.
Stepping outside of the Company, the equity markets over the past twelve months have continued to present
a challenging year for the listed renewables sector. Across the sector, Bluefield Solar included, share price
discounts to NAVs have persisted and so the prospect of capital raises from the equity markets has remained
unattainable.
This has presented a multi layered challenge to the Company as it balances the need to continue progression
of its extensive pipeline of development opportunities, to prevent the risk of loss of value, whilst
simultaneously creating liquidity to reduce drawings under the Company’s RCF balance and provide
support to the Company’s share buyback programme.
Despite these considerable challenges, it is highly pleasing to be able write about a series of actions the
Company has taken over the past year which have made material strides in specifically addressing these
challenges. These were:
1. Strategic Partnership with GLIL: The announcement in December 2023 of the commencement of a
Strategic Partnership with GLIL, the large infrastructure investor. This innovative arrangement, unique
amongst the actions being taken by other listed peers, was structured to simultaneously address an
attractive acquisition opportunity, provide liquidity for reducing the Company’s RCF and progression
of a selected portion of the Company’s development pipeline.
The partnership covers three phases:
a. Phase One of the partnership, completed in January 2024, enabled Bluefield Solar to acquire a
minority stake in a highly attractive operational portfolio alongside GLIL as the majority investor.
The agreement also has the option for Bluefield to increase its stake, assuming there are available
funds.
b. Phase Two of the partnership, completed in August 2024, was the sale by Bluefield Solar of a 50%
stake in a 112MWp operational portfolio owned 100% by the Company. The sale, completed in line
with the Company’s prevailing NAV, realised proceeds of circa £70m and enabled a material initial
repayment (being circa £50m) of the Company’s drawn RCF balance (leaving it at circa £134m at
the time of writing)
c. Phase Three of the partnership, which is currently in progress, is a commitment for GLIL and
Bluefield Solar to co-invest into a selected portfolio of circa 10% of the Company’s proprietary
development pipeline and enable construction over the next two to three years.
14
Report of the Investment Adviser (continued)
Introduction from the Managing Partner of the Investment Adviser (continued)
2. Share buyback Programme: Turning attention to the challenge of the share price discount relative
to the Company’s NAV, in February 2024 the Board announced a share buyback programme of
£20m in order to provide direct support to the share price. As at 30 June 2024, the Company had
spent £9.4m of this allocation.
Whilst there has been considerable success with the various strategic initiatives deployed over the past
twelve months, the steps that are taken next are just as important in ensuring performance of the Company
continues to match that of the previous decade. What does this mean in practice?
On a direct basis, it means reviewing options for prospective disposals of up to a third of the Company’s
development pipeline (in line with the Company’s previous statements on the percentage of retention) to
deliver capital recycling and secure value from development activities as well as consideration of further
sales, on a limited capacity basis, of the Company’s operational assets. Both these initiatives will facilitate
further reductions in the Company’s RCF balance, as well as providing funds to progress and protect the
value of the Company’s remaining developments. An example of this is over 300MW of solar and co-located
battery developments in the north east of England that we are looking to sell in part or as a single package.
On completion this will provide additional liquidity to the Fund and should provide a material return to
BSIF, who is the majority shareholder.
Further to this, we are actively looking at whether there are further sales of operational assets to recycle
funds, and support the initiatives of further paying down of the RCF, and a continued share buyback
strategy. And we also looking at making sure our structural debt is optimised for the long term benefit of
the shareholders.
On a wider basis, it means continuing to operate the Company in keeping with the five core strengths that
have been so successful in driving out performance for shareholders over the past decade:
1. Capital Structure: continued focus on prudent use of leverage and in the near term a gradual
reduction in RCF drawings, with long term financings secured at attractive rates on a fixed interest
basis (a current average cost of debt of c.3.4% on £430m of long-term borrowings),
2. Power Sales Strategy: striking Power Price Agreements contracts at the short end of the power
curve (6-30 months), through competitive tender processes, enabling it to maximise value for
shareholders from the most liquid part of the power market.
3. Active Management: continuing to provide a dedicated workforce of 130 within Bluefield
Partners and Bluefield Services, providing an end to end service, offering from development through
construction to operation and long term management, all with ESG embedded across each function.
4. Proprietary Pipeline: constantly applying the DNA of the business around accessing primary
opportunities (as highlighted by the 1.5GW solar and storage proprietary pipeline the Investment
Adviser has built up exclusively for BSIF) to provide a platform for continued growth or value
accretive sales.
5. Capital Discipline: Since listing in 2013, a judicious approach to deployment of capital has been
paramount as periods of significant investment activity have been combined with periods of
restraint. This approach was at the forefront of the structuring of the Strategic Partnership with
GLIL.
A lot has been achieved in challenging market conditions and we believe that the actions taken over the
past year are showing real evidence of being able to address the issues at hand whilst allowing the
Company’s long term ambitions to remain undimmed.
James Armstrong
Managing Partner, Bluefield Partners LLP
15
Report of the Investment Adviser (continued)
1. About Bluefield Partners LLP (‘Bluefield’)
Bluefield was established in 2009 and is an investment adviser to companies and funds investing in
renewable energy infrastructure. Our team has a proven record in the selection, acquisition and supervision
of large scale energy and infrastructure assets in the UK and Europe. The Bluefield team has been involved
in over £6.7 billion renewable funds and/or transactions in both the UK and Europe, including over £1.6
billion in the UK since December 2011.
Bluefield was appointed Investment Adviser to the Company in June 2013. Based in its London office,
Bluefield’s partners are supported by a dedicated and highly experienced team of investment, operations,
finance, legal and portfolio executives. As Investment Adviser, Bluefield takes responsibility for selection,
origination and execution of investment opportunities for the Company, having executed over 200
individual SPV acquisitions on behalf of BSIF and European vehicles.
2. Portfolio: Acquisitions, Performance and Value Enhancement
Portfolio Overview
As at 30 June 2024, the Company owned 100% of an operational solar portfolio of 129 photovoltaic (“PV”)
plants (consisting of 87 large scale sites, 39 micro sites and 3 roof top sites), 6 wind farms and 109 small
scale UK onshore wind turbines, all 100% owned by the Company, with a total capacity of 812.6MW (30
June 2023: 812.6MW). In addition to this, the Company has a 9% stake in a 246.6MW portfolio of UK solar
assets, acquired during the Year in partnership with GLIL Infrastructure, taking the total portfolio capacity
to 834MW, comprising 776MW of solar and 58MW of onshore wind.
During the Year, the combined solar and wind portfolio, on the 100% owned assets, generated an
aggregated total of 810.6GWh (Prior Year: 836.2GWh), representing a generation yield of 997.6 MWh/MW
(30 June 2023: 1,029 MWh/MW).
Investment Approach, Acquisitions, and Divestments in the year
The Company has taken a disciplined approach to the deployment of capital since listing, investing only
when there are projects of suitable quality at attractive returns to complement the existing portfolio.
Rigorous adherence to restrained capital deployment inevitably means there can be periods where
acquisition activity falls, even when sector activity appears in contrast, but this controlled approach is
beneficial in driving long term, sustainable growth for Shareholders, as evidenced by the Company’s record
of sector leading returns since listing over a decade ago.
16
Report of the Investment Adviser (continued)
2. Portfolio: Acquisitions, Performance and Value Enhancement (continued)
In December 2023, the Company announced a three-phase strategic partnership with GLIL, which
envisages both parties investing together into UK focused solar assets, from development through to
operational plants. The partnership will also facilitate deleveraging of the Company.
On 25 January 2024, the Company announced the successful completion of Phase One of the partnership
with GLIL, which was an investment by BSIF of £20 million of equity, alongside £200 million from GLIL,
to fund the acquisition of a 246.6MW portfolio of UK solar assets. BSIF’s ownership stake in the portfolio
was 9%.
After 30 June 2024, the Company announced the execution of Phase Two of the strategic partnership with
GLIL, which was the sale of a 50% stake in a 112.2MW portfolio of UK solar assets owned by BSIF. Following
amalgamation with the Phase One acquisition, the Company’s equity stake across the combined portfolios
has increased to 25%.
Portfolio Performance and Optimisation
Solar PV Performance
In the Year, irradiation levels were 4.3% lower than the Company’s forecasts and 9.9% lower than the Prior
Year, whilst generation at 647.9GWh, was 9.5% lower than forecast.
During the Year, the solar portfolio achieved a Net PR of 75.4% (Prior Year: 76.2%) against a forecast of
79.96%, due to key component downtime driven primarily by supply chain challenges for key High Voltage
(‘HV’) equipment. Consequently, generation yield was 859.15MWh per MW of installed capacity, 7.8%
lower than recorded in the Prior Year.
Table 1. Summary of Solar Fleet Performance for the Year:
4
Year
Actual
Year
Forecast
Delta to
Forecast
(%
change)
Prior Year
Actual
Delta Year to
Prior Year
Actual (%
change)
Portfolio Total Installed
Capacity (MW)
754.2 N/A N/A 754.2 0.0%
Weighted Average
Irradiation (Hrs)
1,2
1,136.3 1,187.2 -4.3% 1,260.7 -9.9%
Total Generation (MWh) 647,920 715,894 -9.5% 702,428 -7.8%
Generation Yield
(MWh/MW)
859.13 949.26 -9.5% 959.90 -10.5%
Average Total Unit Price
(£/MWh)
3
£247.01 £262.87 -6.0% £223.68 10.4%
Notes to Table 1.
1. Periods of irradiation where irradiance exceeds the minimum level required for generation to occur (50W/m
2
)
2. Excluding grid outages and significant periods of constraint or curtailment that were outside the Company’s control (for
example, DNO-led outages and curtailments)
3. Average Total Unit Price includes all income associated with the sale of power, all subsidy payments, liquidated damages and
insurance claims amounts. ROC recycle revenue is included assuming a 10% recycle rate for both actual and forecast revenue
4. Excludes the strategic partnership with GLIL
17
Report of the Investment Adviser (continued)
2. Portfolio: Acquisitions, Performance and Optimisation (continued)
Solar PV Performance (continued)
Total revenue for the Year was £160.5 million, 13.75% lower than forecast but 1.9% higher than the Prior
Year. PPA agreements which commenced during the Year were the principal reason for the increased
revenue, as the average power price rose 17% to £165/MWh in the Year, up from £141/MWh in the Prior
Year.
Operational costs for the Year (incorporating all fixed, contracted costs such as lease payments, O&M fees
etc.) totalled £29.5 million, including expenditure associated with the optimisation & enhancement projects
(see below).
18
Report of the Investment Adviser (continued)
2. Portfolio: Acquisitions, Performance and Optimisation (continued)
Solar PV Optimisation & Enhancement Activity
The Investment Adviser is taking proactive steps to mitigate risks to both the short- and long-term
operational performance of the portfolio. This is achieved through a rolling capital investment programme
to proactively address key risks to operational performance. The Investment Adviser has identified that one
of the key causes of lower than expected availability is a long lead time for spare parts for major high voltage
components, notably central inverters.
Large central and string inverter revamping projects were completed during the Year, with many of the
projects being completed in the final quarter of the Year. These projects improved performance during that
final quarter, and it is expected that the performance uplifts from these projects will be fully realised in FY
2024/25, with further inverter repowering and optimisation projects planned during that year.
As at 30 June 2024, 494.6 MW of the PV portfolio (being 66% of the solar PV portfolio) have leases that
allow for terms beyond 30 years , of which 362 MW (100% of applications successful) benefit from planning
terms in excess of 30 years. The Investment Adviser continues to pursue lease extensions on the remaining
assets in the portfolio.
GLIL Partnership Portfolio
Further to Phase One of the strategic partnership with GLIL, the acquisition of a 246.6MW UK Solar
portfolio from Lightsource bp was completed on 24 January, with BSIF holding an equity stake of 9%.
During the period from January 2024 to June 2024, this portfolio’s generation was 5% below forecast,
primarily driven by the below expected irradiation (-7.2%).
Onshore Wind Performance
As at 30 June 2024, the Company held an operational onshore wind portfolio of 135 installations,
comprising 109 small scale turbines (55-250kW) and 26 larger turbines (850kW-2,300kW), with an
aggregated capacity 58.4MW.
During the Year, the wind portfolio generated 162.7 GWh, 2% below forecast. This was largely due to several
major component failures, resulting in extended downtimes across the portfolio. Despite this, generation
has improved significantly compared to the Prior Year, up 21.6% due to a combination of improved
availability and wind speeds.
19
Report of the Investment Adviser (continued)
2. Portfolio: Acquisitions, Performance and Optimisation (continued)
Onshore Wind Performance (continued)
Table 2. Aggregated Wind Portfolio Performance for the Year
Year Actual
Year
Forecast
Delta to
Forecast (%
change)
Prior Year
Actual
Delta Year to
Prior Year
Actual (%
change)
Portfolio Total Installed
Capacity (MW)
58.4 N/A N/A 58.4 0.0%
Total Generation (MWh) 162,682.4 165,930.3
-2.0% 133,804.0
21.6%
Generation Yield
(MWh/MW)
2,785.7 2,841.3 -2.0% 2,292.7 21.5%
Average Total Unit Price
(£/MWh)
186.0 188.1 -1.1% 208.3 -10.7%
Notes to Table 2.
1. Actual & Forecast Average Total Power Price exclude ROC recycle estimates
2. Average Total Power Price includes LDs, Insurance & Mutualisation Rebate
Total revenue for the Year was £30.3 million (Prior Year: £27.9 million), with an average revenue per MWh
of £186. Revenues achieved were 3% below forecast, though these were 9% higher compared to Prior Year,
due to increased generation.
Onshore Wind Optimisation & Enhancement Activity
In Northern Ireland, 17 of the 29 small-scale turbines were identified for repowering with replacement EWT
250kW turbines. This will increase both efficiency and output, whilst maintaining their respective NIRO
accreditation status.
As at 30 June 2024, 13 turbines have been repowered and returned to operation, with the remaining four
turbines having received planning approval for repowering, with a new 25-year term. One project has
received turbine delivery, with repowering planned by 31 December 2024.
General Portfolio
OFGEM Audits
As part of the industry-wide audits of FiT and RO-accredited generating assets, the Asset Manager has been
working closely with the regulator on certain assets that have been selected, at random, for audit. All closed
OFGEM audits have had relevant enquiries satisfied, with the respective assets’ accreditation being
maintained. The Asset Manager is working closely with OFGEM to close enquiries on the remaining open
audits.
Health & Safety Activities & Cyber Security
Please refer to the Environmental, Social and Governance report for further information on health & safety
activities and cyber security.
20
Report of the Investment Adviser (continued)
3. Power Purchase Agreements
The Company actively monitors power market conditions, ensuring that contract renewals are spread
evenly through any 12-month period, with competitive tender processes on both fixed and floating price
options run for each PPA renewal in the 3 months prior to the commencement of a new fixing period.
Flexibility within the Company’s capital structure enables PPA counterparties to be selected on a
competitive basis and not influenced by lenders requiring long term contracts with one offtaker. This means
the programme of achieving value and diversification from contracting with multiple counterparties (which
in turn reduces offtaker risk) is executed for the benefit of Shareholders.
By rolling PPA fixes during the Year and targeting the most liquid area of the power market (one to three
years), the Company was able to complete a number of fixes during periods, with average levels turning out
above day-ahead base-load settlement prices over the same period. Evidence of this is reflected in the
Company’s average seasonal weighted power price, which for the Year was £148.80/MWh (Prior Year:
£141.00/MWh), while the average day-ahead base load settlement price was £72.79/MWh (Prior Year:
£169.97).
As at 30 June 2024, the average term of the fixed-price PPAs across the portfolio is 32.5 months (Prior
Year: 26.2 months) and the Company has a price confidence level of 67% to December 2024 and 48% to
June 2025 (on a capacity basis), representing the percentage of the Company’s portfolio that already has
fixed prices in place and thus no exposure to power market fluctuations. Looking ahead, the strategy has
also secured power fixes, and thus revenue certainty, at levels that are in excess of the latest forecaster
expectations.
Table 3. PPA Fixed Power Prices (average for fixes completed vs blended average forecaster price during the Year)
Price as at six
-
months ended:
Jul
-
24
Jan
-
25
Jul
-
25
Jan
-
26
BSIF Portfolio Weighted Average Contract Price
(£/MWh)
129.2
(625MW)
131.5
(595MW)
135.4
(313MW)
115.1
(96MW)
% of BSIF total capacity under PPA Fixed Power
Price contract
77% 73% 38% 12%
Blended Average of forecasters nominal terms
power prices per 30 June 2024 valuation
(£/MWh)
63.3 67.3 69.1 67.6
Footnote: MW stated in the BSIF portfolio weighted average contract price refers to the total amount of the portfolio fixed for that
year; excludes assets under the Strategic Partnership portfolio.
The Investment Adviser believes its PPA policy is the best strategy for Shareholders, who are looking for
stable revenues and forecastable, sustainable dividends with high visibility of revenues on a rolling
multiyear basis. It is this approach that has delivered almost a decade of sector leading dividend cover
(covered by current earnings and post debt amortisation).
4. Proprietary Pipeline
Over the past five years, the Company has continued to implement its new build strategy across the solar
value chain to ensure that the Company continues to build its market share amongst UK solar power
producers, with the Company signing co-development agreements to fund new sites. The Company also
expanded its strategy to battery storage, which will enable the diversification of the Company’s revenues
and allow us to monetise the expected increases in volatility of power prices in the future.
This focus on development activities has enabled the Company to identify a significant pipeline of assets
which can be built over the next five years. As these projects progress, the Company is working with selected
construction contractors to ensure that projects are designed and built to a high specification for long term
performance.
21
Report of the Investment Adviser (continued)
4. Proprietary Pipeline (continued)
The new build strategy has delivered well on its objectives thus far; the development pipeline now stands at
over 1.5 GW and the first two developments to enter the construction phase (Yelvertoft and Mauxhall Farm)
connected to the electricity network shortly after 30 June 2024. Yelvertoft will receive a Contract for
Difference (“CfD”) for its output under AR4.
The following sections provide a more detailed update on both our construction and development
programmes.
Construction Programme
As at 30 June 2024, 93 MW of projects were under construction. These projects are Yelvertoft Solar Farm
(a 49MW solar PV park in Northamptonshire) and Mauxhall Farm Energy Park (a 44MW solar PV project
in North East Lincolnshire). Mauxhall Farm is planned to be a co-located project and construction of a
25MW battery energy storage scheme is expected to commence in the year ending 30 June 2025.
As at the end of the Year, the Company had a pipeline of future solar assets with a capacity of 541MW and
battery storage assets with 233MW capacity that are fully consented and are in pre-construction. The
projects have connection dates between 2024 and 2030.
Of this, the Company is actively exploring EPC contracts for two projects (17MW capacity in total), both of
which have CfDs under AR4 and it plans to launch tenders for a selection of its AR5 accredited projects in
the year ending 30 June 2025.
EPC agreements for the Company’s new build projects are expected to be fixed price contracts comparable
to Yelvertoft and Mauxhall Farm and will require contractors to provide full procurement activity and to
supply all materials. The Investment Adviser completes a full assessment of each contractor’s procurement
and supply chain management processes to ensure compliance with the Company’s ESG policies and
standards.
Development Programme
The Investment Adviser has been pursuing its development strategy since 2019 to enable the Company to
continue to be a key player in the UK renewable energy market. Since this time, a portfolio of 954MW of
solar and 603MW of batteries has been built up across 28 projects. The Company has an investment limit
in pre-construction development stage activities, restricted to 5% of gross assets; less than 3% is currently
committed.
Currently, no value is attributed to projects without planning consent. Once developments receive planning
consent and move from the development stage to pre-construction, the Investment Adviser believes it is
appropriate to reflect this change in the Company’s valuation. At this point in their lifecycle, the projects
will have received all the necessary planning consents, land rights and valid grid connection offers and so
have discernible value beyond the direct costs of development.
The current pipeline status and valuation is summarised in the graphic below.
22
Report of the Investment Adviser (continued)
4. Proprietary Pipeline (continued)
Development Programme (continued
Current pipeline status and valuation at 30 June 2024
5. Analysis of underlying earnings
The total generation and revenue earned in the Year by the Company’s portfolio, split by subsidy regime, is
outlined below:
Subsidy Regime
Generation (MWh)
PPA Revenue (£m)
Regulated Revenue (£m)
FiT 61,611
5.0
12.4
4.0 ROC 17,415
1.4
4.1
2.0 ROC 19,548
1.5
2.4
1.6 ROC 105,055
12.8
10.4
1.4 ROC 281,932
45.9
23.4
1.3 ROC 65,521
8.1
5.2
1.2 ROC 129,664
22.8
10.2
1.0 ROC 46,536
3.9
2.8
0.9 ROC 83,320
7.0
4.5
Total 810,602
108.4
75.4
The Company includes ROC recycle assumptions within its long term forecasts and applies a market based
approach on recognition within any current financial year, including prudent estimates within its accounts
where there is clear evidence that participants are attaching value to ROC recycle for the Year.
The key drivers behind the changes in Underlying Earnings between this Year and the Prior Year are the
combined effects of lower PPA pricing, debt interest and tax (including EGL).
23
Report of the Investment Adviser (continued)
5. Analysis of underlying earnings (continued)
Underlying Portfolio Earnings
Year
(£m)
Prior Year
(£m)
Y
ear to
30 June 22
(£m)
Y
ear to
30 June 21
(£m)
Portfolio Revenue 183.8
184.4
111.4
73.1
Liquidated damages and Other
Revenue
1
12.6
5.4
1.6
2.0
Net Earnings from Acquisitions
in the
year
0.0
0.0
0.0
5.1
Portfolio Income 196.4
189.8
113.0
80.2
Portfolio Costs
-
38.2
-
36.3
-
27.8
-
17.6
Project Finance Interest Costs -12.7
-13.6
-4.7
-1.8
Total Portfolio Income
Earned
145.5
139.9
80.5
60.8
Group Operating Costs
2,3
-38.7
-25.4
-8.3
-7.5
Group Debt Costs -12.2
-6.1
-5.4
-4.7
Underlying Earnings
94
.
6
108.
4
66.8
48.6
Group Debt Repayments -30.1
-18.3
-13.8
-9.3
Underlying Earnings
available for distribution
64
.
5
90.
1
53.0
39.3
Year
(£m)
Prior Year
(£m)
Full year to
30 June 22
(£m)
Full year to
30 June 21
(£m)
Brought forward reserves 58.4
20.9
13.4
8.4
Repayment of RCF -10.0
0.0
0.0
0.0
Share Buybacks -9.4
0.0
0.0
0.0
Acquisitions and CapEx -30.1
0.0
0.0
0.0
Total funds available for
distribution
73.4
111.0
66.4
47.7
Target distribution
4
53.1
51.4
45.2
34.3
Actual Distribution 53.1
52.6
45.5
34.3
Underlying Earnings
carried forward
20.3
58.4
20.9
13.4
1 Other Revenue includes ROC mutualisation, ROC recycle late payment CP21, insurance proceeds, O&M settlement
agreements and rebates received.
2 Includes the Company, BR1 and any tax charges within the group.
3 Excludes one-off transaction costs and the release of up-front fees related to the Company’s debt facilities
4 Target distribution is based on funds required for total target dividend for each financial year.
24
Report of the Investment Adviser (continued)
5. Analysis of underlying earnings (continued)
Underlying Portfolio Earnings (continued)
The table below presents the underlying earnings on a ‘per share’ basis.
Year (£m) Prior Year
(£m)
Year to
30 June 22
(£m)
Year to
30 June 21
(£m)
Actual
Distribution
53.
1
5
2.6
45.
5
34.3
Total funds available
for distribution
(including reserves)
73.4
111.0
66.4
47.7
Average Number of shares
in year*
609,849,113
611,452,217
554,042,715
429,266,617
Target Dividend (pps) 8.80
8.40
8.16
8.00
Total funds available
for distribution (pps)
12.00
18.13
12.22
11.19
Total Dividend Declared &
Paid (pps)
8.80
8.60
8.20
8.00
Reserves carried forward
(pps) **
3.40
9.53
3.39
2.67
* Average number of shares is calculated based on shares in issue at the time each dividend was declared.
** Reserves carried forward are based on the shares in issue at the point of Annual Accounts publication (being 597m
shares for 30 June 2024 and 611m shares for 30 June 2023).
6. NAV and Valuation of the Portfolio
The Investment Adviser is responsible for advising the Board in determining the Directors’ Valuation and,
when required, carrying out the fair market valuation of the Company’s investments.
Valuations are carried out on a quarterly basis at 30 September, 31 December, 31 March and 30 June each
year, with the Company committed to conducting independent reviews as and when the Board believes it
benefits Shareholders.
As the portfolio comprises only non-market traded investments, the Investment Adviser has adopted
valuation guidelines based upon the IPEV Valuation Guidelines published by the BVCA (the British Venture
Capital Association). The application of these guidelines is considered consistent with the requirements of
compliance with IFRS 9 and IFRS 13.
Following consultation with the Investment Adviser, the Directors’ Valuation adopted for the portfolio as
at 30 June 2024 was £965.5 million (30 June 2023: £1,018.4 million).
The table below shows a breakdown of the Directors’ valuations over the last three financial years:
Valuation Component (£m
illion
)
June 2024
June 2023
June 2022
DCF Enterprise Value of Portfolio
1,
100.0
1,195.2
1,180.6
DCF Enterprise Value of JV Portfolio 36.5
-
-
Consented development/construction
and repowering projects
110.3
67.5
13.8
Deduction of Project Co debt
-
423.2
-
430.8
-
390.3
Project Net Current Assets
14
1.9
186.5
135.8
Directors’ Valuation 965.5
1,018.4
939.9
Portfolio Size (MW) 834.0
812.6
766.2
25
Report of the Investment Adviser (continued)
6. NAV and Valuation of the Portfolio (continued)
Discounting Methodology
The Directors’ Valuation is based on the discounting of post-tax, projected cash flows of each investment,
based on the Company’s current capital structure, with the result then benchmarked against comparable
market multiples, if relevant. The discount rate applied on the project cash flows is the weighted average
discount rate. In addition, the Board continues to adopt the approach under the ‘willing buyer/willing seller’
methodology, that the valuation of the Company’s portfolio be appropriately benchmarked to pricing
against comparable portfolio transactions.
Key factors behind the valuation
There have been several factors that have been considered in the Investment Adviser’s recommendation to
the Directors’ Valuation (and which are quantified in the NAV movement chart on page 28):
(i) Power price forecasts and costs have been inflated to June 2024 terms using actual inflation data
published on the Office for National Statistics webpage. The Fund’s RPI assumption for 2025 remains
unchanged at 3.00% (June 2023: 3.00%). On 1 August 2024, the Bank of England cut Base Rate for the
first time since the beginning of the pandemic in March 2020, reducing Base Rate from 5.25% to 5.00%,
the same rate as it was in June 2023.
(ii) The Company’s previous inflation assumptions for ROC revenues had been slightly below the reported
number and in utilising actual inflation for ROC sites, the valuation has increased.
(iii) Renewable Energy Guarantees of Origin for the period 2026-2030 have been included for the first time
in the 30 June 2024 valuation. This adoption follows evidence that reasonable value is now being
achieved through power purchase agreements signed and expectations from forecasters that some
value will continue to be secured for REGOs in the future.
(iv) The portfolio discount rate has been maintained at 8.00% (June 2023: 8.00%).
(v) Inclusion of the latest forecasters’ power price curves as at 30 June 2024 has resulted in a decline in
the valuation as prices have normalised following a prolonged period of higher power prices, driven
largely by increases in commodity prices exacerbated by the impact of the Russian invasion of Ukraine
on wholesale gas prices. Further information regarding power prices is included in section 3 of this
report.
(vi) The value attributed to the Company’s development and construction portfolio has risen during the
Year, reflecting sites receiving planning permission and further progress and investment into
construction projects.
(vii) Working capital has declined in the Year, reflecting the payment of dividends through the Year, the
execution of the Company’s share buyback programme, and performance compared to forecasts.
(viii) Investments into Joint Ventures (JVs) have been included in the valuation for the first time following
the successful completion of Phase One of the strategic partnership with GLIL. The JV continues to
progress with the post year-end signing of Phase Two of the strategic partnership in the form of a sale
of operational assets from BSIF into the JV, and the forthcoming Phase Three, whereby the Company
and GLIL intend to commit capital to a selection of the Company’s development and construction
pipeline.
26
Report of the Investment Adviser (continued)
6.NAV and Valuation of the Portfolio (continued)
Key factors behind the valuation (continued)
By reflecting the core factors above within the Directors’ Valuation for 30 June 2024, the enterprise value
of the operational portfolio is £1,136.5 million (June 2023: £1,195.2 million), representing an effective price
for the solar component of £1.24m/MW (June 2023: £1.35m/MW). These metrics sit within the pricing
range of precedent market transactions and the ‘willing buyer-willing seller’ methodology upon which the
Directors’ Valuation is based.
Power Prices
A blended forecast of three leading consultants is used within the latest Directors’ Valuation
1
, as shown in
the graph below. This is based on forecasts released in the three months ended 30 June 2024. For
illustration purposes, the graph below also includes the blended curve used in the Company’s accounts for
the Prior Year.
The curves used in the 30 June 2024 Directors’ Valuation reflect the following key updates:
1. Short-term European gas prices have fallen amid strong gas storage levels and an evolving gas
supply chain following Russia’s invasion of Ukraine, with Norwegian supply and LNG imports from
across the globe providing substitutes for Russian gas, with a similar trend reflected in the
wholesale power price curve;
2. Higher renewable generation capacity deployment levels in the medium term (with ambitions for
up to 60GW offshore wind and 30GW onshore wind by 2030) as the UK strives to meet its net zero
targets and fully decarbonise its power system by 2030; and
3. Annual demand for electric power in Great Britain, driven principally by electrification of heat and
transport, is expected to rise from 298TWh in 2024 to 423TWh by 2035.
1
Please note, the blended forecast varies depending on whether the asset is a solar or a wind project, reflecting different forecasts
for technology specific capture rates. The solar forecast is shown in the chart on this page.
50
60
70
80
90
100
110
120
2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
£/MWh - real 2024 prices
Change in blended power price forecasts
Jun-23 Dec-23 Jun-24
27
Report of the Investment Adviser (continued)
6.NAV and Valuation of the Portfolio (continued)
Directors’ Valuation and NAV Movement (£m)
Directors’ Valuation movement
(£ million)
As % of
valuation
30 June 2023 Valuation
1,018.4
New investments 19.6
1.9%
Development uplift 42.8
4.2%
Date change and degradation -42.0
-4.1%
Cash receipts from portfolio -65.4
-6.4%
Power curve updates (incl. PPAs &
REGOS)
-7.4
-0.7%
Inflation assumption 8.5
0.8%
Balance of portfolio return -9.0
-0.9%
30 June 2024 Valuation
965.5
(5.2)%
28
Report of the Investment Adviser (continued)
6. NAV and Valuation of the Portfolio (continued)
There have been no material changes to assumptions regarding the future performance of the portfolio
when compared to the Directors’ Valuation of 30 June 2023. A cost optimisation on expiry of subsidies has
been introduced for business rates and insurance. This has been introduced to reflect that these costs are
directly related to the level of income received by the assets, which will fall once the subsidies expire.
The assumptions set out in this section remain subject to continuous review by the Investment Adviser and
the Board.
Reconciliation of Directors’ Valuation to Balance sheet
Balance
(£ million)
Category
30 June 2024
30 June 2023
30 June 2022
Directors’ Valuation
965.5
1,018.4
939.9
Portfolio Holding Company Working Capital
(1.5)
(12.5)
(13.6)
Portfolio Holding Company Debt
(184.0)
(153.0)
(70.0)
Financial Assets at Fair Value per
Balance sheet
780.0
852.9
856.3
Gross Asset Value
1,388.7
1,438.0
1,316.7
Gearing (% GAV*) 43%
41%
35%
*GAV is the Financial Assets, as at 30 June 2024, at NAV of £781.6m plus RCF of £184.0m and third party
portfolio debt of £423.1m (giving total debt of £607.1m).
Enterprise Valuation sensitivities
Valuation sensitivities are set out in tabular form in Note 8 of the financial statements. The following
diagram reviews the sensitivity of the EV of the portfolio to the key underlying assumptions within the
discounted cash flow valuation.
29
Report of the Investment Adviser (continued)
7. Financing
Debt Strategy
Since its IPO, the Company has focused on a simple and defensive approach to debt. This means having
debt agreements that have, primarily, fixed interest rates and are amortising. Debt is split into (1) long-term
asset-level debt, and (2) a revolving credit facility at fund-level for short-term funding. Debt in the portfolio
is generally not subject to stringent lender requirements on PPAs, allowing the Company to take advantage
of more competitive PPA pricing.
The Company’s weighted average cost of long-term debt at 30 June 2024 is 3.53% (30 June 2023: 3.50%)
and is largely locked-in via fixed interest rates. Whilst the Company has some index-linked debt, it also has
significant levels of RPI linked revenues, leaving the Company a net beneficiary of inflation.
The revolving credit facility, detailed below, is the only floating-rate debt instrument in the portfolio and
represents 30% of the total debt balance. 71% of asset-level debt has a fixed interest rate. 29% of principal
for long-term debt is inflation-linked.
Revolving Credit Facility
The Company’s subsidiary BR1 has a revolving credit facility with RBS International, Santander UK and
Lloyds Bank Plc, with a total committed amount of £210 million and facility margin of 1.9% (the ‘RCF’).
The RCF also has an uncommitted accordion feature allowing it to be increased by up to a further £30
million.
The maturity of the facility is May 2025. The Company is in discussions with the lenders to extend the RCF
by an additional two years. As at 30 June 2024, £184 million was drawn from the RCF (30 June 2023: £153
million). After the year-end, following the completion of Phase Two of the strategic partnership with GLIL,
£50.5 million was repaid, reducing the drawn balance to £133.5 million.
External Debt
Excluding the Company’s RCF, total outstanding loans from third-party lenders as at 30 June 2024 total
£423 million, with each loan secured against a portfolio of assets and fully amortising within the life of the
respective asset’s subsidies. The average interest cost, excluding the Company’s RCF, across the external
debt facilities in the table below is 3.53%.
30
Report of the Investment Adviser (continued)
7. Financing (continued)
External Debt (continued)
Debt
Principal
Outstanding (£m)
Maturity
% of Interest
Fixed
(1)
All-in Interest
Rate
Syndicate - Fund RCF 184 May-25 0% 7.00%
Bayern LB - Project Finance 6 Sep-29 100% 5.50%
Syndicate - Project Finance 66 Dec-33 100% 3.50%
Aviva (fixed) - Project Finance 82 Sep-34 100% 2.88%
Aviva (index-linked) - Project Finance 65 Sep-34 100% 3.70%
Macquarie (fixed) - Project Finance 7 Mar-35 100% 4.60%
Macquarie (indexed-linked) - Project
Finance
20 Mar-35 100% 4.70%
Gravis (index-linked) - Project Finance
36 Jun-35 100% 6.48%
NatWest – Project Finance 121 Dec-39 85% 2.70%
Strategic Partnership Portfolio 19.5 Jun-37 100% 3.40%
Total/Wtd Avg 607 67% 4.59%
Total/Wtd Avg excl. RCF 423 96% 3.53%
Note: Index-linked debt treated as fixed for the purposes of this table as proportion fixed represents interest rate risk only
GAV Leverage
The Group’s total outstanding debt as at 30 June 2024 was £607 million (30 June 2023: £584 million) and
its leverage stands at 43% of GAV (30 June 2023: 41%), within the 35% - 45% preferred range the Directors
have outlined as desirable for the Company.
8. Market Developments
UK renewable generation capacity and deployment
At 31 March 2024, Government data shows that UK solar PV capacity stands at 16.7GW across 1.6 million
installations. Of this amount, around 7.3GW (46% of the total solar capacity in the UK) and 5.1GW (32%)
is accredited under the RO and FiT schemes, respectively, 3.4GW (21%) is unaccredited and less than 1% is
under the CfD scheme. Onshore and offshore wind installed capacity stands at around 15.5GW and 14.7GW,
respectively. The UK has 4.4GW of operational battery storage capacity, according to data from energy
association RenewableUK.
The UK’s total renewable generation capacity is projected to continue to grow over the coming years as the
Government strives to meet its net zero targets and meet power demand from the electrification of the
domestic heat, transport and industrial sectors. Deployment is expected to be supported by several policy
initiatives, including the CfD scheme and various planning and grid reforms which are described in more
detail in the next section of this report.
The incoming Labour Government has set ambitious targets to double onshore wind, triple solar generation
capacity and quadruple offshore wind by 2030. To support this ambition, several first-of-a-kind initiatives
such as a new Mission Control for Clean Power 2030, headed by the former chief executive of the Climate
Change Committee (Chris Stark), an Onshore Wind Industry Taskforce and a publicly owned energy
company (Great British Energy) have been set up, all of which should support greater renewable energy roll
out over the upcoming years.
The chart below illustrates the distribution of total installed capacity across different renewable generation
technologies at 31 March 2024 compared with a year earlier.
31
Report of the Investment Adviser (continued)
8. Market Developments (continued)
UK renewable generation capacity and deployment (continued)
Source: UK government Department for Business, Energy & Industrial Strategy *Anaerobic Digestion includes sewage sludge digestion, animal biomass
Secondary market transactions, development and construction activity
Transactional activity in the UK renewables market has eased to some extent, with several infrastructure
funds completing capital recycling via asset disposal programmes to demonstrate value and support
deleveraging efforts. Activity in the UK development market has continued to be driven by factors such as
ambitious decarbonisation targets, increasing preferences by customers for clean energy, demand for ESG
investments and the inclusion of solar PV in upcoming CfD auction rounds.
Development activity has been noticeable in the battery storage area, with developers seeking to provide
solutions to help manage the grid as larger quantities of intermittent renewables are added to the system.
Solar development activity has been somewhat slower, primarily due to grid constraints.
Some construction activity has been observed in the UK solar and battery storage area, although this is
against a backdrop of supply chain challenges and elevated development costs. Converting the UK’s
significant development pipeline into operational solar and storage projects over the next five years will
require developers to adopt an innovative approach to overcome challenges surrounding high construction
costs, grid connection lead times and access to new capital.
With 776MW of operational solar capacity, the Company maintains a strong position within the UK solar
market, owning 5% of the UK’s utility-scale solar PV capacity.
15.46
14.75
1.90
16.70
1.06
1.56
1.03
4.62
-
2
4
6
8
10
12
14
16
18
Onshore
Wind
Offshore
Wind (incl
floating)
Hydro Solar PV Landfill gas Energy from
waste
Anaerobic
Digestion*
Plant
Biomass and
liquid
biofuels
Total installed capacity (GW)
31 March 2023 31 March 2024
32
Report of the Investment Adviser (continued)
9. Regulatory Environment
The regulatory environment remains under the spotlight as the Government seeks to support renewable
energy deployment under particularly tough macroeconomic conditions. Key themes are outlined below.
Update on Contracts for Differences (CfD)
In September 2023, the Government awarded support for 3.7GW of new build renewable generation
capacity through its CfD scheme – allocation round 5 (AR5). Solar projects represented the majority share
at 52% (1.9GW) and onshore wind at 40% (1.5GW), while no offshore projects were successful. This was the
lowest overall renewable capacity procurement level since 2017 and just over a third of the total 10.8GW
that was procured in the AR4. The overall budget for AR5 (across successful pot technologies) was £227
million per year, down from £295 million per year in AR4.
In September 2024, the AR6 results were published. A total of 9.6GW of renewable energy projects were
successful, of which 3.3GW solar projects won contracts (or 34% of total awarded capacity), onshore wind
at 990MW (10%), offshore wind at 4.9GW (51%) and floating offshore at 400MW (4%). The Government
revised the overall AR6 budget to £1.6 billion, up by £0.5 billion from the previous level amid calls from
industry to help meet renewable targets. Most of the budget uplift went to offshore wind, while established
technologies including solar and onshore wind rose by £65 million to £185 million. The AR6 administrative
strike prices across all technologies rose from the previous round, with solar and wind up by 30% and 21%
respectively, at £61/MWh and £64/MWh, respectively.
The Government’s consultation on the proposed amendments to AR7 and future rounds closed in March
2024. Several changes were put forward, such as the inclusion of onshore wind full repowering as a new
eligible technology, the introduction of hybrid metering to better accommodate co-located projects and
changes to the inflation indexation methodology for allocation rounds further ahead. The market awaits a
formal Government response to this consultation.
Electricity Generator Levy
The Electricity Generator Levy – a ‘temporary’ 45% tax on income from electricity sold above the
benchmark price – is set to be in place until 31 March 2028. It applies to extraordinary returns made by
renewable (solar, wind, biomass), nuclear and energy from waste generators that are connected to the UK
national transmission or local distribution networks. Revenues from CfDs are excluded from this levy.
Review of Electricity Market Arrangements
The Government’s second consultation on the UK’s Review of Electricity Market Arrangements (“REMA”)
closed in May 2024. REMA aims to identify necessary reforms needed to transition to a cost effective, lower
carbon and secure electricity system. The most significant reform options at the time included the
possibility of zonal locational pricing and potential changes to the Contract-for-Difference scheme. The
market awaits a formal response to the REMA second consultation.
Bluefield Partners LLP
27 September 2024
33
Environmental, Social and Governance Report
1. Introduction
An introduction from the Chair
I am pleased to present the Company’s ESG progress within this report. The Company remains dedicated
to contributing to a cleaner and more resilient energy system, and its ability to adapt – evidenced through
its strategic partnerships, accretive use of capital, and evolving ESG approach – will support the Company
in delivering long-term value to its Shareholders.
Despite a challenging year for listed renewable funds, we continue to deliver renewable energy at scale,
helping to tackle the global emergencies of climate change and biodiversity loss. The recent change in
Government brings a fresh perspective on energy policy, with a commitment to deliver zero-carbon
electricity by 2030. To achieve this, the UK needs rapid, large-scale deployment of renewable technology
and the infrastructure to support these installations. This will not only accelerate the transition to net zero,
but also deliver energy security and affordable energy pricing.
As such, I am proud of the achievements made by the Company during the Year, particularly the
construction of two major new solar assets which have been energised in recent weeks. On an annual basis,
these assets are expected to generate enough renewable energy to power approximately 33,000 UK homes
and avoid the equivalent of 18,800 tonnes of CO2e.
As the sector grows, responsibility must be taken for both the positive and negative impacts of renewable
energy operations, with industry players working together to drive responsible business practice across
global supply chains. The Company recognises, and works to manage and minimise, the potential adverse
impacts of its business operations, considering them within its responsible investment approach. At the
same time, ESG opportunities, such as those relating to nature enhancement, present an exciting avenue
through which the Company can create additional value.
John Scott,
Chair
An introduction from the Investment Adviser
This report marks a continuation of the Company’s commitment to transparency and accountability by
consistently reporting its ESG performance, maintaining year-on-year alignment with the Task Force on
Climate-related Financial Disclosures (“TCFD”) recommendations, and sustaining its reporting practices
under the EU’s Sustainable Finance Disclosure Regulation (“SFDR”). As the Investment Adviser, we
continue to work on the Company’s behalf to increase the availability and quality of ESG data relating to
the Company’s assets, to better inform our strategic decision-making.
The Company continues to respond to a dynamic ESG regulatory and reporting landscape, and work has
been undertaken to review the Company’s alignment with new disclosure rules. As part of its horizon
scanning, the Investment Adviser proactively monitors for emerging ESG trends and assesses the
interdependencies of ESG topics material to the Company, such as the linkage between decarbonisation
and biodiversity, or the social impact of a growing renewable sector. This insight is used to inform the
Company’s management of ESG risks and opportunities.
34
Environmental, Social and Governance Report (continued)
1. Introduction (continued)
An introduction from the Investment Adviser (continued)
The Investment Adviser’s business model, with in-house expertise across development, investment,
construction and operational activities, facilitates the integration of ESG across the asset lifecycle
2
. The
Investment Adviser’s commitment to strengthening its ESG capabilities is reflected in the expansion of its
ESG team, who work to build resilience into the Company’s investments. We look forward to continuing to
deliver the Company’s ESG aspirations, and help protect Shareholder value, by further refining our ESG
commitments, KPIs, and strategic approach in the coming years.
James Armstrong,
Managing Partner of Bluefield Partners LLP
2. ESG Highlights
During the Year, the Company:
Executed a second physical scenario analysis, which examined the potential impacts of changing wind
speeds on the Company’s wind portfolio.
Developed near-term net zero targets, covering the Company’s scope 1, 2 and 3 emissions.
The Company’s West Raynham Solar Farm was the first site in the UK to be awarded gold certification
from Wild Power®, an independent certifier, for its biodiversity enhancement efforts.
Developed a nature framework, aligned with the recommendations of the Task Force on Nature-related
Financial Disclosures (“TNFD”).
Delivered 13 classroom workshops and 16 solar site visits to schools in the vicinity of the Company’s
assets
3
.
3. Purpose of this Report
This ESG report summarises the Company’s approach to responsible investment during the Year, including
a summary of ESG risks and opportunities material to the Company, and how these are being managed to
help build resilience and create additional value within the Company’s investments. In particular, the report
demonstrates to Shareholders, and other stakeholders, the continued commitment of the Company to
review, assess, and enhance its ESG performance. The content within this report is supported by additional
information published within the Company’s regulatory disclosures, available on its website.
Please note, the figures presented within this report relate to the Company’s wholly owned investments.
Relating to the Company’s new strategic partnership, the Company is in the process of onboarding these
assets onto its ESG reporting regime, whilst at the same time reviewing existing KPIs to ensure they remain
relevant for strategic partnerships as opposed to sole ownership. As a result, the Company has reported the
ESG performance associated with its 9% equity share
4
against a subset of its ESG KPIs, presented in the
ESG Appendix. Please refer to the case-study presented on page 38 for information on how the Company
applied its responsible investment approach to these investments.
Whilst the Company has significantly enhanced its ESG reporting in recent years, the reporting landscape
continues to evolve. The International Sustainability Standards Board published its sustainability
disclosure standards (IFRS S1 and S2) in June 2023. The Company has undertaken an assessment of its
ESG and climate-related disclosures against these standards and will review its reporting approach in light
of these requirements over the coming months.
2
Where asset lifecycle is referred to throughout this report, it references development, investment, and operational
stages of the asset lifecycle. It does not include the manufacturing or end-of-life processing of materials.
3
Workshops and site visits delivered between Sept 23 – July 24.
4
As at 30 June 2024.
35
Environmental, Social and Governance Report (continued)
4. ESG Strategy
ESG Context
As a renewable energy business, the Company is supporting the UK's transition to a net zero economy
through the provision of renewable energy. With renewables powering a significant portion of the UK grid
mix in the past year
5
, the Company is well-positioned to further support the UK in achieving its legally
binding target to bring all Greenhouse Gas emissions (“GHG”) to net zero by 2050
6
.
The Company recognises its broader ESG impacts and responsibilities, and its ESG strategy has identified
a range of priority topics across various ESG areas, which underpin its responsible investment approach.
These priorities have been integrated into a comprehensive framework designed to help deliver value for
stakeholders and support long-term returns for Shareholders.
Regulation & Framework Alignment
EU Sustainable Finance Disclosure Regulation (“SFDR”) & EU Taxonomy
The Company is classified as an Article 8 product under the SFDR and published its second PAI statement
in June 2024. Please refer to Periodic Annex IV and the Company’s website for further information
regarding its ongoing compliance with the SFDR and EU Taxonomy.
UK Sustainability Disclosure Requirements & UK Green Taxonomy
As a non-UK AIF, the Company is not currently in scope of the UK Sustainability Disclosure Requirements
(“SDR”). However, the applicability of the framework to overseas funds is currently pending. The Company
is monitoring the guidance and will be prepared to review its alignment, subject to any new legislation.
As a UK authorised firm, the Investment Adviser is within scope of the SDR’s anti-greenwashing rule and
has implemented processes to support the Investment Adviser’s compliance.
Task Force on Climate-related Financial Disclosures (“TCFD”) & Task Force on Nature-related Financial
Disclosures (“TNFD”)
The Company has voluntarily adopted the recommendations of the TCFD and its third TCFD report is
presented on page 52. The Company has developed a nature framework aligned with the recommendations
of the TNFD, as described on page 42.
5
https://www.solarpowerportal.co.uk/2023-sees-cleanest-uk-electricity-mix-in-66-years/
6
UK enshrines new target in law to slash emissions by 78% by 2035 - GOV.UK (www.gov.uk)
36
Environmental, Social and Governance Report (continued)
4. ESG Strategy (continued)
ESG Framework
Sustainable Development Goals
7
The United Nations Sustainable Development Goals (“SDGs”) have been mapped against
the Company’s ESG pillars, following the alignment protocol. In total, eight goals have been
identified where the Company believes it can make a positive contribution. The Company’s
largest contributions will be in relation to Goal 7, ‘Affordable and Clean Energy’ and Goal
13, ‘Climate Action’. The Company’s portfolio generated 810,602 MWh of renewable energy
during the Year, supporting domestic energy security and decarbonisation of the UK energy
market. The Company reports and endeavours to minimise the negative impacts of its
operations, as described throughout its ESG and regulatory disclosures. Further information on the
Company’s alignment with the SDGs can be found on the Company’s website (www.bluefieldsif.com).
7
Disclaimer: The content of this publication has not been approved by the United Nations and does not reflect the
views of the United Nations or its officials or Member States.
37
Environmental, Social and Governance Report (continued)
4. ESG Strategy (continued)
Commitments & KPIs
Key commitments for the Year are presented in Table 1. A full breakdown of the Company’s commitments
and KPIs, and performance against these, is presented in the ESG Appendix. Commitments and KPIs are
reviewed annually to align with the Company's evolving ESG strategy, with any changes approved and
monitored by the Board.
Pillar
Key Commitments
Climate Change
Mitigation
• Report renewable energy generation annually;
• Invest in industry collaborations to support the energy transition;
• Continue to build climate resilience and inform business strategy through climate risk
assessments and scenario analysis; and
• Develop a net zero pathway.
Pioneering Positive
Local Impact
• Evaluate biodiversity net gain across the operational portfolio and achieve at least 20%
biodiversity net gain on new solar developments;
• Conduct independent biodiversity assessments across at least 10% of sites annually
(relating to assets over 1MW in capacity);
• Continue to promote positive action within the communities the Company operates
within through community benefit funds and educational sessions; and
• Develop a nature framework, building upon existing biodiversity commitments and
encompassing the recommendations of the TNFD.
Generating Energy
Responsibly
• Ensure 100% of the Company’s assets are covered by a Human Rights Policy, which
covers United Nations Global Compact principles and OECD guidelines;
• Require adoption of the Company’s Supplier Code of Conduct by priority Tier 1 and,
where possible, Tier 2 suppliers; and
• Continue to develop due diligence mechanisms to identify, prevent and mitigate
human rights impacts across the Company’s operations and, where possible, its supply
chain.
Table 1 – Key ESG commitments for the Company
The Investment Adviser engages the Company’s key service providers to enable the monitoring of asset-
level sustainability aspects. However, some aspects of data collection remain challenging. As a result, data
gaps still exist, and estimates continue to be used in certain circumstances. Work will continue to improve
the accuracy and quality of ESG data over time. The Investment Adviser is currently embedding an ESG
system on behalf of the Company, which will enable enhanced data insights and analytical capabilities.
ESG Oversight
The Board has ultimate responsibility and oversight of ESG risks and opportunities, and ESG is considered
by the Directors as part of Board meetings, investment decisions and risk management. The Board has an
ESG Committee, chaired by Meriel Lenfestey, which meets at least once a year.
Operationally, ESG is managed by the Investment Adviser, with regular updates provided to the Board
through investment committee papers, ESG committee meetings, Board meetings and ad hoc calls or
written updates. The Investment Adviser is responsible for embedding and monitoring ESG initiatives
across the portfolio, working to integrate ESG into all stages of the asset lifecycle. The Investment Adviser’s
Head of ESG provides updates to the Board of the Investment Adviser through quarterly Board reports, and
regularly reports ESG progress to the Investment Director and Managing Partner.
38
Environmental, Social and Governance Report (continued)
4. ESG Strategy (continued)
ESG Oversight (continued)
Figure 1 – The Company’s ESG Governance Structure
Responsible Investment
The Company recognises the importance of sustainability in all aspects of investment. The Company is well
positioned to consider ESG within its investments, given the long-term nature of its business model.
ESG is embedded within the Company’s investment process, and a standalone ESG due diligence
questionnaire ensures detailed checks are made in relation to ESG risks and opportunities, as identified by
SASB standards. Diligence is also undertaken in relation to requirements of the SFDR, including PAI
indicators and climate risk screening, and the EU Taxonomy’s Do No Significant Harm (DNSH) criteria.
Further information can be found in the Company’s Sustainable Investment Policy, available on its website.
The Company’s Investment Adviser has been a signatory of the UN Principles for Responsible Investment
since 2019.
Case Study: Co-investment
On 22 December 2023, the Company announced a long-term strategic partnership with GLIL
Infrastructure, through which both parties committed to acquiring a portfolio of 58 UK solar assets. This
acquisition was announced on 25 January 2024, and the Company acquired a 9% equity share in the
portfolio. Although a minority stakeholder, a priority for the Company was to apply its responsible
investment approach to these investments. The Company:
● Performed comprehensive ESG due diligence on the 246.6MW portfolio of assets, including checks
regarding SFDR and EU Taxonomy requirements;
● Included ESG schedules and obligations with respect to the Company’s ESG policies in agreements
with asset management and Operation & Maintenance (O&M) providers; and
● Created a post-investment ESG plan, to guide follow-up action from Asset Management and O&M
service providers.
The Company continues to work to onboard the assets into its ESG reporting regime.
39
Environmental, Social and Governance Report (continued)
5. Climate Change Mitigation
Key Commitments
• Report renewable energy generation annually;
• Invest in industry collaborations to support the energy transition;
• Continue to build climate resilience and inform business strategy through climate risk assessments
and scenario analysis; and
• Develop a net zero pathway.
Advocating Renewable Energy
As a UK-focused renewable energy business, the Company contributes towards climate change mitigation
and remains committed to supporting the UK’s decarbonisation agenda. Achievements during the Year
include:
Generated 810,602 MWh of renewable energy;
Powered the equivalent of 300,000 UK homes with renewable electricity for a year;
Avoided 167,800 tonnes of CO2e emissions; and
Had 93MW of solar infrastructure under construction at Year end, which on completion is estimated
to generate an additional 91,000 MWh of renewable energy annually.
In recognition of its positive environmental contribution, the Company has been awarded the following
accreditations: TISE Sustainable/Guernsey Green Fund/LSE Green Economy Mark
Political Engagement
During the Year, the Investment Adviser emphasised the cost and speed at which solar can be deployed and
developed through responses to policy consultations, direct engagement with policymakers (including
through briefings and letters), and appearances at Government-related committees and inquiries. Please
refer to page 77 for a summary of engagement during the Year.
With the change of UK Government in July 2024, and the formation of the Department of Energy Security
and Net Zero, the Company and its Investment Adviser look forward to re-engaging with the Government
to continue these efforts through meetings, attendance at relevant events, and participating in appropriate
formal Select Committee inquiries and consultations.
Industry Engagement
The Investment Adviser partners with trade industry bodies to engage UK policymakers across the political
spectrum in advocating for renewable energy. Engaging with industry groups also enables the Investment
Adviser to inform and contribute to best practice, stay abreast of market developments, and support the
UK’s energy transition. Bluefield employees are active participants in trade body working groups. For
example, the Head of ESG for the Investment Adviser contributes to the Solar Energy UK Natural Capital
Steering Group, and representatives of Bluefield Operations are part of the Solar Energy UK Skills Steering
Group.
As the renewable sector grows, industry collaboration will be essential in addressing emerging social and
environmental risks, such as those relating to supply chain or asset end-of-life. The Company has
committed to investing in industry collaborations supporting the energy transition; please refer to page 72
for further information.
40
Environmental, Social and Governance Report (continued)
5. Climate Change Mitigation (continued)
Carbon Emissions
GHG inventory
The Company reviews and reports its GHG emissions every six months. Please refer to page 59 of the
Company’s TCFD report for the GHG inventory relating to the Year.
Carbon targets and the net zero pathway
The Company has developed near-term targets on its journey to align to net zero by no later than 2050. The
targets follow the core principles of the Science Based Target Initiative (“SBTi”) near-term criteria for
Financial Institutions (FI), but are not SBTi validated. The Investment Adviser views that the current
guidance is not well suited to the investments made by the Company, particularly regarding the criteria
relating to scope 3 emissions, where the majority of the Company’s emissions lie.
Therefore, the Company has adopted holistic near-term targets for financed emissions, including a 50%
absolute reduction in project scope 1 and scope 2 emissions
8
by 2030 (from a 2023 calendar base year),
and to engage 75% of project suppliers, by emissions, to set their own scope 1 and scope 2 targets by 2029.
These targets currently apply to the Company’s wholly owned investments; the application of the targets to
the Company’s strategic partnership is under review. The Company will review its position on SBTi
validation over coming years if revisions are made to the relevant standards, or if more applicable standards
are released.
Monitoring carbon emissions is a vital step on the pathway to net zero, but there are challenges, particularly
regarding the collaborative action needed to drive down scope 3 emissions. The Company is aware that its
ability to decarbonise will rely on wide-scale change across the industry and economy, requiring significant
Governmental support. Nevertheless, the Company has developed this initial set of net zero targets to guide
action across its investments over coming years, and is committed to reviewing and adjusting these targets
over time so that they remain appropriate to the nature of the Company’s investments. Whilst the net zero
pathway has been modelled, the focus over coming months will be to formalise target-specific roadmaps to
support the Company in delivering the required emissions reductions.
Managing climate-related risks & opportunities
The Company is committed to building climate resilience within its portfolio. During the Year, the Company
undertook a second physical scenario analysis, focused upon the potential impact of changing wind speeds,
and developed a climate adaptation plan. Please refer to the Company’s TCFD report for further
information.
8
‘Project’ refers to the GHG emissions that sit within the Company’s scope 3 category 15 investments.
41
Environmental, Social and Governance Report (continued)
6. Pioneering Positive Local Impact
Key Commitments
1. Evaluate biodiversity net gain across the operational portfolio and achieve at least 20% biodiversity
net gain on new solar developments;
2. Conduct independent biodiversity assessments across at least 10% of sites annually (relating to assets
over 1MW in capacity);
3. Continue to promote positive action within the communities the Company operates within through
community benefit funds and educational sessions; and
4. Develop a nature framework, building upon existing biodiversity commitments and encompassing the
recommendations of the TNFD.
Land use and land management
Nature is an area of focus and commitment for the Company. The UK has been assessed as one of the most
nature-depleted countries in the world
9
, and the Company recognises the significant risk that nature loss
may present to businesses and the economy. Nature’s intrinsic relationship with climate requires a unified
response, and through its land under management, the Company seeks to enhance nature across its
portfolio and promote environmental stewardship as part of asset lifecycle management.
The construction and operation of renewable infrastructure assets can impact the local environment, for
example through land use change or disturbance to habitats and species. The Company endeavours to
minimise its negative impacts where possible, and the collection of asset-level environmental data supports
the Company in monitoring adverse environmental impacts over time.
Solar farms can support agricultural activities while providing an alternative revenue source for farmers.
During the Year, conservation grazing was introduced to one of the Company’s solar assets, to better
manage the land for wildlife. Sheep are typically removed from fields during the wildflower window between
April and early August, allowing plants to set seed and bloom. Additionally, at Stow Longa solar farm in
Cambridgeshire, information gained from ecological assessments has been used to amend land
management activities to better support farmland bird species. Further information can be found on the
Company’s website (www.bluefieldsif.com).
Quantifying Biodiversity
The Company has continued to measure the biodiversity across its portfolio to establish a baseline from
which opportunities to enhance nature, through the addition of site-specific measures, can be identified.
During the reporting year, the Company conducted an additional 15 biodiversity net gain
10
assessments
across operational assets, bringing the total to 45 since the introduction of this approach in 2023.
The Company also conducted ecological assessments across 10 operational solar assets. Following industry
best-practice, assessments on botany, invertebrates, breeding birds and soil were undertaken. For the first
time, environmental DNA (eDNA) was analysed, which focused upon invertebrate and fungi identification.
The results of the biodiversity net gain assessments and ecological surveys will be used to identify nature
enhancement activities for the coming year.
The Company shares ecological data with the UK trade body Solar Energy UK, for inclusion within
industry-wide datasets and annual solar habitat reports. This contribution supports the understanding
of ecological trends and the development of industry best practice.
9
https://stateofnature.org.uk/wp-content/uploads/2023/09/TP25999-State-of-Nature-main-report_2023_FULL-
DOC-v12.pdf
10
Biodiversity net gain is calculated using the DEFRA Biodiversity Metric. Data was taken from ecological
monitoring surveys. In all cases, including those where data was lacking, a precautionary approach was taken.
42
Environmental, Social and Governance Report (continued)
6. Pioneering Positive Local Impact (continued)
Case study – Wild Power® Gold certification
In May 2024, West Raynham Solar Farm was awarded gold certification from Wild Power®, an
independent certifier providing tools and processes to help developers and operators measure, manage,
monitor and report on their biodiversity efforts
11
.
Biodiversity and land management specialists from Bluefield Operations and Wychwood Biodiversity
conducted an ecological survey which identified appropriate management improvements for the site. The
existing measures and new additional features contributed to the site achieving its Wild Power® gold
certification. The site already hosted approximately 40 acres of wildflower meadow with conservation
grazing, and five acres of young tree plantings. Enhancement work included increasing ecological data
monitoring and availability, conducting an ecosystem services assessment, and installing additional
microhabitats for protected species including birds, reptiles, and a maternity bat roost box.
Joe Arafa, Director of Wild Power® said: “We are delighted to have issued the UK’s first Wild Power®
certification to Bluefield’s West Raynham Solar Farm. We commend Bluefield for their work to enhance
the biodiversity measures at the site and congratulate them for achieving Wild Power’s gold standard at
West Raynham.”
Nature Framework
The Company has developed a nature framework during the Year, building upon and bringing together
previous nature activity. Its aim is to provide an overarching strategy through which the Company can
identify and manage its nature-related risks and opportunities; communicate activities associated with
nature in a consistent and clear manner; and align with emerging regulatory and framework requirements.
It will also guide actions to integrate nature more fully across the asset lifecycle, from development through
to end-of-life.
To inform the framework, workshops were held with representatives from the Investment Adviser and other
service providers, including from O&M, asset management, investment, commercial, construction and
development teams, to explore nature-related impacts, dependencies, risks and opportunities which exist
across the asset lifecycle. This information was combined with that obtained from a landscape review, which
evaluated broader nature impacts and dependencies associated with the solar & wind energy sectors,
market analysis, and consideration of the localities of the Company’s assets.
Key focus areas within the framework include:
Land management
Nature protection & improvement
Engagement & education
Materials sourcing & supply chain
Focus over coming months will be to finalise KPIs which can be used by the Company to monitor and
communicate its nature activities.
Community Impact and Initiatives
An increasing number of communities may be impacted by renewable energy projects as the industry grows.
As the owner of infrastructure assets, the Company recognises the importance of maintaining a social
licence to operate and seeks to build and maintain positive relationships with the communities close to its
investments. Local stakeholders, including landowners, residents, and parish council members, are
engaged as appropriate across the asset lifecycle, including during project development, construction and
operation.
11
https://wildpower.org/
43
Environmental, Social and Governance Report (continued)
6. Pioneering Positive Local Impact (continued)
Community Impact and Initiatives (continued)
The Company has continued its partnership with Earth Energy Education to deliver an educational
programme to schools close to the Company’s assets, equipping students with knowledge about climate
change and the role renewable energy can play in powering a more sustainable future. Between Sept 23 –
July 24, the Company delivered 13 classroom workshops and facilitated 16 site visits with support from site
engineers and other Bluefield employees.
The Company has also paid over £296,000 to community benefit schemes
12
, funding local community
projects. For example, in connection with Bradenstoke Solar Farm, a £10,000 grant was used towards the
construction of a new, larger village hall, serving the communities of East Tytherton, Tytherton Lucas and
neighbouring villages and hamlets within the Bremhill civil parish.
Case study: Community engagement during the construction of Yelvertoft Solar Farm
Since 2022, the Company has proactively engaged with the community surrounding its new 48.4 MWp
Yelvertoft Solar Farm in Northamptonshire, aiming to keep residents informed about progress on
construction and invite feedback. The Company’s development partner, Bluefield Renewable
Developments, and EPC contractor for the site, Equans, have facilitated this process. The Company has
shared updates on its measures to protect biodiversity at the site (in line with planning requirements) and
the drainage management systems installed to help prevent flooding, which had previously caused issues
in the area. Positive feedback on the impact of the flood mitigation measures has already been received.
A community benefit fund has also been established, with the Company providing an annual contribution
to the Yelvertoft parish council to support initiatives benefiting local residents. In addition, the Company
has facilitated site visits and solar energy lessons for children at local primary schools, providing students
with an insight into the construction process and how the constituent elements of a solar farm work together
to produce renewable energy.
Delivery Partnerships
Engagement with key service providers is the primary method for implementing sustainable business
practices by the Company. During the 2022/2023 Year, several policies were adopted by the Company,
including a Sustainable Procurement Policy, Human Rights Policy, Waste Management Policy and Supplier
Code of Conduct.
Focus during the Year was on the implementation of these policies across the Company’s operations. For
example, an external consultant was engaged to support the Company in reviewing human rights due
diligence processes across the asset lifecycle. There was continued roll-out of the Company’s Supplier Code
of Conduct, with a spend-based approach taken to identify priority suppliers to engage with. A webinar was
held in June 2024 to offer suppliers the opportunity to learn more about the Code and how it applies.
Bluefield also adopted its own Supplier Code of Conduct, relating to its UK operations
13
, enabling the
cascade of the Company’s ESG expectations onto a subset of its tier 2 (i.e., not directly engaged by the
Company) suppliers. Work will continue over the coming year to further integrate the policies across the
Company’s operations and key service providers.
Case Study: Engaging with Engineering, Procurement, and Construction (EPC) Contractors
The Company recently engaged a new EPC contractor to deliver construction works for an upcoming
project. The Investment Adviser engaged and supported the EPC to calculate their carbon footprint for the
first time. Such actions demonstrate the Company’s efforts to positively influence contractors and suppliers
in the sector and support them in their responsible business approach.
12
This total represents the community benefit payments the Company is contractually due to pay each year.
13
Relating to Bluefield Partners LLP, Bluefield Services Limited, Bluefield Operations Limited, Bluefield
Renewable Developments Limited and Bluefield Construction Management Limited.
44
Environmental, Social and Governance Report (continued)
6. Pioneering Positive Local Impact (continued)
Health & Safety
The Investment Adviser continues to ensure health and safety (H&S) awareness, policies, processes and
procedures remain at the forefront of activity around the Company’s portfolio. Asset H&S policies are
reviewed at least annually by a third
-
party H&S advisor. All main O&M contractors are audited annually by
a qualified third-party specialist consultant, with any key findings followed up on by the Asset Manager.
EPC contractors, O&M Contractors, and Asset Managers provide updates on their H&S performance on a
regular basis. For the Year, the Company recorded:
● Lost time incident rate (calculated per 100,000 employees): 1.16
● Number of reportable accidents (RIDDOR)
14
: 3
● Number of near misses: 169
The majority of near misses were reported by Bluefield Operations, where identifying, investigating, and
reporting near miss incidents is culturally ingrained within the organisation (helping reduce the probability
of H&S incidents occurring). Therefore, the relatively high number of near misses is reflective of a proactive
risk management culture.
7. Generating Energy Responsibly
Key Commitments
• Ensure 100% of the Company’s assets are covered by a Human Rights Policy, which covers United
Nations Global Compact principles and OECD guidelines;
• Require adoption of the Company’s Supplier Code of Conduct by priority
15
Tier 1 and, where possible,
Tier 2 suppliers; and
• Continue to develop due diligence mechanisms to identify, prevent and mitigate human rights impacts
across the Company’s operations and, where possible, its supply chain.
Human and Labour Rights
Human and labour rights remain high priorities for the Company. While the Company recognises that its
supply chains are complex and full transparency has not yet been achieved, it will continue to monitor its
processes in relation to human and labour rights, committing to make improvements as the approach to
conducting due diligence evolves. The Company also recognises that human rights due diligence is an
ongoing process, where stakeholder engagement is important at each step. Please refer to the Company’s
website (www.bluefieldsif.com) for further information on its approach to this area.
In June 2023, the Company adopted a Human Rights Policy aligned to international standards and
guidelines, notably the United Nations Guiding Principles on Business and Human Rights. Following
adoption of this policy, focus has turned to its implementation, with the Company firstly reviewing its
human rights due diligence processes. Key stages of the project included:
• Identification of key stakeholder groups where human rights due diligence should be focused;
• High-level assessment of human rights risk for each of these stakeholder groups, informed by a risk
workshop attended by Bluefield stakeholders (who are involved at different stages of the asset lifecycle).
The result was the identification of high priority risks and the potential impact of each on rightsholders;
• An environmental & social risk analysis on the Company’s top 20 suppliers, following a spend based
approach;
14
RIDDOR: Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 2013. Metric reflects incidents
which occurred on the Company’s sites.
15
Following a spend-based approach.
45
Environmental, Social and Governance Report (continued)
7. Generating Energy Responsibly (continued)
Human and Labour Rights (continued)
• Review of the Company’s current human rights KPIs; and
• Review of the Company’s human rights communication processes.
This analysis led to recommendations tailored to the asset lifecycle and identified actions to be taken, where
needed, at each lifecycle stage (e.g. development, construction and ongoing operation). The Company also
mapped mitigations currently taken against identified risks and steps required to further advance its due
diligence approach. The Company will continue to monitor and update its human rights due diligence
processes, where appropriate, across the portfolio.
Examples of the Company’s human rights due diligence and management mechanisms:
● Human rights considerations embedded within pre-investment due diligence;
● Comprehensive ESG due diligence undertaken on key third parties such as EPCs, or O&M service
providers as part of transactions;
● Obligation for new key suppliers to adhere to the Company’s Supplier Code of Conduct;
● Human rights considerations built into procurement oversight processes for key infrastructure,
specifically solar PV and battery energy storage systems;
● Adoption of policies aligned to human rights frameworks;
● Social audits requested for solar PV manufacturing facilities as part of EPC engagements; and
● External ESG risk analysis undertaken on key solar and battery manufacturers.
The Company’s Modern Slavery Statement is available on its website (www.bluefieldsif.com).
Responsible and Sustainable Procurement
Since the turn of the century, the renewables industry has scaled rapidly and achieved significant growth.
However, due in part to the long lifespan of renewable energy infrastructure, which can reach 40 years,
there has historically been a limited focus on end-of-life processes. As the first generation of solar and wind
farms approach the end of their economic lifetimes, responsible decommissioning of sites and equipment
is becoming a key sustainability topic. Increased scrutiny on ESG credentials has brought this issue to the
attention of the industry, investors, and the media, highlighting the potential environmental impact and
the opportunity to improve circularity by reusing materials and reducing waste. Addressing this challenge
could unlock emissions reduction opportunities and value in constituent materials.
During the Year, the Company partnered with Lancaster University to launch a research programme
focused on end-of-life decision-making for renewable assets. The first stage of the programme, due for
completion in September 2024, was a project focused upon the development of a ‘materials passport’ for a
new build solar farm. The aim of the project was to map the constituent equipment and components needed
to build a solar farm, enabling insight into opportunities to enhance the recyclability, recycled content, and
recovery of materials.
Materials passports are a concept gaining traction across the construction industry
16
, and the Company is
pleased to have applied this principle to a UK solar project
17
. This material mapping exercise may also
unlock opportunities or points of leverage from an emissions reduction, climate adaptation, and nature
perspective. This project will enable the Company to better consider circular economy principles in future
construction projects.
16
Materials Passports: Accelerating Material Reuse in Construction. / Costa, Ana; Hoolahan, Rachel.
London: Orms designers and architects ltd, 2024. 74 p.
17
Note that materials passports are applied in other contexts across the globe, signalling the direction of travel; for
example, the recent amendment to the EU Directive 2006/66/EC Battery Regulation, introduces a requirement for all
EV and industrial batteries over 2kWh to have a unique ‘battery passport’ by 1 February 2027.
46
Environmental, Social and Governance Report (continued)
7. Generating Energy Responsibly (continued)
Good Governance and Business Ethics
Corporate Governance
Please refer to page 91 for the Company’s Corporate Governance Report.
As an FCA-regulated entity, the Investment Adviser maintains high standards of professional conduct. Key
policies, including in relation to anti-bribery, anti-corruption and anti-money laundering, conflicts of
interest, and compliance are in place, and third-party compliance advisers are used to ensure regulatory
obligations are met through quarterly reviews and the undertaking of an annual audit of business activities.
As part of an employee's induction process, employees are guided through the Investment Adviser's position
on anti-bribery and corruption. To ensure ongoing awareness, all employees are required to complete
computer-based training on this topic. In addition, in support of the Investment Adviser's approach towards
appropriate conduct and ethics, employees are required to sit computer-based training on Bullying and
Harassment, and Whistleblowing.
Diversity
Diversity is an important consideration for the effective functioning of the Company’s Board. Please refer
to page 92 of the Corporate Governance Report for further information on the Board’s commitment in this
area.
Board Training
The Board undertook training sessions to build awareness of climate-related issues. One session focused
upon net zero targets and pathways, including the different accreditation frameworks available and the
Company’s proposed targets up to 2030. The other session, in July 2024, explored the climate risk work
undertaken by the Company to date, with special consideration of topics such as extreme heat, changing
wind patterns, and the Company’s climate adaptation plan.
Cybersecurity
Cyber security risk is managed under the Company’s overarching risk management framework, and the
Company looks to continually evolve its approach to cyber security, including through periodic reviews and
engagement with key service providers. The Investment Adviser has continued to arrange penetration
testing of 74% of the portfolio (excluding small scale sites) by a specialist external consultant, as part of a
cyber security review. Further tests are planned for the coming financial year.
8. Looking Forward
As the Company looks to 2025, its commitment to sustainability and responsible investment remains
resolute. Recognising the dynamic nature of ESG factors and the evolving regulatory landscape, the
Company is poised to enhance its approach to align with best practices and emerging standards. With a
clear vision and adaptive strategy, the Company is confident in its ability to deliver sustainable value for its
shareholders in an increasingly changing world.
47
Environmental, Social and Governance Report (continued)
ESG Appendix
The following table highlights the Company’s ESG performance for the Year. Performance has been
reported separately for wholly owned assets and the strategic partnership with GLIL Infrastructure. Where
referenced, unless otherwise stated, ‘assets’ refers to operational and construction assets.
Pillar
Commitment
Supporting
KPIs
Prior Year
(wholly owned assets)
Year
(wholly owned
assets)
Year
18
(strategic partnership)
Climate Change Mitigation
Report renewable
energy generation
annually.
Renewable
energy
generated
(MWh)
836,231
810,6
02
1
1,160
CO2e
avoided
19
(tCO2e)
173,000
167,800
2,300
Equivalent
houses
powered (#)
288,000
300,000
4
,100
Additional
solar
infrastructure
under
construction
(MW)
93
93
-
Estimated
additional
annual
renewable
energy
generation
(MWh)
91,000
91,000
-
Battery assets
under
construction
(MW)
-
-
-
I
nvest in industry
collaborations to
support the
energy transition.
Revenue
targeting
industry
collaboration
(£)
£
0
20
£25,000
-
Report against the
Company’s carbon
emissions annually.
21
Scope 1 GHG
Emissions
(tCO2e)
19
45
1
Scope 2 GHG
Emissions
(tCO2e)
22
1,422
399
0
Scope 3 GHG
Emissions
(tCO2e)
27,963
18,299
54
Total GHG
Emissions
(tCO2e)
29,404
18
,
743
55
Carbon
Footprint
(tCO2e)
Please refer to the
Company’s PAI
statement.
Please refer to
the Company’s
PAI statement.
-
GHG intensity
(tCO2e / EUR
Rev)
Please refer to the
Company’s PAI
statement.
Please refer to
the Company’s
PAI statement
-
D
evelop a
n
et
z
ero
pathway.
Net
z
ero
pathway
No
Yes
–
targets
developed.
-
18
ESG performance relating to the period 1 Jan 2024 – 30 Jun 2024 and apportioned according to the Company’s
9% equity stake (where appropriate).
19
KPI updated from ‘savings’ to ‘avoided’.
20
£50,000 was allocated but the project was not finalised until the current Year.
21
Please note that the emissions stated for the current Year are not comparable with the prior Year due to a change
in methodology. Further details are provided within the TCFD disclosure, on p.60.
22
Market-based emissions are stated.
48
developed
(Y/N)
Implement
renewable energy
import tariffs across
the portfolio.
23
Installed
capacity with
renewable
energy import
tariffs (%)
24
85%
80%
100%
Share of non
-
renewable
energy
consumption
and non-
renewable
energy
production of
investee
companies
from non-
renewable
energy sources
compared to
renewable
energy sources
(%)
Please refer to the
Company’s PAI
statement.
Please refer to
the Company’s
PAI statement
-
C
ontinue to build
climate resilience
and inform business
strategy through
climate risk
assessments and
scenario analysis.
25
Scenario
analysis
undertaken
(Y/N)
Yes
Yes
-
Climate
adaptation
plan
developed
(Y/N)
26
No
Yes
-
Pioneering Positive Local Impact
E
valuate
biodiversity
net gain across the
operational portfolio
and achieve at least
20% biodiversity net
gain on new solar
developments
27
.
New
developments
that have had
biodiversity
net gain
assessment
(%)
100%
100%
-
New solar
developments
with at least
20%
biodiversity
net gain
achieved (%)
100%
67%
28
-
Existing sites
with
biodiversity
net gain
assessment
(#)
30
45
-
Conduct
independent
biodiversity
assessments across
Operational
assets
independently
assessed
(relating to
assets over
1MW in
capacity) (%)
11%
11%
-
23
The KPI of ‘Relative percentage of renewable and non-renewable energy consumed by the Company (%)’ has
been removed. Renewable energy consumption will continue to be tracked via the KPI of ‘Installed capacity with
renewable energy import tariffs’.
24
Relates to assets where the Company has control over the procurement of imported electricity.
25
The KPI of ‘climate change risk and vulnerability assessment undertaken (Y/N)’ has been removed as this has
been completed.
26
Updated from ‘Assets covered by a climate adaptation plan (%)’.
27
Relating to planning applications submitted by the Company together with its development partners during the
Year.
28
One planning application submitted during the Year did not reach a 20% uplift on hedgerow units (but did achieve
>55% uplift on habitat units).
49
at least 10% of sites
annually (relating to
assets over 1MW in
capacity).
Notable
species
identified
(e.g., red and
amber listed
species) (#)
Red listed bird species:
12
Amber listed bird
species: 17
Red listed bird
species: 15
Amber listed
bird species: 17
-
Assets
without
a biodiversity
protection
policy
covering
operational
sites owned,
leased,
managed in,
or
adjacent to, a
protected area
or an area of
high
biodiversity
value outside
protected
areas (%)
Please refer to the
Company’s PAI
statement.
Please refer to
the Company’s
PAI statement
-
D
evelop a
na
ture
framework, building
upon existing
biodiversity
commitments and
encompassing the
recommendations of
the TNFD.
Nature
framework
developed
(Y/N)
No
Yes
-
Minimise potential
risks posed to
threatened species
by the Company’s
assets and apply
industry best
practice to new sites
under development.
Assets that are
located in or
near to
29
biodiversity-
sensitive areas
(%)
2
7
%
30
27%
30%
A
ssets
that
negatively
affect
biodiversity-
sensitive areas
(%)
0%
-
Please refer to the
Company’s PAI
statement.
0%
-
Please
refer to the
Company’s PAI
statement
-
A
ssets
which
are deemed to
have
operations
that affect
threatened
species (%)
0%
-
Please refer to the
Company’s PAI
statement.
0%
-
Please
refer to the
Company’s PAI
statement
-
Continue to promote
positive action
within the
communities the
Company operates
within through
community benefit
funds and
educational sessions.
Revenue given
to
partnerships
benefiting the
local
community
(£)
£20,000
£28,000
-
Revenue paid
to community
benefit
schemes (£)
>£2
87
,000
31
>£296,000
-
Young people
engaged (#)
647
(between May
–
Jul
23).
501 (between
Sep 23 – July
24)
-
Educational
workshops
delivered
(including site
visits) (#)
25, including 17 school
workshops and 8 site
visits (between May –
Jul 23).
29, including 13
school
workshops and
16 site visits
(between Sep
23 – July 24)
-
29
Defined as within 1 kilometre of a biodiversity-sensitive area.
30
KPI has been updated from 22% (as presented in the 2023 Annual Report & Financial Statements).
31
Note that the figure of >£253,000 published within the 2023 Annual Report & Financial Statements was restated.
50
Insist that Tier 1
suppliers that
directly service the
portfolio
32
report
H&S
performance on a
quarterly basis.
Lost time
incident rate
(per 100,000
employees)
-
1.16
-
Number of
reportable
accidents
(RIDDOR) (#)
6
3
1
Number of
near misses
(#)
154
169
32
Bluefield
employees
who have
received H&S
training (%)
100% (as at 28 Sept 23)
100% (as at 1
Aug 24)
-
Map the Company’s
supply chains, with
priority given to Tier
1 suppliers.
Tier 1
suppliers
mapped by
spend (%)
33
100%
100%
-
Tier 2
suppliers
mapped by
spend
(relating to
Bluefield
service
providers)
(%)
34
100%
100%
-
E
nsure 100% of
the
Company’s assets are
covered by a Human
Rights Policy, which
covers United
Nations Global
Compact principles
and OECD
guidelines.
Assets
with
Human Rights
Policy (%)
100%
100%
-
Continue to develop
due diligence
mechanisms to
identify, prevent and
mitigate human
rights impacts across
the Company’s
operations and,
where possible, its
supply chain.
A
ssets
with a
due diligence
process to
identify,
prevent,
mitigate, and
address
adverse
human rights
impacts (%)
100%
100%
-
Share of
investments in
assets without
policies to
monitor
compliance
with the
United
Nations
Global
Compact
principles or
OECD
Guidelines for
Multinational
Enterprises or
grievance
/complaints
handling
mechanisms
to address
violations of
the United
Nations
Please refer to the
Company’s PAI
statement.
Please refer to
the Company’s
PAI statement
-
32
Suppliers relates to EPC, O&M, and asset management contractors.
33
Updated from ‘Tier 1 supply chains mapped (%)’.
34
Updated from ‘Tier 2 supply chains mapped (relating to Bluefield service providers) (%)’.
51
G
lobal
Compact
principles or
OECD
Guidelines for
Multinational
Enterprises
(%)
Implement
mechanisms to
measure the
Company’s
hazardous waste
ratio.
Tonnes of
hazardous
waste and
radioactive
waste
generated by
assets per
million EUR
invested,
expressed as a
weighted
average
Please refer to the
Company’s PAI
statement.
Please refer to
the Company’s
PAI statement
-
C
learly communicate
the ESG governance
structure.
Clear
governance
structures in
ESG report
(Y/N)
Yes
Yes
-
Further diversify the
Company’s Board.
R
atio of
female to male
board
members
expressed as a
percentage of
all board
members (%)
40%
40%
33%
Number of
board
positions held
by a woman
(#)
2
2
1
Number of
board
members from
a non-white
ethnic
minority
background
(#)
-
-
-
E
nsure 100% of
the
Company’s assets are
covered by a
sustainable
procurement policy.
A
ssets
with
sustainable
procurement
policy (%)
100%
100%
-
Require adoption of
the Company’s
Supplier Code of
Conduct by priority
Tier 1 and, where
possible, Tier 2
suppliers
Tier 1
suppliers
signed
Supplier Code
of Conduct (#)
26
3
0
-
Tier 2
suppliers
signed
Supplier Code
of Conduct (#)
-
22
-
E
ncourage O&M
contractors to follow
the waste hierarchy
principles.
A
ssets
with a
waste
management
policy (%)
100%
100%
-
52
Task Force for Climate-related Financial Disclosures (TCFD)
1. Introduction
The Company’s core objective, to provide attractive returns to Shareholders through investment in
renewable energy infrastructure assets, sets it in an advantageous position to capitalise upon opportunities
that arise from the transition to a low carbon economy. However, climate change is dynamic and uncertain,
and societal response will be shaped by climate events of varying severity and impact, depending on the
trajectory that global emissions take. The Company is committed to having a climate resilient strategy in
place, supported by scenario analysis and risk management processes, to strengthen its ability to deliver
shareholder value in a changing world. The following report explains how the Company is working to
comply with all eleven recommendations of the TCFD.
Please note the impact of the Company’s new strategic partnership (namely the emissions associated with
the Company’s 9% equity share) has been considered within the GHG inventory table on page 60.
2. Governance
Board oversight
The Board has ultimate responsibility for and oversight of climate-related risks and opportunities; please
refer to page 37 for how the Board oversees progress against ESG (including climate) commitments, KPIs
and targets. Any sustainability or climate-specific targets in development (e.g. a net zero target) are
presented to the Board by the Investment Adviser so they can review, challenge and, if satisfied, approve.
The Board remains well-informed of developing physical and transitional risks and opportunities
associated with climate change, and how these might materialise in the Company’s short-, medium- and
long-term future, through close engagement with the Investment Adviser. In July 2024, the Board was
trained on the use of scenario analysis as a tool to inform risk management and strategic decision-making
and presented with the combined results of physical scenario analyses undertaken over the last 18 months.
Every investment decision considered by the Board is associated with renewable energy infrastructure.
Therefore, the Board is conversant in assessing climate-related opportunities. Increased consideration of
climate-related risks, particularly physical risks, has therefore been the main area of focus for the Company
since adopting the TCFD recommendations.
The consideration of trade-offs is inherent to the Board’s decision-making process. For example, the Board
recognises that CO2e emissions are incurred during the construction of new assets, both from the embodied
carbon and installation process. However, the Company quantified these emissions, through a lifecycle
carbon assessment for a new build 50MW solar asset based in the UK. The results indicated an estimated
payback period of between one to three years, thereby demonstrating a net positive effect on the lifetime
avoided emissions of the asset once operational. Such analyses inform the Board’s decision to build out a
development pipeline in order to support the decarbonisation of the energy sector long-term.
Management
The Investment Adviser is responsible for day-to-day management of ESG, including climate matters, and
progress is communicated to the Board as described on page 37. ESG is an agenda item for both the Board
and the Investment Adviser, where it is discussed as part of wider strategic priorities and risk management.
Roles and responsibilities are defined within the Company’s ESG structure on page 38. The Investment
Adviser oversees the implementation of the Company’s ESG Strategy, which includes a climate change
mitigation pillar, under which specific climate-related commitments and KPIs have been developed. In line
with this strategy, the Investment Adviser works with the Company’s key service providers to continue to
integrate climate considerations across the asset lifecycle, including pre-investment due diligence, asset
management and reporting. Asset data collected from service providers is collated by the Investment
Adviser and used to inform the ongoing assessment of climate-related risks and opportunities.
53
Task Force for Climate-related Financial Disclosures (TCFD)
(continued)
2. Governance
Management (continued)
Remuneration of the Investment Adviser is not directly linked to sustainability metrics and targets (e.g.
GHG emissions). However, the nature of the Company’s asset class targets climate change mitigation, and
the successful pursuit of that objective is reflected in remuneration. This creates alignment between
Shareholder interest, climate change mitigation and the Investment Adviser’s commercial interest.
3. Strategy
The Company’s strategy is aligned to climate change mitigation, which seeks to tackle one of the primary
root causes of climate-related risk and take advantage of any feasible opportunities. To inform its strategy,
the Company has continued to employ scenario analysis
35
as a tool to better characterise its most material
climate-related risks, and opportunities, understanding how those risks and opportunities could
materialise over short-, medium- and long-term time horizons (2030, 2040 and 2050, respectively). Key
insights from these analyses are described in the following section, which is concluded with an overall
assessment of the Company’s resilience to climate change in each emissions scenario.
Approach to Scenario Analyses
Three scenario analyses have been undertaken to date: the first assessed risks associated with the transition
to a low carbon economy, the second focused upon the impact of extreme heat for solar PV and battery
storage assets, and the third analysed the impact of projected changes in wind speed on wind assets. These
were identified as potentially financially material physical risks to the Company during climate screening
workshops. These workshops were held with representatives from the Bluefield service provider companies
and steered by consideration of forward-looking climate projections. Flood risk was also considered to be
potentially financially material, but this is subject to extensive assessment and mitigation as part of the
standard regulatory planning and development process.
Table 1: Scenarios used for transitional and physical scenario analyses, based on established climate models. Broad
alignment exists between each set of scenarios, despite slight differences in warming implications.
35
Assumptions and limitations: The Company acknowledges the uncertainty offered by climate change scenarios,
and thus the results of the scenario analyses will be used as an approximate, rather than definitive, guide.
Warming implications
Description of Scenario
Physical
Transitional
Net Zero by
2050
Global cooperation for effective regulation &
mitigation of emissions, avoiding the worst impacts of
climate change. Shifts occur gradually toward a more
sustainable & inclusive path, meeting Paris Agreement
goals.
<2°C 1.5°C
Delayed
Transition
Progress is delayed; effective policies are not
introduced until 2030 or later, and in a more rapid and
disruptive manner. Warming exceeds 2°C and a degree
of environmental degradation occurs, but damages are
constrained by improvements in energy and resource
use.
2-4°C <2°C
Current
Policies
Continued emphasis on economic growth and
technological progress. Effective policies to
decarbonise are not introduced globally and there is
continued reliance on fossil fuels, leading to high levels
of warming, which could exceed 4°C.
>4°C >3°C
54
Task Force for Climate-related Financial Disclosures (TCFD)
(continued)
3. Strategy (continued)
The scenarios used in the physical analysis were derived from Representative Concentration Pathways
(“RCPs”)
36
and Shared Socioeconomic Pathways (“SSPs”)
37
; the transitional scenarios were derived from
global climate models produced by the Network for Greening the Financial System (“NGFS”)
38
. The SSP
pathways denote higher warming potential, which better highlights physical risks, whilst the NGFS
pathways more effectively portray transitional impacts. The results of these analyses are presented in the
‘Strategy’ section and continue to be developed and integrated into business strategy and financial planning.
Whilst there is some variance in the results of the analyses by scenario up to 2050, it should be noted that
the primary divergence in impact between scenarios is expected to be seen between 2050 and 2100. The
remaining weighted average life of the Company’s portfolio of assets means there is limited exposure to
variability in these scenarios. The impact assessment below can therefore be read across all scenarios and
is not specific to certain variabilities of these scenarios.
Results of Physical Scenario Analysis
The following section summarises the extreme heat and wind-focused physical scenario analyses, setting
out the potential impact on the business model and value chain. Please refer to the Company’s 2023 TCFD
report (Table 2, page 44 of the Company’s 2023 Annual Report) for a more detailed breakdown of the
impact of extreme heat across the different scenarios referenced above.
Physical Analysis – Impacts of extreme heat on yield
Above a certain temperature threshold (around 25°C), heat can start to affect multiple components of PV
systems, resulting in efficiency losses in PV modules, accelerated PV cell degradation, and inverter failure.
As average temperatures increase with climate change, the IPCC predicts extreme heat events will become
more frequent and severe
39
, presenting a risk to the Company’s portfolio over the short, medium, and long-
term. Heat is expected to manifest as a risk to solar asset performance in two ways: the chronic effects of
long-term average temperature rise on PV cell efficiency, and acute failure of key components (i.e.,
inverters) during heatwaves, both of which can impact yield.
Acute Risk
Extreme heat events (e.g. heatwaves) are typically short-term spikes that can lead to failures in constituent
components within a PV system. The threshold at which failures are more commonly observed was agreed
by Bluefield to be 33°C, informed by past events on the solar portfolio. The number of days exceeding this
temperature are likely to increase, primarily impacting PV systems through their ancillary equipment (e.g.
inverters). Although there are associated losses to revenue during downtime, the results of the scenario
analysis imply that this may not be financially material. However, it should be noted that this analysis does
not consider the full suite of risks that extreme heat events could present to the Company; for instance, the
cost of equipment replacement or repair, or compound risks associated with multiple climate-related events
playing out at once, which were not modelled. Nevertheless, considerate design, procurement and planning
can help mitigate the impact of heat. For example, inverters can be located away from other equipment to
36
The RCPs pre-dated the SSP scenario’s and were developed by the International Panel on Climate Change, they
were the dominate scenarios used in Coupled Model Intercomparison Project (CMIP) 5
37
The SSPs are a range of new “pathways” built by the International Panel on Climate Change in CMIP 6 to
examine how global society, demographics and economics might change over the next century with climate change.
38
The NGFS, established at the Paris “One Planet Summit” in 2017 by eight central banks and supervisors, has
developed global climate models to provide granular data on transition pathways and climate impacts, to understand
how climate change, climate policy and technology trends could evolve in different futures.
39
Chapter 11: Weather and Climate Extreme Events in a Changing Climate | Climate Change 2021: The Physical
Science Basis (ipcc.ch)
55
Task Force for Climate-related Financial Disclosures (TCFD)
(continued)
3. Strategy (continued)
Physical Analysis – Impacts of extreme heat on yield
Acute Risk (continued)
prevent overheating, and increasingly, technologies with a greater capacity to dissipate heat (through fans
or internal cooling systems) are becoming available to the market.
In addition to PV systems, the impact of extreme heat on battery storage systems was evaluated. Analysis
of technical specifications revealed that battery storage systems
40
appear resilient to the UK temperature
ranges predicted across all three scenarios, with in-built cooling systems able to maintain internal ambient
air temperature and therefore optimal asset performance. Thus, extreme heat should not present a material
risk to the operation of battery storage systems adopted into the Company’s portfolio in the future.
The Company notes that components of wind turbines may also be exposed to risk of overheating. However,
this was not considered likely to become material during initial climate screening workshops, and thus has
not been modelled to date.
Chronic Risk
Average temperature rise represents a more sustained financial risk to the solar portfolio. PV systems begin
to experience curtailments in output efficiency due to heat at approximately 25°C. Although technologies
vary, every degree of temperature rise over this threshold is considered to result in an approximately 0.41%
reduction in efficiency. As average temperatures rise, solar cells will be pushed beyond their optimal
operating temperature more frequently and to a greater extent, in line with the trajectory of global
emissions.
Whilst the impact of extreme heat on yield is not considered to be financially material at present, the
Company notes the unpredictability of climate projections, and thus is assessing adaptative measures to
address these risks. Technological advancements of PV systems are helping to mitigate this risk in part; PV
panels with improved temperature coefficients are becoming available to the market. The Company
considers the heat resilience of PV technologies installed within new build projects, capturing this
information within asset-specific adaptation plans
41
. The Investment Adviser will assess the feasibility of
additional mitigation measures, including novel solutions entering the market.
The Impact of Changing Wind Speed on Yield
42
Modelling changes to wind speed associated with climate change is a highly complex and uncertain exercise.
The many determinants of storms and high winds, and non-linear dynamics within the global climate
system, make them difficult to model compared with temperature change. Increasingly severe storms and
high wind speeds have been noted in the UK over the past 40 years
43
, and it is acknowledged that this could
increase further with climate change. Moreover, the chronic effect of the ‘global stilling’ phenomenon,
whereby polar regions have warmed faster than tropical regions, reducing atmospheric pressure differences
and wind speeds as a result, has been detected over similar timeframes and is expected to continue in some
projections
44
. Despite the uncertainty, it is essential to have a forward-looking view of these factors and
understand how they may be exacerbated by climate change, as both have the potential to impact wind asset
performance.
40
Please note that the battery storage system modelled was deemed to be representative of those currently available
on the market. However, specifications do vary.
41
Note asset-specific adaptation plans are produced for all new build assets, of which the Company has completed
two to date.
42
The Company is aware that in extreme cases, high winds can cause damage to solar assets. Although not modelled
within the wind scenario analysis, these events are isolated and are not expected to be financially material.
43
https://www.metoffice.gov.uk/research/climate/understanding-climate/uk-and-global-extreme-events-wind-storms
44
Global ‘Stilling’: Is Climate Change Slowing Down the Wind? - Yale E360
56
Task Force for Climate-related Financial Disclosures (TCFD)
(continued)
3. Strategy (continued)
The Impact of Changing Wind Speed on Yield (continued)
Acute Risk
High wind speeds present a double-edged sword for wind turbines; up to a certain threshold, they can drive
greater generation yields and create more revenue. However, when wind speeds exceed approximately 55-
65mph, turbines may shut down to prevent asset damage. This is a key mitigation to acute damage caused
by high winds and storms to protect the turbines.
Acute high wind speed events are expected to increase with climate change. The analysis indicated that the
highest winds will be felt in the extremities of the UK (i.e., Northern Scotland and Cornwall). Although more
frequent turbine shutdowns in these areas may lead to lost revenue, the benefit of higher wind speeds across
the rest of the UK is likely to outweigh this cost to the Company. Diversity in the portfolio between
geography and asset classes enables the Company to take advantage of any beneficial weather conditions
that climate change may bring whilst helping mitigate the negative impacts.
Chronic Risk
Despite an increase in extreme wind events, current projections suggest that overall annual average wind
speeds will continue to decline across the UK. Scientific consensus and model agreement on the probable
trajectory of wind stilling has not yet been reached, and therefore this scenario remains highly variable.
Wind stilling poses a risk to average revenues as generation from turbines would decline. However, given
the minority exposure of the Company’s investments to wind
45
and the relatively slight impact on average
speeds, it is not considered to be financially material at this time. However, given recent instability in power
prices, the extent of possible financial impact is difficult to determine with a high degree of certainty.
Results of Transitional Scenario Analysis
Transitional opportunities are expected to predominate over transitional risks due to the nature of the
Company and its role in providing low carbon energy to a decarbonising economy. Risks associated with
the low carbon transition are likely to become more apparent from 2030 onwards, as the realities of needing
to meet net zero goals solidify. However, the accompanying opportunities are high, with taxes on emissions-
intensive industries and broader regulatory shifts that should encourage further investment into
renewables.
Please refer to the Company’s 2023 TCFD report for a detailed summary of the transitional scenario
analysis, conducted in 2022, which qualitatively assessed the impact of potential policy, regulatory,
technology, and market changes associated with mitigative and adaptative responses to climate change.
Key insights from this analysis are discussed together with physical risks within the context of resilience in
the next section.
Assessment of resilience
Drawing on the results from all three scenario analyses, the Company has assessed its resilience to climate-
related risk in each of the scenarios, summarised below. Work will continue to integrate findings from the
scenario analyses into the Company’s risk management processes, strategic and investment-related
decisions, and financial planning.
45
Limited to a maximum of 25% of the Company’s Gross Asset Value as per its Investment Policy.
57
Task Force for Climate-related Financial Disclosures (TCFD)
(continued)
3. Strategy (continued)
Assessment of resilience (continued)
Net Zero (1.5°C – 2°C)
Due to the nature of its investments, few transitional risks are expected to present a high risk to the
Company. The greatest risks in this scenario come from technology change in the long-term. This could
quicken the rate of asset depreciation and require large scale investment to install new technologies across
the portfolio. However, the Company views the accompanying opportunity as high. Technological progress
may lead to greater yielding PV assets as well as better battery storage solutions, combining to increase
revenues. Policy and legal shifts are also likely to present high opportunities over the long-term, which the
Company is well placed for, as they create conditions conducive to growth of the portfolio.
Delayed Transition (2-4°C)
In a Delayed Transition, the medium-term is more disruptive than the other scenarios. This is due to
significant shifts required to move to a low-carbon trajectory, compensating for previous inaction. Again,
this creates both risks and opportunities to the Company. Market shifts are particularly likely: service
providers may face supply chain issues, and revenues may be exposed to risk from volatility in power prices.
However, the opportunity from a disorderly transition is that there is a sudden shift away from fossil fuels,
which is likely to cause a demand spike for renewable energy. With the Company’s growing portfolio and
development pipeline, it has the opportunity to facilitate this increased demand. Reputational opportunities
are also highest in this scenario in the long-term, as increased value is placed on sustainability credentials
to limit warming. In a 2-4°C scenario, chronic physical risk increases over time, but to a lesser extent than
in the >4° scenario; greater yield losses are felt for PV, due to rising temperatures, and for wind turbines,
should stilling take effect. Incidences of acute wind and heat events similarly increases over time but are
less impactful in this scenario, as much of the Company’s generation capacity is located away from the worst
affected counties.
Current Policies (>3, >4°C)
The Company is generally exposed to lower transitional risks and opportunities in this scenario. As a
provider of renewable energy, it stands to gain from a transition to a low carbon economy. If this does not
occur, there may be limited opportunities to grow the portfolio beyond those experienced currently, across
even the longest time horizons. A lack of climate policy and action will result in the greatest exacerbation of
climate hazards, making physical risk to assets highest in this scenario, though not to the extent that is
expected to cause a material financial impact to the Company. The value chain impact is potentially
significant; climate-related disruption in the supply chain for new assets could lead to shortages of supply
and price spikes, with polysilicon being a particularly volatile component of a PV system
46
.
The Company will use the results of the climate modelling to inform investment decision-making and
mitigation measures to enhance the long-term resilience of its portfolio to evolving physical climate risks.
4. Risk Management
Governance
For information relating the Board’s approach to risk management, which is inclusive of climate risk,
please refer to page 67.
Physical risk management
Overall, the physical scenario analyses indicate that extreme heat and changing wind patterns do not
currently pose a financially material risk to the Company with respect to asset yield and revenue generation.
46
https://energy.economictimes.indiatimes.com/news/renewable/unprecedented-polysilicon-price-volatility-
threatening-solar-power-capacityinvestments/98382153
58
Task Force for Climate-related Financial Disclosures (TCFD)
(continued)
4. Risk Management (continued)
Physical risk management (continued)
The Company is, however, aware of the limitations of scenario analysis and the evolving nature of climate
hazards. Of note is the fact that climate-related risks are unlikely to occur in isolation; compound risks
associated with the assets themselves and the broader supply chain may play out simultaneously,
heightening the risk posed.
To enable a dynamic response to physical climate risk, the Company has developed a portfolio-wide
adaptation plan, which will help the Company monitor climate-related risks, further inform investment
decisions, and identify opportunities to enhance resilience. The plan is structured around stages of the asset
lifecycle, to support a holistic understanding of physical climate change impacts to the Company’s direct
operations and key service providers, and to map out accountability across key stakeholders. It will also
serve as an evidence base from which data to monitor risk can be refined and fed into strategic decision-
making where necessary.
Transitional risk management
The management of transitional risk is integrated within the responsibilities of the Investment Adviser.
Mitigation measures pertaining to key transitional risk areas, as identified in the transitional scenario
analysis, are presented in Table 2.
Table 2: Mitigation measures used by the Company to manage transitional climate-related risks.
Technology
advances
The Investment Adviser models the operational asset life, taking account of depreciation and physical
degradation, to forecast NAV and portfolio revenue. Outputs are listed in the Company’s risk register
and are regularly updated to inform long-term scenario planning. This enables active risk management,
including the arrangement of appropriate contingency funds for equipment failure and longer-term
decision-making around asset repowering and equipment upgrades, helping reduce NAV depreciation.
Diversification is another important resilience mechanism, allowing the Company to expand into
alternative technologies. The Company’s development pipeline also gives it greater scope to implement
new technologies as they become commercially viable.
Business
reputation
The Company’s continued transparency regarding the climate actions it is taking, including voluntary
alignment with the TCFD, helps mitigate against reputational risks. Robust compliance with ESG
regulation further supports this. Within its ESG report, the Company aims to disclose information
relating to both achievements (through a comprehensive set of commitments and KPIs) and challenges,
helping to provide a balanced perspective. These actions stand to strengthen the Company’s reputation
and financial benefit could be realised in the form of increased investment, as investor preferences shift
towards low carbon energy
and sustainable investment
.
Policy &
legal action
The Investment Adviser’s legal counsel keeps abreast of upcoming policy and legal changes, and external
legal and technical advisers support the Company in maintaining compliance with applicable policy and
regulation. The Company has developed a robust set of policies to externalise ESG expectations to third
parties, helping cascade responsible business practice across key service providers. As a FCA regulated
entity, the Investment Adviser evidences
high
standards of professional conduct.
Market
disruption
The Company’s investment strategy of owning and operating predominantly subsidised assets provides
strong visibility of revenues and helps protect the Company against future regulatory changes in power
markets. The Investment Adviser supplements this by continuously monitoring new long-term fixed
revenue streams that are becoming available. For example, it secures contracts for difference, enhancing
revenue visibility and security. In the future, the Company is expected to diversify its revenue streams
through investment in batteries, which benefit from power price volatility. Novel revenue streams and
technologies are continually evaluated for their ability to enhance the resilience of the Company’s long-
term investment objective.
Ongoing risk identification & assessment
Climate-related risks and opportunities are identified and assessed on an ongoing basis at different stages
of the asset lifecycle. Climate considerations are integrated into pre-investment ESG due diligence
59
Task Force for Climate-related Financial Disclosures (TCFD)
(continued)
4. Risk Management (continued)
Ongoing risk identification & assessment (continued)
and are a key consideration within the Company’s ESG strategy, aiding the long-term management of
climate matters post-investment. Development partners, including Bluefield Renewables Development
Limited, ensure that climate factors are considered during the development process of new assets, for
example through flood risk assessments.
On a daily basis, asset management and O&M service providers identify, escalate, and respond to climate-
related incidents impacting the Company’s assets. Irregularities in generation are flagged in real time by
monitoring teams who diagnose the issue, classify the risk, and communicate it to asset management and
O&M teams through incident reports. Examples of risks classified as “climate-related” include string-level
identification of inverter failures during heatwaves and downtime of wind turbines due to storm activity.
The Company is also taking steps to engage its supply chain on climate risk through its net zero targets.
Please refer to the ESG report on page 40.
5. Metrics and Targets
Metrics
The financial performance and overall success of the Company is intrinsically linked to opportunities that
result from the transition to a low carbon economy. The Company monitors this through metrics relating
to returns and dividends paid to Shareholders, which are underpinned by the total generation yield of the
portfolio.
The Company also tracks its ESG performance against a set of commitments and KPIs, enabling the
Company to manage its ESG risks and opportunities alongside financial objectives (see ESG Appendix on
page 47). As an infrastructure owner, the Company’s assets are vulnerable to physical and transitional
climate risks, a selection of which have been explored quantitatively through scenario analysis (see Strategy
section). Insights from scenario analyses will be used to inform metrics used by the Company to assess and
monitor climate-related risks and opportunities, and steer portfolio resilience measures.
GHG Inventory results
The Company’s GHG inventory relating to the Year is presented in Table 3
47
, calculated in line with the
GHG Protocol Corporate Accounting Standard and the Partnership for Carbon Accounting Financials.
DEFRA GHG reporting conversion factors, DEFRA conversion factors by SIC, and power provider specific
emissions factor datasets were used in the analysis (corresponding with the period emissions were
incurred). Some aspects of data collection remain challenging, and as a result, a proportion of data was
estimated or extrapolated.
47
Calculation of the carbon footprint was supported by a third-party consultant, but it has not been externally
verified.
60
Task Force for Climate-related Financial Disclosures (TCFD)
(continued)
5. Metrics and Targets (continued)
GHG Inventory results (continued)
Table 3: the Company’s GHG emission inventory for the period 1 July 2023 – 30 June 2024, highlighting emission
results per scope, including a breakdown of scope 3 categories. These figures are inclusive of the emissions associated
with the Company's investment stake in the strategic partnership with GLIL Infrastructure as of 30 June 2024.
Location-Based
Emissions (tCO2e)
% of
total
Market-Based
Emissions (tCO2e)
% of
total
Scope 1 46 0.24 46 0.24
Scope 2 748 3.91 399 2.12
Scope 3 18,353 95.85 18,353 97.63
Purchased Goods & Services
18,
065
18,065
Fuel- and Energy-Related Activities
260 260
Waste Generated in Operations
19 19
Water Consumption
0.1 0.1
Upstream Leased Assets
48
9
9
Total 19,147 18,798
During the Year, the Company updated the boundaries of its GHG inventory to align with reporting done
under the EU’s SFDR. Previously, an organisational boundary based on the operational control approach
was defined; now, an equity share approach has been adopted. This also aligns with the financial reporting
approach, which was deemed more appropriate given the Company’s recent strategic partnership. The
Company has also had regard to guidance from the Partnership for Carbon Accounting Financials during
this process, adjusting for the impact of debt in the structure.
This change increased the accuracy of the Company’s inventory, and the Company will continue to evaluate
and adjust its GHG accounting methodology as it evolves its approach. The Company will review
opportunities to enhance the accuracy of scope 3 data, particularly in relation to new asset construction,
including the embodied carbon of supplied modules and emissions arising from installation.
The Company’s scope 1 emissions have increased during the Year. This change pertains to a combination of
increased generator usage for planned electricity network operator outages and essential maintenance and
repair activities, as well as solar and wind asset repowering activities. The Company has observed a decrease
in scope 2 emissions following the transfer of several assets onto renewable import tariffs. The Company’s
adjusted scope 3 emissions appear to have decreased; however, it is noted that this is largely due to the
described methodology changes.
Climate-related targets
The Company takes its role in the transition to net zero seriously and has developed net zero targets during
the Year. The Company has also been identifying its dependencies to reach net zero; the business model
means that operational assets rely on a number of third-party firms, and engagement with these providers
will be critical to reduce carbon emissions across the supply chain. Please refer to page 40 for further
information.
48
Please note this category relates to emissions from electricity consumed by assets where the Company does not
have control over the electricity import tariff.
61
Strategic Report
1. Company’s Objectives and Strategy
The Company seeks to provide Shareholders with an attractive and sustainable return, principally in the
form of quarterly income distributions, by investing primarily in solar energy assets located in the UK. The
Company also invests a minority of its capital into other renewable assets, including wind and energy
storage.
Subject to maintaining a prudent level of reserves, the Company aims to achieve quarterly income
distributions through optimisation of asset performance, acquisitions and the use of gearing. The
Company’s dividend target for the Year was 8.80pps and by declaring a fourth interim dividend of 2.20pps
following three interim dividends of 2.20pps, the Company’s total dividend of the Year was 8.80pps .
The Operational and Financial Review section on page 65 provides further information relating to
performance during the year.
2. Company’s Operating Model
Structure
The Company holds and manages its investments through a UK limited company, Bluefield Renewables 1
Limited (BR1), in which the Company is the sole shareholder.
62
Strategic Report (continued)
2. Company’s Operating Model (continued)
Management
Board and Committees
The independent Board is responsible to Shareholders for the overall management of the Company. The
Board has adopted a Schedule of Matters Reserved for the Board which sets out the particular duties of the
Board. Such reserved powers include decisions relating to the determination of investment policy, approval
of new investments, oversight of the Investment Adviser, approval of changes in strategy, risk assessment,
Board composition, capital structure, statutory obligations and public disclosure, financial reporting and
entering into any material contracts by the Company.
Through the Committees and the use of external independent advisers, the Board manages risk and
governance of the Company. The Board consists of five independent non-executive Directors, three of whom
are Guernsey residents. See the Corporate Governance Report for further details.
Investment Adviser
The Investment Adviser’s key responsibilities include identifying and recommending suitable investments
for the Company and negotiating the terms on which such investments will be made.
Under a technical services agreement with BR1, the Investment Adviser is responsible for supervising and
monitoring all existing investments. Additionally, the Investment Adviser has the same ownership as
several key entities that provide essential services to the Company’s portfolio. BSL delivers asset
management services, while BOL and BRD manage the operational aspects of most investments and
oversee the pipeline of development projects, respectively. BCM, also under the same ownership as the
Investment Adviser, provides construction management services for the new build portfolio.
During the Year, the Investment Adviser received a fee equivalent to 0.8% of NAV (Prior Year: 0.8%). A
summary of the fees paid to the Investment Adviser is given in Note 16 of the financial statements. The fees
paid to BSL, BRD, BOL and BCM are also detailed in Note 16.
Administrator
The Board delegated administration and company secretarial services to the Administrator. Further details
on the responsibilities assigned to the Administrator can be found in the Corporate Governance Report.
Employees and Officers of the Company
The Company does not have any employees and therefore policies for employees are not required. The
Directors of the Company are listed on pages 87 to 88.
Investment Process
Through its record of investment in the UK renewable energy market, the Investment Adviser has developed
a rigorous approach to investment selection, appraisal and commitment.
Repeat transaction experience with specialist advisers
The Investment Adviser has worked with a range of specialist advisers from multiple disciplines in each of
the transactions it has executed in the UK and European markets and is able to source relevant expertise to
address project issues both during and following a transaction.
Application of standardised terms developed from direct experience
The Investment Adviser has developed standardised terms which have been specifically tested by reference
to real transaction and project operational experience. Whilst contract terms are specifically negotiated and
tailored for each individual project, the Investment Adviser always includes contractual protection
regarding recovery of revenue losses for underperformance and obligations for correction of defects.
63
Strategic Report (continued)
2. Company’s Operating Model (continued)
Investment Process (continued)
Rigorous internal approval process
All investment recommendations issued to the Company are made following the formalised review process
described below:
(1) Investment origination and review by the Investment Adviser’s managing partners
Before incurring costs in relation to the preparation of a transaction, a project is concept reviewed by the
Investment Adviser’s managing partners, following which a letter of interest or memorandum of
understanding is issued, and project exclusivity is secured.
(2) Director Concept Approval
In the event that material costs are to be incurred in pursuing a transaction, a concept paper is issued by
the Investment Adviser for review by the Board. This fixes a project evaluation budget as well as confirming
the project proposal is in line with the Company’s investment policy and strategy and aligned to ESG
principles.
(3) Due diligence
In addition to applying its direct commercial experience in executing renewable energy acquisitions and
managing operational projects, the Investment Adviser engages legal, technical, ESG and, where required,
insurance, tax and accounting advisers from its extensive network to undertake independent due diligence.
(4) Investment Adviser Investment Committee
Investment recommendations issued by the Investment Adviser are made following the submission of a
detailed investment paper to the Investment Committee. The Investment Committee operates on the basis
of unanimous consent and has a record of making detailed evaluation of project risks. The investment paper
submitted to the Investment Committee discloses all interests which the Investment Adviser and any of its
affiliates may have in the proposed transaction.
(5) Board approval
Following approval by the Investment Adviser’s Investment Committee, investment recommendations are
issued by the Investment Adviser for review by the Board of the Company. The Board undertakes detailed
review meetings with the Investment Adviser to assess the recommended projects. If the Board of the
Company approve the relevant transaction, the Investment Adviser is authorised to execute it in accordance
with the Investment Adviser’s recommendation and any condition stipulated in the Board’s approvals. The
Boards is regularly updated on the pipeline of potential new investments to help provide context for capital
allocation decisions.
(6) Closing memorandum
Prior to executing the transaction, the Investment Adviser completes a closing memorandum confirming
that the final transaction is in accordance with the terms presented in the investment paper to the
Investment Adviser’s Investment Committee, and the board of the Company; detailing any material
variations and outlining how any conditions to the approval of the Investment Committee and/or Board
approval have been addressed. This closing memorandum is countersigned by an appointed member of the
Investment Adviser’s Investment Committee prior to completing the transaction.
Managing conflicts of interest
The Investment Adviser is regulated by the FCA and is bound by conduct of business rules relating to
management of conflicts of interest. The Board noted that the Investment Adviser has other clients and has
satisfied itself that the Investment Adviser has procedures in place to address potential conflicts of interest
which, together with any mitigation measures, are disclosed in the investment recommendation for each
investment.
64
Strategic Report (continued)
3. Investment Policy
The Company invests in a diversified portfolio of renewable energy assets, all located within the UK, with a
focus on utility scale assets and portfolios on greenfield, industrial and/or commercial sites. With a focus
on solar PV, the Company has the ability to invest up to 25% of the Company’s GAV into complementary
renewable technologies, principally wind and storage. The Company’s responsible investment approach is
discussed in Environmental, Social and Governance Report on page 33.
Individual assets or portfolios of assets are held within SPVs into which the Company invests through equity
and/or debt instruments. The Company typically seeks legal and operational control through direct or
indirect stakes of normally 100% in such SPVs, but may participate in joint ventures or minority interests
to gain exposure to assets which the Company would not be able to acquire on a wholly-owned basis. In the
situation of joint ventures or minority interests, the Company would ensure a high degree of influence over
decisions.
The Company may, at a holding company level, make use of both short-term debt finance and long term
structural debt, but such holding company level debt (when taken together with the SPV finance noted
above) will not exceed 50% of the GAV. It may also make use of non-recourse finance at the SPV level to
provide leverage for specific renewable energy infrastructure assets or new portfolios provided that at the
time of entering into (or acquiring) any new financing, total non-recourse financing within the portfolio will
not exceed 50% of GAV.
While it is not the Company’s policy to be a long term holder of non-UK assets, the Company can invest up
to 10% of GAV into assets outside the UK to enable it to acquire portfolios with a mix of UK and non-UK
assets. Furthermore, up to 5% of the GAV may be invested into pre-construction UK solar development
opportunities. As at 30 June 2024 this is less than 3% (30 June 2023: 2%). The aggregate exposure to other
renewable energy assets, energy storage technologies, UK solar development opportunities and non-UK
assets will be limited to 30% of the Company’s GAV.
No single asset (excluding any third-party funding or debt financing in such asset) will represent, on
acquisition, more than 25% of the NAV.
The Company derives its revenues from the sale of ROCs, FiTs and CfDs (or any such regulatory regimes
that may replace them from time to time) alongside the sale of electricity under power purchase agreements
with counterparties such as co-located industrial energy consumers and wholesale energy purchasers.
The Company may invest up to 5% of GAV into developing further UK solar development opportunities and
purchase assets pre- or post-construction in order to:
1. Maximise quality and scale of deal flow;
2. Optimise the efficiency of the acquisitions;
3. Minimise risk via appropriate contractual agreements; and
4. Acquire assets using prudent assumptions.
65
Strategic Report (continued)
3. Investment Policy (continued)
Listing Rule Investment Restrictions
The Company currently complies with the investment restrictions set out below and will continue to do so
for so long as they remain requirements of the FCA:
neither the Company nor any of its subsidiaries will conduct any trading activity which is
significant in the context of the Group as a whole;
the Company must, at all times, invest and manage its assets in a way which is consistent with
its objective of spreading investment risk and in accordance with the published investment
policy; and
not more than 10% of the GAV at the time the investment is made will be invested in other
closed-ended investment funds which are listed on the Official List.
As required by the Listing Rules, any material change to the investment policy of the Company will be made
only with the prior approval of the FCA and Shareholders.
4. Operational & Financial Review for the year
Key Performance Indicators
As at 30 June 2024
As at 30 June 2023
Market capitalisation (£m)
63
6
.0
733
.
7
Total
dividends per share declared in relation to the
year
8.80p
8.60p
NAV (£m)
781
.6
854
.2
NAV per share
129.75p
139.70p
Total Shareholder Return
(4.67)%
(2.03)%
Market capitalisation (1)
The Directors regard the Company’s market capitalisation as an important secondary indicator of the
trading liquidity in its shares. The Company’s market capitalisation (the market value of its Ordinary
Shares) at 30 June 2024 was £636 million, down from £734 million at 30 June 2023. This principally
reflects a widening in the discount to underlying NAV and the buyback of 9 million shares.
Total dividends per share declared (1)
The Company generates returns primarily in the form of distributions and the Company has a progressive
dividend target. The dividend grew by 2.3% to 8.80pps in the Year, from 8.60pps in the Prior Year.
66
Strategic Report (continued)
4. Operational & Financial Review for the year (continued)
NAV
The Company’s average NAV forms the denominator of the Total Expense Ratio calculation and is thereby
a determinant of BSIF’s total expense ratio. As the variable costs of running the company tend to reduce
with increasing NAV a larger NAV will reduce the TER. The finite life of renewable asset leases will
ultimately lead to attrition of the Company’s NAV. The Directors recognise this as a significant feature and
have expanded the mandate of the Company in part to mitigate this effect.
NAV Per Share(1)
Whilst the Company’s principal goal is to produce income, the NAV per share movement informs our
shareholders and the Board whether this income has been produced at the expense of capital growth. The
NAV per share fell during the year and produced a negative return to capital, reflecting lower long term
electricity prices and lower inflation expectations.
Total Shareholder Return(1)
This is a measure of the combined return to Shareholders from dividend income and share price movements
and whilst this should be positive in the long-term, short-term fluctuations in shareholder and market
sentiment can cause this number to be positive or negative. The return of -4.67% for 2024 compared to the
return of -2.03% in 2023 largely reflects the reduction in share price during the year to 30 June 2024
following a widening of the discount to NAV that has arisen. In August 2023, the Bank of England increased
the Base Rate to 5.25% and held it at that level until August 2024, when it announced a 25bps reduction.
Acquisitions
See the Investment Adviser’s Report in Section 2.
Portfolio Performance
See the Investment Adviser’s Report under Sections 2 and 5.
The Company’s PPA strategy is to enter into 12 to 36 month electricity sales contracts, with contracting
periods spread quarterly across the portfolio in order to minimise the portfolio’s sensitivity to short term
price volatility.
Summary Statement of Comprehensive Income
(1) please see Alternative Performance Measures on pages 148 to 150 for further details.
Year ended
30 June 2024
£ million
Year ended
30 June 2023
£ million
Total Income (Note 4 of the financial statements) 0.9
0.9
Change in fair value of assets (Note 8 of the financial statements) (8.3)
48.2
Administrative expenses (Note 5 of the financial statements)
(2.2)
(2.3)
Total comprehensive (loss)/income (9.6)
46.8
Earnings per share (1.57p)
7.65p
67
Strategic Report (continued)
4. Operational & Financial Review for the period (continued)
Summary Statement of Comprehensive Income (continued)
Income for the period is the monitoring fees paid by BR1 to BSIF.
The total comprehensive loss before tax of (£9.6) million reflects the performance of the Company when
valuation movements and operating costs are included. Further detail on the valuation movements of
BSIF’s portfolio is given in the Report of the Investment Adviser.
The Company’s ongoing charges ratio for the Period was 1.02% (2023: 1.00%), calculated in accordance
with the AIC recommended methodology, which excludes non-recurring costs and uses the average NAV in
its calculation. See page 150 for a tabular calculation of the Company’s ongoing charges ratio.
5. Directors’ Valuation* of the Company’s portfolio
The Investment Adviser, or an independent external valuer, is responsible for preparing the fair market
valuation recommendations for the Company’s investments for review and approval by the Board.
Valuations are carried out quarterly, as at 30 September, 31 December, 31 March and 30 June, with an
external review as and when the Board deems appropriate.
The fair market value adopted for the portfolio was £965.5m (Note 8 of the financial statements) and is
confirmed by an alternative approach using a combination of discounted cash flows of income generated
from the portfolio of investments.
The Board reviews the recommendations of the Investment Adviser to form an opinion of the fair value of
the Company’s investments. A detailed analysis of the Directors’ Valuation is presented in the Report of the
Investment Adviser.
* Directors’ Valuation is an alternative performance measure to show the gross value of the SPV investments
held by BR1, including their holding companies. A reconciliation of the Directors’ Valuation to Financial
assets at fair value through profit and loss is shown in Note 8 of the financial statements.
6. Principal Risks and Uncertainties
In line with the FCA’s Disclosure Guidance and Transparency Rules, the Board identifies the material
inherent risks to which the Company is exposed and takes appropriate steps to mitigate and control these
risks to a level that is deemed acceptable by the Board.
The Board is ultimately responsible for defining the level and type of risk that the Company considers
acceptable, ensuring its activities remain in line with the Company’s Investment Policy while pursuing its
Investment Objective.
The risk appetite that the Company is willing to accept is dependent on the potential likelihood and severity
of impact caused by the relevant risk events or circumstances, and the timescale over which they may occur.
The risk framework adopted by the Company ensures clear and transparent descriptors and parameters of
acceptable risk in regard to the operation of the Company and management of the investment portfolio,
designed to prevent excessive risk taking, whilst maximising shareholder return.
When assessing strategic and external risks, such as wider political or economic circumstances, that are
outside the Board’s ability to control, these are deemed as accepted risks of doing business. Although not
fully controllable by the Company, these risks are monitored closely, mitigated where possible, and are
factored into all decision making.
Without compromise, the Board has zero-tolerance for fraud, bribery, corruption, money laundering, tax
evasion, terrorist financing, proliferation financing and any other forms of financial crime. In addition, the
Board will seek to follow best practice and remain compliant with all applicable laws, rules, and regulations.
68
Strategic Report (continued)
6. Principal Risks and Uncertainties (continued)
All inherent risks identified (including those classified as ‘emerging’) that could have a material adverse
effect on the Company’s performance and value of Ordinary Shares are recorded in the Company’s risk
matrix (and associated reporting) which is reviewed by the Board at least twice a year.
The Company’s risks are categorised as follows:
Strategic and external risks
Investment portfolio management risks
Fund operation risks
Regulatory and Compliance risks
Emerging risks
Those inherent risks that are determined as having the potential to threaten the Company’s business model,
future performance, solvency or liquidity and reputation are classified as ‘Principal Risks’ and are set out
in the table below. These Principal Risks are a small subset of the comprehensive set of risks which the
Board reviews.
69
Strategic Report (continued)
6. Principal Risks and Uncertainties (continued)
INVESTMENT PORTFOLIO MANAGEMENT
Risk Potential Impact Mitigation
1. Transaction Pricing
Risk
A failure to identify and secure
opportunities to either acquire
or divest of certain assets that
would be of strategic
importance to the portfolio
could lead to the portfolio not
having the required mix of
technology or mix of age of
asset
A failure to transact at
appropriate prices could lead
to sites being acquired at too
high a value or sites being sold
at an undervalue.
Both failures could lead to
shareholder concern and could
impact negatively on the
Company’s finances. Both
failures could also lead the
Board to query if the
Investment Adviser is acting in
accordance with the
Investment Advisory
Agreement and if an effective
control environment within
the Investment Adviser exists.
The Company maintains a diverse
portfolio of assets across various
technologies (wind, solar and BESS),
ages, and operational stages,
reducing the impact of poor
transaction outcomes due to
concentration on any single asset
type.
The Company’s established presence
and reputation in the market attract
high quality opportunities and afford
good negotiation opportunities.
The Company’s Investment Adviser
maintains strong working
relationships with other industry
players, including developers, off
takers, land agents, existing landlords
on current sites, advisors, etc which
ensures it receives insights and
access to quality investment
opportunities potentially ahead of the
market.
2. Poor performance
of operational sites
Predicted generation and
associated revenue may be
negatively impacted and affect
the Company’s ability to meet
its dividend targets, leading to
shareholder concern and
reputational damage.
The Portfolio consists of a large
number of assets therefore minimal
risk arises from a single operational
plant not being managed effectively.
Project companies hold appropriate
agreements with experienced service
providers for the effective
management of operational plants,
including routine preventative
maintenance activity
3. Supply Chain Risks
There is a risk of reputational
damage or financial loss if the
supply chain is not adequately
managed with appropriate due
diligence conducted and
oversight of key suppliers.
The Bluefield Group represents a
high proportion of the Company’s
supply chain spend, over which BSIF
has a high degree of influence.
All industry players share the same
risk in relation to forced labour
within the polysilicon supply chain.
70
Strategic Report (continued)
6. Principal Risks and Uncertainties (continued)
FUND OPERATIONS
Risk Potential impact Mitigation
4. Levels of capital
available for allocation are
constrained
The NAV would decrease
over time if the Company
does not identify and
exploit available sources
of capital to grow the
portfolio.
A diversified capital raising strategy
that includes a mix of equity, debt,
and alternative financing options to
reduce reliance on any single source
of capital.
Strong relationships with a wide
range of financial institutions,
investors, and potential joint venture
partners ensure layers of redundancy
and consistent access to capital for
allocation even where some sources
are unavailable or overdrawn
5. Valuation risk
Valuations of the SPV
investments may be over
or understated.
Valuations presented by the
Investment Adviser are underpinned
by comparisons with other market
transactions and confirmed by the
use of long term DCF modelling. The
valuations are reviewed and
challenged by the Board as a
minimum on a semi-annual basis.
The Investment Adviser has recently
improved the valuation model to
reduce the risk of errors. Detailed
controls and internal review
procedures are in place to mitigate
the risk of error.
Given the high level of judgement
and subjectivity involved in setting
the assumptions that drive the
model, the Board robustly challenges
assumptions made on a semi-annual
basis and uses third party data
wherever possible to support inputs.
For example, to mitigate the impact
of future power price volatility on the
Company’s portfolio valuation,
blended power price curves from
three leading forecasters are used in
the portfolio cash flow model. The
portfolio benefits from Government
subsidy in the form of FiT and ROC
income.
The Board will consider the
frequency of independent reviews of
the financial model in conjunction
with the Investment Adviser.
71
Strategic Report (continued)
6. Principal Risks and Uncertainties (continued)
STRATEGIC AND EXTERNAL
Risk
Potential impact
Mitigation
6. Physical and
Transitional Climate
Related Risks
Global climate change
presents both risks and
opportunities to the
Company. Whilst the
Company is well
positioned to benefit
from the opportunities
arising from a
decarbonising economy,
physical climate impacts,
particularly extreme heat
and changing wind
patterns, have the
potential to cause damage
to assets and impact
generation, ultimately
impacting revenues.
Climate change presents both risks
and opportunities to the Company:
climate change opportunities are the
basis on which the fund’s strategic
aims have been founded. Monitoring
and managing transitional risks (such
as technology advances, policy
changes etc) forms part of the day
today management of a renewable
energy fund.
Some key equipment and
infrastructure (such as inverters and
wind turbines) have inbuilt climate
resilience measures, such as cooling
systems prevent overheating or
automatic shutdown thresholds to
prevent damage caused by high
winds.
7.Volatility in power
prices
Without the delivery of
an effective power sales
strategy, there is a risk
that the power generated
will be unsold, or not sold
at an appropriate level,
leading to reduced
revenue.
If downside risk
associated with power
market volatility is not
managed via an effective
power sales strategy,
there is a risk that the
Company becomes
unreasonably exposed to
sustained periods of low
power prices, or even
negative prices.
These factors would
adversely influence the
Company’s ability to
deliver against dividend
targets.
Each asset sells generated power (and
any associated benefits) via a
separate Power Purchase Agreement
(PPA), meaning it is therefore
unlikely that material amounts of
power will be uncontracted at any
point.
Approximately 40% of the Company’s
revenues arise from subsidy
payments that are fixed (increasingly
annually in line with inflation) and
guaranteed by the UK Government,
reducing exposure to power price
volatility.
72
Strategic Report (continued)
6. Principal Risks and Uncertainties (continued)
STRATEGIC AND EXTERNAL (CONTINUED)
Risk Potential impact Mitigation
8. Loss of Popularity of
Renewable Energy
Infrastructure Sector
The challenging macro-
economic environment
(e.g. higher interest rates,
volatile energy prices etc)
has led to a fall in
popularity of the whole
renewable energy
infrastructure sector
leading to companies in
the sector operating at
discounts in excess of
10% to NAV, constraining
their ability to raise new
equity. This has had a
negative impact on
investor
confidence/satisfaction
and has made investors
more reluctant to invest,
triggering continuation
votes in some vehicles,
increased the level of
M&A activity in the
market and put pressure
on Boards to take action.
The NAV of BSIF’s portfolio is heavily
insulated from the volatility in energy
prices and elevated interest rates as a
result of the Company’s power fixing
strategy and high weighting to fixed
debt which is fully amortising.
BSIF also benefits from having an
extremely experienced investment
advisory team who are able to secure
innovative strategic partnerships
(such as the one with GLIL) and
implement strategies to recycle
capital, ensures optimal deployment
of available resources when the
ability to raise new capital from the
public markets is constrained.
Transparent, fair, balanced and
timely communications with all
shareholders is a key priority of the
BSIF Board, the Investment Adviser
and the Company’s broker. Being
open to feedback and listening to
shareholders views forms a critical
part of the Board’s wider decision-
making process.
9.
Reform of Energy
Markets Risk
The UK Government is
currently consulting with
industry on plans to
reform the UK Electricity
Market (REMA), which
may involve controls on
future sales prices for
renewable generators.
The Investment Adviser provides
regular updates in this regard within
the quarterly Board papers.
The Investment Adviser takes a
proactive approach to supporting the
energy transition, not only through
its advisory role to the Company, but
also by engaging and supporting the
Government to create a policy
framework which can enable net
zero. This includes responding to
government consultations, meeting
with political leaders across the
political spectrum to discuss
renewable energy and working with
partners in the sector to engage in
relevant discussions via the
government’s Solar Energy
Taskforce.
73
Strategic Report (continued)
6. Principal Risks and Uncertainties (continued)
STRATEGIC AND EXTERNAL (CONTINUED)
Risk Potential impact Mitigation
10.
Cyber and
Ransomware risk
Cyber and Ransomware
attacks could become
more frequent and
difficult to identify and
prevent therefore causing
financial loss, business
disruption, data loss or
theft and reputational
damage.
Separate SCADA platforms used per
asset (per site) reduce the risk of
attacks on all sites simultaneously.
The Investment Adviser (and other
key service providers from within the
Bluefield group of companies) have
dedicated IT resources focusing on
information security and cyber
security.
Penetration testing at asset level for
solar PV portfolio has been
conducted and follow up
recommendations are being
implemented across the portfolio to
improve security.
Longer-term viability statement
Assessing the Prospects of the Company
The corporate planning process is underpinned by scenarios that encompass a wide spectrum of potential
outcomes. These scenarios are designed to explore the resilience of the Company to the potential impact of
significant risks set out below.
The scenarios are designed to be severe but plausible and take full account of the likely effectiveness of the
actions to be taken to avoid or reduce the impact of the underlying risks and which would be open to
management. In considering the likely effectiveness of such actions, the conclusions of the Board’s regular
monitoring and review of risk and internal control systems, as discussed on page 67, is taken into account.
The Board reviewed the impact of stress testing the quantifiable risks to the Company’s cash flows in the
previous pages and concluded that the Company, assuming current and envisaged leverage levels, would be
able to continue to produce distributable income in the event of the following scenarios:
Strategic Report
Risk Factor
2.
Plant performance degradation of 1.0% per annum versus
0.4% per annum
2.
Plant availability reduced to 95%
5.
P90 irradiation
7
.
Power price set to £2
3
/MWh
The Board considers that this stress testing based assessment of the Company’s prospects is reasonable in
the circumstances of the inherent uncertainty involved.
74
Strategic Report (continued)
6. Principal Risks and Uncertainties (continued)
Longer term viability statement (continued)
The period over which we confirm longer term viability
Within the context of the corporate planning framework discussed above, the Board assessed the prospects
of the Company over a five-year period ending 30 June 2029, and have determined that the five-year period
remains an appropriate period to provide this viability statement as this period accords with the Company’s
planning purposes.
This period is used for our mid-term business plans and has been selected because it presents the Board
with a reasonable degree of confidence whilst still providing an appropriate longer-term outlook.
Confirmation of longer-term viability
Based upon the robust assessment of the principal and emerging risks facing the Company and its stress
testing-based assessment of the Company’s prospects, the Board confirms that it has a reasonable
expectation that the Company will be able to continue in operation and meet its liabilities as they fall due
over the period to 30 June 2029.
These inherent risks associated with investments in the renewable energy sector could result in a material
adverse effect on the Company’s performance and value of Ordinary Shares.
The Company’s risks are mitigated and managed by the Board through continual review, policy setting and
half yearly review of the Company’s risk matrix by the Audit and Risk Committee to ensure that procedures
are in place with the intention of minimising the impact of the above-mentioned risks. The Board last
carried out a review of the risk matrix at the Audit and Risk Committee meeting held on 20 May 2024. The
Board relies on periodic reports provided by the Investment Adviser and Administrator regarding risks that
the Company faces. When required, external experts, including tax advisers, legal advisers and ESG
advisers, are employed.
7. Stakeholder Engagement
Directors’ Responsibilities Pursuant to Section 172 of the Companies Act 2006
The Directors of the Company, by abiding by the AIC Code, aim to achieve high standards in corporate
governance. According to the AIC Code, all member businesses, regardless of where they are headquartered,
are required to report on the items outlined in Section 172 of the UK Companies Act 2006.
Section 172 recognises that directors are responsible for acting in a way that they consider, in good faith, is
the most likely to promote the success of the company for the benefit of its shareholders as a whole, with
focus on the consequences of any decision in the long term. In doing so, they are also required to consider
the broader implications of their decisions and operations on other key stakeholders and their impact on
the wider community and the environment. A key stakeholder is one that either has a direct stake in the
Company or directly impacts the long-term performance of the Company. Key decisions are those that are
either material to the company or are significant to any of the Company’s key stakeholders.
The Board considers that the interests of the Company and its stakeholders must be balanced for the
Company to succeed. As a result, the Board has summarised below some of the methods by which it
develops and maintains connections with its stakeholders, while also considering the Company's effects on
the environment and broader society.
75
Strategic Report (continued)
7. Stakeholder Engagement (continued)
Stakeholder Group
Methods of Engagement
Shareholders and Prospective Investors
Our Shareholders and prospective investors are
integral to every decision made by the Board. A
knowledgeable and supportive shareholder base
is vital to the long-term sustainability of our
business. Understanding the views and priorities
of our Shareholders is, therefore, crucial to
retaining their continued support.
The Company engages with its Shareholders
through the issue of regular portfolio updates in
the form of RNS announcements and quarterly
factsheets.
The Company provides in-depth commentary on
the investment portfolio performance, corporate
governance and corporate outlook in its annual
and interim reporting.
In addition, the Company, through its brokers
and Investment Adviser, undertakes regular
meetings with existing and prospective investors
to solicit their feedback, understand any areas of
concern, and share forward-looking investment
commentary.
The Company receives quarterly feedback from
its brokers in respect of their investor
engagement and investor sentiment.
Bluefield Partners LLP (the Investment
Adviser)
Our Investment Adviser is fundamental to the
Company’s investment and business objectives.
Key responsibilities include identifying and
recommending suitable investments for the
Company to the Board and negotiating the terms
on which such investments will be made on
behalf of the Board.
The Board frequently engages with the
Investment Adviser through planned and ad hoc
Board and committee meetings to receive
updates on operations of existing investments
and acquisitions.
The Board receives quarterly board packs from
the Investment Adviser, delivering the most
pertinent and informative data on which the
Board can base its decisions.
The Investment Adviser and the Board review the
Company’s power price fixing strategy and
portfolio valuation on a quarterly basis and
detailed cash flow forecasts are discussed prior to
each dividend declaration.
The Board engages in strategic planning with the
Investment Adviser with the aim of aiding the
Company in attaining its investment goals and
accomplishing its purpose.
In January 2024, the Company completed Phase
One of its long-term strategic partnership with
GLIL, a UK pension fund which invests into core
UK infrastructure with a portfolio value of £3
billion of infrastructure assets.
The strategic partnership with GLIL enables the
Company to deliver on a number of key areas
simultaneously: to continue to keep investment
momentum in a difficult time for public market
76
Strategic Report (continued)
7. Stakeholder Engagement (continued)
infrastructure funds and judiciously diversify the
portfolios’ revenues; to provide an additional
external validation of asset values; to create
additional liquidity and lower the Company's
overall debt burden; and to partner with a like-
minded investment group.
Ocorian Administration (Guernsey)
Limited (the Administrator, Company
Secretary & Designated Manager)
Our Administrator provides essential services to
the Board, ensuring that Board procedures are
followed and that it complies with the Law and
applicable rules and regulations of the GFSC and
the LSE.
The Board interacts with the Administrator for
day-to-day administrative, fund accounting and
company secretarial services via emails, calls and
formal and informal meetings.
The Company monitors ongoing performance at
regular board meetings and the Management
Engagement and Service Providers Committee
(“MESPC”) reviews terms of engagement and
quality of service provision annually.
Regulators
Regulators are important stakeholders in
maintaining the Company's listing and ensuring
a sufficient and transparent level of disclosure in
its communications and reporting. Because of
this, Shareholders obtain accurate, timely, and
relevant details regarding the Company.
Regulators include the FCA in its function as the
UK Listing Authority, the FRC in its supervision
of UK governance and accounting, as well as the
GFSC. Membership of the AIC and compliance
with the AIC Code is a fundamental part of
ensuring the Company complies with relevant
guidance and regulation.
Activities of the Audit and Risk Committee
(“ARC”), including regular review of principal
and emerging risks, oversight of the
Administrator and Investment Adviser’s
adherence to internal control systems and
procedures, and thorough review of the interim
and annual report and financial statements
ensures compliance with required regulation.
On 27 September 2023, the board agreed to adopt
an Audit Committee and External Audit
Minimum Standards Checklist which was
prepared by the Administrator with board review,
following guidance from the FRC.
Other Key Stakeholders and Advisers
(Legal Advisors, Brokers, Auditors, etc.)
Establishing a productive and collaborative
working relationship with our other key service
providers and advisers ensures that we receive
high quality services to help deliver the
Company’s investment and business objectives.
The Company has identified its key service
providers and on an annual basis the MESPC
undertakes a review of performance based on a
questionnaire through which it seeks feedback.
The MESPC also regularly reviews all material
contracts for service quality and value.
Conclusions and recommendations drawn by the
MESPC are fed back to the Board for approval.
The Board and its sub-committees engage
regularly with its service providers on a formal
and informal basis.
77
Strategic Report (continued)
7. Stakeholder Engagement (continued)
Lenders
It is important to maintain a strong working
relationship with our existing lenders as it is
essential for the Company to have funding
available, as it is needed, for investment and
development pipeline purposes. We aim to build
strong relationships with existing lenders and
potential lenders who may provide debt facilities
in the future.
The Investment Adviser provides quarterly
compliance reporting to lenders in accordance
with the terms of the relevant facility agreements.
The Company consults with the lenders on
matters which may require their consent under
the relevant facility agreements.
The Board reviews the Company’s re-financing
needs on a regular basis and encourages early
engagement with lenders.
The Investment Adviser is currently in
discussions with BR1’s RCF lenders to extend the
maturity
on the RCF
.
Government and Policy makers
The Board believes that as the Company provides
a critical element of the United Kingdom’s
electricity generation infrastructure and de-
carbonisation plans, that it is important to
engage with the Government to help to ensure
that the country’s required levels of the supply of
renewable energy are achieved.
Engagement with the Government and policy
makers also assists the Company in its strategic
planning.
The Board encourages the Investment Adviser to
engage with senior political leaders and their
respective staff both directly in face-to-face
meetings and indirectly via membership of
industry representative bodies such as the Solar
Industry Association.
During the Year, engagement focused on the
impact of the Energy Generator Levy on investor
confidence. The Investment Adviser called for an
investment allowance that would not incentivise
fossil fuels above renewables. Independent
Director Michael Gibbons appeared at the House
of Lords Industry and Regulators Committee.
Managing Director of BRD (Jonathan Selwyn)
also provided spoken evidence as part of the
Energy Security and Net Zero Committee inquiry,
‘Keeping the power on: our future energy
technology mix’, following a written evidence
submission.
PPA Counterparties
These are counterparties who purchase the
electricity generated by the Company.
The Investment Adviser ensures that when PPAs
are put in place, the end dates of the contracts are
phased to ensure a constant flow of revenue. PPA
counterparties are selected on a competitive basis
but with a clear focus on achieving diversification
of counterparty risk. A quarterly update on the
contracts is provided by the Investment to the
Board.
Joint Venture Partner
A joint venture partner refers to a business entity
that co-invests with the Company to acquire
assets to grow the BSIF portfolio and build out a
portion the Company’s development pipeline.
The Company currently has one joint venture
partner, GLIL.
The Investment Adviser engages with GLIL as co-
investors of a Strategic Partnership portfolio.
78
Strategic Report (continued)
7. Stakeholder Engagement (continued)
The Board recognises the opportunity the joint
venture partnership provides in enabling the
growth of the portfolio and maximising value for
our shareholders over the long term.
The Investment Adviser provides commercial,
and operational oversight services to the
Strategic Partnership portfolio including day to
day management of the PPA counterparty,
Lenders, Asset Manager, O&M Contractor, and
Network Service Provider, including site
attendance as required for major works.
The Board receives quarterly updates from the
Investment Adviser on the Strategic Partnership
portfolio and progression on executing the agreed
three phases of the relationship.
The Board views the Strategic Partnership as an
opportunity for both BSIF and GLIL to invest in
a portion of the sizeable renewable energy
pipeline which our Investment Adviser has
identified, while maximising value for our
shareholders over the long term.
Portfolio Level Stakeholders
This includes O&M service providers, grid
connectors, planning authorities, landowners
and developers.
The Company has agreements with O&M
providers to provide active operation and
maintenance services for the operational
portfolio.
The Investment Adviser engages with developers,
for example Light Rock Power Ltd or BRD, to
provide new build development opportunities or
run the solar farms by joint venture. These
developers interact with planning authorities,
landowners and local communities and assess the
viability of projects.
Community and Environment
The Company recognises that its investments
can have an impact at the local level. Community
perception of renewable technology is important
as it feeds into local decision making, policy
development and ultimately planning
requirements. Engagement undertaken as part
of the planning process helps develop positive
relationships with local stakeholders and obtain
community support. The Company’s operations
also have environmental impacts and
dependencies, and the Company recognises the
opportunity it has to enhance nature across its
portfolio.
The Company has adopted a suite of ESG policies
to convey ESG expectations to key suppliers who
service its portfolio.
‘Pioneering Positive Local Impact’ is a central
pillar within the Company’s ESG strategy, and
social and environmental risks are considered
within the Company’s risk management
processes.
Community stakeholders are engaged as part of
the development process of new assets, and once
operational, engagement is maintained through
administration of community benefit funds
(where applicable). During the Year, the
Company delivered an educational programme to
local schools; please refer to the ESG report for
further information.
79
Strategic Report (continued)
7. Stakeholder Engagement (continued)
The construction and operation of renewable
infrastructure assets can impact the local
environment, for example through land use
change or disturbance to habitats and species.
The Company endeavours to minimise negative
impacts where possible, and the collection of
asset-level environmental data supports the
Company in monitoring adverse environmental
impacts. Nature is also a key area of focus for the
Company; please refer to the ESG report for
further information.
Based on stakeholder interaction mentioned in the previous table, by way of example, a few key decisions
made in the Year to meet investor objectives are described in the following table:
Key Decision
Impact on Long
-
term
Success
Stakeholder consideration
The Board announced in
December 2023 the signing of
a Memorandum of
Understanding ('MOU') with
GLIL regarding the formation
of the long-term Strategic
Partnership which commits
both parties to investing
together into UK focused solar
assets, from development
through to operational plants.
Current capital market
conditions make it difficult to
raise new capital using the
instruments which have served
the Company and its
shareholders well through the
past ten years. In response,
the Board has been evaluating
how best to continue BSIF’s
development programme,
while maximising value for our
shareholders over the long
term. The Strategic
Partnership with GLIL creates
the opportunity for both
parties to invest in the sizeable
renewable energy pipeline
which our Investment Adviser
has identified, while
responding to shareholder
feedback in reducing our short-
term debt position.
The Strategic Partnership is
acting on feedback from our
shareholders and enables BSIF
to deliver on a number of key
areas simultaneously: to
continue to keep investment
momentum in a difficult time
for public market
infrastructure funds and
diversify the portfolios
revenues; to provide an
additional external validation
of asset values; to create
additional liquidity and lower
the Company's overall debt
burden; and to partner with a
like-minded investment group.
The Board announced in
February 2024 the
commencement of a share
buyback programme,
allocating £20 million for the
purchase of its own shares.
The share buyback programme
addresses shareholder
concerns on the excessive
discount at which the
Company's shares currently
trade relative to the underlying
NAV, managing share price
volatility.
The Board keeps its capital
allocation policy under regular
review, evaluating the relative
merits of further investment
(into both new and existing
assets), the management of
debt and returning value to
shareholders via dividends or
through other methods such as
share buybacks.
80
Strategic Report (continued)
7. Stakeholder Engagement (continued)
Delivery of educational site
visits to its recently completed
construction project, Yelvertoft
Solar Farm, for local
community members.
Engagement with communities
can support local
understanding of how
renewable projects contribute
to climate change mitigation,
as well as strengthening
community relationships. This
in turn supports the
Company’s social license to
operate.
Following engagement with the
local community via its
development partner, Bluefield
Development, the Company
delivered educational site visits
to Yelvertoft Solar Farm for a
local primary school and scout
group.
Commitment to adopt net zero
targets.
As a renewable energy
company, the Company is well
positioned to support
decarbonisation of the UK
energy sector. However, it also
takes responsibility for its own
carbon emissions and
recognises the importance of
reducing these as part of
evidencing its own
commitment to the net zero
transition.
The Investment Adviser relayed
to the Board Shareholders’
increasing focus on net zero
alignment. The Company has
subsequently adopted
decarbonisation targets during
the reporting period.
The Board continues to engage
with a PR specialist to assist in
taking proactive steps to
influence HM Government on
proposed energy policies and
gain support for renewable and
sustainable energy.
Educate stakeholders on
importance of solar power for
energy security, reduced
emissions and cost-reduction
Build pro-solar allies and
generate political relationships
to aid progress on the
decarbonisation of the UK
energy markets.
Meriel Lenfestey
Elizabeth Burne
Director Director
27 September 2024
27 September 2024
81
Report of the Directors
The Directors hereby submit the annual report and financial statements of the Company for the year ended
30 June 2024.
General Information
The Company is a non-cellular company limited by shares incorporated in Guernsey under the Law on 29
May 2013. The Company’s registration number is 56708, and it has been registered and is regulated by the
GFSC as a registered closed-ended collective investment scheme and as a Green Fund after successful
application under the Guernsey Green Fund Rules to the GFSC on 16 April 2019. The Company’s Ordinary
Shares were admitted to the Premium Segment of the Official List and to trading on the Main Market of the
London Stock Exchange following its IPO which completed on 12 July 2013.
Principal Activities
The principal activity of the Company is to invest in a portfolio of large scale UK based solar, wind and
renewable energy infrastructure assets.
The Company has a progressive dividend target. The dividend target for the financial year ending 30 June
2025 is 8.90pps.
Business Review
A review of the Company’s business and its likely future development is provided in the Chair’s Statement
on pages 7 to 10, in the Report of the Investment Adviser on pages 13 to 32 and Strategic Report on pages
61 to 80.
Listing Requirements
The Company has complied with the applicable Listing Rules throughout the year.
Results and Dividends
The results for the year are set out in the financial statements on pages 114 to 141.
The dividends for the year are set out in the financial statements in Note 14 on pages 134 and 135.
82
Report of the Directors (continued)
Share Capital
The Company has one class of Ordinary Shares. The issued nominal value of the Ordinary Shares represents
100% of the total issued nominal value of all share capital. Under the Company’s Articles, on a show of
hands, each shareholder present in person or by proxy has the right to one vote at general meetings. On a
poll, each shareholder is entitled to one vote for every share held.
Shareholders are entitled to all dividends paid by the Company and, on a winding up, providing the
Company has satisfied all of its liabilities, the Shareholders are entitled to all of the surplus assets of the
Company. The Ordinary Shares have no right to fixed income.
Shareholdings of the Directors
The Directors of the Company and their beneficial interests in the shares of the Company as at 30 June
2024 are detailed below:
Director Ordinary
Shares of £1
each held 30
June 202
4
% holding at
30 June 202
4
Ordinary
Shares of £1
each held 30
June 202
3
% holding at
30 June 202
3
John Scott* 683,929
0.11
625,619
0.10
Elizabeth Burne 15,000
0.00
15,000
0.00
Michael Gibbons 37,800
0.01
-
-
Meriel Lenfestey 7,693
0.00
7,693
0.00
Chris Waldron* 55,000
0.01
N/A
N/A
Paul Le Page N/A
N/A
35,000
0.01
*Including shares held by PCAs
83
Report of the Directors (continued)
Directors’ Authority to Buy Back Shares
The Board believes that the most effective means of minimising any discount to NAV which may arise on
the Company’s share price is to deliver strong, consistent performance from the Company’s investment
portfolio in both absolute and relative terms. However, the Board recognises that wider market conditions
and other considerations will affect the rating of the Ordinary Shares. During the year, the Company
commenced share buybacks as it was assessed to be an economically attractive investment opportunity. The
share buybacks have been done by means of the the Company repurchasing its Ordinary Shares. Therefore,
subject to the requirements of the Listing Rules, the Law, the Articles and other applicable legislation, the
Company may purchase Ordinary Shares in the market in order to address any imbalance between the
supply of and demand for Ordinary Shares or to enhance the NAV of Ordinary Shares.
In deciding whether to make any such purchases the Board will have regard to what it believes to be in the
best interests of Shareholders and to the applicable Guernsey legal requirements which require the Board
to be satisfied on reasonable grounds that the Company will, immediately after any such repurchase, satisfy
a solvency test prescribed by the Law and any other requirements in its Articles. The making and timing of
any buybacks will be at the absolute discretion of the Board and not at the option of the Shareholders. Any
such repurchases would only be made through the market for cash at a discount to NAV.
On incorporation, the Company passed a written resolution granting the Board general authority to
purchase in the market up to 14.99% of the Ordinary Shares in issue immediately following Admission. A
resolution to renew such authority was passed by Shareholders at the AGM held on 28 November
2023. Therefore, authority was granted to the Board to purchase in the market up to 14.99% of the Ordinary
Shares in issue immediately following the AGM held on 28 November 2023 at a price not exceeding the
higher of (i) 5% above the average mid-market values of Ordinary Shares for the five Business Days before
the purchase is made or (ii) the higher of the last independent trade or the highest current independent bid
for Ordinary Shares. The Board intends to seek renewal of this authority from the Shareholders at the AGM
scheduled to be held on 6 December 2024.
Pursuant to this authority, and subject to the Law and the discretion of the Board, the Company may
purchase Ordinary Shares in the market on an ongoing basis with a view to addressing any imbalance
between the supply of and demand for Ordinary Shares.
Ordinary Shares purchased by the Company may be cancelled or held as treasury shares. The Company may
borrow and/or realise investments in order to finance such Ordinary Share purchases.
The Company purchased 9,078,000 Ordinary Shares for treasury during the Year.
84
Report of the Directors (continued)
Directors’ and Officers’ Liability Insurance
The Company maintains insurance in respect of directors’ and officers’ liability in relation to their acts on
behalf of the Company. Insurance is in place, having been renewed on 12 July 2024.
Substantial Shareholdings
As at 30 June 2024, the Company had been notified of the following substantial voting rights over 3% as
Shareholders of the Company.
Shareholder
Shareholding
% Holding
BlackRock 78,036,722
12.
9
6
Hargreaves Lansdown, stockbrokers (EO) 36,854,524
6.
12
Gravis Capital Management 31,949,080
5.
30
LGT Wealth Management 30,650,661
5.0
9
CCLA Investment Management 25,953,700
4.
31
Interactive Investor (EO) 22,193,663
3.6
8
Total 225,638,350
37.
46
The Directors confirm that there are no securities in issue that carry special rights with regard to the control
of the Company. The Company also provides the same information as at 2 September 2024, being the most
current information available.
Shareholder
Shareholding
% Holding
BlackRock 78,036,722
13.04
Hargreaves Lansdown, stockbrokers (EO) 38,111,215
6.37
Gravis Capital Management 31,094,184
5.19
LGT Wealth Management 29,233,759
4.88
Interactive Investor (EO) 23,294,453
3.89
CCLA Investment Management 21,389,838
3.57
West Yorkshire PF 18,873,092
3.15
AJ Bell, stockbrokers 18,007,124
3.01
Total 258,040,387
43
.
10
Independent Auditor
KPMG has been the Company’s external Auditor since the Company’s incorporation. The Audit and Risk
Committee recommends retaining KPMG as Auditor, subject to Shareholder approval at the forthcoming
AGM. A resolution will be proposed to reappoint them as Auditor and authorise the Directors to determine
the Auditor’s remuneration for the ensuing year. The Audit and Risk Committee will periodically review the
appointment of KPMG. Further information on the work of the Auditor is set out in the Report of the Audit
and Risk Committee on pages 101 to 106.
85
Report of the Directors (continued)
Articles of Incorporation
The Company’s Articles may be amended only by special resolution of the Shareholders.
Going Concern
The Board, in its consideration of going concern, has reviewed comprehensive cash flow forecasts prepared
by the Investment Adviser, as well as the performance of the solar and wind plants currently in operation.
The Group has a committed Revolving Credit Facility (RCF) of £210 million, with an uncommitted
accordion feature that allows for an additional £30 million. The facility is set to mature in May 2025. As of
30 June 2024, the Group had drawn £184 million from the RCF. After the year-end, following the
completion of Phase Two of the strategic partnership with GLIL, £50.5 million was repaid, reducing the
drawn balance to £133.5 million.
The Investment Adviser is currently in discussions with lenders to refinance and extend the RCF by an
additional two years in early 2025. Lenders have indicated a strong interest in the extension. With robust
cash generation, the Board is confident that all debt repayments will be met and confirms that no covenant
breaches occurred during the year.
UK inflation dropped from 10.7% (RPI) in June 2023 to 2.9% in June 2024. In August 2024, the Bank of
England cut the Base Rate to 5.00%, with 5 year gilt rates now below 4%. Lower interest rates reduce BSIF’s
credit costs, while fixed-rate debt has significantly shielded it from rate hikes.
BSIF has built a robust development pipeline exceeding 1.5 GW, with two major solar projects, Yelvertoft
(48.4MW) and Mauxhall Farm (44.5MW), connected to electricity network shortly after the Year end. Over
750 MW of the pipeline is fully consented, ready for construction within five years.
The Investment Adviser, with BSIF Board approval, is actively managing the large pipeline, and is planning
to sell around a third of this based on funding availability, a strategy which continues to be reviewed on a
regular basis.
BSIF's Investment Adviser focuses on protecting and enhancing the operational portfolio through proactive
risk mitigation. A rolling capital investment programme addresses key risks, such as long lead times for
high voltage spare parts, particularly central inverters. Significant inverter revamping projects were
completed, boosting performance in late FY2023/24, with full benefits expected in FY2024/25. Additional
optimisation and repowering projects are planned for the upcoming year.
The Board also notes that at the AGM held on 28 November 2023, the shareholders of the Company voted
overwhelmingly in favour for the continuation of the Company for a further 5 years.
Taking the above into account, at the time of approving these accounts the Board has a reasonable
expectation that the Company has adequate resources to continue in operational existence for the 12
months from the date of signing the financial statements and does not consider there to be any material
threat to the viability of the Company. The Board has therefore concluded that it is appropriate to adopt the
going concern basis of accounting in preparing the financial statements.
86
Report of the Directors (continued)
Internal controls review
Taking into account the information on Principal Risks and Uncertainties provided on pages 67 to 74 of the
strategic report and the ongoing work of the Audit and Risk Committee in monitoring the risk management
and internal control systems on behalf of the Board, the Directors
are satisfied that they have carried out a robust assessment of the Principal Risks and Uncertainties
facing the Company, including those that would threaten its business model, future performance,
solvency or liquidity; and
have reviewed the effectiveness of the risk management and internal control systems and no
significant failings or weaknesses were identified.
Fair, Balanced and Understandable
The Board has considered whether the Annual Report taken as a whole is fair, balanced and understandable,
taking into account the commentary and tone and whether it includes the requisite information needed for
Shareholders to assess the Company’s business model, performance and strategy. In addition, the Board
also questioned the Investment Adviser on information included and excluded from the Annual Report,
and considered whether the narrative at the front of the report is consistent with the financial statements.
As a result of this work, each of the Board members considers that the Annual Report is fair, balanced and
understandable and includes the requisite information needed for Shareholders to assess the Company’s
business model, performance and strategy.
Financial Risks Management Policies and Procedures
Financial Risks Management Policies and Procedures are disclosed in Note 15.
Principal Risks and Uncertainties
Principal Risks and Uncertainties are discussed in the Strategic Report on pages 67 to 74.
Annual General Meeting
The AGM of the Company will be held at 10.30am on 6 December 2024 at Floor 2, Trafalgar Court, Les
Banques, St Peter Port, Guernsey. Details of the resolutions to be proposed at the AGM, together with
explanations, will appear in the Notice of Meeting to be distributed to Shareholders together with this
Annual Report.
Members of the Board will be in attendance at the AGM and will be available to answer shareholder
questions.
By order of the Board
Meriel Lenfestey
Elizabeth Burne
Director
Director
27 September 202
4
27 September 202
4
87
Board of Directors
John Scott (Chair and Chair of the Nomination Committee)
John Scott was appointed as a non-executive director of the Company on 12 June 2013 and is a former
investment banker who spent 20 years with Lazard and has served on the boards of several investment
trusts. Mr Scott was Chair of Impax Environmental Markets plc between May 2014 and May 2023. He has
been Chair of JP Morgan Global Core Real Assets since its flotation in 2019. In June 2017, he retired as
Chair of Scottish Mortgage Investment Trust PLC. He has an MA in Economics from Cambridge University
and an MBA from INSEAD.
Elizabeth Burne (Chair of the Audit and Risk Committee)
Elizabeth Burne was appointed as a non-executive director of the Company in October 2021, is a Fellow of
the Association of Chartered Certified Accountants with a First Class Honours degree in Applied Accounting
and over twenty years' experience within the financial services sector across the Channel Islands and
Australia. Prior to becoming a non-executive director Ms Burne was an audit director at PwC, working in
alternative asset management and insurance, assisting clients with strategic, financial, risk and corporate
governance matters. Ms Burne holds a portfolio of non-executive directorships including HarbourVest
Global Private Equity Limited (a constituent of the FTSE 250 Index), as well as a number of private
companies in the venture capital, private equity, real estate and insurance sectors.
Michael Gibbons (Senior Independent Director and Chair of Remuneration Committee)
Michael Gibbons was appointed as a non-executive director of the Company on 7 October 2022, holds an
MA from Downing College, Cambridge, is a Fellow of the Energy Institute, and was awarded an OBE in
2008 and CBE in 2015 for services to regulatory reform. Mr Gibbons has held a very wide range of senior
appointments in the private and public sectors, including chairing the government’s independent
Regulatory Policy Committee from 2009 – 2017. The main part of his private sector career has been in the
energy industry, taking senior positions in ICI, Powergen and Elexon, who run central systems in the GB
wholesale electricity market, and where he was Chair from 2013-2022. Mr Gibbons has also worked on
carbon capture and storage at Board level for several developers and became Chair of the Carbon Capture
and Storage Association in 2014-2017. He was also Chair of the British Committee of the World Energy
Council from 2009 to 2014.
Meriel Lenfestey (Chair of the Environmental, Social and Governance Committee)
Meriel Lenfestey was appointed as a non-executive director of the Company in April 2019. Ms Lenfestey
founded Flow Interactive in 1997, a London based Customer Experience Consultancy assisting clients
across many sectors embracing digital transformation. Since exiting the business in 2016 she has held a
portfolio of non-executive director and advisory roles across Energy, Telecoms, Transport, Infrastructure,
Technology and local charities. She is a non-executive director at International Public Partnerships (FTSE
250), Boku (FTSE AIM), and Ikigai Ventures (FTSE All share). She also Chairs Jersey Telecom (privately
owned) as well as acting as a non-executive director at Art for Guernsey, a local charity. Until February
2023 she was Chair at Gemserv. She has an MA in Computer Related Design from the Royal College of Art,
a Financial Times Non-Executive Director Diploma, is a Fellow of the RSA and sits on the Guernsey IoD.
88
Board of Directors (continued)
Chris Waldron (Chair of the Management Engagement and Service Providers Committee)
Chris Waldron was appointed as a non-executive director of the Company on 1 December 2023. Mr Waldron
has over 35 years' experience as an investment manager, specialising in fixed income, hedging strategies
and alternative investment mandates and until 2013 was Chief Executive of the Edmond de Rothschild
Group in the Channel Islands. Prior to joining the Edmond de Rothschild Group in 1999, Mr Waldron held
investment management positions with Bank of Bermuda, the Jardine Matheson Group and Fortis but he
is now primarily an independent non-executive director of a number of listed funds and investment
companies. He is a Fellow of the Chartered Institute of Securities and Investment.
89
Directors’ Statement of Responsibilities
The Directors are responsible for preparing the annual report and financial statements in accordance with
applicable law and regulations.
The Law requires the Directors to prepare financial statements for each financial year. Under the Law, the
Directors have elected to prepare the financial statements in accordance with IFRS as adopted by the EU
and applicable law. The financial statements are required by Law to give a true and fair view of the state of
affairs of the Company and of its profit or loss for that year. In preparing these financial statements, the
Directors are required to:
select suitable accounting policies and then apply them consistently;
make judgments and estimates that are reasonable, and prudent;
state whether applicable accounting standards have been followed, subject to any material departures
disclosed and explained in the financial statements;
assess the Company’s ability to continue as a going concern, disclosing, as applicable, matters related
to going concern; and
use the going concern basis of accounting unless they either intend to liquidate the Company or to cease
operations, or have no realistic alternative but to do so.
The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy
at any time, the financial position of the Company and enable them to ensure that the financial statements
comply with the Law. They are responsible for such internal control as they determine is necessary to enable
the preparation of financial statements that are free from material misstatement, whether due to fraud or
error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the
assets of the Company and to prevent and detect fraud and other irregularities.
So far as each Director is aware, there is no relevant audit information of which the Company’s Auditor is
unaware, and each Director has taken all the steps that they ought to have taken as a Director in order to
make themself aware of any relevant audit information and to establish that the Company’s Auditor is aware
of that information. This confirmation is given and should be interpreted in accordance with the provisions
of section 249 of the Law.
The Directors are responsible for the maintenance and integrity of the corporate and financial information
included on the Company’s website, and for the preparation and dissemination of Financial Statements.
Legislation in Guernsey governing the preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
By order of the Board
Meri
e
l Lenfestey
Elizabeth Burne
Director
Director
27
September 202
4
27
September 202
4
90
Responsibility Statement of the Directors in Respect of the
Annual Report
Each of the Directors, whose names are set out on pages 87 and 88 in the Board of Directors section of the
annual report, confirms that to the best of their knowledge that:
the financial statements, prepared in accordance with IFRS, as adopted by the EU give a true and fair
view of the assets, liabilities, financial position and profit or loss of the Company;
the Management Report (comprising Chair’s Statement, Strategic Report, Report of the Directors and
Report of the Investment Adviser) includes a fair review of the development and performance of the
business and the position of the Company together with a description of the principal risks and
uncertainties on pages 67 to 74; and
Having taken advice from the Audit and Risk Committee, the Directors consider the annual report and
financial statements, taken as a whole, is fair, balanced and understandable and that it provides the
information necessary for Shareholders to assess the Company’s position, performance, business model
and strategy.
By order of the Board
Meri
e
l Lenfestey
Elizabeth Burne
Director
Director
27
September 202
4
27
September 202
4
91
Corporate Governance Report
The Board recognises the importance of sound corporate governance, particularly the requirements of the
AIC Code. The Company is currently complying with the latest AIC code effective 1 January 2019.
The Company has been a member of the AIC since 15 July 2013. The Board has considered the principles
and provisions of the AIC Code. The AIC Code provides a ‘comply or explain’ code of corporate governance
and addresses all the principles set out in the UK Code as well as setting out additional principles and
recommendations on issues that are of specific relevance to investment companies such as the Company.
The Board considers that reporting against the principles and recommendations of the AIC Code provides
better information to Shareholders.
The GFSC issued a Guernsey Code which came into effect on 1 January 2012. The introduction to the
Guernsey Code states that “Companies which report against the UK Code or the AIC Code of Corporate
Governance are also deemed to meet this Code”. Therefore, AIC members which are Guernsey-domiciled
and which report against the AIC Code are not required to report separately against the Guernsey Code.
The AIC Code is available on the AIC’s website (www.theaic.co.uk). The UK Code is available from the FRC’s
website (www.frc.org.uk). The Guernsey code is available from the GFSC’s website (www.gfsc.gg).
Throughout the year ended 30 June 2024, the Company has complied with the provisions of the AIC Code
and the provisions of the UK Code, except to the extent highlighted below.
Provision A.2.1 of the UK Code requires a chief executive to be appointed; as an investment company,
however, the Company has no employees and therefore has no requirement for a chief executive. Until its
inaugural meeting on 28 November 2023, the Company had not established a remuneration committee
which was not in accordance with provisions B.2.1 and D.2.1 of the UK Code, and Principle 7 of the AIC
Code respectively. The absence of an internal audit function is discussed in the Report of the Audit and Risk
Committee on page 104.
The Board
The Directors’ biographies are provided on pages 87 and 88 which set out the range of investment, financial
and business skills and experience represented.
John Scott was appointed on 12 June 2013, Meriel Lenfestey was appointed on 1 April 2019, Elizabeth Burne
was appointed on 7 October 2021, Michael Gibbons was appointed on 7 October 2022 and Chris Waldron
was appointed on 1 December 2023. The Board appointed Michael Gibbons as Senior Independent Director
effective from 29 November 2022 to fulfil any function that is deemed inappropriate for the Chair to
perform. Paul Le Page was appointed on 12 June 2013 and he retired as a Director of the Company on 30
September 2023.
The five Directors submit themselves for re-election at the next AGM, which is due to take place on 6
December 2024.
Any Director who is elected or re-elected at that meeting is treated as continuing in office throughout. If
they are not elected or re-elected, they shall retain office until the end of the meeting or (if earlier) when a
resolution is passed to appoint someone in their place or when a resolution to elect or re-elect the Director
is put to the meeting and lost.
92
Corporate Governance Report (continued)
The Board (continued)
The Board is of the opinion that members should be re-elected because they believe that they have the right
skills and experience to continue to serve the Company. As recommended in Principle 7 of the AIC Code,
the Board has considered the need for a policy regarding tenure of service. As at 30 June 2024, one director
had been on the Board for approximately eleven years. The Board is cognisant of the AIC guidance around
Board member tenure and has taken positive action to address this by implementing a carefully thought
through succession plan that manages the transition of corporate knowledge, recognises the benefits of
bringing new perspectives and diversity, all whilst ensuring independence.
The Company’s succession planning includes the engagement of Fletcher Jones, a UK based Executive
Search practice which is independent of the Company. Fletcher Jones were involved in the processes
whereby Michael Gibbons and Chris Waldron were appointed as Directors on 7 October 2022 and 1
December 2023 respectively. They are also currently assisting the Company in the search for an additional
Director in advance of the planned retirement of John Scott in 2025, as noted in the Chair’s Statement.
The Board meets at least four times a year in Guernsey, with unscheduled meetings held where required to
consider investment related or other issues. In addition, there is regular contact between the Board, the
Investment Adviser and the Administrator. Furthermore, the Board requires to be supplied in a timely
manner with information by the Investment Adviser, the Company Secretary and other advisers in a form
and of a quality appropriate to enable it to discharge its duties.
The Company has adopted a share dealing code which applies to the Board and any persons discharging
managerial responsibilities. This is to ensure compliance by the Board, and relevant personnel of the
Investment Adviser, with the requirements of the UK Market Abuse Regulations.
The Board monitors developments in corporate governance to ensure the Board remains aligned with best
practice, especially with respect to the increased focus on diversity. The Board acknowledges the importance
of diversity, including gender (as stated in Principle 7 of the AIC Code), for the effective functioning of the
Board and commits to supporting diversity in the boardroom. It is the Board’s aspiration to have well-
diversified representation, and it continues to value directors with diverse skill sets, capabilities and
experience gained from different geographical and professional backgrounds that enhance the Board by
bringing a wide range of perspectives to the Company. The Board is satisfied with the current composition
and functioning of its members and notes that we have 40% female representation, exceeding the Hampton-
Alexander Review target.
Gender identity
Number of
Board
members
Percentage
of the Board
Number of
senior positions
on the Board
Men 3
60%
2
Women 2
40%
-
Ethnic background
White British or other White (including
minority
-
white groups)
5
100%
2
Other ethnic group -
-%
-
The above information is based upon an annual self-declaration from the Directors.
The Company has only two of the senior roles specified by the Listing Rules, namely the positions of Chair
and Senior Independent Director. Both of these roles are occupied by men. However, the Board considers
that the chairs of its permanent sub-committees are all senior positions. Currently the Audit and Risk
Committee and the ESG Committee are chaired by women. The Board is cognisant that it does not currently
have minority ethnic representation and this is a key focus of its succession planning.
93
Corporate Governance Report (continued)
Directors’ Remuneration
The Chair was entitled to an annual remuneration of £81,000 (2023: £68,906). The other Directors were
entitled to an annual remuneration of £54,000 (2023: £43,050). The Chair of the Nomination Committee
receives an additional annual fee of £3,000 (2023: N/A). The Chair of the Remuneration Committee
receives an additional annual fee of £3,000 (2023: N/A). The Chair of the Environmental, Social and
Governance Committee receives an additional annual fee of £7,000 (2023: £5,250). The Chair of the Audit
and Risk Committee receives an additional annual fee of £11,000 (2023: £8,768). The Chair of the
Management Engagement and Service Providers Committee receives an additional annual fee of £4,000
(2023: £3,150).
The remuneration earned by each Director in the past two financial years was as follows:
Director
Year ended
30 June
2024
£
Year ended 30
June
2023
£
John Scott (appointed Chair on 29 November 2022) 75,960
58,326
Elizabeth Burne 57,943
45,389
Michael Gibbons (appointed 7 October 2022) 49,802
31,267
Meriel Lenfestey 54,650
46,965
Chris Waldron (appointed 1 December 2023) 32,839
N/A
Paul Le Page (retired 30 September 2023) 12,972
51,759
John Rennocks (retired 22 February 2023) N/A
37,928
The total Directors’ fees expense for the year amounted to £284,166 (2023: £271,634). As disclosed in Note
16, John Scott and Michael Gibbons are directors of BR1, and have received remuneration in respect of BR1.
All of the Directors are non-executive and each is considered independent for the purposes of Chapter 15 of
the Listing Rules.
In accordance with Article 22 of AIFMD, the Company shall disclose the total amount of remuneration for
the financial year, split into fixed and variable remuneration, paid by the AIFM to its staff, and number of
beneficiaries, and, where relevant, carried interest paid by the AIF. As the Company is categorised as an
internally managed Non-EU AIFM for the purposes of AIFMD, Directors’ remuneration reflects this
amount.
Duties and Responsibilities
The Board has overall responsibility for optimising the Company’s success by directing and supervising the
affairs of the business and meeting the appropriate interests of shareholders and relevant stakeholders,
while enhancing the value of the Company and also ensuring the protection of investors. A summary of the
Board’s responsibilities is as follows:
statutory obligations and public disclosure;
strategic matters and financial reporting;
investment strategy and management;
risk assessment and management including reporting, compliance, governance, monitoring and
control; and
other matters having a material effect on the Company.
94
Corporate Governance Report (continued)
Duties and Responsibilities (continued)
The Directors have access to the advice and services of the Administrator, who is responsible to the Board
for ensuring that Board procedures are followed and that it complies with the Law and applicable rules and
regulations of the GFSC and the LSE. Where necessary, in carrying out their duties, the Directors may seek
independent professional advice and services at the expense of the Company.
The Company maintains appropriate directors’ and officers’ liability insurance in respect of legal action
against its Directors.
The Board’s responsibilities for the annual report are set out in the Directors’ Responsibilities Statement
on page 89. The Board is also responsible for issuing appropriate half-yearly financial reports and other
price-sensitive public reports.
The attendance record of the Directors for the year to 30 June 2024 is set out below:
Director
John
Scott
Elizabeth
Burne
Michael
Gibbons
Meriel
Lenfestey
Chris
Waldron*
Paul Le
Page**
Scheduled Board Meetings
(max 4)
4
4
4
4
2 (max 2)
1 (max 1)
Ad
-
hoc Board Meetings
(max
20
)
15
20
18
18
10 (max 12)
5 (max 5)
Audit and Risk Committee
Meetings (max
9
)
9
9
9
7
5 (max 5)
3 (max 3)
Management Engagement
and Service Providers
Committee Meetings (max
3)
3
3
3
3
1 (max 1)
N/A
ESG Committee Meetings
(max 3)
3
3
3
3
2 (max 2)
1 (max 1)
Nomination Committee
Meetings (max 2)
2
2
2
2
1 (max 1)
N/A
RemCo Committee
Meetings (max 4)
4
4
4
4
2 (max 3)
N/A
20 ad-hoc Board Meetings were held during the year to formally review and authorise each investment
made by the Company and to consider interim dividends, amongst other items.
The Board believes that, as a whole, it comprises an appropriate balance of skills, experience, age,
knowledge and length of service. The Board also believes that diversity of experience and approach,
including gender diversity, amongst Board members is of great importance and it is the Company’s policy
to give careful consideration to issues of Board balance when making new appointments. Any new Director
appointed to the Board will be provided with a bespoke induction programme tailored to the individual
needs of the Director.
Performance Evaluation
In accordance with Principle 7 of the AIC Code, the Board is required to undertake a formal and rigorous
evaluation of its performance on an annual basis. A formal evaluation of the performance of the Board as a
whole, including the Chair, is scheduled for completion in Q1 2025. The evaluation is undertaken utilising
self-appraisal questionnaires and is followed by a detailed discussion of the outcomes which includes an
assessment of the Directors’ continued independence.
*Appointed 1 December 2023
**Retired 30 September 2023
95
Corporate Governance Report (continued)
Committees of the Board
Audit and Risk Committee
The Board established an Audit and Risk Committee in 2013. It is chaired by Elizabeth Burne. At the date
of this report the committee comprised all of the Directors set out on page 3. The role and activities of this
committee and its relationship with the Auditor is contained in the Report of the Audit and Risk Committee
on pages 101 to 106. The Committee operates within clearly defined terms of reference which are available
on the Company’s website (www.bluefieldsif.com).
Nomination Committee
The Board established a Nomination Committee in 2022. It is chaired by John Scott and at the date of this
report comprised all of the Directors set out on page 3. The principal functions of the Committee are to
assist the Board in filling vacancies on the Board and its committees and to review and make
recommendations regarding Board structure, size and composition. The Committee shall meet at least once
a year.
The primary matters discussed and activities undertaken by the Committee during the year were:
undertaking a Board evaluation review following completion of a questionnaire by each individual
Director;
conducting a review of the Committee’s own performance;
instigating a recruitment and appointment process for the appointment of a sixth director which
was ongoing at the year end; and
planning for an external board evaluation.
Management Engagement and Service Providers Committee
The Board established a Management Engagement and Service Providers Committee in 2022. It is chaired
by Chris Waldron and at the date of this report comprised all of the Directors set out on page 3. The principal
function of the Committee is to review annually the contractual relationships with, and scrutinise and hold
to account the performance of, the Investment Adviser. Additionally, the Committee shall review annually
the performance and terms of engagement of any other key service providers to the Company as considered
appropriate. The Committee shall meet at least once a year.
The primary matters discussed and activities undertaken by the Committee during the year were:
receiving a presentation from the Investment Adviser summarising their performance and key
differentiating factors;
carrying out a formal review of the Investment Advisory Agreement, resulting in a change to the
Investment Advisory Fee;
conducting a review of the Committee’s own performance;
Board members performed on-site visits to the Investment Adviser's offices in London as well as a
local solar farm site, with members from GLIL, the Company’s strategic partner; and
conducting a detailed review of the performance of the Company's key service providers.
96
Corporate Governance Report (continued)
ESG Committee
The Board established an ESG Committee in 2022. It is chaired by Meriel Lenfestey and at the date of this
report comprised all of the Directors set out on page 3. The principal function of the Committee is to provide
a forum for mutual discussion, support and challenge of the Investment Adviser with respect to ESG
including, with respect to the policies adopted by the Company, in respect to investment and divestment
and by the Investment Adviser with respect to asset management activities and their reporting on ESG
matters to the Committee and Board. The Committee will also assist on such other matters related to ESG
as may be referred to it by the Board. The Committee shall meet at least once a year.
The primary matters discussed and activities undertaken by the Committee from the beginning of the
financial year to date were:
receiving a presentation, and subsequently adopting, net zero Targets for the Company;
receiving a presentation to upskill the Committee on climate risk activities undertaken for the
Company, including development of a climate adaptation plan; and
conducting a review of the Committee’s own performance.
Please refer to the ESG report for further information on these activities.
Remuneration Committee
The Board established a Remuneration Committee in 2023. It is chaired by Michael Gibbons and at the
date of this report comprised all of the Directors set out on page 3. The principal duties of the Committee
include regular reviews of the levels of remuneration of the Directors of the Company and of BR1 and
consideration of the need to appoint external remuneration consultants and the terms of reference for any
such consultants. The Committee shall also ensure that all provisions and requirements regarding the
disclosure and reporting of remuneration arrangements are fulfilled.
The primary matters discussed and activities undertaken by the Committee during the year were as follows:
establishing the terms of reference of the committee with the Board;
a Remuneration Review was undertaken with input from Trust Associates, resulting in a Director
fee uplift with effect from 1 January 2024 and a further increase in line with inflation with effect
from 1 July 2024 in order to align the fees with the Company’s financial year;
a Remuneration Policy was adopted;
conducting a review of the Committee’s own performance;
an increase in BR1 fees was recommended to the BR1 Board of Directors; and
a resolution will be proposed at this year’s AGM to increase the Directors’ Fee Cap in the Articles
to allow for the appointment of an additional Director to facilitate the Board succession plan.
Internal Control and Financial Reporting
The Board acknowledges that it is responsible for establishing and maintaining the Company’s system of
internal control and reviewing its effectiveness. Internal control systems are designed to manage rather
than eliminate the failure to achieve business objectives and can only provide reasonable but not absolute
assurance against material misstatements or loss. The Audit and Risk Committee reviews all controls
including operations, compliance and risk management. The key procedures which have been established
to provide internal control are:
the Board has delegated the day–to-day operations of the Company to the Administrator and the
Investment Adviser; however, it remains accountable for all of the functions it delegates;
the Board clearly defines the duties and responsibilities of the Company’s agents and advisers and
appointments are made by the Board after due and careful consideration. The Board monitors the
ongoing performance of such agents and advisers;
97
Corporate Governance Report (continued)
Internal Control and Financial Reporting (continued)
the Board monitors the actions of the Investment Adviser at regular Board meetings and is also given
frequent updates on developments arising from the operations and strategic direction of the underlying
investee companies; and
the Administrator provides administration and company secretarial services to the Company.
The Administrator maintains a system of internal control on which it reports to the Board.
The Board has reviewed the need for an internal audit function and has decided that the systems and
procedures employed by the Administrator and Investment Adviser, including their own internal controls
and procedures, provide sufficient assurance that a sound system of risk management and internal control,
which safeguards shareholders’ investment and the Company’s assets, is maintained. An internal audit
function specific to the Company is therefore considered unnecessary.
The systems of control referred to above are designed to ensure effectiveness and efficient operation,
internal control and compliance with laws and regulations. In establishing the systems of internal control,
regard is paid to the materiality of relevant risks, the likelihood of costs being incurred and costs of control.
It follows therefore that the systems of internal control can only provide reasonable but not absolute
assurance against the risk of material misstatement or loss.
The Company has delegated the provision of all services to external service providers whose work is
overseen by the Board at its quarterly meetings. Each year a detailed review of performance pursuant to
their terms of engagement is completed by the Management Engagement and Service Providers Committee
and recommendations made to the Board.
Investment Advisory Agreement
In accordance with Listing Rule 15.6.2(2)R, the Directors formally appraise the performance and resources
of the Investment Adviser.
The Investment Adviser, Bluefield Partners, is led by its managing partners, James Armstrong and Giovanni
Terranova, who founded the Bluefield business in 2009 following their prior work together in European
solar energy. Neil Wood, who joined in 2013, was appointed partner in 2020 and runs the Investment
Adviser alongside the two founders. The Investment Adviser’s team has a combined record, prior to and
including Bluefield Partners LLP, of investing more than £1.6 billion in renewable projects. The Investment
Adviser’s non-executive team includes Mike Rand, Bluefield Partners founder and former Managing
Partner, William Doughty, the founding CEO of Semperian; Dr. Anthony Williams, the former chair of the
Risk Committee for the Fixed Income, Currencies & Commodities Division, and Partner at Goldman Sachs
& Co; and Jon Moulton, former managing partner and founder of Alchemy Partners.
The MESPC meets formally twice a year to review the performance of key service providers and dedicates
one meeting to a detailed review of the Investment Adviser. At that meeting in May 2024, the MESPC
considered the resources and experience of the Investment Adviser, its long term record of investment and
its operational performance. No material issues were identified and the MESPC’s recommendation to the
Board was that the continuing appointment of the Investment Adviser was in the best interests of
shareholders.
Dealings with Shareholders
The Board welcomes Shareholders’ views and places great importance on communication with its
shareholders. The Company’s AGM will provide a forum for shareholders to meet and discuss issues with
the Directors of the Company. Members of the Board will also be available to meet with shareholders at
other times, if required. In addition, the Company maintains a website which contains comprehensive
information, including regulatory announcements, share price information, financial reports, investment
objectives and strategy and information on the Board.
98
Corporate Governance Report (continued)
Principal and Emerging Risks
Each Director is aware of the risks inherent in the Company’s business and understands the importance of
identifying, evaluating, controlling and monitoring these risks. The Board has adopted procedures and
controls that enable it to manage these risks within acceptable limits and to meet all of its legal and
regulatory obligations.
The Board considers the process for identifying, evaluating, controlling and monitoring any significant risks
faced by the Company on an ongoing basis and these risks are reported and discussed at Board meetings.
It ensures that effective controls are in place to mitigate these risks and that a satisfactory compliance
regime exists to ensure all applicable local and international laws and regulations are upheld.
The Company’s Principal and Emerging Risks are discussed in detail on pages 67 to 74 of the Strategic
Report. The Company’s financial instrument risks are discussed in Note 15 to the financial statements.
Changes in Regulation
The Board monitors and responds to changes in regulation as they affect the Company and its policies.
AIFMD
The EU Alternative Investment Fund Managers Directive (“EU AIFMD”) was introduced in 2014 in order
to harmonise the regulation of alternative investment fund managers (“AIFMs”) and imposed obligations
on AIFMs who manage or distribute alternative investment funds (“AIFs”), such as the Company, in the EU
(which at that time also included the UK) or who wished to market shares in such funds to professional
investors in the EU (including the UK). Since Brexit, EU AIFMD has been transposed into UK domestic law
by virtue of the European Union (Withdrawal) Act 2018, as amended, (“UK AIFMD” and together with EU
AIFMD, “AIFMD”), with EU AIFMD continuing to regulate AIFMs’ activities in the EU and the marketing
of an AIF’s shares to professional investors in the EU, and UK AIFMD similarly applying to such activities
in the UK and the marketing of an AIF’s shares to UK professional investors.
The Company was established in Guernsey in 2013 as a self-managed Non-EU/Non-UK AIF. Additionally,
upon the implementation of EU AIFMD, the Company took advice on and implemented sufficient and
appropriate policies and procedures that enable the Board to fulfil its role in relation to the functions of
both portfolio management and risk management. The Company is therefore categorised as an internally
managed Non-EU/Non-UK AIFM for the purposes of AIFMD and as such neither it nor the Investment
Adviser is required to seek authorisation under AIFMD.
The marketing of shares in AIFs that are established outside the UK and the EU (such as the Company) to
UK professional investors or to professional investors in any EU member state is prohibited unless certain
conditions are met. Certain of these conditions are outside the Company’s control as they are dependent on
the regulators of the relevant third country (in this case Guernsey) and the UK (or relevant EU member
state, as applicable) entering into regulatory co-operation agreements with one another.
Currently, the Company is only able to market its shares to professional investors in the UK and the EU to
the extent that it complies with the applicable National Private Placing Regime (“NPPR”), if any.
The Board is currently permitted to market the Company’s shares to professional investors in the UK
pursuant to Regulation 59 of the UK Alternative Investment Fund Managers Regulations 2013 (as
amended). In addition, the Company is also permitted to market its shares to professional investors in The
Republic of Ireland, the Netherlands and Luxembourg pursuant to their respective NPPRs. The Board
works with the Company’s professional advisers to ensure the necessary conditions are met, and all required
notices and disclosures are made under each applicable NPPR to enable the Company to continue
marketing its shares to professional investors in the UK and the other relevant EU member states. In
conjunction with the Company’s professional advisers, the Board also monitors any developments in
AIFMD which might impact the Company in the future.
99
Corporate Governance Report (continued)
Changes in Regulation (continued)
AIFMD (continued)
Any regulatory changes arising under AIFMD, the applicable NPPRs or otherwise that limit the Company’s
ability to market future issues of its shares to professional investors in the UK and/or the EU may materially
adversely affect the Company’s ability to carry out its investment policy successfully and to achieve its
investment objectives, which in turn may adversely affect the Company’s business, financial condition,
results of operations, NAV and/or the market price of its shares.
FATCA and CRS
The Company is registered under FATCA and continues to comply with FATCA and the Common Reporting
Standard’s requirements to the extent relevant to the Company.
PRIIPs
The Company is in compliance with the requirement to publish a key information document (“KID”) under
both the EU and UK PRIIPs Regulations. The current KIDs (one prepared in accordance with the EU PRIIPs
Regulation and the other prepared in accordance with the UK PRIIPs Regulation) are available on the
Company’s website.
Consumer Duty
On 31 July 2023 the FCA introduced a new Principle for Businesses (Principle 12) applicable to authorised
firms in the UK which carry on ‘retail market business’ and who can determine, or materially influence
retail customer outcomes. This new Principle 12 was accompanied by a package of rules and guidance,
which are collectively known as the Consumer Duty.
The Company is not subject to the Consumer Duty as it is not an FCA authorised firm. However, the
Company is aware that its shares may be held by or on behalf of retail customers, and that other firms within
the distribution chain of its shares are within scope of the Consumer Duty requirements. Accordingly, it is
the Board’s intention that the Company will respond to information and other requests from UK authorised
firms in the distribution chain of the Company’s shares in such a way as to support their compliance with
the Consumer Duty.
NMPI
The UK Financial Conduct Authority’s rules (the “FCA Rules”) restrict the marketing within the UK of
certain pooled investments or funds referred to in the FCA Rules as “non mainstream pooled investments”
(“NMPIs”) to ordinary retail clients. These rules took effect on 1 January 2014. The Company conducts its
affairs such that its shares are excluded from the FCA’s restrictions which apply to NMPI products because
its shares are shares in an investment company which, if it were domiciled in the UK, would currently
qualify as an “investment trust”. It is the Board’s intention that the Company will make all reasonable efforts
to continue to conduct its affairs in such a manner that its shares can continue to be recommended by
independent financial advisers to UK retail investors in accordance with the FCA Rules relating to NMPIs.
100
Corporate Governance Report (continued)
Guernsey Green Fund Status
The Guernsey Green Fund aims to provide a platform for investments into various green initiatives and
gives investors a trusted and transparent product that contributes to the internationally agreed objectives
of mitigating environmental damage and climate change. The Company successfully obtained Guernsey
Green Fund Status on 16 April 2019.
Following an application to the GFSC, the Company was deemed to have met the following investment
criteria outlined in the Guernsey Green Fund Rules, 2021:
The Property of a Guernsey Green Fund shall be invested with the aim of spreading risk and with the
ultimate objective of mitigating environmental damage resulting in a net positive outcome for the
environment;
A Guernsey Green Fund shall comprise 75% assets by value that meet the Guernsey Green Fund Rules
criteria. The remaining 25% must not lessen or reduce the Guernsey Green Fund's overall objective of
mitigating environmental damage nor comprise an investment of a type specified within schedule 3 of
the Guernsey Green Fund Rules, 2021;
A Guernsey Green Fund shall only comprise assets permitted to be held under its principal documents
or prospectus and of a nature described in its prospectus; and
A Guernsey Green Fund shall not be invested in contravention of limits or restrictions imposed under
its principal documents or prospectus.
The Company fulfils the above investment criteria by investing in a diversified portfolio of renewable energy
assets, each located within the UK, with a focus on utility scale assets and portfolios on greenfield sites. The
Group targets long life renewable energy infrastructure, expected to generate energy output over asset lives
of at least 25 years. The Company incorporates Environmental Social & Governance policies into its
investment processes and is actively monitoring and working to improve its environmental and social
impact. The production of renewable energy equates to a significant amount of CO2 emissions saved,
representing a sustainable and ethical investment.
By order of the Board
Meriel Lenfestey
Elizabeth Burne
Director
Director
27
September 202
4
27
September 202
4
101
Report of the Audit and Risk Committee
The Audit and Risk Committee, chaired by Elizabeth Burne and comprising all of the Directors set out on
page 3, operates within clearly defined terms of reference (which are available from the Company’s website,
www.bluefieldsif.com) and includes all matters indicated by Rule 7.1 of the UK FCA’s DTRs and the AIC
Code. It is also the formal forum through which the Auditor will report to the Board of Directors.
The Audit and Risk Committee meets no less than three times a year, and at such other times as the Audit
and Risk Committee shall require, and meets the Auditor at least twice a year. Any member of the Audit
and Risk Committee may request that a meeting be convened by the company secretary. The Auditor may
request that a meeting be convened if they deem it necessary. Any Director who is not a member of the
Audit and Risk Committee, the Administrator and representatives of the Investment Adviser shall be invited
to attend the meetings as the Directors deem appropriate.
The Board has taken note of the requirement that at least one member of the Committee should have recent
and relevant financial experience and is satisfied that the Committee is properly constituted in that respect,
with one of its members who is a qualified accountant and three members with an investment background.
Responsibilities
The main duties of the Audit and Risk Committee are:
monitoring the integrity of the interim and annual financial statements of the Company and any formal
announcements relating to the Company’s financial performance and reviewing significant financial
reporting judgements contained in them;
reporting to the Board on the appropriateness of the Board’s accounting policies and practices including
critical judgement areas;
reviewing the valuation of the Company’s investments prepared by the Investment Adviser, and making
a recommendation to the Board on the valuation of the Company’s investments;
reviewing the going concern assumption and any statements regarding the future prospects or longer-
term viability of the Company;
meeting regularly with the Auditor to review their proposed audit plan (including the audit approach)
and the subsequent audit report and assess the effectiveness of the audit process and the levels of fees
paid in respect of both audit and non-audit work;
making recommendations to the Board in relation to the appointment, reappointment or removal of
the Auditor and approving their remuneration and the terms of their engagement;
monitoring and reviewing annually the Auditor’s independence, objectivity, expertise, resources,
qualification and non-audit work;
considering annually whether there is a need for the Company to have its own internal audit function;
keeping under review the effectiveness of the accounting and internal control systems of the Company;
reviewing compliance with the Listing Rules, Disclosure Guidance and Transparency Rules, the
provisions of the UK Corporate Governance Code, AIC Code of Corporate Governance and associated
guidance and other legal and regulatory requirements; and
overseeing and assessing the effectiveness of the Company’s risk framework to ensure appropriate risk
management and regulatory compliance processes are operating.
102
Report of the Audit and Risk Committee (continued)
Responsibilities (continued)
The Audit and Risk Committee is required to report formally to the Board on its findings after each meeting
on all matters within its duties and responsibilities.
The Auditor is invited to attend the Audit and Risk Committee meetings as the Committee deems
appropriate and at which they have the opportunity to meet with the Committee without representatives of
the Investment Adviser or the Administrator being present at least once per year.
Financial Reporting
In relation to the financial reporting, the Audit and Risk Committee, with the Administrator, Investment
Adviser and the Auditor, reviewed the appropriateness of the interim and annual financial statements,
concentrating on, amongst other matters:
the quality and acceptability of accounting policies and practices;
the clarity of the disclosures and compliance with financial reporting standards and relevant financial
and governance reporting requirements;
material areas in which significant judgements were applied or there had been discussion with the
Auditor;
that the annual report and financial statements, taken as a whole, are fair, balanced and understandable
and provide the information necessary for Shareholders to assess the Company’s performance, business
model and strategy; and
addressing any correspondence from regulators in relation to the Company’s financial reporting.
To aid its review, the Audit and Risk Committee considered reports from the Administrator and Investment
Adviser and also reports from the Auditor on the outcomes of their half year review and annual audit. Like
the Auditor, the Audit and Risk Committee displayed the necessary professional scepticism their role
requires.
Meetings
The Committee has met formally on 10 occasions in the year covered by this report. The matters discussed
and challenged at those meetings were:
consideration and agreement of the terms of reference of the Audit and Risk Committee for approval
by the Board;
review of the Company’s risk framework, including the Company’s risk appetite, business objectives,
risk cards and risk matrix;
determination of the Company’s Principal Risks and Uncertainties;
review of the internal controls systems;
review of the accounting policies and format of the interim and annual financial statements;
103
Report of the Audit and Risk Committee (continued)
Meetings (continued)
review and approval of the terms of engagement, audit/non-audit fees and the audit plan of the Auditor
and timetable for the interim and annual financial statements;
review of the valuation policy and methodology of the Company’s investments applied in the interim
and annual financial statements;
detailed review of the interim and annual report and financial statements;
assessment of the audit tenure, independence and effectiveness of the external audit process as
described below; and
assessment of the Committee’s performance.
Primary Area of Judgement
The Audit and Risk Committee determined that the key risk of misstatement of the Company’s financial
statements is the fair value of the investments held by the Company in the context of the high degree of
judgement involved in the assumptions and estimates underlying the discounted cash flow calculations.
As outlined in Note 8 of the financial statements, the fair value of the BR1’s investments (Directors’
Valuation) as at 30 June 2024 was £965,549,054 (2023: £1,018,350,175). Market quotations are not
available for these investments so their valuation is undertaken using a discounted cash flow methodology.
The Directors have also considered transactions in similar assets and used these to infer the discount rate.
Significant inputs such as the discount rate, rate of inflation, power price forecast and the amount of
electricity the renewable energy infrastructure assets are expected to produce are subjective and include
certain assumptions. As a result, this requires a series of judgements to be made as explained in Note 8 in
the financial statements.
The valuation of BR1’s portfolio of renewable energy infrastructure assets (Directors’ Valuation) as at 30
June 2024 has been determined by the Board based on information provided by the Investment Adviser.
The Audit and Risk Committee also reviewed and suggested factors that could impact BR1’s portfolio
valuation and its related sensitivities to the carrying value of the investments as required in accordance with
IPEV Valuation Guidelines.
The Audit and Risk Committee remains satisfied that the valuation techniques used are appropriate for the
Company’s investments and consistent with the requirements of IFRS. The Audit and Risk Committee,
informed by the Company’s Administrator, Investment Adviser and Auditor, ensures that the Board is kept
regularly informed of relevant updates or changes to IFRS that may impact the Company, including but not
limited to valuation principles.
104
Report of the Audit and Risk Committee (continued)
Risk Management and Internal Controls
The Audit and Risk Committee is responsible for the Company’s system of internal controls and overall risk
framework, it considers the potential impact and likelihood of each of the Company’s material risks
occurring and monitors the effectiveness of the material controls/mitigants in operation. As part of this
process the Committee also takes time to consider emerging risks at least twice a year as well as whether
there is a need for the Company to engage third party experts to perform separate assurance engagements
over specific risk areas.
The risk management framework used by the Company ensures that all decisions taken in pursuit of the
Company’s business objectives are within the Company’s risk appetite parameters. However, the Board
acknowledges that internal controls can only be designed to manage rather than irradicate risks that could
threaten the Company’s business objectives being achieved. They provide reasonable, but not absolute
assurance against material misstatement or loss and rely on the internal control environments at its key
service providers operating effectively.
A full review of the Company’s risk framework, including the way in which material risks are
identified/assessed, how effectively they are controlled/mitigated and how they are reported was conducted
during the year enhancing the relevancy and quality of information delivered to the Committee for
consideration. A key outcome of the Committee’s work is the assessment of the Principal Risks and
Uncertainties as set out on pages 67 to 74 of the Strategic Report.
Internal Audit
The Audit and Risk Committee considers at least once a year whether there is a need for an internal audit
function. Currently it does not consider there to be a need for an internal audit function, given that there
are no employees in the Company and all outsourced functions are with parties who have their own internal
controls and procedures.
FRC Reviews
The Audit Quality Review Team of the Financial Reporting Council (“FRC”) performed a review of the audit
of the Company for the year ended 30 June 2023 with no major findings arising from their review. In the
opinion of the Audit and Risk Committee the outcome was satisfactory, which provides further comfort on
the effectiveness of KPMG.
The FRC also reviewed the Company’s Annual Report and Financial Statements for the year ended 30 June
2023. Based on their review, the FRC wrote to the Company on 29 February 2024 stating there were no
questions or queries that the FRC wished to raise with the Company at that time. However, the FRC noted
some matters where they believed that users of the financial statements would benefit from improvements
to the existing reporting.
The Company has endeavoured to address these matters in the financial statements. This included
additional disclosure on the significant judgements involved in determining that the Company is an
investment entity (see note 2 (c) on page 119) and providing more clarity on the amount of gains or losses
on financial assets attributable to changes in unrealised gains or losses (see note 8 on page 126).
The FRC notes that its review does not provide assurance that the Annual Report and Financial Statements
are correct in all material respects and that its role is not to verify the information provided but to consider
compliance with reporting requirements.
External Audit
KPMG was initially appointed as the Company’s external auditor at inception of the Company and retained
appointment following an extensive, robust and competitive audit tender process being conducted in the
prior year. The conclusion from this process was that, of those firms who participated in the tender, KPMG
105
Report of the Audit and Risk Committee (continued)
External Audit (continued)
offered the most compelling case for the provision of a high quality audit at good value for Shareholders.
The resolution to reappoint KPMG was passed at the Company’s AGM in November 2023.
The Auditor is required to rotate the audit partner every five years. The current Audit Partner, Barry Ryan,
is in his third year of tenure. There are no contractual obligations restricting the choice of external auditor.
The objectivity of the Auditor is reviewed by the Audit and Risk Committee which also reviews the terms
under which the external Auditor may be appointed to perform non-audit services. The Audit and Risk
Committee reviews the scope and results of the audit, its cost effectiveness and the independence and
objectivity of the Auditor, with particular regard to any non-audit work that the Auditor may undertake.
In order to safeguard Auditor independence and objectivity, the Audit and Risk Committee ensures that
any advisory and/or consulting services provided by the external Auditor do not conflict with its statutory
audit responsibilities. Advisory and/or consulting services will generally cover only reviews of interim
financial statements and capital raising work. Any non-audit services conducted by the Auditor outside of
these areas will require the consent of the Audit and Risk Committee before being initiated.
During the year, KPMG was engaged to provide a review of the Company’s interim financial statements.
Total fees paid by the Company and its subsidiaries amounted to £873,285 (30 June 2023: £864,174), fees
for the Company itself amounted to £171,315 for the year ended 30 June 2024 (30 June 2023: £157,325) of
which £123,815 related to audit and audit related services to the Company (30 June 2023: £112,325) and
£47,500 in respect of non-audit services (30 June 2023: £45,000).
The Audit and Risk Committee considers KPMG to be independent of the Company and that the provision
of services relating to the review of the interim financial statements (being considered a non-audit service)
is not a threat to the objectivity and independence of the conduct of the audit as appropriate safeguards are
in place.
In line with the Company’s policy on the provision of non-audit services, the external Auditor may not
undertake any work for the Company in respect of the following matters: preparation of the financial
statements; provision of investment advice; taking management decisions; advocacy work in adversarial
situations; provision of tax and tax compliance services; promotion of, dealing in, or underwriting the
Company’s shares; provision of payroll services; design or implementation of internal control or risk
management or financial information technology systems, provision of valuation services, provision of
services related to internal audit; and provision of certain human resources functions.
To fulfil its responsibility regarding the independence of the Auditor, the Audit and Risk Committee has
considered:
the discussions with, and reports from the Auditor describing how they safeguard and maintain their
independence and the arrangements in place to identify, report and manage any actual or perceived
conflicts of interest;
the extent of non-audit services provided by the Auditor; and
arrangements in place to ensure the Auditor’s objectivity, robustness and perceptiveness when
handling key accounting and audit judgements.
To assess the effectiveness of the Auditor, the Committee sought feedback from the Company’s Auditor,
Investment Adviser and Company Administrator/Secretary on the conduct and quality of the previous
year’s audit. The feedback received, via the use of a detailed questionnaire and follow-up discussion session,
focused on:
the Auditor’s fulfilment of the agreed audit plan (including the audit approach) and variations from it;
the quality, objectivity, robustness (level of challenge and professional scepticism) and independence
of the audit;
106
Report of the Audit and Risk Committee (continued)
External Audit (continued)
the robustness of the Auditor in handling key accounting and audit judgements;
the audit team structure and culture;
the quality and timeliness of reporting and communication; and
any issues that arose during the course of the audit.
Based on the findings of the review, the Audit and Risk Committee concluded it was satisfied with KPMG’s
effectiveness, robustness and independence as Auditor, having considered the degree of diligence and
professional scepticism demonstrated by them, and therefore concluded that KPMG’s appointment as the
Company’s auditor should be continued.
Other matters
In line with the Committee’s terms of reference, a review of the performance of the Committee was
conducted during the year which concluded that all responsibilities of the Committee had been sufficiently
undertaken.
If any shareholders would like further information about the Audit and Risk Committee’s activities and
operations the Chair of the Audit and Risk Committee, or any of the other members of the Committee,
would be pleased to discuss, otherwise will be available at the AGM to answer any questions.
On behalf of the Audit and Risk Committee
Elizabeth Burne
Chair of the Audit and Risk Committee
27 September 2024
107
Independent Auditor’s Report to the Members of Bluefield Solar Income
Fund Limited
Our opinion is unmodified
We have audited the financial statements of Bluefield Solar Income Fund Limited (the “Company”), which comprise the
statement of financial position as at 30 June 2024, the statements of comprehensive income, changes in equity and
cash flows for the year then ended, and notes, comprising material accounting policies and other explanatory
information.
In our opinion, the accompanying financial statements:
give a true and fair view of the financial position of the Company as at 30 June 2024, and of the Company’s financial
performance and cash flows for the year then ended;
are prepared in accordance with International Financial Reporting Standards as adopted by the EU; and
comply with the Companies (Guernsey) Law, 2008.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.
Our responsibilities are described below. We have fulfilled our ethical responsibilities under, and are independent of
the Company in accordance with, UK ethical requirements including the FRC Ethical Standard as required by the Crown
Dependencies' Audit Rules and Guidance. We believe that the audit evidence we have obtained is a sufficient and
appropriate basis for our opinion.
Key audit matters: our assessment of the risks of material misstatement
Key audit matters are those matters that, in our professional judgment, were of most significance in the audit of the
financial statements and include the most significant assessed risks of material misstatement (whether or not due to
fraud) identified by us, including those which had the greatest effect on: the overall audit strategy; the allocation of
resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context
of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters. In arriving at our audit opinion above, the key audit matter was as follows (unchanged from
2023):
Independent Auditor’s Report to the Members of Bluefield Solar
Income Fund Limited (continued)
108
The risk Our response
Valuation of financial
assets held at fair
value through profit or
loss
£780,043,000 (2023:
£852,844,000)
Refer to Report of the
Audit and Risk
Committee on pages
101 to 106, note 2(j)
accounting policy and
note 8 disclosures.
Basis:
The Company’s investment in its immediate
subsidiary is carried at fair value through profit or loss
and represents a significant proportion of the
Company’s net assets (2024: 99.8%; 2023: 99.8%).
The fair value of the immediate subsidiary, which
reflects its net asset value, predominantly comprises
of the fair value (£965,549,000) of underlying special
purpose vehicle renewable project investments
(“SPVs”) and the immediate subsidiary level debt
(see note 8).
The fair value of the SPVs has been determined
using the income approach, discounting the future
cash flows of underlying renewable projects (the
“Valuations”), for which there is no liquid market. The
Valuations incorporate certain assumptions including
discount rate, power price forecasts, inflation, energy
yield, and other macro-economic assumptions. The
non-operational renewable asset SPVs are valued at
their costs as an approximation of their fair value.
The Valuations are adjusted for other specific assets
and liabilities of the SPVs.
Risk:
The Valuations represent both a risk of fraud and
error associated with estimating the timing and
amounts of long term forecast cash flows alongside
the significant judgement involved in the selection,
and application, of appropriate assumptions.
Changes to long term forecast cash flows and/or the
selection and application of different assumptions
may result in a materially different valuation of
financial assets held at fair value through profit or
loss.
We therefore determined that the Valuations have a
high degree of estimation uncertainty giving rise to a
potential range of reasonable outcomes greater than
our materiality for the financial statements as a
whole. The financial statements disclose in note 8 the
sensitivities estimated by the Company.
Our audit procedures included, but
were not limited to:
Control evaluation:
We assessed the design and
implementation of the control over
the Valuation of financial assets
held at fair value through profit or
loss.
Valuation model integrity and
model inputs:
We tested the valuation model
for mathematical accuracy
including, but not limited to,
material formulae errors;
We agreed a risk based
selection of key inputs used in
the valuation model, such as
power price forecasts,
contracted revenue and
operating costs to supporting
documentation;
We agreed a value driven
sample of balances within the
residual net asset amounts at
subsidiary and SPV levels to
supporting documentation,
such as independent bank
confirmations and other
source documentation;
We obtained and vouched
significant additions to non-
operational renewable assets
during the year to supporting
documentation; and
In order to assess the
reliability of management’s
forecasts, for a risk based
selection, we assessed the
historical accuracy of the cash
flow forecasts against actual
results.
Benchmarking the valuation
assumptions:
With support from our KPMG
valuation specialist, we challenged
the appropriateness of the
Company’s valuation methodology
and key assumptions including
discount rate, power price
forecasts, inflation, energy yield
Independent Auditor’s Report to the Members of Bluefield Solar
Income Fund Limited (continued)
109
The risk Our response
and other macro-economic
assumptions applied, by:
assessing the
appropriateness of the
valuation methodology applied
by the Investment Adviser;
benchmarking against
independent market data and
relevant peer group
companies;
challenging the energy yield
assumptions in the valuation
model, by reference to due
diligence reports prepared by
third-party engineers or
historical performance;
comparing, where
appropriate, the valuation of
underlying renewable projects
to market transactions in close
proximity to year end; and
using our KPMG valuation
specialist’s experience in
valuing similar investments.
Assessing transparency:
We considered the
appropriateness and adequacy of
the disclosures made in the
financial statements (see notes
2(j), 3 and 8) in relation to the use
of estimates and judgements
regarding the fair value of
investments, the valuation
estimation techniques inherent
therein and fair value disclosures
for compliance with International
Financial Reporting Standards as
adopted by the EU.
Our application of materiality and an overview of the scope of our audit
Materiality for the financial statements as a whole was set at £16,600,000, determined with reference to a benchmark
of net assets of £781,557,000, of which it represents approximately 2% (2023: 2%).
In line with our audit methodology, our procedures on individual account balances and disclosures were performed to
a lower threshold, performance materiality, so as to reduce 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 for the Company was set at 75% (2023: 75%) of materiality for the financial statements as a
whole, which equates to £12,400,000. We applied this percentage in our determination of performance materiality
because we did not identify any factors indicating an elevated level of risk.
We reported to the Audit Committee any corrected or uncorrected identified misstatements exceeding £830,000, in
addition to other identified misstatements that warranted reporting on qualitative grounds.
Independent Auditor’s Report to the Members of Bluefield Solar
Income Fund Limited (continued)
110
Our application of materiality and an overview of the scope of our audit (continued)
Our audit of the Company was undertaken to the materiality level specified above, which has informed our identification
of significant risks of material misstatement and the associated audit procedures performed in those areas as detailed
above.
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
(the “going concern period").
In our evaluation of the directors' conclusions, we considered the inherent risks to the Company's business model and
analysed how those risks might affect the Company's financial resources or ability to continue operations over the going
concern period. The risks that we considered most likely to affect the Company's financial resources or ability to
continue operations over this period were:
Availability of capital to meet operating costs and other financial commitments; and
Ability of the Company’s subsidiaries to refinance or repay debt and to comply with debt covenants
We considered whether these risks could plausibly affect the liquidity in the going concern period by comparing severe,
but plausible downside scenarios that could arise from these risks individually and collectively against the level of
available financial resources indicated by the Company’s financial forecasts.
We considered whether the going concern disclosure in note 2(b) to the financial statements gives a full and accurate
description of the directors' assessment of going concern.
Our conclusions based on this work:
we consider that the directors' use of the going concern basis of accounting in the preparation of the financial
statements is appropriate;
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
we have nothing material to add or draw attention to in relation to the directors' statement
in the notes to the
financial statements on the use of the going concern basis of accounting with no material uncertainties that may
cast significant doubt over the Company's use of that basis for the going concern period, and that statement is
materially consistent with the financial statements and our audit knowledge.
However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that
are inconsistent with judgements that were reasonable at the time they were made, the above conclusions are not a
guarantee that the Company will continue in operation.
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:
enquiring of management as to the Company’s policies and procedures to prevent and detect fraud as well as
enquiring whether management have knowledge of any actual, suspected or alleged fraud;
reading minutes of meetings of those charged with governance; and
using analytical procedures to identify any unusual or unexpected relationships.
As required by auditing standards, and taking into account possible incentives or pressures to misstate performance
and our overall knowledge of the control environment, we perform procedures to address the risk of management
Independent Auditor’s Report to the Members of Bluefield Solar
Income Fund Limited (continued)
111
Fraud and breaches of laws and regulations – ability to detect (continued)
Identifying and responding to risks of material misstatement due to fraud (continued)
override of controls, in particular the risk that management may be in a position to make inappropriate accounting
entries, and the risk of bias in accounting estimates such as the valuation of unquoted investments. On this audit we
do not believe there is a fraud risk related to revenue recognition because the Company’s revenue streams are simple
in nature with respect to accounting policy choice, and are easily verifiable to external data sources or agreements with
little or no requirement for estimation from management. We did not identify any additional fraud risks.
We performed procedures including:
identifying journal entries and other adjustments to test based on risk criteria and comparing any identified entries
to supporting documentation;
incorporating an element of unpredictability in our audit procedures; and
assessing significant accounting estimates for bias.
Further detail in respect of valuation of unquoted investments is set out in the key audit matter section of this report.
Identifying and responding to risks of material misstatement due to non-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 sector experience and through discussion with management (as required by auditing standards),
and from inspection of the Company’s regulatory and legal correspondence, if any, and discussed with management
the policies and procedures regarding compliance with laws and regulations. As the Company is regulated, our
assessment of risks involved gaining an understanding of the control environment including the entity’s procedures for
complying with regulatory requirements.
The Company is subject to laws and regulations that directly affect the financial statements including financial reporting
legislation and taxation legislation and we assessed the extent of compliance with these laws and regulations as part
of our procedures on the related financial statement items.
The Company is subject to other laws and regulations where the consequences of non-compliance could have a
material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or
litigation or impacts on the Company’s ability to operate. We identified financial services regulation as being the area
most likely to have such an effect, recognising the regulated nature of the Company’s activities and its legal form.
Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to
enquiry of management and inspection of regulatory and legal correspondence, if any. Therefore if a breach of
operational regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that
breach.
Context of the ability of the audit to detect fraud or breaches of law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material
misstatements in the financial statements, even though we have properly planned and performed our audit in
accordance with auditing standards. 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 remains a higher risk of non-detection of fraud, as this may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to
detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected
to detect non-compliance with all laws and regulations.
Other information
The directors are responsible for the other information. The other information comprises the information included in the
annual report but does not include the financial statements and our auditor's report thereon. Our opinion on the financial
statements does not cover the other information and we do not express an audit opinion or any form of assurance
conclusion thereon.
Independent Auditor’s Report to the Members of Bluefield Solar
Income Fund Limited (continued)
112
Other information (continued)
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial statements or our knowledge
obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information, we are required to report that fact. We have
nothing to report in this regard.
Disclosures of emerging and principal risks and longer term viability
We are required to perform procedures to identify whether there is a material inconsistency between the directors’
disclosures in respect of emerging and principal risks and the viability statement, and the financial statements and our
audit knowledge. we have nothing material to add or draw attention to in relation to:
the directors’ confirmation within the Longer-term viability statement (pages 73 and 74) that they have carried out
a robust assessment of the emerging and principal risks facing the Company, including those that would threaten
its business model, future performance, solvency or liquidity;
the emerging and principal risks disclosures describing these risks and explaining how they are being managed or
mitigated;
the directors’ explanation in the Longer-term viability statement (pages 73 and 74) as to how they have assessed
the prospects of the Company, over what period they have done so and why they consider that period to be
appropriate, and their statement as to whether they have a reasonable expectation that the Company will be able
to continue in operation and meet its liabilities as they fall due over the period of their assessment, including any
related disclosures drawing attention to any necessary qualifications or assumptions.
We are also required to review the Longer-term viability statement, set out on pages 73 and 74 under the Listing
Rules. Based on the above procedures, we have concluded that the above disclosures are materially consistent with
the financial statements and our audit knowledge.
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:
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;
the section of the annual report describing the work of the Audit Committee, including the significant issues that
the audit committee considered in relation to the financial statements, and how these issues were addressed; and
the section of the annual report that describes the review of the effectiveness of the Company’s risk management
and internal control systems.
We are required to review the part of Corporate Governance Statement relating to the Company’s compliance with the
provisions of the UK Corporate Governance Code specified by the Listing Rules for our review. We have nothing to
report in this respect.
We have nothing to report on other matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies (Guernsey) Law, 2008 requires us
to report to you if, in our opinion:
the Company has not kept proper accounting records; or
the financial statements are not in agreement with the accounting records; or
we have not received all the information and explanations, which to the best of our knowledge and belief are
necessary for the purpose of our audit.
Independent Auditor’s Report to the Members of Bluefield Solar
Income Fund Limited (continued)
113
Respective responsibilities
Directors' responsibilities
As explained more fully in their statement set out on page 89, the directors are responsible for: the preparation of
the financial statements including being satisfied that they give a true and fair view; such internal control as they
determine is necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error; assessing the Company’s ability to continue as a going concern, disclosing, as applicable,
matters related to going concern; and using the going concern basis of accounting unless they either intend to liquidate
the Company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue our opinion in an auditor’s report. Reasonable
assurance is a high level of assurance, but does not guarantee that an audit conducted in accordance with ISAs (UK)
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial statements.
A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities.
The purpose of this report and restrictions on its use by persons other than the Company's
members as a body
This report is made solely to the Company’s members, as a body, in accordance with section 262 of the Companies
(Guernsey) Law, 2008. Our audit work has been undertaken so that we might state to the Company’s members those
matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted
by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members,
as a body, for our audit work, for this report, or for the opinions we have formed.
Barry Ryan
For and on behalf of KPMG Channel Islands Limited
Chartered Accountants and Recognised Auditors
Guernsey
27 September 2024
114
Statement of Financial Position
As at 30 June 2024
30 June 202
4
30 June 202
3
Note
£’000
£’000
ASSETS
Non
-
current assets
Financial assets held at fair value through profit
or loss
8 780,043
852,844
Total non-current assets
780,043
852,844
Current assets
Trade and other receivables 9
924
910
Cash and cash equivalents 10
1
,
253
969
Total current assets
2,177
1,879
TOTAL ASSETS
782,220
854,723
LIABILITIES
Current liabilities
Other payables and accrued expenses 11 663
534
Total current liabilities
663
534
TOTAL LIABILITIES
663
534
NET ASSETS
781,557
854,189
EQUITY
Share capital
654,441
663,809
Retained earnings
1
27,116
190,380
TOTAL EQUITY 13 781,557
854,189
Ordinary Shares in issue at year end 13 602,374,217
611,452,217
Net asset value per Ordinary Share (pence)
7 129.75
139.70
These financial statements were approved and authorised for issue by the Board of Directors on 27
September 2024 and signed on their behalf by:
The accompanying notes form an integral part of these financial statements.
Meriel Lenfestey
Elizabeth Burne
Director
Director
27
September 202
4
27
September 20
24
115
Statement of Comprehensive Income
For the year ended 30 June 2024
Year ended
Year ended
30 June 2024
30 June 2023
Note
£’000
£’000
Income
Income from investments 4
900
900
Bank interest
2
5
6
925
906
Net (losses)/gains on financial assets held at fair
value through profit or loss
8
(
8,336
)
48,164
Operating income
(
7,411
)
49,070
Expenses
Administrative expenses 5
2,190
2,277
Operating expenses
2,190
2,277
Operating (loss)/profit
(
9,601
)
46,793
(Loss)/profit and total comprehensive
(
loss
)/
income for the year
(9,601)
46,793
Earnings per share:
Basic and diluted (pence) 12 (1.57)
7.65
All items within the above statement have been derived from continuing activities.
The accompanying notes form an integral part of these financial statements.
116
Statement of Changes in Equity
For the year ended 30 June 2024
Number of
Ordinary
Shares
Note
Share capital
Retained
earnings
Total equity
£’000
£’000
£’000
Shareholders' equity at
1 July 2023
611,452,217
663,809
190,380
854,189
Purchase of Ordinary
shares
into Treasury
13
(9,078,000)
(9,368)
-
(9,368)
Dividends paid 13,14
-
-
(53,663)
(53,663)
Total comprehensive loss
for the year
-
-
(9,601)
(9,601)
Shareholders' equity at
30 June 2024
602,374,217
654,441
127,116
781,557
For the year ended 30 June 2023
Number of
Ordinary
Shares
Note
Share capital
Retained
earnings
Total equity
£’000
£’000
£’000
Shareholders' equity at
1 July 2022
611,452,217
663,809
194,582
858,391
Dividends paid 13,14
-
-
(50,995)
(50,995)
Total comprehensive
income for the year
-
-
46,793
46,793
Shareholders' equity at
30 June 2023
611,452,217
663,809
190,380
854,189
The accompanying notes form an integral part of these financial statements.
117
Statement of Cash Flows
For the year ended 30 June 2024
Year
ended
Year
ended
30 June 202
4
30 June 202
3
Note
£’000
£’000
Cash flows from operating activities
Total comprehensive (loss)/income for the year
(
9,601
)
46,793
Adjustments:
Increase in trade and other receivables
(14)
(28)
Increase in other payables and accrued expenses
23
44
Net losses/(gains) on financial assets held at fair value
through profit or loss
8 8,336
(48,164)
Net cash used in operating activities*
(1,256)
(1,355)
Cash flows from investing activities
Receipts from investments held at fair value through
profit or loss**
8 64,465
51,700
Net cash generated from investing activities
64,465
51,700
Cash flow from financing activities
Purchase of Ordinary shares into Treasury 13
(9,
262
)
-
Dividends paid 14
(53,663)
(50,995)
Net cash used in financing activities
(
62,925
)
(50,995)
Net increase/(decrease) in cash and cash equivalents
284
(650)
Cash and cash equivalents at the start of the year
969
1,619
Cash and cash equivalents at the end of the year 10 1,253
969
The accompanying notes form an integral part of these financial statements.
*Net cash used in operating activities includes £900,000 (2023: £900,000) of investment income.
**Receipts from investments held at fair value through profit or loss comprises loan principal of £31.3
million (2023: £29.9 million) repaid by BR1 and £33.2 million (2023: £21.8 million) of interest received
from BR1. Investment acquisition costs at project level as referred to in the Investment Advisors report do
not appear in the Statement of Cash Flows as the financial statements are not consolidated.
Notes to the Financial Statements for the year ended 30 June
2024
118
1. General information
The Company is a non-cellular company limited by shares and was incorporated in Guernsey under the Law
on 29 May 2013 with registered number 56708 as a closed-ended investment company. It is regulated by
the GFSC.
The financial statements for the year ended 30 June 2024 comprise the financial statements of the
Company only (see Note 2 (c)).
The investment objective of the Company is to provide Shareholders with an attractive return, principally
in the form of quarterly income distributions, by being invested primarily in solar energy assets located in
the UK. It also has the ability to invest a minority of its capital into wind and energy storage assets.
The Company has appointed Bluefield Partners LLP as its Investment Adviser.
2. Summary of material accounting policies
a) Basis of preparation
The financial statements included in this annual report have been presented on a true and fair basis and
prepared in accordance with IFRS as adopted by the EU and the DTR of the UK FCA.
These financial statements have been prepared under the historical cost convention with the exception of
financial assets measured at fair value through profit or loss, and in compliance with the provisions of the
Law.
Standards, interpretations and amendments to published standards adopted in the period
New and Revised Standards
The Company adopted Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice
Statement 2) from 1 July 2023. Although the amendments did not result in any changes to the accounting
policies themselves, they impacted the accounting policy information disclosed in the financial statements.
The amendments require the disclosure of 'material', rather than 'significant', accounting policies. The
amendments also provide guidance on the application of materiality to disclosure of accounting policies,
assisting entities to provide useful, entity-specific accounting policy information that users need to
understand other information in the financial statements.
The Company has not adopted early any standards, amendments or interpretations to existing standards
that have been published and will be mandatory for the Company’s accounting periods beginning after 1
July 2024 or later periods.
At the date of authorisation of these financial statements, certain new standards, and amendments to
existing standards have been published by the IASB that are not yet effective and have not been adopted
early by the Company.
The Board expects that all relevant pronouncements will be adopted in the Company's accounting policies
for the first period beginning after the effective date of the pronouncement. New standards, interpretations
and amendments are not expected to have a material impact on the Company’s financial statements.
b) Going concern
The Board, in its consideration of going concern, has reviewed comprehensive cash flow forecasts prepared
by the Investment Adviser, as well as the performance of the solar and wind plants currently in operation.
Notes to the Financial Statements for the year ended 30 June
2024 (continued)
119
2. Summary of material accounting policies (continued)
b) Going concern (continued)
The Group has a committed Revolving Credit Facility (RCF) of £210 million, with an uncommitted
accordion feature that allows for an additional £30 million. The facility is set to mature in May 2025. As of
30 June 2024, the Group had drawn £184 million from the RCF. After the year-end, following the
completion of Phase Two of the strategic partnership with GLIL, £50.5 million was repaid, reducing the
drawn balance to £133.5 million.
The Investment Adviser is currently in discussions with lenders to refinance and extend the RCF by an
additional two years in early 2025. Lenders have indicated a strong interest in the extension. With robust
cash generation, the Board is confident that all debt repayments will be met and confirms that no covenant
breaches occurred during the year.
UK inflation dropped from 10.7% (RPI) in June 2023 to 2.9% in June 2024. In August 2024, the Bank of
England cut the Base Rate to 5.00%, with 5 year gilt rates now below 4%. Lower interest rates reduce BSIF’s
credit costs, while fixed-rate debt has significantly shielded it from rate hikes.
BSIF has built a robust development pipeline exceeding 1.5 GW, with two major solar projects, Yelvertoft
(48.4MW) and Mauxhall Farm (44.5MW), connected to electricity network shortly after the Year end. Over
750 MW of the pipeline is fully consented, ready for construction within five years.
The Investment Adviser, with BSIF Board approval, is actively managing the large pipeline, and is planning
to sell around a third of this based on funding availability, a strategy which continues to be reviewed on a
regular basis.
BSIF's Investment Adviser focuses on protecting and enhancing the operational portfolio through proactive
risk mitigation. A rolling capital investment programme addresses key risks, such as long lead times for
high voltage spare parts, particularly central inverters. Significant inverter revamping projects were
completed, boosting performance in late FY2023/24, with full benefits expected in FY2024/25. Additional
optimisation and repowering projects are planned for the upcoming year.
The Board also notes that at the AGM held on 28 November 2023, the shareholders of the Company voted
overwhelmingly in favour for the continuation of the Company for a further 5 years.
Taking the above into account, at the time of approving these accounts the Board has a reasonable
expectation that the Company has adequate resources to continue in operational existence for the 12
months from the date of signing the financial statements and does not consider there to be any material
threat to the viability of the Company. The Board has therefore concluded that it is appropriate to adopt the
going concern basis of accounting in preparing the financial statements.
c) Basis of Non-Consolidation
The Company makes its investments in the SPVs through its wholly owned subsidiary, BR1. The Company
meets the definition of an investment entity as described by IFRS 10. Under IFRS 10 investment entities
are required to hold subsidiaries at fair value through profit or loss rather than consolidate them.
Under the definition of an investment entity, the entity should satisfy all three of the following tests:
obtains funds from one or more investors for the purpose of providing these investors with investment
management services;
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); and
measures and evaluates the performance of substantially all of its investments on a fair value basis.
Notes to the Financial Statements for the year ended 30 June
2024 (continued)
120
2. Summary of material accounting policies (continued)
c) Basis of Non-Consolidation (continued)
In assessing whether the Company meets the definition of an investment entity set out in IFRS 10, the
Directors note that:
the Company is an investment company that invests funds obtained from multiple investors in a
diversified portfolio of renewable energy infrastructure assets and has appointed the Investment
Adviser to advise on the Company’s investments;
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 expire
and may also exit investments earlier for reasons of portfolio balance or profit; and
the Board evaluates the performance of the Company’s investments on a fair value basis with the fair
value of operational SPVs being calculated on a discounted cash flow basis in accordance with the IPEV
Valuation Guidelines. The Investment Adviser recommends the fair value on a quarterly basis, which
includes a complete review of all valuation assumptions on a semi-annual basis, subject to the Board's
approval as at 30 June and 31 December each year.
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 Board considered the investment entity status of BR1 and concluded that it is, like the Company, an
investment entity based on the same factors as listed above. As such the Company is not permitted to
consolidate BR1 in the preparation of its financial statements and all subsidiaries are recognised at fair
value through profit or loss.
d) Functional and presentation currency
These financial statements are presented in Sterling, which is the functional currency of the Company as
well as the presentation currency. All amounts are stated to the nearest thousand unless otherwise stated.
The Company’s funding, investments and transactions are all denominated in Sterling.
e) Income
Monitoring fee income is recognised on an accruals basis.
Interest income on cash and cash equivalents is recognised on an accruals basis using the effective interest
rate method.
f) Expenses
Operating expenses are the Company’s costs incurred in connection with the ongoing administrative costs
and management of the Company’s investments. Operating expenses are accounted for on an accruals basis.
g) Finance costs
Finance costs are recognised in the Statement of Comprehensive Income in the period to which they relate
on an accruals basis using the effective interest rate method. Arrangement fees for finance facilities are
amortised over the expected life of the facility.
Notes to the Financial Statements for the year ended 30 June
2024 (continued)
121
2. Summary of material accounting policies (continued)
h) Dividends
Dividends declared and approved are charged against equity. A corresponding liability is recognised for any
unpaid dividends prior to year end. Dividends approved but not declared will be disclosed in the notes to
the financial statements.
i) Segmental reporting
IFRS 8 ‘Operating Segments’ requires a ‘management approach’, under which segment information is
presented on the same basis as that used for internal reporting purposes.
The Board has considered the requirements of IFRS 8 ‘Operating Segments’, and is of the view that the
Company is engaged in a single segment of business, being investment in UK renewable energy
infrastructure assets via its holding company and SPVs, and therefore the Company has only a single
operating segment.
The Board, as a whole, has been determined as constituting the chief operating decision maker of the
Company. The key measure of performance used by the Board to assess the Company’s performance and to
allocate resources is the total return on the Company’s NAV, as calculated under IFRS, and therefore no
reconciliation is required between the measure of profit or loss used by the Board and that contained in
these financial statements.
The Board has overall management and control of the Company and will always act in accordance with the
investment policy and investment restrictions set out in the Company’s latest Prospectus, which cannot be
radically changed without the approval of Shareholders. The Board has delegated the day-to-day
implementation of the investment strategy to its Investment Adviser but retains responsibility to ensure
that adequate resources of the Company are directed in accordance with their decisions. Although the Board
obtains advice from the Investment Adviser, it remains responsible for making final decisions in line with
the Company’s policies and the Board’s legal responsibilities.
j) Financial instruments
Classification and measurement of financial assets and financial liabilities
Financial assets and financial liabilities are recognised in the Company’s Statement of Financial Position
when the Company becomes a party to the contractual provisions of the instrument.
i) Financial assets held at fair value through profit or loss
Classification
The Company’s investment in BR1 is accounted for as a financial asset rather than consolidated as the
Company qualifies as an investment entity under IFRS 10, therefore the Company’s investment is held at
fair value through profit or loss in accordance with the requirements of IFRS 9.
Recognition and de-recognition
Purchases and sales of investments are recognised on the trade date – the date on which the Company
commits to purchase or sell the investment. A financial asset is de-recognised either when the Company has
transferred all the risks and rewards of ownership; or it has neither transferred nor retained substantially
all the risks and rewards and when it no longer has control over the assets or a portion of the asset; or the
contractual right to receive cash flow has expired.
Notes to the Financial Statements for the year ended 30 June
2024 (continued)
122
2. Summary of material accounting policies (continued)
j) Financial instruments (continued)
Measurement
Subsequent to initial recognition, investment in BR1 is measured at each subsequent reporting date at fair
value. The Company holds all of the shares in the subsidiary, BR1, which is a holding vehicle used to hold
the Company’s SPV investments. The Directors believe it is appropriate to value this entity based on the fair
value of its portfolio of SPV investment assets held plus its other assets and liabilities. The SPV investment
assets held by the subsidiary are valued semi-annually as described in Note 8 on a discounted cash flow
basis which is benchmarked against market transactions.
Gains or losses, through profit or loss, are made up of BR1’s profit or loss, which comprises mainly cash
receipts from its SPVs, the fair value movement of BR1’s SPV portfolio and cash received in respect of
Eurobond instrument interest. Furthermore, cash receipts made to the Company by BR1 are accounted for
as a repayment of loans and not reflected in the Company’s income, apart from monitoring fees (see Note
4).
ii) Cash and cash equivalents and trade and other receivables
Cash and cash equivalents comprise cash on hand and short term deposits with an original maturity of three
months or less that are readily convertible to a known amount of cash and are subject to an insignificant
risk of changes in value. Other receivables are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. These financial assets are included in current assets,
except for maturities greater than twelve months after the reporting date, which are classified as non-
current assets. They are initially recognised at fair value plus transaction costs that are directly attributable
to the acquisition, and subsequently carried at amortised cost using the effective interest rate method, less
provision for impairment.
iii) Financial liabilities
The classification of financial liabilities at initial recognition depends on the purpose for which the financial
liability was issued and its characteristics.
All financial liabilities are initially recognised at fair value net of transaction costs incurred. All purchases
of financial liabilities are recorded on the trade date, being the date on which the Company becomes party
to the contractual requirements of the financial liability.
The Company’s financial liabilities consist of only financial liabilities measured at amortised cost.
Financial liabilities measured at amortised cost
These include trade payables and other short term monetary liabilities, which are initially recognised at fair
value and subsequently carried at amortised cost using the effective interest rate method.
Derecognition of financial liabilities
A financial liability (in whole or in part) is derecognised when the Company has extinguished its contractual
obligations, it expires, or is cancelled. Any gain or loss on derecognition is taken to profit and loss.
k) Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after
deducting all of its liabilities. Equity instruments issued by the Company are recognised as the proceeds
received, net of direct issue costs. Direct issue costs include those incurred in connection with the placing
and admission which include fees payable under the Placing Agreement, legal costs and any other applicable
expenses.
Notes to the Financial Statements for the year ended 30 June
2024 (continued)
123
2. Summary of material accounting policies (continued)
k) Equity instruments (continued)
Treasury shares are recognised at acquisition cost and are presented as a deduction from shareholders’
equity.
3. Critical accounting judgements, estimates and assumptions in applying the Company’s
accounting policies
The preparation of these financial statements under IFRS requires management to make judgements,
estimates and assumptions that affect the application of policies and reported amounts of assets and
liabilities, income and expenses. The estimates and associated assumptions are based on historical
experience and other factors that are believed to be reasonable under the circumstances, the results of which
form the basis of making judgements about carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these estimates.
The area involving a high degree of judgement and/or complexity and/or area where assumptions and
estimates are significant to the financial statements has been identified as the valuation of the Company’s
investment in BR1 which is estimated predominantly on the valuation of the portfolio of investments held
by BR1 (see Note 8).
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only that period
or in the period of the revision and future period if the revision affects both current and future periods.
As disclosed in Note 8, the Board believes it is appropriate for the Company’s portfolio to be benchmarked
on a £m/MW basis against comparable portfolio transactions and on this basis a weighted average discount
rate of 8.00% (8.00% as at 30 June 2023) has been utilised.
Use of a blended power forecast is unchanged. The inflation assumption also remains unchanged at 3.5%
in 2024, and 3% from 2025 to 2029 as a medium-term rate (June 2023: 3%), before reducing to a long term
assumption of 2.25% (June 2023: 2.25%) thereafter.
The Directors’ Valuation as at 30 June 2024 is based on a weighted average life of the portfolio of 27 years
(vs. 28 years in June 2023), reflecting both new acquisitions and asset life extensions.
4. Income from investments
Year ended
Year ended
30 June 202
4
30 June 202
3
£’000
£’000
Monitoring fee in relation to loans supplied (Note 16)
900
900
900
900
The Company provides monitoring and loan administration services to BR1 for which an annual fee is
charged, payable in arrears.
Notes to the Financial Statements for the year ended 30 June
2024 (continued)
124
5. Administrative expenses
Year ended
Year ended
30 June 202
4
30 June 202
3
£’000
£’000
Investment advisory base fee * (see Note 16) 663
729
Legal and professional fees 322
300
Administration fees 504
542
Directors’ remuneration 284
272
Audit fees 124
112
Non-audit fees 48
45
Broker fees 50
50
Regulatory Fees 66
58
Registrar fees 35
88
Insurance 14
12
Listing fees 43
45
Other expenses 37
24
2,190
2,277
*The Investment advisory base fee is paid by both the Company (10%) and BR1 (90%). The amount shown above reflects
the amount paid by the Company only. Note 16 shows the full fee paid to the Investment Adviser.
Investment Advisory Agreement
The Company, BR1 and the Investment Adviser have entered into an Investment Advisory Agreement,
under which the Investment Adviser has overall responsibility for the non-discretionary management of
the Company’s assets and any of BR1’s SPVs (including uninvested cash) in accordance with the Company’s
investment policies, restrictions and guidelines.
The Investment Adviser is entitled to a base fee, which is payable quarterly in arrears, on the following
scale:
NAV up to and including £750,000,000, 0.8% per annum
NAV above £750,000,000> £900,000,000, 0.75% per annum
NAV above £900,000,000, 0.65% per annum.
The fee is based on the NAV reported in the most recent quarterly NAV calculation. The above fee scale is
effective from 21 December 2023 following the approval of an updated Investment Advisory Agreement
during the year. Previously, the fee was calculated at a rate of 0.8% per annum of the NAV up to and
including £750,000,000, 0.75% per annum of the NAV above £750,000,000 and up to and including
£1,000,000,000 and 0.65 per annum of the NAV above £1,000,000,000.
Under the amended and restated Investment Advisory agreement dated 21 December 2023, the Investment
Adviser is also entitled, subject to exceptional circumstances, to receive a 20% Development Profit Margin
Commission on the disposal of development projects to third parties.
In the event that the Company terminates the Investment Advisory Agreement prior to the expiry of the
lease on the Investment Adviser’s office in London, the Company has agreed to meet 80% of the rent and
other charges until the expiry of the current lease.
Notes to the Financial Statements for the year ended 30 June
2024 (continued)
125
5. Administrative expenses (continued)
Investment Advisory Agreement (continued
On 11 June 2014, BSIFIL (as the previous holding company) entered into a Technical Services Agreement
with the Investment Adviser, with a retrospective effective date of 25 June 2013, in order to delegate the
provision of the consultancy services to the Investment Adviser in its capacity as technical adviser to the
SPVs. On the same date the Group entered into a base fee offset arrangement agreement, whereby the
aggregate technical services fee and base fee payable (under the Investment Advisory Agreement) shall not
exceed the base fee that would otherwise have been payable to the Investment Adviser in accordance with
the Investment Advisory Agreement had no fees been payable under the Technical Services Agreement.
The fees incurred for the year and the amount outstanding at the year end are shown in Note 16.
Administration Agreement
The Administrator has been appointed to provide day-to-day administration and company secretarial
services to the Company, as set out in the Administration Agreement dated 24 June 2013.
Under the terms of the Administration Agreement, the Administrator is entitled to an annual fee, at a rate
equivalent to 10 basis points of NAV up to and including £100,000,000, 7.5 basis points of NAV above
£100,000,000 and up to and including £200,000,000 and 5 basis points of the NAV above £200,000,000,
subject to a minimum fee of £100,000 per annum. The fees are for the administration, accounting,
corporate secretarial services, corporate governance, regulatory compliance and stock exchange continuing
obligations provided to the Company. In addition, the Administrator will receive an annual fee of £7,500
and £3,000 for the provision of a compliance officer and money laundering reporting officer, respectively.
The Administrator is entitled to an investment related transaction fee charged on a time spent basis, which
is capped at a total of £5,000 per investment related transaction. All reasonable costs and expenses incurred
by the Administrator in accordance with this agreement are reimbursed to the Administrator quarterly in
arrears.
The Administrator also receives a fee of £5,000 per annum in relation to the administration of the
Company’s Guernsey Green Fund Status.
For the year ended 30 June 2024, the Company incurred fees to the Administrator of £503,977 (2023:
£542,176), of which £129,908 (2023: £135,992) was outstanding at the year end.
6. Taxation
The Company has obtained exempt status under the Income Tax (Exempt Bodies) (Guernsey) Ordinance
1989 for which it paid an annual fee of £1,600 (2023: £1,200) (included within regulatory fees).
The income from the Company’s investments is not subject to any further tax in Guernsey although the
subsidiary and underlying SPVs, as UK based entities, are subject to the current prevailing UK corporation
tax rate. The standard rate of UK corporation tax is 25% (2023: 25%).
7. Net asset value per Ordinary Share
The calculation of NAV per Ordinary Share is based on NAV of £781,557,386 (2023: £854,189,487) and the
number of shares in issue at 30 June 2024 of 602,374,217 (2023: 611,452,217) Ordinary Shares.
Notes to the Financial Statements for the year ended 30 June
2024 (continued)
126
8. Financial assets held at fair value through profit or loss
The Company’s accounting policy on the measurement of these financial assets is discussed in Note 2(j)(i)
and below.
30 June 2024
30 June 2023
Total
Total
£’000
£’000
Opening balance (Level 3) 852,844
856,380
Cash receipts from non-consolidated subsidiary* (64,465)
(51,700)
Realised gains on investment in non-consolidated subsidiary** 33,167
21,838
Unrealised change in fair value of financial assets held at fair
value through
profit or loss
***
(41,503)
26,326
Closing balance (Level 3) 780,043
852,844
Analysis of net
(losses)/
gains on financial assets held at fair value through profit or loss
(per statement of comprehensive income)
Year ended
Year ended
30 June 2024
30 June 2023
£’000
£’000
Unrealised change in fair value of financial
assets held at fair value through profit or
loss
***
(
41,503
)
26,326
Realised gains on investment in non-
consolidated subsidiary
*
*
33,167
21,838
Net (losses)/gains on financial assets
held at fair value through profit or loss
(8,336)
48,164
*Comprising of repayment of Eurobond loans issued by BR1 and Eurobond interest received
**Interest received on Eurobond loans issued by BR1
***The movement in unrealised losses for the year ended 30 June 2023 of (£3,536,000) as stated in the
prior year’s financial statements has been amended to reflect the amended presentation of the principal
repayments in the table above.
Investments at fair value through profit or loss comprise the fair value of the investment portfolio, which
the Investment Adviser recommends on a quarterly basis, including a complete review of all valuation
assumptions on a semi-annual basis, subject to the Board’s approval, and the fair value of BR1, the
Company’s single, direct subsidiary being its cash, working capital and debt balances. A reconciliation of
the investment portfolio value to financial assets at fair value through profit or loss in the Statement of
Financial Position is shown on page 127.
The above tables as presented in the prior year’s financial statements have been revised to show more clearly
the impact on realised and unrealised gains of cash receipts from non-consolidated subsidiary. These
receipts totalling £51,700,000 in the prior year comprised repayments of Eurobond loan principal of
£29,862,000 and Eurobond interest received of £21,838,000.
Notes to the Financial Statements for the year ended 30 June
2024 (continued)
127
8. Financial assets held at fair value through profit or loss (continued)
30 June 2024
30 June 2023
Total
Total
£’000
£’000
SPV investment portfolio, Directors’ Valuation
965,549
1,018,350
Immediate Holding Company
Cash
28,671
26,407
Working capital
(30,177)
(38,913)
Debt
(184,000)
(153,000)
(185,506)
(165,506)
Financial assets at fair value through profit or loss
780,043
852,844
Fair value measurements
IFRS 13 ‘Fair Value Measurement’ requires disclosure of fair value measurement by level. The level of fair
value hierarchy within the financial assets or financial liabilities is determined on the basis of the lowest
level input that is significant to the fair value measurement. Financial assets and financial liabilities are
classified in their entirety into only one of the three levels.
The fair value hierarchy has the following levels:
Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2 – inputs other than quoted prices included within Level 1 that are observable for the assets or
liabilities, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
Level 3 – inputs for assets or liabilities that are not based on observable market data (unobservable
inputs).
The determination of what constitutes ‘observable’ requires significant judgement by the Company. The
Company considers observable data to be market data that is readily available, regularly distributed or
updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively
involved in the relevant market.
The only financial instrument carried at fair value is the investment held by the Company, BR1, which is
fair valued at each reporting date. The Company’s investment has been classified within Level 3 as BR1’s
investments are not traded and contain unobservable inputs.
Transfers during the year
There have been no transfers between levels during the year ended 30 June 2024. Any transfers between
the levels will be accounted for on the last day of each financial year. Due to the nature of the investments,
these are always expected to be classified as Level 3.
Notes to the Financial Statements for the year ended 30 June
2024 (continued)
128
8. Financial assets held at fair value through profit or loss (continued)
Directors’ Valuation methodology and process
The same valuation methodology and process for operational assets is followed in these financial statements
as was applied in the preparation of the Company’s financial statements for the year ended 30 June 2023.
Before planning has been achieved, no value is attributed (beyond costs incurred), to the Company’s
development pipeline.
However, once the projects receive planning permission they are then valued according to the following
criteria:
Projects purchased by the Company from developers are valued at investment cost (deemed to
approximate fair value).
Other projects in the Company’s pipeline are valued on an asset-by-asset basis and benchmarked
against values from wider market processes.
During the construction stages assets continue to be valued at investment cost (deemed to be approximate
fair value). The Investment Adviser intends for newly built projects to be valued on a DCF basis shortly after
they become operational.
Investments that are operational are valued on a DCF basis over the life of the asset (typically more than 25
years) and, under the ‘willing buyer-willing seller’ methodology, prudently benchmarked on a £/MW basis
against comparable transactions for large scale portfolios.
Each investment is subject to full UK corporate taxation at the prevailing rate with the tax shield being
limited to the applicable capital allowances from the Company’s SPV investments.
The Investment Adviser recommends the fair value on a quarterly basis, which includes a complete review
of all valuation assumptions on a semi-annual basis, subject to the Board's approval. The key inputs, as
listed below, are derived from various internal and external sources. The key inputs to a DCF based
approach are: the equity discount rate, the cost of debt (influenced by interest rate, gearing level and length
of debt), power price forecasts, long term inflation rates, asset life, irradiation forecasts, average wind
speeds, operational costs and taxation. Given discount rates are a product of not only the factors listed
previously but also regulatory support, perceived sector risk and competitive tensions, it is not unusual for
discount rates to change over time. Evidence of this is shown by way of the revisions to the original discount
rates applied between the first renewable acquisitions and those witnessed in the past twelve months.
Both the current and prior year valuations saw the inclusion of the Electricity Generator Levy (“the Levy”)
on excess profits produced by electricity generators as announced by the Chancellor of the Exchequer in the
Autumn Statement in November 2022. The Levy is a temporary 45% tax on the extraordinary returns made
by electricity generators towards the end of 2022 while European energy prices soared in the wake of
Russia’s invasion of Ukraine. The Levy will be in place from 1 January 2023 until 31 March 2028, with the
benchmark price linked to UK Consumer Price Inflation. The Investment Adviser previously sought
external advice from its legal and tax advisers on how to model the Levy within the valuation methodology.
Given discount rates are subjective, there is sensitivity within these to the interpretation of factors outlined
above.
Notes to the Financial Statements for the year ended 30 June
2024 (continued)
129
8. Financial assets held at fair value through profit or loss (continued)
Directors’ Valuation methodology and process (continued)
The weighted average discount rate has been maintained at 8.00% as at 30 June 2024 (2023: 8.00%). The
Board have determined that an effective price of £1.24m/MW (2023: £1.35m/MW) is an appropriate basis
for the valuation of the BSIF portfolio as at 30 June 2024. The reduction compared to 30 June 2023 is
mainly due to a decline in working capital levels due to debt repayments, dividends and investment into
construction assets and declines in power forecasts.
In order to smooth the sensitivity of the valuation to forecast timing or opinion taken by a single forecast,
the Board continues to adopt the application of blended power curves from three leading forecasters.
The fair values of operational SPVs are calculated on a discounted cash flow basis in accordance with the
IPEV Valuation Guidelines. The Investment Adviser recommends the fair value on a quarterly basis, which
includes a complete review of all valuation assumptions on a semi-annual basis, subject to the Board’s
approval as at 30 June and 31 December each year.
Sensitivity analysis
The table below analyses the sensitivity of the fair value of the Directors’ Valuation to an individual input,
while all other variables remain constant.
The Directors consider the changes in inputs to be within a reasonable range based on their understanding
of market transactions. This is not intended to imply that the likelihood of change or that possible changes
in value would be restricted to this range.
30 June 202
4
30 June 202
3
Input
Change in
input
Change in fair
value
of Directors’
Valuation
£m
Change in
NAV
per share
(pence)
Change in fair
value
of Directors’
Valuation
£m
Change in
NAV
per share
(pence)
Discount rate
+ 0.5%
(20.6)
(3.43)
(18.8)
(3.07)
- 0.5%
16.4
2.73
19.4
3.17
Power prices
+10%
58.1
9.65
54.2
8.86
-
10%
(62.9)
(10.45)
(56.9)
(9.31)
Inflation rate
+ 0.5%
44.5
7.39
31.7
5.19
-
0.5%
(46.5)
(7.73)
(30.2)
(4.94)
Energy yield
10-year P90
(102.8)
(17.07)
(105.0)
(17.17)
10
-
year
P10
104.7
17.3
7
111.9
18.30
O&M
+10%
(11.6)
(1.93)
(9.1)
(1.49)
-
10%
6.9
1.1
4
9.1
1.49
Notes to the Financial Statements for the year ended 30 June
2024 (continued)
130
8. Financial assets held at fair value through profit or loss (continued)
Subsidiaries and Associates
The Company holds investments through subsidiary companies which have not been consolidated as a
result of the adoption of IFRS 10: Investment entities exemption to consolidation. Below is the legal entity
name and ownership percentage for the SPVs which are all incorporated in the UK except for Bluefield
Durrants GmBH which is incorporated in Germany.
Name
Ownership
percentage
Name
Ownership
percentage
Bluefield Renewables 1 Limited
100
Gypsum Solar Farm Limited
100
Bluefield Renewables 2 Limited
100
Holly Farm Solar Park Limited
100
Bluefield SIF Investments Limited
100
Kellingley Solar Farm Limited
100
Bunns Hill Solar Limited
100
Little Bear Solar Limited
100
HF Solar Limited
100
Place Barton Farm Solar Park Limited
100
Hoback Solar Limited
100
Willows Farm Solar Limited
100
Littlebourne Solar Farm Limited
100
Southwick Solar Limited
100
Molehill PV Farm Limited
100
Butteriss Down Solar Farm Limited
100
Pashley Solar Farm
Limited
100
Goshawk Solar Limited
100
ISP (UK) 1 Limited
100
Kite Solar Limited
100
Solar Power Surge Limited
100
Peregrine Solar Limited
100
West Raynham Solar Limited
100
Promothames 1
Limited
100
Sheppey Solar Limited
100
Rookery Solar
Limited
100
Capelands Solar Farm Limited
100
Mikado Solar Projects (2) Limited
100
North Beer Solar Limited
100
Mikado Solar Projects (1) Limited
100
WEL Solar Park 2 Limited
100
KS SPV 5 Limited
100
Hardingham Solar Limited
100
Eagle Solar
Limited
100
Redlands Solar Farm Limited
100
Kislingbury M1 Solar Limited
100
WEL Solar Park 1 Limited
100
Thornton Lane Solar Farm Limited
100
Saxley Solar Limited
100
Gretton Solar Farm Limited
100
Frogs L
o
ke Solar Limited
100
Wormit
Solar Farm Limited
100
Old Stone Farm Solar Park Limited
100
Langlands Solar Limited
100
Bradenstoke Solar Park Limited
100
Bluefield Merlin LTD
100
GPP Langstone LLP
100
Harrier Solar Limited
100
Ashlawn Solar Limited
100
Rhydy
Pandy Solar Limited
100
Betingau Solar Limited
100
New Energy Business Solar Limited
100
Grange Solar Limited
100
Corby Solar Limited
100
Hall Solar Limited
100
Falcon Solar Farm Limited
100
Oulton Solar Limited
100
Folly Lane Solar Limited
100
Romsey Solar Limited
100
New Road Solar Limited
100
Salhouse Solar Limited
100
Blossom 1 Solar Limited
100
Tollgate Solar Limited
100
Blossom 2 Solar Limited
100
Trethosa Solar Limited
100
New Road 2 Solar Limited
100
Welbourne Energy LLP
100
GPP Eastcott LLP
100
Barvills Solar Limited
100
GPP Blackbush LLP
100
Clapton Farm Solar Park Limited
100
GPP Big Field LLP
100
Court Farm Solar
Farm
Limited
100
WSE Hartford Wood Limited
60
East Farm Solar Park Limited
100
Oak Renewables 2 Limited
100
Galton Manor
Solar Park Limited
100
Oak Renewables Limited
100
Notes to the Financial Statements for the year ended 30 June
2024 (continued)
131
8. Financial assets held at fair value through profit or loss (continued)
Subsidiaries and Associates (continued)
Name
Ownership
percentage
Name
Ownership
percentage
Creathorne Farm Solar Park Limited
(formerly Good Energy Creathorne Farm
Solar Park (003) Limited
)
100
Wind Energy Scotland (Fourteen Arce
Fields) Limited
100
Lower End Farm Solar Park Limited
(formerly Good Energy Lower End Farm
Solar
Park (026)
Limited)
100
Wind Energy Scotland (Birkwood
Mains) Limited
100
Woolbridge Solar Park Limited (formerly
Good Energy Woolbridge Solar Park
(010) Limited)
100
Wind Energy Scotland (Holmhead)
Limited
100
Rook Wood Solar Park Limited (formerly
Good Energy Rook Wood Solar Park
(057) Limited
)
100
Mosscliff Power 5 Limited 100
Carloggas Solar Park Limited (formerly
Good Energy Carloggas Solar Park (009)
Limited
)
100
Mosscliff Power 10 Limited 100
Cross Road Plantation Solar Park Limited
(formerly Good Energy Cross Road
Plantation Solar Park (028) Limited)
100
Mosscliff Power 2 Limited 100
Delabole Windfarm Limited (formerly
Good Energy Delabole Windfarm Limited
100
Mosscliff Power 3 Limited 100
Hampole Windfarm Limited (formerly
Good Energy Hampole Windfarm
Limited)
100
Mosscliff Power 4 Limited 100
Renewable Energy Assets Limited
(formerly Wind Energy Generation Assets
No.1 Limited and Good Energy
Generation Assets No.1 Limited)
100
Mosscliff Power 6 Limited 100
Wind Energy 1 Hold Co Limited
100
Mosscliff Power 7 Limited 100
Aisling Renewables Limited
100
Mosscliff Power Limited 100
Wind Energy 3 Hold Co
100
E2 Energy PLC 100
Wind Energy (NI) Limited
100
Wind Energy One Limited 100
Ash Renewables No 3 Limited
100
Wind Energy Two Limited 100
Ash Renewables No 4 Limited
100
New Road Wind Limited 100
Ash Renewables No 5 Limited
100
Yelvertoft Solar Farm Limited 100
Ash Renewables No 6 Limited
100 Paytherden Solar Farm Limited
(formerly Peradon Solar Farm
Limited
)
100
Wind Beragh Limited
100
Lower Tean Leys Solar Farm Limited 60
Wind Camlough Limited
100
Lower Mays Solar Farm Limited 100
Wind Cullybackey Limited
100
Longpasture Solar Farm Limited 60
Wind Dungorman Limited
100
Leeming Solar Farm Limited 60
Wind Killeenan Limited
100
Wallace Wood Solar Farm Limited 60
Wind Mowhan Limited
100
LEO1B Energy Park Limited 60
Wind Mullanmore Limited
100
LH DNO Grid Services Limited 60
Carmoney Energy Limited
100
Sweet Briar Solar Farm Limited 60
Errigal Energy Limited
100
BF31 WHF Solar Limited 60
Galley Energy Limited
100
BF27 BF Solar Limited 60
S&E Wind Energy Limited
100
BF13A TF Solar Limited 60
Wind Energy 2 Hold Co Limited
100
HW Solar Farm Limited 100
Boston RE Ltd
100
AR108 Bolt Solar Farm Limited 100
Notes to the Financial Statements for the year ended 30 June
2024 (continued)
132
8. Financial assets held at fair value through profit or loss (continued)
Subsidiaries and Associates (continued)
Name
Ownership
percentage
Name
Ownership
percentage
DC21 Earth SPV Limited
100
BF33C LHF Solar Limited 60
E5 Energy Limited
100
AR006 GF Solar Limited 100
E6 Energy Limited
100
Mauxhall Farm Energy Park Limited 100
E7 Energy Limited
100
BF16D BHF Solar Limited 100
Hallmark Powergen 3 Limited
100
BF33E BHF Solar Limited 60
Warren Wind Limited
100
BF58 Hunts Airfield Solar Ltd 60
Wind Energy Three Limited
100
Lightning 1 Energy Park Limited 100
Wind Energy Holdings Limited
100
Abbots Ann Farm Solar Park Limited 100
Crockbaravally Wind Holdco Limited 100
Canada Farm Solar Park Limited 100
Crockbaravally Wind Farm Limited 100 Kinetica 846 Limited
100
Dayfields Solar Limited 100 Kinetica 868 Limited
100
Farm Power Apollo Limited 100
Twineham Energy Limited 60
Freathy Solar Park Limited 100
Sheepwash Lane Energy Barn Limited 100
IREEL FIT TopCo Limited 100 Whitehouse Farm Energy Barn
Limited
100
IREEL FIT HoldCo Limited 100
Bluefield Durrants GmBH 100
IREEL Wind TopCo Limited 100
New Road Solar 3 Limited 100
IREEL Solar HoldCo Limited 100
New Road Solar 4 Limited 100
IREL Solar HoldCo Limited 100 Renewable Energy Hold Co Limited
(formerly Wind Energy Holding
Company No.1 Limited and Good
Energy Holding Company No.1
Limited)
100
Ladyhole Solar Limited 100
Westover Gridco Limited
50
Morton Wood Solar Limited 100
Lyceum Solar Limited
9
Nanteague Solar Limited 100
Wind Energy 4 Hold Co Limited
100
Newton Down Wind HoldCo Limited 100 West Raynham X Energy Park
Limited
60
Newton Down Windfarm Limited 100
Padley Wood Solar Limited 100
Peel Wind Farm (Sheerness) Limited 100
Port of Sheerness Wind Farm Limited 100
Sandys Moor Solar Limited 100
St Johns Hill Wind Holdco Limited 100
St Johns Hill Wind Limited 100
Trickey Warren Solar Limited 100
Whitton Solar Limited 100
LPF UK Equityco Limited 100
LPF UK Solar Limited 100
LPF Kinetica UK Limited 100
Notes to the Financial Statements for the year ended 30 June
2024 (continued)
133
9. Trade and other receivables
30 June 2024
30 June 2023
£’000
£’000
Current assets
Income from investments 900
900
Other receivables 24
10
924
910
There are no material past due or impaired receivable balances outstanding at the year end.
The Directors consider that the carrying amount of all receivables approximates to their fair value.
10. Cash and cash equivalents
Cash and cash equivalents comprise cash held by the Company and short term bank deposits held with
maturities of up to three months. The carrying amount of these assets as at 30 June 2024 was £1,253,168
(2023: £968,878) and approximated their fair value. Cash held by BR1, the Company’s immediate wholly
owned subsidiary, as at 30 June 2024 is shown in Note 8.
11. Other payables and accrued expenses
30 June 202
4
30 June 202
3
£’000
£’000
Current liabilities
Investment advisory fees 162
164
Administration fees 130
136
Audit fees 120
109
Payable for Treasury shares purchased 106
-
Directors’ fees 85
72
Other payables 60
53
663
534
The Company has financial risk management policies in place to ensure that all payables are paid within
the agreed credit period. The Directors consider that the carrying amounts of all payables approximate to
their fair value.
12. Earnings per share
Year ended
Year ended
30
June 202
4
30 June 202
3
(Loss)/profit attributable to Shareholders of the Company
(£
9,600,983
)
£46,793,621
Weighted average number of Ordinary shares 609,849,113
611,452,217
Basic and diluted earnings from continuing
operations and (loss)/profit for the year (pence per
share)
(1.57)
7.65
Notes to the Financial Statements for the year ended 30 June
2024 (continued)
134
13. Share capital
The authorised share capital of the Company is represented by an unlimited number of Ordinary Shares of
no par value which, upon issue, the Directors may designate into such classes and denominate in such
currencies as they may determine.
Number of
Ordinary Shares
Year ended
30 June 202
4
Year ended
30 June 202
3
Number
Number
Opening balance 611,452,217
611,452,217
Purchase of Ordinary shares into Treasury (9,078,000)
-
Closing balance 602,374,217
611,452,217
Treasury Shares
On 15 February 2024, the Company announced a share buyback programme in which it had allocated £20
million to purchase its own shares post closed period. During the year ended 30 June 2024, 9,078,000
Treasury shares were purchased at an average price of 103.19 pence per share. The total amount spent on
the buyback was £9,368,038.
The Company held 9,078,000 Treasury shares at the year end (2023: nil).
Shareholders’ Equity
Year ended
30 June 202
4
Year ended
30 June 202
3
£’000
£’000
Opening balance 854,189
858,391
Purchase of Ordinary shares into Treasury (9,368)
-
Dividends paid (53,663)
(50,995)
Total comprehensive (loss)/income (9,601)
46,793
Closing balance 781,557
854,189
Rights attaching to shares
The Company has a single class of Ordinary Shares, which are entitled to dividends declared by the
Company. At any general meeting of the Company, each ordinary Shareholder is entitled to have one vote
for each share held. The Ordinary Shareholders also have the right to receive all income attributable to
those shares and participate in distributions made and such income shall be divided pari passu among the
holders of Ordinary Shares in proportion to the number of Ordinary Shares held by them.
14. Dividends
On 7 August 2023, the Board declared a third interim dividend of £12,840,497, in respect of the year ended
30 June 2023, equating to 2.10pps (third interim dividend in respect of the year ended 30 June 2022:
2.05pps), which was paid on 1 September 2023 to Shareholders on the register on 18 August 2023.
On 28 September 2023, the Board declared a fourth interim dividend of £14,063,401 in respect of the year
ended 30 June 2023, equating to 2.30pps (fourth interim dividend in respect of the year ended 30 June
2022: 2.09pps), which was paid on 6 November 2023 to Shareholders on the register on 6 October 2023.
Notes to the Financial Statements for the year ended 30 June
2024 (continued)
135
14. Dividends (continued)
On 26 January 2024, the Board declared its first interim dividend of £13,451,949, in respect of the year
ending 30 June 2024, equating to 2.20pps (first interim dividend in respect of the year ended 30 June
2023: 2.10pps), which was paid on 9 March 2024 to Shareholders on the register on 9 February 2024.
On 14 May 2024, the Board declared a second interim dividend of £13,307,233, in respect of the year ended
30 June 2024, equating to 2.20pps (second interim dividend in respect of the year ended 30 June 2023:
2.10pps), which was paid on 24 June 2024 to Shareholders on the register on 24 May 2024.
15. Risk management policies and procedures
The Company is exposed to a variety of financial risks, including market risk (including price risk, currency
risk and interest rate risk), credit risk, liquidity risk and portfolio operational risk. The Investment Adviser
and the Administrator report to the Board on a quarterly basis and provide information to the Company
which allows it to monitor and manage financial risks relating to its operations.
The Company's overall risk management programme focuses on the unpredictability of financial markets
and government energy policy and seeks to minimise potential adverse effects on the Company's financial
performance, as referenced in the Principal Risks and Uncertainties section in the Strategic Report.
The Board is ultimately responsible for the overall risk management approach within the Company. The
Board has established procedures for monitoring and controlling risk. The Company has investment
guidelines that set out its overall business strategies, its tolerance for risk and its general risk management
philosophy.
In addition, the Investment Adviser monitors and measures the overall risk bearing capacity in relation to
the aggregate risk exposure across all risk types and activities. Further details regarding these policies are
set out below:
Market price risk
Market price risk is defined as the risk that the fair value of future cash flows of a financial instrument held
by the Company, in particular through the Company’s subsidiary, BR1, will fluctuate because of changes in
market prices.
Market price risk will arise from changes in electricity prices whenever PPAs expire and are renewed. The
timing of these is staggered to minimise risk.
BR1’s future SPV investments are subject to fluctuations in the price of secondary assets which could have
a material adverse effect on the BR1’s ability to source projects that meet its investment criteria and
consequently its business, financial position, results of operations and business prospects.
The Company's overall market position is monitored by the Investment Adviser and is reviewed by the
Board of Directors on an ongoing basis.
Currency risk
The Company does not have any direct currency risk exposure as all its investments, borrowings and other
transactions are in Sterling. The Company is however indirectly exposed to currency risk on future
equipment purchases, made through BR1’s SPVs, where equipment is imported.
Interest rate risk
Interest rate risk is the risk that the value of financial instruments and related income from the cash and
cash equivalents will fluctuate due to changes in market interest rates.
Notes to the Financial Statements for the year ended 30 June
2024 (continued)
136
15. Risk management policies and procedures (continued)
Interest rate risk (continued)
The Company is also exposed, through BR1, to interest rate risk on drawings under its RCF. Please see page
29 in the Investment Adviser’s report for details of the third party debt within the Company’s subsidiaries.
The Company's interest bearing financial assets consist of cash and cash equivalents. The interest rates on
the short term bank deposits are fixed and do not fluctuate significantly with changes in market interest
rates.
The following table shows the portfolio profile of the financial assets at year end:
Interest rate
Total as at
30 June 2024
£’000
Floating rate
RBSI
1.83
%
976
Fixed rate
Lloyds
0.00
%
277
1,253
Interest rate
Total as at
30 June 2023
£’000
Floating rate
RBSI
1.70
%
753
Fixed rate
Lloyds
0.00
%
216
969
The valuation of BR1’s SPV investments is subject to variation in the discount rate, which are themselves
subject to changes in interest rate risk due to the discount rates applied to the discounted cash flow
technique when valuing the investments. The Investment Adviser reviews the discount rates semi-annually
and takes into consideration market activity to ensure appropriate discount rates are recommended to the
Board. The Group is exposed to interest rate risk on the Directors’ Valuation of £965.6m (2023: £1,018.4m).
Credit risk
Credit risk is the risk that a counterparty will be unable to pay amounts in full when due.
Notes to the Financial Statements for the year ended 30 June
2024 (continued)
137
15. Risk management policies and procedures (continued)
Credit risk (continued)
The underlying SPVs are contracted only with investment grade counter parties, mitigating PPA
counterparty risk. The Directors do not have any concerns around the continuing purchasing of power
through its current PPAs.
The Company’s credit risk exposure is due to a portion of the Company's assets being held as cash and cash
equivalents and accrued interest. The Company maintains its cash and cash equivalents and borrowings
across two different banking groups to diversify credit risk. The total exposure to credit risk arises from
default of the counterparty and the carrying amounts of financial assets best represent the maximum credit
risk exposure at the year end date. As at 30 June 2024, the maximum credit risk exposure in relation to
cash and cash equivalents held by the Company was £1,253,168 (2023: £968,878). If the cash and cash
equivalents held by BR1 are included, this increases to £29,923,873 (2023: £27,375,878). All cash and cash
equivalents held by the Company and BR1 is with banks that have a credit rating which is of investment
grade.
Cash
Fixed deposit
Total as at
30 June 202
4
£’000
£’000
£’000
RBSI 976
-
976
Lloyds -
277
277
976
277
1,253
Cash
Fixed deposit
Total as at
30 June 202
3
£’000
£’000
£’000
RBSI 753
-
753
Lloyds -
216
216
753
216
969
The carrying amount of these assets approximates their fair value.
Notes to the Financial Statements for the year ended 30 June
2024 (continued)
138
15. Risk management policies and procedures (continued)
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its liabilities as they fall due. The
Investment Adviser and the Board continuously monitor forecasted and actual cash flows from operating,
financing and investing activities.
As the Company’s investments, through BR1, are in the SPVs, which are private companies that are not
publicly listed, the return from these investments is dependent on the income generated or the disposal of
renewable energy infrastructure assets by the SPVs and will take time to realise.
The Company, through BR1, expects to comply with the covenants of its revolving credit facility.
The following table details the Company’s expected maturity for its financial assets and liabilities. These are
undiscounted contractual cash flows:
Less than one
year
Between
one and five
years
After five
years
Total as at
30 June 202
4
£’000
£’000
£’000
£’000
Assets
Financial assets held at fair
value through profit or loss*
-
-
423,162
423,162
Trade and other
receivables**
924
-
-
924
Cash and cash equivalents
1,253
-
-
1,253
Liabilities
Other payables and accrued
expenses
(663)
-
-
(663)
1,514
-
423,162
424,676
* the Company passes debt to BR1 under loan agreements; as at the year end there is an additional amount
of non-contractual cash which is not reflected above in addition to the interest income
**excluding prepayments
As part of the financing terms provided by all third party leaders to companies within the Group, lenders
have security packages which include charges over the shares of the borrower entity and any wholly owned
subsidiaries.
Notes to the Financial Statements for the year ended 30 June
2024 (continued)
139
15. Risk management policies and procedures (continued)
Liquidity risk (continued)
Less than one
year
Between
one and five
years
After five
years
Total as at
30 June 202
3
£’000
£’000
£’000
£’000
Assets
Financial assets held at fair
value through profit or loss*
-
-
454,460
454,460
Trade and other
receivables**
910
-
-
910
Cash and cash equivalents
969
-
-
969
Liabilities
Other payables and accrued
expenses
(534)
-
-
(534)
1,345
-
454,460
455,805
* the Company passes debt to BR1 under loan agreements; as at the year end there is an additional amount
of non-contractual cash which is not reflected above
**excluding prepayments
Portfolio operational risk
Portfolio operational risk is defined as the risk that renewable energy infrastructure assets perform below
expectation after acquisition and revenue received from the sale of electricity is reduced. This risk is
mitigated by BSL ensuring that operation and maintenance contractors are compliant with their contractual
obligations including reaction times, maintenance plans and service levels.
Concentrations of risk
Concentrations of risk arise from financial instruments that have similar characteristics and are affected
similarly by changes in economic or other conditions. All assets are located in the UK and consist of solar,
wind and energy storage assets.
Capital management policies and procedures
The Company’s capital management objectives are to ensure that the Company will be able to continue as
a going concern while maximising the capital return to equity Shareholders.
In accordance with the Company’s investment policy, the Company’s principal use of cash (including the
proceeds of any share issuance and loan facilities) is to fund BR1’s projects, as well as expenses related to
fundraising, the share issues, ongoing operational expenses and payment of dividends and other
distributions to Shareholders in accordance with the Company's dividend policy.
Notes to the Financial Statements for the year ended 30 June
2024 (continued)
140
15. Risk management policies and procedures (continued)
Capital management policies and procedures (continued)
The Board, with the assistance of the Investment Adviser, monitors and reviews the broad structure of the
Company's capital on an ongoing basis.
The Company has no imposed capital requirements.
The capital structure of the Company consists of issued share capital and retained earnings.
16. Related party transactions and Directors’ remuneration
In the opinion of the Directors, the Company has no immediate or ultimate controlling party.
The Chair was entitled to an annual remuneration of £81,000 (2023: £68,906). The other Directors were
entitled to an annual remuneration of £54,000 (2023: £43,050). The Chair of the Nomination Committee
receives an additional annual fee of £3,000 (2023: N/A). The Chair of the Remuneration Committee
receives an additional annual fee of £3,000 (2023: N/A). The Chair of the Environmental, Social and
Governance Committee receives an additional annual fee of £7,000 (2023: £5,250). The Chair of the Audit
and Risk Committee receives an additional annual fee of £11,000 (2023: £8,768). The Chair of the
Management Engagement and Service Providers Committee receives an additional annual fee of £4,000
(2023: £3,150).
The total Directors’ fees expense for the year amounted to £284,166 (2023: £271,634) of which £85,414
was outstanding at 30 June 2024 (2023: £71,517).
At 30 June 2024, the number of Ordinary Shares held by each Director is as follows:
2024
Number of
Ordinary Shares
2023
Number of
Ordinary Shares
John Scott*
683,929
625,619
Elizabeth Burne
15,000
15,000
Michael Gibbons
37,800
-
Meriel Lenfestey
7,693
7,693
Chris Waldron
*
55
,000
N/A
Paul Le Page
N/A
35,000
799,422
683,312
*Including shares held by PCAs
John Scott and Michael Gibbons are Directors of BR1. They received an annual fee of £6,828 (2023: £6,565)
each for their services to this company. Neil Wood and James Armstrong, who are partners of the
Investment Adviser, are also Directors of BSIFIL and BR1.
The Company and BR1’s investment advisory fees for the year amounted to £6,510,644 (2023: £7,052,064)
of which £512,618 (2023: £554,919) was outstanding at the year end. James Armstrong, Giovanni
Terranova and Neil Wood, who are partners of the Investment Adviser, hold a 0.03%, 0.07% and 0.01%
interest in the Company as at 30 June 2024, respectively.
Notes to the Financial Statements for the year ended 30 June
2024 (continued)
141
16. Related party transactions and Directors’ remuneration (continued)
Fees paid during the year by SPVs to BSL, a company which has the same ownership as that of the
Investment Adviser totalled £5,795,140 (2023: £4,456,173). BSL provides asset management and other
services relating to the operation of daily management activities of the renewable energy project companies.
Fees paid during the year by SPVs to BOL, a company which has the same ownership as that of the
Investment Adviser totalled £15,819,315 (2023: £10,156,959). BOL provides O&M and other services
relating to the operation of daily management activities of the renewable energy project companies.
Fees paid during the year by SPVs to BRD, a company which has the same ownership as that of the
Investment Adviser, totalled £808,168 (2023: £1,624,024). BRD locates and manages a pipeline of
development projects for the Company and the amount includes £Nil (2023: £966,681) for BRD’s share of
development projects sold.
Fees paid during the year by SPVs to BCM, a company which has the same ownership as that of the
Investment Adviser totalled £335,223 (2023: £Nil). BCM provides construction management services on
the new build portfolio.
The Company’s monitoring fee income received from BR1 amounted to £900,000 (2023: £900,000) of
which £900,257 was outstanding at the year end (2023: £900,257).
17. Subsequent events
The following events happened after the end of the Company’s reporting period on 30 June
2024
On 22 July 2024, the Company announced the signing of Phase Two of its long term strategic partnership
with GLIL, being the sale of a 50% stake in a 112.2MW portfolio of UK solar assets which had been 100%
owned by the Company. On 5 September 2024, the Company announced completion of the sale for c.£70
million, of which £50.5 million was used to partially repay the RCF. The remaining proceeds will be used
to provide funding for the Company’s construction pipeline. After completion of Phase Two, the Company’s
equity stake in the combined portfolios increased to approximately 25%. This includes the acquisition of
the Lightsource BP Portfolio, in which Bluefield Solar secured a 9% equity interest alongside GLIL during
Phase One of the Strategic Partnership in December 2023.
Post year end, on 19 August 2024, the Board declared a third interim dividend of £13,171,273 in respect of
the year ended 30 June 2024, equating to 2.20pps (third interim dividend in respect of the year ended 30
June 2023: 2.10pps), which will be paid on or around 30 September 2024 to Shareholders on the register
on 30 August 2024.
Post year end, Meriel Lenfestey bought an additional 12,307 Ordinary Shares and Chris Waldron bought an
additional 35,000 Ordinary Shares of the Company.
Post year end, on 27 September 2024, the Board approved a fourth interim dividend in respect of the year
ended 30 June 2024 of 2.20pps (fourth interim dividend in respect of the year ended 30 June 2023:
2.30pps), which will be declared on 30 September 2024 and will be paid on or around 15 November 2024
to Shareholders on the register on 11 October 2024.
During the period from 1 July 2024 up to and including 26 September 2024, the Company purchased
5,505,000 Treasury shares at a total cost of £5,930,527.
Glossary of Defined Terms (continued)
142
Administrator means Ocorian Administration (Guernsey) Limited
AGM means the Annual General Meeting
AIC means the Association of Investment Companies
AIC Code means the Association of Investment Companies Code of Corporate Governance
AIF means Alternative Investment Fund
AIFM means Alternative Investment Fund Management
AIFMD means the Alternative Investment Fund Management Directive
Articles means the Memorandum of 29 May 2013 as amended and Articles of Incorporation as adopted
by special resolution on 7 November 2016
Auditor means KPMG Channel Islands Limited (see KPMG)
Aviva Investors means Aviva Investors Limited
BCM means Bluefield Construction Management Limited
BEIS means The Department for Business, Energy and Industrial Strategy
BEPS means Base erosion and profit shifting
BESS means battery energy storage systems
Bluefield means Bluefield Partners LLP
Bluefield Group means Bluefield Partners LLP and Bluefield Companies
BOL means Bluefield Operations Limited
Board means the Directors of the Company
BR1 means Bluefield Renewables 1 Limited being the only direct subsidiary of the Company
BRD means Bluefield Renewable Developments Limited
Brexit means departure of the UK from the EU
BSIF means Bluefield Solar Income Fund Limited
BSL means Bluefield Asset Management Services Limited
BSUoS means Balancing Services Use of System charges: costs set to ensure that network companies can
recover their allowed revenue under Ofgem price controls
Business days means every official working day of the week, generally Monday to Friday excluding public
holidays
CAGR means compound annual growth rate
Calculation Time means The Calculation Time as set out in the Articles of Incorporation
CCC means Committee on Climate Change
CfD means Contract for Difference
Glossary of Defined Terms (continued)
143
Company means Bluefield Solar Income Fund Limited
Companies Law means the Companies (Guernsey) Law 2008, as amended (see Law)
Cost of debt means the blended cost of debt reflecting fixed and index-linked elements
CO2e means Carbon Dioxide emissions
CRS means Common Reporting Standard
CSR means Corporate Social Responsibility
DCF means Discounted Cash Flow
DEFRA means the Department for Environment, Food and Rural Affairs
DESNZ means the Department for Energy Security and Net Zero
Defect Risk means that there is an over-reliance on limited equipment manufacturers which could lead to
large proportions of the portfolio suffering similar defects
Directors’ Valuation means gross value of the SPV investments held by BR1, including their holding
companies.
DNO means Distribution Network Operator
DNSH means Do No Significant Harm
DSCR means debt service cover ratio
DTR means the Disclosure Guidance and Transparency Rules of the UK’s FCA
EBITDA means Earnings before interest, tax, depreciation and amortisation
EGL means Electricity Generator Levy
EGM means Extraordinary General Meeting
EIS means Enterprise Investment Scheme
EPC means Engineering, Procurement & Construction
EPS means Earning per share
ESCC means Equity Shares in Commercial Companies category
ESG means Environmental, Social & Governance
EU means the European Union
EV means enterprise valuation
FAC means Final Acceptance Certificate
FATCA means the Foreign Account Tax Compliance Act
FI means Financial Institution
Financial Statements means the audited annual financial statements
Glossary of Defined Terms (continued)
144
FiT means Feed-in Tariff
FRC means Financial Reporting Council
GAV means Gross Asset Value
GDPR means General Data Protection Regulation
GFSC means the Guernsey Financial Services Commission
GHG means greenhouse gas
GHG Protocol supplies the world's most widely used greenhouse gas accounting standards
GLIL means GLIL Infrastructure LLP
Group means Bluefield Solar Income Fund Limited, its subsidiaries and associates
Guernsey Code means the Guernsey Financial Services Commission Finance Sector Code of Corporate
Governance
GWh means Gigawatt hour
GW means Gigawatt peak
IAS means International Accounting Standard
IASB means the International Accounting Standards Board
IFRS means International Financial Reporting Standards as adopted by the EU
Investment Adviser means Bluefield Partners LLP
IPCC means Intergovernmental Panel on Climate Change
IPEV Valuation Guidelines means the International Private Equity and Venture Capital Valuation
Guidelines
IPO means initial public offering
IRR means Internal Rate of Return
IVSC The International Valuation Standards Council
KID means Key Information Document
KPI means Key Performance Indicators
KPMG means KPMG Channel Islands Limited (see Auditor)
kWh means Kilowatt hour
kW means Kilowatt
Law means Companies (Guernsey) Law, 2008 as amended (see Companies Law)
LD means liquidated damages
Listing Rules means the set of FCA rules which must be followed by all companies listed in the UK
Lloyds means Lloyds Bank Group plc
Glossary of Defined Terms (continued)
145
LSE means London Stock Exchange plc
LTF means long term facility provided by Aviva Investors Limited
Macquarie means Macquarie Bank Limited
Main Market means the main securities market of the LSE
MESPC means Management Engagement and Service Providers Committee
MW means Megawatt (a unit of power equal to one million watts)
MWh means Megawatt hour
NatWest means NatWest International plc
NAV means Net Asset Value as defined in the prospectus
NGFS means Network for Greening the Financial System
NIRO means Northern Ireland Renewables Obligation
NMPI means Non-mainstream Pooled Investments and Special Purpose Vehicles and the rules around
their financial promotion
NPPR means the AIFMD National Private Placement Regime
O&M means Operation and Maintenance
OECD means The Organisation for Economic Cooperation and Development
Official List means the Premium Segment of the UK Listing Authority’s Official List
Ofgem means Office of Gas and Electricity Markets
Ordinary Shares means the issued ordinary share capital of the Company, of which there is only one class
Outage Risk means that a higher proportion of large capacity assets hold increased exposure to material
losses due to curtailments and periods of outage
P10 means Irradiation estimate exceeded with 10% probability
P90 means Irradiation estimate exceeded with 90% probability
PAI means Principle Adverse Indicators
PCA means Persons Closely Associated
PCAF means Partnership for Carbon Accounting Financials
PPA means Power Purchase Agreement
pps means pence per share
PR means Performance Ratio (the ratio of the actual and theoretically possible energy outputs)
PRIIPS means Packaged Retail and Insurance-Based Investment Products
PV means Photovoltaic
Glossary of Defined Terms (continued)
146
RBSI means Royal Bank of Scotland International Limited
RCF means Revolving Credit Facility
RCP means Representative Concentration Pathway
REGO means Renewable Energy Guarantees of Origin
REMA means Review of Electricity Market Arrangements
RIDDOR means Reporting of Injuries, Diseases and Dangerous Occurrences Regulations
RO Scheme means the Renewable Obligation Scheme which is the financial mechanism by which the UK
Government incentivises the deployment of large-scale renewable electricity generation by placing a
mandatory requirement on licensed UK electricity suppliers to source a specified and annually increasing
proportion of the electricity they supply to customers from eligible renewable sources, or pay a penalty
ROC means Renewable Obligation Certificates
ROC recycle means the payment received by generators from the redistribution of the buy-out fund.
Payments are made into the buy-out fund when suppliers do not have sufficient ROCs to cover their
obligation.
RPI means the Retail Price Index
Santander UK means Santander UK plc
SASB means Sustainability Accounting Standards Board
SBTI means Science Based Targets Initiative
SCADA means Supervisory Control and Data Acquisition
SDG means the United Nations Sustainable Development Goals
SDR means Sustainability Disclosure Requirements
SFDR means the Sustainable Finance Disclosure Regulation
SIC means Standard Industrial Classification
SONIA means Sterling Overnight Index Average
SPA means Share Purchase Agreement
SPVs means the Special Purpose Vehicles which hold the Company’s investment portfolio of underlying
operating assets
SSP means Shared Socioeconomic Pathways
Sterling means the Great British pound currency
TCFD means Task Force for Climate-related Financial Disclosures
TNFD means Taskforce on Nature-related Financial Disclosures
TISE means The International Stock Exchange (formerly CISE, Channel Islands Securities Exchange)
UK means the United Kingdom of Great Britain and Northern Ireland
Glossary of Defined Terms (continued)
147
UK Code means the United Kingdom Corporate Governance Code
UK FCA means the UK Financial Conduct Authority
UNGC means the United Nations Global Compact
United Nations Principles for Responsible Investment means an approach to investing that aims
to incorporate environmental, social and governance factors into investment decisions, to better manage
risk and generate sustainable, long-term returns
148
Alternative Performance Measures
Unaudited
APM
Definition
Purpose
Calculation
Total return
The percentage
increase/(decrease) in
NAV, inclusive of
dividends paid, in the
reporting period.
A key measure of the
success of the
Investment Adviser’s
investment strategy.
The change in NAV for the
period plus any dividends
paid divided by the initial
NAV. (129.75-
139.70+2.10+2.30+2.20+2
.
2
0)/
139
.
70
=
(0.83)
%
Total
Shareholder
Return
The percentage
increase/(decrease) in
share price, inclusive of
dividends paid, in the
reporting period.
A measure of the return
that could have been
obtained by holding a
share over the reporting
period.
The change in share price
for the period plus any
dividends paid divided by
the initial share price.
(105.60-
120.00+2.10+2.30+2.20+2
.20)/120.00=(4.67)%. The
measure excludes
transaction costs.
Total
Dividends
Declared in
Period
This is the sum of the
dividends that the Board
has declared relating to
the reporting period.
A measure of the income
that the company has
paid to shareholders
that can be compared to
the Company’s target
dividend.
The linear sum of each
dividend declared in the
reporting period.
Underlying
Earnings
Total net income of the
Company’s investment
portfolio.
A measure to link the
underlying financial
performance of the
operational projects to
the dividends declared
and paid by the
Company.
Total income of the
Company’s portfolio minus
Group operating costs
minus Group debt costs.
Market
Capitalisation
The total value of the
Company’s issued share
capital.
This is a key indicator of
the Company’s liquidity.
The price per share
multiplied by the number
of shares in issue.
NAV per
Ordinary
Share
The Company’s closing
NAV per share at the
year end.
A measure of the value
of one Ordinary Share.
The net assets attributable
to Ordinary Shares on the
statement of financial
position (£781.6m) divided
by the number of ordinary
shares in issue
(602,374,217) as at the
calculation date.
Sale of
Electricity
The total proportion of
revenue generated by
the Company’s portfolio
that is attributable to
electricity sales.
A measure to
understand the
proportion of revenue
attributable to sales of
electricity.
The amount of revenue
attributable to electricity
sales divided by the total
revenue generated by the
Company’s portfolio,
expressed as a percentage.
Total Revenue Total net income of the
Company’s investment
portfolio.
A measure to outline the
Total revenue of the
portfolio on per MW
basis.
Total income of the
Company’s portfolio
owned for a full 12 months.
PPA Revenue
Revenue
generated
through PPAs.
A measure to outline the
revenue earned by the
portfolio from power
sales.
Total revenue from all
power price sales during
the period from the
Company’s portfolio.
149
Alternative Performance Measures (continued)
Unaudited
Regulated
Revenue
Revenue generated from
the sale of FiTs and
ROCs.
A measure to outline the
revenue earned by the
portfolio from
government subsidies.
Total revenue from all subsidy
income earned during the year
from the Company’s portfolio.
Ongoing
charges ratio
The recurring costs that
the Company and its
Immediate Holding
Company has incurred
during the year
excluding performance
fees and one off legal
and professional fees
expressed as a
percentage of the
Company’s average
NAV for the
year
.
A measure of the
minimum gross profit
that the Company needs
to produce to make a
positive return for
Shareholders.
Calculated in accordance with
the AIC methodology detailed
in the table below.
Weighted
Average ROC
A relative indicator of
the regulatory revenues
within a renewable
portfolio.
A measure of the
Company’s portfolio
earnings as a proportion
of its assets.
Total Regulated Revenue
received by the portfolio
divided by the product of the
current market value of a ROC
and the annual generation
capacity of the portfolio.
Weighted
Average Life
The average operational
life of the Company’s
portfolio.
A measure of the
Company’s progress in
extending the life of its
portfolio beyond the end
of the subsidy regime in
2036.
The sum of the product of each
plant’s operational capacity in
MW and the plant’s expected
life divided by the total
portfolio capacity in MW.
Directors’
Valuation
The gross value of the
SPV Investments held
by BR1, including their
holding companies
minus Project level
debt.
An estimate of the sum
that would be realised if
the Company’s portfolio
was sold on a willing
buyer, willing seller
basis.
A reconciliation of the
Directors’ Valuation to
Financial assets at fair value
through profit and loss is
shown in Note 8 of the
financial statements.
Gross Asset
Value
The Market Value of all
Assets within the
Company.
A measure of the total
value of the Company’s
Assets.
The total assets attributable to
Ordinary Shares on the
Statement of Financial
Position.
Total
Outstanding
Debt
The total outstanding
balances of all debt held
within the Company
and its subsidiaries.
A measure that is used to
establish the Company’s
level of gearing.
The sum of the Sterling
equivalent values of all loans
held within the Company.
150
Alternative Performance Measures (continued)
Unaudited
Ongoing Charges
Year to 30 June 202
4
The Company
Immediate
Holding Company
Total
£’000s
£’000s
£’000s
Fees to Investment Adviser
662,531
5,909,672
6,572,203
Legal and professional fees
190,897
309,739
500,636
Administration fees
503,977
-
503,977
Directors’ remuneration
284,166
14,035
298,201
Audit fees
123,815
18,060
141,875
Other ongoing expenses
246,273
165,090
411,363
Total ongoing expenses
2,011,659
6,416,596
8,428,255
Average NAV
824,192,892
Ongoing Charges (using AIC methodology)
1.02%
SFDR Periodic Disclosures (continued)
Unaudited
151
ANNEX IV
Template periodic disclosure for the financial products referred to in Article 8, paragraphs 1, 2 and 2a, of
Regulation (EU) 2019/2088 and Article 6, first paragraph, of Regulation (EU) 2020/852
Product name: Bluefield Solar Income Fund
Limited (the Company)
Legal entity identifier: 2138004ATNLYEQKY4B30
Environmental and/or social characteristics
Does this financial product have a sustainable investment objective?
☐Yes ☒
No
☐ It made sustainable investments
with an environmental objective:
_%
☒ It promoted Environmental/Social (E/S)
characteristics and while it does not have as its
objective a sustainable investment, it had a
proportion of 99.72%
49
of sustainable investments
☐ in economic activities that qualify as
environmentally sustainable under the
EU Taxonomy
☒ with an environmental objective in economic activities
that qualify as environmentally sustainable under the EU
Taxonomy
☐ in economic activities that do not
qualify as environmentally sustainable
under the EU Taxonomy
☐ with an environmental objective in economic activities
that do not qualify as environmentally sustainable under
the EU Taxonomy
☐ with a social objective
☐ It made sustainable investments
with a social objective _%
☐ It promoted E/S characteristics, but did not make
any sustainable investments
To what extent were the environmental and/or social characteristics promoted
by this financial product met?
Bluefield Solar Income Fund Limited (the Company) is an investment company
focused on the acquisition and long-term management of a diversified portfolio of
renewable assets in the UK. As the first solar focused investment company listed on
the London Stock Exchange (LSE), the Company’s mandate has since widened to
include minority investment in other renewable asset types, including onshore wind
and storage technologies.
49
As at 30 June 2024.
Sustainable investment
means an investment in
an economic activity that
contributes to an
environmental or social
objective, provided that
the investment does not
significantly harm any
environmental or social
objective and that the
investee companies
follow good governance
practices.
The EU Taxonomy is a
classification system laid
down in Regulation
(EU) 2020/852,
establishing a list of
environmentally
sustainable economic
activities. That
Regulation does not
include a list of socially
sustainable economic
activities. Sustainable
investments with an
environmental objective
might be aligned with
the Taxonomy or not.
Sustainability
indicators measure
how the environmental
or social characteristics
promoted by the
financial product
are attained.
SFDR Periodic Disclosures (continued)
Unaudited
152
As a renewable energy infrastructure fund, the Company has an intrinsic
environmental focus. The Company promotes the following environmental
characteristics: climate change mitigation; reduction of reliance on fossil fuels; and
facilitation of the UK’s transition to a net zero economy through the provision of
renewable energy infrastructure and contribution to domestic energy security. The
Company achieves these environmental characteristics through investment in
renewable energy assets and supporting technologies.
Given that the Company only invested in renewable energy assets during the reporting
period (including development stage projects), it met the environmental characteristics
described above. However, the Company recognises that it has broader
environmental and social impacts, and that these must be considered alongside good
governance as part of supporting its long-term success. The Company’s ESG strategy
has been developed with a focus upon priority ESG risks and opportunities,
considered as part of the Company’s responsible investment approach. These have
been integrated into a holistic framework through which the Company aims to deliver
value for its stakeholders, and which aims to support delivery of long-term returns for
shareholders. The Company communicates its ESG performance through a
comprehensive set of commitments and KPIs. Please refer to the Company’s 2024
ESG Report within its Annual Report for further information.
How did the sustainability indicators perform?
The sustainability indicators used to measure the attainment of the environmental
characteristics promoted by the Company are presented below. The Company’s
performance during the reporting period is presented in the third column. Performance
relates to both the Company’s wholly owned assets and Company’s 9% equity stake
50
in a strategic partnership with GLIL infrastructure:
Commitment KPIs As at 30 June 2024 As at 30 June 2023
We will report
our renewable
energy
generation
annually.
Renewable energy
generated (MWh)
821,762 MWh 836,231 MWh
CO2e emissions avoided
51
(tCO2e)
170,100 tonnes 173,000 tonnes
Equivalent houses
powered (#)
304,100 288,000
Additional solar
infrastructure under
construction (MW)
93MW 93MW
Estimated additional
annual renewable energy
generation (MWh)
91,000 MWh 91,000 MWh
Battery assets under
construction (MW)
0 MW 0 MW
50
As at 30 June 2024.
51
Please note this indicator has been updated from ‘CO2e savings achieved’.
SFDR Periodic Disclosures (continued)
Unaudited
153
‘CO2e emissions avoided’ are calculated using generation data and the appropriate
greenhouse gas conversion factor from the UK Government. In the current year, the Company
reported avoided emissions on a gross basis, reflecting its equity share in investments but
without allocating any avoided emissions to debt finance providers.
‘Equivalent number of homes powered’ is calculated using UK Office of Gas and Electricity
Markets’ (Ofgem) Typical Domestic Consumption Values for a medium-sized household.
... and compared to previous periods?
Please see the table above.
What were the objectives of the sustainable investments that the financial
product partially made and how did the sustainable investment contribute to
such objectives?
The Company promotes environmental characteristics but does not have as its
objective sustainable investment. However, the Company considers that the vast
majority of its investments are environmentally sustainable under the EU Taxonomy
(contributing to the environmental objective of Climate Change mitigation) and
qualifying as sustainable investments under the SFDR.
The Company considers that all of its investments in renewable energy
infrastructure and supporting technologies support the Company’s environmental
characteristics of climate change mitigation, reduction of reliance on fossil fuels, and
facilitation of the UK’s transition to a net zero economy through the provision of
renewable energy infrastructure and contribution to domestic energy. In relation to
alignment with the EU Taxonomy, this is assessed and disclosed by the Company
annually as part of its periodic reporting.
ESG is embedded within the Company’s investment process, and a standalone ESG
questionnaire enables detailed checks to be made in relation to ESG risks and
opportunities, as identified by SASB standards. Diligence is also undertaken in
relation to requirements of the EU SFDR, including in relation to PAI indicators and
climate risk screening, and the EU Taxonomy’s Do No Significant Harm (DNSH)
criteria. Further information can be found in the Company’s Sustainable Investment
Policy.
During the reporting period, the Company acquired a 9% equity share in a portfolio
of 58 UK solar assets, as part of a strategic partnership with GLIL infrastructure.
Diligence in relation to ESG considerations was undertaken as part of the
transaction process, as described above. The Company also made investments into
development projects and repowering activities associated with existing assets.
Alignment with the EU Taxonomy is considered within the investment due diligence
process undertaken on new assets, as described above. The Company also
continues to undertake activities to better align its portfolio with the EU Taxonomy,
including climate modelling and activities relating to human rights, nature and
circular economy considerations.
The Company acknowledges that ongoing work will be required to maintain
alignment with the EU Taxonomy, including through the due diligence mechanisms
described above, and is committed to continual improvement in its ESG approach.
Please refer to the Company’s 2024 ESG Report for information on progress made
during the reporting period.
SFDR Periodic Disclosures (continued)
Unaudited
154
How did the sustainable investments that the financial product partially
made not cause significant harm to any environmental or social
sustainable investment objective?
The Company recognises that it has broader environmental and social impacts, and
that these must be considered alongside good governance as part of supporting its
long-term success. The Company’s ESG strategy has been developed with a focus
on priority ESG risks and opportunities, considered as part of the Company’s
responsible investment approach. These have been integrated into a holistic
framework through which the Company aims to deliver value for its stakeholders,
and which aims to support delivery of long-term returns for shareholders. The
Company communicates its ESG performance through a comprehensive set of
commitments and KPIs. Please refer to the Company’s 2024 ESG Report within its
Annual Report for further information.
ESG is embedded within the Company’s investment process, and a standalone ESG
questionnaire enables detailed checks to be made in relation to ESG risks and
opportunities, as identified by SASB standards. Diligence is also undertaken in
relation to requirements of the SFDR, including in relation to PAI indicators and
climate risk screening, and the EU Taxonomy’s DNSH criteria. The SFDR’s social
indicators, including ‘Violations of UN Global Compact principles and Organisation
for Economic Cooperation and Development (OECD) Guidelines for Multinational
Enterprises’ and ‘Lack of processes and compliance mechanisms to monitor
compliance with UN Global Compact principles and OECD Guidelines for
Multinational Enterprises’ are included within this.
Once acquired into the portfolio, there is active management of sustainability issues
over the operational lifetime of the assets, in line with the Company’s ESG strategy.
Each asset is subject to routine ESG data reporting to allow the monitoring of ESG
performance and fulfilment of ESG reporting requirements.
Activities undertaken during the reporting period to support the Company’s
alignment with the EU Taxonomy’s DNSH criteria include:
Undertaking a second physical scenario analysis, this time focused upon
the potential impact of changing wind patterns on the Company’s wind
assets. The scenario analysis considered all regions of the UK, therefore
encompassing all regions in which the Company has investments. The
results of the three scenario analyses undertaken to date have been used
to create a climate adaptation plan for the portfolio. This work further
supports the Company’s alignment to DNSH criteria relating to ‘Climate
Change Adaptation’.
The Company partnered with Lancaster University to launch a research
programme focused on end-of-life decision-making for renewable assets.
The first project focused on the development of a ‘materials passport’ for
a newly built solar farm. Such activities further support the Company’s
alignment with DNSH criteria relating to ‘Transition to a Circular Economy’.
The Company has developed a nature strategy, to guide actions to
integrate nature more fully across the asset lifecycle
52
, from development
through to end-of-life. Such supports the Company’s alignment with DNSH
52
Where asset lifecycle is referred to throughout this report, it references development, investment, and operational stages of the
asset lifecycle. It does not include the manufacturing or end-of-life processing of materials.
Principal adverse
impacts are the most
significant negative
impacts of investment
decisions on
sustainability factors
relating to
environmental, social
and employee matters,
respect for human rights,
anticorruption and
antibribery matters.
SFDR Periodic Disclosures (continued)
Unaudited
155
criteria relating to ‘Protection and Restoration of Biodiversity and
Ecosystems’.
Please refer to the Company’s ESG and TCFD reports, disclosed within its 2024
Annual Report, for further information on these activities and the broader ESG
progress made by the Company during the reporting period.
How were the indicators for adverse impacts on sustainability factors taken
into account?
The SFDR prescribes 14 mandatory PAI indicators that the Company must
consider and report against. For each of these indicators, the Company has
undertaken an assessment to identify which of these relate to the activities of
the fund. The Company has also identified an additional two PAI indicators to
report against:
Lack of a human rights policy: Share of investments in entities without
a human rights policy.
Natural species and protected areas: Share of investments in
investee companies whose operations affect threatened species;
Share of investments in investee companies without a biodiversity
protection policy covering operational sites owned, leased, managed
in, or adjacent to, a protected area or an area of high biodiversity
value outside protected areas.
The Company’s 2024 PAI statement, relating to the 2023 calendar year, is
available on its website.
As referenced, sustainability considerations are integrated into the
Company’s investment process (please refer to the Company’s Sustainable
Investment Policy) and PAI indicators are included within the Company’s
investment ESG due diligence questionnaire.
Post-investment, a range of sustainability data is routinely collected from each
asset within the Company’s portfolio, which is used to produce annual PAI
disclosures. The development of the Company’s ESG strategy was also
informed by regulatory drivers, including the PAI indicators.
Were sustainable investments aligned with the OECD Guidelines for
Multinational Enterprises and the UN Guiding Principles on Business and
Human Rights? Details:
The Company recognises the importance of fair treatment of those involved in
the delivery of its infrastructure projects along the supply chain and is
committed to appropriate due diligence and implementation of policy and
practice to help combat modern slavery and human trafficking. The Company
has zero tolerance for any form of human rights abuse, as reflected in the
Company’s Modern Slavery Statement, available on its website.
The SFDR’s social indicators, including ‘Violations of UN Global Compact
principles and Organisation for Economic Cooperation and Development
(OECD) Guidelines for Multinational Enterprises’ and ‘Lack of processes and
SFDR Periodic Disclosures (continued)
Unaudited
156
compliance mechanisms to monitor compliance with UN Global Compact
principles and OECD Guidelines for Multinational Enterprises’ are included
within the Company’s investment ESG due diligence questionnaire. Human
rights are also considered more broadly within this, including in relation to any
O&M arrangements which may form part of the investment opportunity.
The Company has also adopted a Human Rights Policy and Supplier Code of
Conduct, informed by these frameworks. During the reporting period, the
Company undertook a review of its human rights due diligence processes;
please refer to the 2024 ESG report for further information.
The EU Taxonomy sets out a "do not significant harm" principle by which
Taxonomy-aligned investments should not significantly harm EU Taxonomy
objectives and is accompanied by specific Union criteria.
The "do no significant harm" principle applies only to those investments
underlying the financial product that take into account the EU criteria for
environmentally sustainable economic activities. The investments underlying
the remaining portion of this financial product do not take into account the EU
criteria for environmentally sustainable economic activities.
Any other sustainable investments must also not significantly harm any
environmental or social objectives.
How did this financial product consider principal adverse impacts on
sustainability factors?
The Company takes into consideration the PAIs of its investment decisions on
sustainability factors. During the reporting period, the Company published its
second PAI report covering the reporting period of 1 January to 31 December
2023. Within this, the Company improved its methodology to reporting against
the PAI indicators; please refer to the disclosure, available on the Company’s
website, for further information.
The Company considered and disclosed against the following PAI indicators:
1. GHG emissions
2. Carbon footprint
3. GHG intensity of investee companies
4. Exposure to companies active in the fossil fuel sector
5. Share of non-renewable energy consumption and production
6. Energy consumption intensity per high impact climate sector
7. Activities negatively affecting biodiversity-sensitive areas
SFDR Periodic Disclosures (continued)
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157
8. Emissions to water
9. Hazardous waste and radioactive waste ratio
10. Violations of UN Global Compact principles and Organisation for
Economic Cooperation and Development (OECD) Guidelines for
Multinational Enterprises
11. Lack of processes and compliance mechanisms to monitor compliance
with UN Global Compact principles and OECD Guidelines for Multinational
Enterprises
12. Unadjusted gender pay gap
13. Board gender diversity
14. Exposure to controversial weapons (anti-personnel mines, cluster
munitions, chemical weapons and biological weapons)
15. Natural species and protected areas
16. Lack of a human rights policy
As an investment company, the Company has no employees and management of the
portfolio is outsourced to key service providers. Through its Investment Adviser, the
Company works collaboratively with key service providers to establish processes for
the collection of PAI (sustainability) data. However, PAI reporting requires a breadth
and depth of data that the industry is still adjusting to, and as such data collection
remains challenging in some areas. The Company is committed to working with its key
service providers to support the continual improvement in the availability and quality
of sustainability-related data, which is expected to improve as data collection
processes mature over time.
What were the top investments of this financial products?
Please note that the table below relates to the top 10 investments held by the
Company during the reporting period.
Largest investments Sector % Assets
53
Country
Solar Asset Energy 10.9% United Kingdom
53
Calculated using the Total Investment Value of the asset as a proportion of the Company’s Total Assets. The
Company is availing itself of the derogation available in Article 52(b) of Commission Delegated Regulation (EU)
2022/1288.
The list includes the
investments constituting
the greatest proportion
of investments of the
financial product during
the reference period
which is: 1 July 2023 –
30 June 2024
SFDR Periodic Disclosures (continued)
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158
Solar Asset Energy 7.3% United Kingdom
Solar Asset Energy 6.9% United Kingdom
Solar Asset Energy 5.7% United Kingdom
Construction Asset Energy 4.5% United Kingdom
Construction Asset Energy 4.1% United Kingdom
Solar Asset Energy 4.0% United Kingdom
Wind Asset Energy 3.3% United Kingdom
Repowering Activity Energy 3.1% United Kingdom
Solar Asset Energy 3.0% United Kingdom
What was the proportion of sustainability-related investments?
What was the asset allocation?
As of 30 June 2024, sustainability-related investments accounted for 99.72% of the
Company’s Total Assets. The remaining 0.28% consisted of non-sustainable
investments, primarily cash holdings and trade and other receivables.
#1 Aligned with E/S characteristics includes the investments of the financial product
used to attain the environmental or social characteristics promoted by the financial product.
Taxonomy aligned*
99.72%
#1A
Sustainable
99.72%
#1 Aligned
with E/S
characteristics
100%
90%
Investments
#2 Other
0%
Other environmental*
99.72%
Social
0%
To comply with the EU
Taxonomy, the criteria
for fossil gas include
limitations on emissions
and switching to fully
renewable power or low-
carbon fuels by the end
of 2035. For nuclear
energy, the criteria
include comprehensive
safety and waste
management rules.
Enabling activities
directly enable other
activities to make a
substantial contribution
to an environmental
objective.
Transitional activities
are activities for which
low-carbon alternatives
are not yet available and
among others have
greenhouse gas emission
levels corresponding to
the best performance.
Asset allocation
describes the share of
investments in specific
assets.
SFDR Periodic Disclosures (continued)
Unaudited
159
#2 Other includes the remaining investments of the financial product, which are neither
aligned with the environmental or social characteristics nor are qualified as sustainable
investments.
The category #1 Aligned with E/S characteristics covers:
- The sub-category #1A Sustainable covers environmentally and socially
sustainable investments.
*The percentage of sustainable investments that are aligned to the EU Taxonomy
or an Other Environmental objective are disclosed in the charts below.
In which economic sectors were the investments made?
The Company invests primarily in solar energy infrastructure assets, with minority
exposure to other forms of renewable energy infrastructure (including wind assets)
and supporting technologies, such as battery storage.
To what extent were the sustainable investments with an environmental
objective aligned with the EU Taxonomy?
54
The graphs below show in green the percentage of investments that were aligned
with the EU Taxonomy. As there is no appropriate methodology to determine the
taxonomy-alignment of sovereign bonds*, the first graph shows the Taxonomy
alignment in relation to all the investments of the financial product including
sovereign bonds, while the second graph shows the Taxonomy alignment only in
relation to the investments of the financial product other than sovereign bonds.
54
% of OpEx alignment was calculated using the methodology outlined in the EU Taxonomy regulation. The
numerator includes direct costs specifically tied to EU Taxonomy-aligned activities, while the denominator
comprises all direct expenses incurred by the Company. % of Turnover alignment was determined based on the
Company’s revenue, excluding that of interest rate swaps, as a proportion of total Company revenue during the
reporting period.
SFDR Periodic Disclosures (continued)
Unaudited
160
.
*For the purpose of these graphs, 'sovereign bonds' consist of all sovereign exposures.
Non-aligned activities within the assets are predominantly associated with operational
expenses and turnover. Typically, non-aligned operational expenses include indirect
corporate services that cannot be directly attributed to a specific aligned activity, such
as professional services. Non-aligned turnover stems from financial income like
interest rate SWAPs in the calculation. It is important to note that all non-aligned
activities have undergone assessment and have been determined to cause no
significant harm to the EU Taxonomy's objectives.
Did the financial product invest in fossil gas and/or nuclear energy
related activities that comply with the EU Taxonomy
55
?
Yes:
In fossil gas In nuclear energy
No
55
Fossil gas and/or nuclear related activities will only comply with the EU Taxonomy where they contribute to
limiting climate change ("climate change mitigation") and do not significantly harm any EU Taxonomy objective -
see explanatory note in the left hand margin. The full criteria for fossil gas and nuclear energy economic activities
that comply with the EU Taxonomy are laid down in Commission Delegated Regulation (EU) 2022/1214.
92.06%
100%
96.4%
7.94%
0%
3.64%
OpEx
CapEx
Turnover
50% 100%
1. Taxonomy-alignment of investments
including sovereign bonds*
Taxonomy-aligned (no gas and nuclear)
Non Taxonomy-aligned
96.4%
100%
92.06%
Taxonomy-aligned
activities are expressed
as a share of:
-
turnover reflecting
the share of revenue
from green activities
of investee
companies.
-
capital expenditure
(CapEx) showing the
green investments
made by investee
companies, e.g. for a
transition to a green
economy.
-
operational
expenditure (OpEx)
reflecting green
operational activities
of investee
companies.
92.06%
100%
96.4%
7.94%
0%
3.64%
OpEx
CapEx
Turnover
50% 100%
2. Taxonomy-alignment of investments
excluding sovereign bonds*
Taxonomy-aligned (no gas and nuclear)
Non Taxonomy-aligned
96.4%
100%
92.06%
This graph represents 99.72% of the total investments.
This graph represents 99.72% of the total investments.
SFDR Periodic Disclosures (continued)
Unaudited
161
What was the share of investments made in transitional and enabling
activities?
The share of investments made in enabling activities was 0.79%56 as at 30 June
2024, which is related to the Company’s battery investment value (based on
operational and controlled pipeline). No investments were made in transitional
activities.
How did the percentage of investments that were aligned with the EU
Taxonomy compare with previous reference periods?
Revenue Alignment: 96.4% (2023: 97.5%)
CapEx Alignment: 100% (2023: 100%)
OpEx Alignment: 92.06% (2023: 98.9%)
For the current disclosure, the EU Taxonomy alignment assessment process has been
enhanced, particularly with regard to Operating Expenses. This has increased the
accuracy of alignment calculations, but limits comparability with the EU Taxonomy
assessment of the previous year.
What was the share of sustainable investments with an environmental objective
not aligned with the EU Taxonomy?
Revenue non-alignment: 3.6% (2023:2.5%)
CapEx non-alignment: 0% (2023: 0%)
OpEx non-alignment: 7.94% (2023: 1.1%)
During the year, the EU Taxonomy alignment assessment process has been
enhanced, particularly with regard to Operating Expenses. This has increased the
accuracy of alignment calculations.
What was the share of socially sustainable investments?
0%. The Company does not hold investments that would be considered to be socially
sustainable investments.
What investments are included under "other", what was their purpose and were
there any minimum environmental or social safeguards?
The Company's investments classified as "non-sustainable" consist of cash and cash-
equivalents, along with trade and other receivables. Cash and cash-equivalents refer
to highly liquid assets like bank deposits and short-term investments. Trade and other
receivables represent money owed to the Company for goods or services provided
but not yet paid for by customers or other parties. Certain categories of Operating
Expenses were excluded if they were not directly related to the operation of renewable
energy assets.
56
The battery energy storage system’s (‘BESS’) portion of the Enterprise Value, including pre-operational projects.
are sustainable
investments with an
environmental objective
that do not take into
account the criteria for
environmentally
sustainable economic
activities under
Regulation (EU)
2020/852.
SFDR Periodic Disclosures (continued)
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162
What actions have been taken to meet the environmental and/or social
characteristics during the reference period?
The Company considers that all of its investments in renewable energy infrastructure
and supporting technologies support the Company’s environmental characteristics of
climate change mitigation, reduction of reliance on fossil fuels, and facilitation of the
UK’s transition to a net zero economy through the provision of renewable energy
infrastructure and contribution to domestic energy.
During the reporting period, the Company acquired a 9% equity share in a portfolio of
58 UK solar assets, as part of a strategic partnership with GLIL infrastructure. The
Company also made investments into development projects and repowering activities
associated with existing assets.
The Company reports its wider ESG progress within its annual ESG report; please
refer to the 2024 Annual Report for further information.
How did this financial product perform compared to the reference benchmark?
The Company has not designated an index as a reference benchmark to determine
its alignment with the environmental and social characteristics that it promotes.
How does the reference benchmark differ from a broad market index?
Not applicable.
How did this financial product perform with regard to the sustainability
indicators to determine the alignment of the reference benchmark with
the environmental or social characteristics promoted?
Not applicable.
How did this financial product perform compared with the reference
benchmark?
Not applicable.
How did this financial product perform compared with the broad market
index?'
Not applicable.
Reference benchmarks
are indexes to measure
whether the financial
product attains the
environmental or social
characteristics that they
promote.