Q4 2021 NAV, Scrip Dividend and Operational Update (10.02.2022)

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10 February 2022

Foresight Solar Fund Limited

('Foresight Solar' or 'the Company')

Q4 2021 Net Asset Value, Scrip Dividend and Operational Update, and Annual Results release date

Click here to view the announcement.

Foresight Solar, a fund investing in a diversified portfolio of ground-based solar PV and battery storage assets in the UK and internationally, announces that as of 31 December 2021 its unaudited Net Asset Value ('NAV') was £660.0 million (30 Sep 2021: £635.0 million), resulting in a NAV per ordinary share of 108.2 pence (30 Sep 2021: 104.1 pence).

Summary of NAV Key drivers for Q4 2021:


p/share movement

NAV at 30 September 2021


Project actuals


Power forecasts


Power Purchase Agreements




Discount rate adjustments


Other movements


NAV at 31 December 2021


The NAV increase over the fourth quarter was driven by three main factors - an increase in power prices, above budget inflation and a discount rate reduction for the Australian asset valuations.

UK power prices strengthened throughout the year, reaching record highs in the fourth quarter. This was largely driven by increased energy demand following the easing of Covid-19 restrictions, coupled with increasing natural gas prices as supply tightened, compounded by low wind production. Power prices were significantly ahead of budget for the period driving actual cash receipts from projects, generating a positive impact on NAV of 0.4 pence per share. The Company has continued to implement its active power price management strategy, entering into new fixed rate power purchase agreements at prices significantly above forecasts, resulting in a NAV increase of approximately 0.8 pence per share.

Higher power price forecasts increased the valuation of future cashflows, equating to a positive impact on NAV of 0.4 pence per share. UK power price forecasts demonstrated strong growth during the period, although this was partially offset by lower forecasts for Australia. The percentage of fixed revenues at 31 December 2021 represented 78% of total revenues in 2022, 69% in 2023 and 65% in 2024. The Company continues to fix prices at attractive rates.

Inflation for the period was significantly above the Company's assumption of 3% per annum. The NAV incorporates the rebasing effect of higher inflation for the full year to 31 December 2021, resulting in an uplift of 2.7 pence per share. The Company's medium and long-term assumptions remain unchanged. If inflation continues to increase ahead of forecast, this is expected to have a further net positive impact on the Company's NAV during 2022.

Discount rates for the Australian operational assets have been revised down during the period to reflect market transactions observed in H2 2021 prior to the acquisition of the remaining stakes in the Oakey 1 and Longreach investments. It is the opinion of the Investment Manager that these updates reflect a prudent fair market value of the investments. The impact of this has been to reduce the Weighted Average Discount Rate ('WADR') for the Australian portfolio from 8.41% to 7.88%, resulting in a NAV increase of 0.4p per share.

Other relevant NAV movements for the period include a small upside from the insurance renewal on the Australian portfolio and higher import power costs in the UK. The balance of the 0.6 pence per share reduction to NAV consists of the standard adjustments for dividends paid, funds costs, foreign exchange movements and a discount rate unwind for the period.

The Gross Asset Value ('GAV'), including Company and subsidiaries, as at 31 December 2021, was £1,172.0 million (30 September 2021: £1,106.3 million).

Operational update

While electricity generated by the Company portfolio was 5.3% below base case for the twelve-month period, strong power prices in the period resulted in total revenues being 16%, or £15.3 million, ahead of budget. Consolidated EBITDA was 22%, or £16.6 million, ahead of budget.

Generation by the UK portfolio for the full year was 1.0% above budget, resulting from strong asset operational performance and above budget irradiation for the first half of the year.

The Australian portfolio experienced a challenging year in 2021, with lower than budgeted irradiation and curtailment impacting assets that are otherwise operating in line with technical expectations. Operations were also significantly impacted by outages for State-level interconnector works on the grid, leading to recurring negative pricing events. This resulted in final generation for the year being 20.7% below budget. These interconnector works are due to be concluded shortly by the grid operator, which is expected to reduce the frequency of negative pricing events.

Construction update

Construction of the Spanish projects made good progress during the year, with substantial completion of the site facilities reached at all four locations. The projects have all entered the commissioning phase and all are expected to become fully operational during the first half of 2022. In December 2021, the Company signed a ten-year PPA with Statkraft for the 98.5MW Lorca project, securing a further stream of contracted revenues at an attractive price. In the UK, the Sandridge battery storage project also remains on schedule to become operational in the fourth quarter of 2022.

Gearing Update

The Company's total outstanding debt as of 31 December 2021 was £512.0 million, comprising long-term debt of £388.6 million and revolving credit facilities of £123.4 million.

The total outstanding long-term debt of £388.6 million represents approximately 33.2% of GAV of the Company and subsidiaries as at 31 December 2021.

Total outstanding debt, including revolving credit facilities of £512.0 million, represents approximately 43.7% of GAV of the Company and subsidiaries as at 31 December 2021.

Refinancing Update

The Company is in the process of refinancing its existing revolving credit facilities into one single facility. This is expected to complete in Q1 2022.

Foresight Solar is also refinancing the existing senior debt facilities on its Oakey 1 and Longreach solar assets in Australia. This process is well advanced and scheduled to complete ahead of the expiry of the current facilities in April 2022.

Acquisition pipeline update

The Investment Manager is currently appraising a healthy pipeline of ready-to-build solar PV assets and battery storage projects, which it believes would be yield accretive for the Company.


The Company remains on target to deliver an annual dividend of 6.98 pence per share for the year ending 31 December 2021. The yield on the Company's shares is 7.02% as of close of business on 9 February 2022.

Dividend cover for 2021 was 1.21x and is forecast to increase further for 2022.

Cancellation of Scrip Dividend

On 3 February 2022, the Company announced a scrip reference price of 100.6 pence per new Ordinary Share under the Company's scrip dividend alternative for the third interim dividend for the financial period ending 30 September 2021 (the "Q3 Dividend").

In light of the Company's Net Asset Value ("NAV") per ordinary share being greater than the scrip reference price, the Board has exercised its discretion to cancel the scrip dividend alternative in respect of the Q3 Dividend. Those shareholders who elected to receive the Q3 Dividend as scrip alternative will instead be paid in cash on 28 February 2022 and, should they so wish, can choose to apply the cash dividend in acquiring additional Ordinary Shares in the secondary market. The Board will continue to assess the possibility of offering scrip dividends with respect to future quarterly dividends where the scrip reference price is above NAV per ordinary share.

2021 Annual Results release date

The Company announces it will publish its Annual Results for the year ended 31 December 2021 on Wednesday 9 March 2022. A further Notice of Results announcement will be released in due course.

For further information, please contact:

Foresight Group

+44 (0)20 3667 8147

Nish Sivarajan

Jefferies International Limited

+44 (0)20 7029 8000

Neil Winward

Gaudi Le Roux

Citigate Dewe Rogerson

+44 (0)20 7638 9571

Toby Moore

Lucy Eyles

Lucy Gibbs

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