TIDMBSIF

RNS Number : 2162R

Bluefield Solar Income Fund Limited

28 February 2023

28 February 2023

Bluefield Solar Income Fund Limited

('Bluefield Solar' or the 'Company')

Interim Report and Unaudited Condensed Interim Financial Statements

for the six months ended 31 December 2022

Bluefield Solar (LON:BSIF), the London listed income fund focused on acquiring and managing renewable energy and storage assets predominately in the UK, is pleased to announce its Interim Report for the six months ended 31 December 2022.

The Interim Report has been submitted to the National Storage Mechanism and will shortly be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism

Highlights

As at 31 December 2022/ 30 June 2022

 
        Net Asset Value (NAV)                     Dividend Target per Share 
         GBP870.7m GBP858.4m                         FY23 8.40pps 8.12pps 
            NAV per share 
           142.40p 140.39p 
 
   Six month period to 31 December 2022 / 31 December 2021 
       Underlying Earnings(1)                           Total Shareholder Return(2) 
      (pre amortisation of debt)                                 6.98% 5.68% 
          GBP51.4m GBP21.4m 
                                                        Total return to Shareholders 
   Underlying Earnings per share(1)                               since IPO 
      (pre amortisation of debt)                               101.59% 81.69% 
             8.41p 4.31p 
                                                               Total Return(3) 
                                                                 4.38% 9.61% 
    Underlying Earnings per share 
    available for distribution(1) 
     (post amortisation of debt) 
             6.26p 2.57p 
 
                        Environmental, Social and Governance (ESG) 
 
             Forecast annual CO2e savings of over 163,000 tonnes (2022: 120,000 
                                          tonnes) 
         Approximately 292,000 homes powered with renewable energy (2022: 215,000) 
                                             4 
         Over GBP200,000 to be paid to community benefit schemes (2022: GBP154,000) 
                                             5 
 
 
 
                          Construction and Development Pipeline 
                               -- 49 MW under construction 
                     -- 466 MW approved                      1.38 GW 
                  -- 216 MW in planning            (956 MW Solar, 424 MW 
                                                             battery) 
                               -- 649 MW potential capacity 
 
 
 
 
 

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. Further detail is provided below.

2. Total Shareholder Return is based on share price movement and dividends paid in the period . It is defined in the Alternative Performance Measure appendix.

3. Total Return is based on the NAV movement and dividends paid in the period . It is defined in the Alternative Performance Measure appendix.

4. For a year, based on forecasted annual generation.

5. During the 2022/23 financial year.

Results Summary:

 
                                                                  Six months ended   Six months ended 31 December 2021 
                                                                  31 December 2022 
-------------------------------------------------------  -------------------------  ---------------------------------- 
            Total operating income                                   GBP38,845,159                       GBP54,510,638 
            Total comprehensive income before tax                    GBP37,642,084                       GBP53,699,532 
            Total underlying earnings(1)                             GBP51,438,238                       GBP21,389,077 
            Earnings per share (per below)                                   6.16p                              11.05p 
            Underlying EPS available for 
             distribution(2)                                                 6.26p                               2.57p 
            Underlying EPS brought forward(3)                                3.39p                               2.67p 
            Total underlying EPS available for 
             distribution                                                    9.65p                               5.24p 
            1(st) interim dividend for the year ending 
             30 June 2023                                                    2.10p                               2.03p 
            NAV per share                                                  142.40p                             122.96p 
            Share Price as at 31 December                                   136.0p                              124.3p 
            Total Return(4)                                                  4.38%                               9.61% 
            Total Shareholder Return(5)                                      6.98%                               5.68% 
            Total Shareholder Return since inception(6)                    101.59%                              81.69% 
            Dividends per share paid since inception                        65.59p                              57.39p 
-------------------------------------------------------  -------------------------  ---------------------------------- 
 

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. Further detail is provided below.

2. Underlying EPS is calculated using underlying earnings available for distribution divided by the weighted average number of shares in issue through the period.

3. Underlying EPS brought forward is calculated using the number of shares in issue.

4. Total Return is based on NAV per share movement and dividends paid in the period.

5. Total Shareholder Return is based on share price movement and dividends paid in the period .

6. Total Shareholder Return since inception is based on share price movement and dividends paid since the IPO.

John Scott, Chair of Bluefield Solar, said:

"It is very pleasing to report on another successful period for Bluefield Solar, with further growth of our asset base and delivery of excellent returns for shareholders. With continued progress in its proprietary development pipeline, along with construction underway on Yelvertoft, the Company is entering an exciting period, delivering on each of the three tenets of its development strategy: invest, construct and the selective recycling of capital.

Bluefield Solar looks to the year ahead with great confidence and relishes the opportunity to play an increasing role in the UK's transition to renewable and sustainable methods of electricity generation"

Analyst presentation

A remote call for analysts will be hosted by James Armstrong and Neil Wood of Bluefield Partners LLP at 09:30am today, 28 February 2023. For details, please contact Buchanan on BSIF@buchanan.uk.com.

A copy of the presentation is available via the Company's website and an audio webcast of the presentation will also be made available after 12pm today.

https://bluefieldsif.com/

For further information:

 
 Bluefield Partners LLP (Company Investment   Tel: +44 (0) 20 7078 0020 
  Adviser)                                     www.bluefieldllp.com 
  James Armstrong / Neil Wood / Giovanni 
  Terranova 
 Numis Securities Limited (Company Broker)    Tel: +44 (0) 20 7260 1000 
  Tod Davis / David Benda                      www.numis.com 
 Ocorian Administration (Guernsey) Limited    Tel: +44 (0) 1481 742 742 
  (Company Secretary & Administrator)          www.ocorian.com 
  Patrick Ogier 
 Media enquiries:                             Tel: +44 (0) 20 7466 5000 
  Buchanan (PR Adviser)                        www.buchanan.uk.com 
  Henry Harrison-Topham / Henry Wilson         BSIF@buchanan.uk.com 
 

Notes to Editors

About Bluefield Solar

Bluefield Solar is a London listed income fund focused on acquiring and managing renewable energy and storage projects predominantly in the UK, to provide stable, long term dividends for its shareholders whilst furthering the decarbonisation of the energy system. Not less than 75% of the Company's gross assets will be invested into UK solar assets. The Company can also invest up to 25% of its gross assets into wind, hydro and storage technologies. The majority of the Company's revenue streams are regulated and non-correlated to short term UK energy market fluctuations. Bluefield Solar owns and operates one of the UK's largest, diversified portfolios of solar assets with a combined installed power capacity in excess of 812 MWp.

Bluefield Solar is listed on the Main Market of the London Stock Exchange and is a member of the FTSE 250, classified within the Closed End Investments subsector.

Further information can be viewed at www.bluefieldsif.com

About Bluefield Partners

Bluefield Partners LLP was established in 2009 and is an investment adviser to companies and funds investing in renewable energy infrastructure. It has a proven record in the selection, acquisition and supervision of large-scale energy assets in the UK and Europe. The team has been involved in over GBP6 billion renewable funds and/or transactions in both the UK and Europe, including over GBP1 billion in the UK since December 2011.

Bluefield Partners LLP has led the acquisitions of, and currently advises on, over 100 UK based solar PV assets that are agriculturally, commercially or industrially situated. Based in its London office, it is supported by a dedicated and experienced team of investment, legal and portfolio executives. Bluefield Partners LLP was appointed Investment Adviser to Bluefield Solar in June 2013.

Corporate Summary

Investment objective

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. The Company also has the ability to invest a minority of its share capital into wind, hydro and energy storage assets.

The Board seeks to adopt a progressive dividend strategy, although the ability to maintain or grow dividends is dependent upon a number of factors, including future power prices in the UK.

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 it is accredited as a Green Fund after successful application to the GFSC under the Guernsey Green Fund Rules 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. The issued capital during the year comprises the Company's Ordinary Shares denominated in Sterling.

The Company 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 period 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 UK limited company parent, which changed from Bluefield SIF Investments Limited (BSIFIL) to Bluefield Renewables 1 Limited (BR1) in May 2022 to facilitate arrangement of the new RCF. 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 70 sites (585MW) of the investment portfolio held by BR1 as at period end.

In December 2020 Bluefield Renewables Devlopment 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.

Please refer below for the details of Company's corporate structure.

Chair's Statement

Introduction

Following a successful financial year to 30 June 2022, which saw the Company's generating capacity grow by 25%, during the six months to 31 December 2022 ("H1 22/23", or the "Period") we have continued to deliver excellent results, notwithstanding various external challenges. Power prices reached record highs during H1 22/23 and the Company's ability to maximise the value of energy sales through its policy of typically fixing prices 18 months ahead means the Company's near- term earnings projections are very strong.

Allied to this is the excellent progress seen with the Company's development programme, with 865MW under active development and 446MW in pre-construction, providing a platform for significant growth in our business.

The main features of the Period are:

-- The Company completed the purchase of an operating 47MWp subsidised solar portfolio with an enterprise value of approximately GBP56m.

-- The Company committed GBP34m of funding as it commenced construction of Yelvertoft, a CfD-backed 49MW solar plant.

-- Obtaining consent on 215MW of solar developments within the Company's proprietary pipeline, adding c.2pps to the December 2022 NAV.

-- Progressing the pipeline of solar and storage currently under development by the Company, which stands at 1.38 GW (956 MW solar and 424 MW battery storage).

-- The NAV per share rose to 142.40pps as at 31 December 2022 (30 June 2022: 140.39pps), reflecting principally the positive effect of higher electricity prices, offset by the cost of the Electricity Generator Levy (the "Levy").

-- The dividend target for FY 22/23 has been set at not less than 8.40pps, up from the 8.20pps dividends paid in respect of FY 21/22, which itself had an initial target of 8.12pps.

   --      A first interim dividend for the current FY of 2.10pps was declared on 23 January 2023. 

-- Effective application of the Company's power fixing strategy provides strong earnings over the next 24 months, with expectation of achieving over 2x dividend cover for the full year.

   --      The Company was promoted to the FTSE 250 index. 

At the time of writing, the Group's total outstanding debt has increased to GBP531.1 million and its leverage level stands at c.38% of GAV, at the lower end of our preferred range of 35%-45%.

Acquisitions

During the Period, the Company completed the acquisition of a 1.4 ROC 46.4MWp solar portfolio located in Lincolnshire (39.3MWp) and Cumbria (7.1MWp). This purchase grows the Company's generating portfolio to 812.6MWp (June 2022: 766.2MWp), and increases the proportion of solar (85%) to onshore wind (15%). The Company's mandate allows for diversification of up to 25% of its GAV into non solar renewables.

The Company has seen continued success with its proprietary development pipeline; consents were achieved on 215MW of solar assets, contributing an uplift over costs of c.GBP15m (c.2pps) and a small element of capital recycling was achieved through the disposal of an existing development for c.GBP1.8m.

With construction underway on Yelvertoft, itself a product of the Company's proprietary development programme, and the growth of the wider pipeline to 1.38 GW, the Company is delivering on each of the three tenets of its development strategy; invest, construct, selectively recycle capital.

Underlying Earnings and Dividend Income

The Underlying Earnings for the Period, before amortisation of long-term finance, were GBP51.4m, or 8.41pps, and underlying earnings for distribution, post debt repayments of GBP13.2m (2.15pps), were GBP38.2m (December 2021: GBP12.8m). Including carried forward earnings from June 2022 of 3.39pps, the total funds available for distribution as at 31 December 2022 were 9.65pps (December 2021: 5.24pps).

The Company's portfolio has once again performed well, with solar generation 6.17% above budget, the material factor behind the strong financial performance having been the significant increase in UK wholesale power prices, driven up by the price of natural gas. As a result, the Company has been able to secure significantly higher power price fixes during the Period across 140MWp at an average price of 262.84/MWh. The higher prices on these contracts have been locked in typically for 18 months and in some cases for over 24 months.

Valuation and Discount Rate

The Company faced a number of political challenges during the Period, with Britain seeing three Prime Ministers and four Chancellors in 15 weeks. Unsurprisingly, this fostered a period of considerable confusion over energy policy, including whether and how Government might impose extra taxes on some or all electricity generators. The financial turmoil arising from the short-lived Truss administration rattled the capital markets, but demand for renewable projects, at all stages of their lifecycle, has remained strong. We have benefitted from higher power prices and to an extent from rising inflation, but these effects have been partially offset by the impact of the Levy and by the increased cost of debt.

The Investment Adviser continues to see pricing for secondary market solar portfolios within the range of GBP1.25m to GBP1.45m/MWp. Higher interest rates and the inclusion of onshore wind within BSIF's portfolio have caused the Board to increase to 7.25% the portfolio discount rate for the 31 December 2022 Directors' Valuation (30 June 2022: 6.75%). T

he resultant enterprise value of the Company's operational portfolio is GBP1,222m (c.GBP1.38m/MW for the solar assets vs. GBP1.39m/MW in June 2022). The Directors' Valuation as at 31 December 2022 is in line with recent market transactions and consistent with the Company's valuation methodology of 'willing buyer/willing seller'.

Inflation

During 2022, inflation reached levels not seen since the 1980s, as higher commodity and energy prices pushed RPI to 13.4% and CPI to 10.5% in December 2022.

Since the turn of the year there have been encouraging signs that inflation has peaked, but expectations remain that inflation will remain well above the Bank of England's 2% target for the foreseeable future. Since our income grows with inflation, resulting from the indexation provisions in our regulated revenues, increases in RPI have the effect of boosting both our earnings and the valuation of our assets.

Reflecting the latest economic forecasts, as well as the transition from RPI to CPIH post 2030, inflation assumptions supporting the valuation are 10.9% in 2022, 5.5% in 2023 (June 2022: 3.4%) and thereafter 3.0% until 2029, before dropping to 2.25%.

Power Prices

Russia's war in Ukraine has had a profound effect on energy markets worldwide. Severe supply disruptions continue to affect Europe and, with the UK still heavily dependent on imported methane for the generation of electricity (over 40% in 2022), record gas prices drove electricity prices to new highs towards the end of the summer. In recent months UK wholesale electricity prices have eased considerably, as natural gas prices have fallen sharply from the highs touched in August 2022 of over GBP500/MWh, dropping to below GBP118/MWh in February 2023.

Due to the Company's PPA sales strategy of fixing power for between one and three years ahead, it enters 2023 with more than 80% of its merchant revenue hedged to March 2024, so has limited revenue exposure to the recent declines in the electricity market. Thanks to some well-timed sales contracts agreed during the Period, the Board has a high degree of confidence in achieving dividend cover in excess of 2.0x (including carried forward earnings and post debt amortisation) in the financial years ending June 2023, June 2024 and June 2025.

The Electricity Generator Levy

In November 2022, in response to demands for "windfall tax", the UK government announced the introduction of a temporary 45% tax - the "Levy" - on the extraordinary profits made by electricity generators late last year 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 of GBP75 per MWh linked to UK Consumer Price Inflation.

Revenues earned from assets under Feed in Tariffs, Renewable Obligation Certificates, or Contracts for Differences with the Low Carbon Contracts Company are exempt. Given that around 53% of BSIF's revenues out to the mid-2030s are derived from such subsidy schemes, the Company is reasonably well positioned to absorb the Levy and is pleased to be part of the solution to the energy crisis, an issue that is affecting every section of the economy and is in danger of causing real hardship to the most vulnerable households in the country.

The Board and its Committees

We continue the process of refreshing the BSIF Board. After nine highly successful years as Chair, John Rennocks decided that it was time for him to relinquish that position and stepped down at the November 2022 AGM, retiring from the Board in February 2023. John had been in the Chair since the formation of the Company in 2013 and was instrumental in its formation and flotation. I know my colleagues join me in recognising the immense contribution which John has made to BSIF's evolution from that of a fledgling participant in an untested area, to that of a major constituent of what has now become the GBP16 billion renewable power sector. John has led the Company with vision and great distinction; the Board looks forward to extending his legacy.

I am delighted to welcome Michael Gibbons as our new Senior Independent Director. Michael has a wealth of energy markets experience from his time at ICI and then PowerGen and has spent almost nine years chairing the British Government's independent Regulatory Policy Committee. Michael brings to BSIF a considerable body of knowledge in supporting the Company's further growth in the face of a rapidly evolving regulatory landscape.

During the Period, three new committees were established by the Board: a Nomination Committee, a Management Engagement and Service Providers Committee and an Environmental, Social and Governance Committee. Meanwhile Paul Le Page, who has chaired the Audit and Risk Committee since the foundation of the Company, intends to retire from that role with effect from the 2023 AGM, whereupon that role will be assumed by Elizabeth Burne. A key task for the Audit and Risk Committee during the current year is to conduct an audit tender; KPMG has been our auditor from inception and, in line with best practice, after ten years it is time to assess our options in this area.

Environmental, Social and Governance ("ESG")

The Company continues to make great progress with the implementation of its ESG strategy and has recently satisfied its Level 2 reporting requirements under the Sustainable Finance Disclosure Regulation (SFDR). As part of this, a recent assessment determined that the Company's current portfolio is 100% aligned with the EU Taxonomy, an achievement of which the Board is very proud and one which reflects well on our Investment Adviser, Bluefield Partners.

Conclusion

Despite a very choppy political backdrop, the second half of 2022 saw further progress by your Company, which continued to deliver excellent returns for its shareholders, while at the same time growing its asset base. Dividends increased and your Board is confident of delivering an earnings stream which will continue to grow in the coming years. The Board also has great confidence in its Investment Adviser, Bluefield Partners, who have steered us with skill since our foundation nearly a decade ago.

One of the many lessons which we derive from the continuing and tragic war in Ukraine is the need for greater energy security. Domestically generated solar electricity has an enormous role to play in achieving the shift away from imported hydrocarbons, while simultaneously decarbonising the economy. Although the achievements of the renewable energy sector are remarkable, for example in providing (by some measures) over 40% of the UK's domestically generated electricity in the period January-September 2022, there remains a considerable amount still to do if we are to wean ourselves off our thirst for fossil fuels and play our part in the global efforts to reach net zero.

Your Company is well placed to participate in the enormous programme of investment that is required in the coming years if we are to meet the ambitious goals set by the UK government and the United Nations. As we approach our tenth anniversary, BSIF has shown what can be achieved through a steady programme of investment and astute management of its assets. Your Board looks to the years ahead with great confidence.

John Scott

Chair

27 February 2023

The Company's Investment Portfolio

[chart]

Analysis of the Company's Investment Portfolio

[chart]

Report of the Investment Adviser

   1.     About Bluefield Partners LLP 

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 GBP6.5 billion of renewable funds and/or transactions in both the UK and Europe, including over GBP1 billion for BSIF 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, legal and portfolio executives. As Investment Adviser, Bluefield is responsible for the origination and selection of investment opportunities, which are then proposed to the Board of BSIF. Bluefield has executed over 200 individual SPV acquisitions on behalf of BSIF and other European vehicles through geographically dedicated teams.

2. Structure

The Company's corporate structure is summarised below:

[chart]

3. Portfolio: Acquisitions, Performance and Value Enhancement

Portfolio Overview

As at 31 December 2022, the Company held an operational solar portfolio of 129 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 with a total capacity of 812.6MWp.

During the period to 31 December 2022, the combined solar and wind portfolio generated an aggregated total of 391.8GWh, representing a Generation Yield of 511.4MWh/MW.

Acquisitions in the Period

In December 2022 the Company completed the acquisition of a 46.4MWp operational solar portfolio from Fengate Asset Management. The enterprise value of the portfolio is GBP56.0 million, including the economic benefit of all cashflows from May 2022. The portfolio contains GBP27.3 million of long-term amortising debt provided by Macquarie Bank Limited.

The portfolio consists of two ground mounted solar photovoltaic ('PV') plants, a 39.3MWp plant (Raventhorpe) located in Scunthorpe, Lincolnshire and a 7.1MWp facility (Roanhead) located in Barrow-in-Furness, Cumbria.

Both solar sites are accredited under the Renewable Obligation Certificate ('ROC') regime with a tariff of 1.4 ROCs.

Portfolio Performance and Optimisation

Solar PV Performance

In the 6-month period to 31 December 2022, irradiation levels were 9.7% higher than the Company's forecast and 13.3% higher than the same period in FY 2021/22.

During the reporting period, the solar portfolio achieved a Net PR of 76.96% (FY 2021/22: 79.5%) against a forecast of 79.5% and generated 327.4GWh of power, 6.2% above expectations. Higher than expected irradiation was the principal driver behind the generation exceeding expectations, however above forecasted irradiation lowers PR due to the increased effects of inter row shading losses and higher component temperatures.

Notwithstanding the lower PR, total generation increased by 26.6% when compared to the six months to 31 December 2021 due to the combined impact of the solar portfolio capacity increasing by 10.1% and the irradiation during the period having been 13.3% higher As a result of these factors, the generation yield (generation per MW of installed capacity) increased by 9.6% to 462.55MWh/MWp when compared to the same period in the 2021/22 reporting year.

Table 1. Summary of Solar Fleet Performance for H1 2022/23:

 
                                                    Delta                    Delta 22/23 
                              H1          H1          to           H1             to 
                                                   Forecast                  21/22 Actual 
                            2022/23     2022/23       (%        2021/22           (% 
                            Actual     Forecast    change)      Actual6        change) 
                          ==========  ==========  =========  =============  ============= 
 Solar Portfolio 
  Total Installed           707.76      707.76        -          613.00         15.46% 
 Capacity (MWp)(1) 
======================== 
 Weighted Average           601.03      548.03      9.67%        530.40         13.32% 
 Irradiation (Hrs)(2,3) 
======================== 
 Total Generation 
  (MWh)                     327,377     308,363     6.17%       258,646         26.57% 
========================  ==========  ==========  =========  =============  ============= 
 Generation Yield           462.55      435.69      3.80%        421.9          9.64% 
 (MWh/MWp) 
======================== 
 Average Revenue           GBP180.96   GBP171.80    5.33%     GBP135.40(5)      33.65% 
 (GBP/MWh)(4) 
======================== 
 

Notes to Table 1.

   1.    Excludes 2 solar plants acquired in late December 2022 (46.4 MWp ) 

2. Periods of irradiation where irradiance exceeds the minimum level required for generation to occur (50W/m(2) )

3. Excluding grid outages and significant periods of constraint or curtailment that were outside the Company's control (for example, DNO-led outages and curtailments)

4. Average Revenue 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

5. H1 2021/22 Average Revenue includes ROC recycle amounts received. These amounts were not received by 31 Dec 21, therefore not included in the published 2021/22 interim results

6. Includes 30.1 MWp of solar assets acquired in January 2022, not included in the published 2021/22 interim results (performance data now available to 1 July 2022)

Total Revenue for the period was GBP59.24m, 16.39% higher than forecasts and 69.16% higher than the previous FY. Favourable fixed PPA agreements which commenced during the period were the principal reason for increased revenue, as the average power price rose from GBP135.40/MWh in the previous FY to GBP180.96/MWh, representing a 33.65% increase.

Operational costs for the period (incorporating all fixed, contracted costs such a lease payments, O&M fees etc.) totalled c.GBP15.18m, including expenditure associated with the optimisation & enhancement projects (see below).

Solar PV Optimisation & Enhancement Activity

A core focus of the Investment Adviser's activities is protecting, optimising, and enhancing the value of the Company's operational portfolio.

Principally this is done through in-depth performance monitoring and carefully tailored preventative maintenance programmes, ensuring that capital spend across the Company's portfolio (expected to be GBP4-5m annually over the next decade) is completed during periods of low irradiation (being October to February).

A rolling capital works programme is essential for optimising the long-term operational performance of the portfolio.

As at 31 December 2022, 494.6 MWp (30 June 2022: 401 MWp) of the PV portfolio have leases that allow for terms beyond 30 years (being 60.87% of the solar PV portfolio), with 338.2 MWp (100% of applications successful) benefitting from planning terms in excess of 30 years with the Investment Adviser continuing to pursue lease extensions on the remaining assets in the portfolio.

Onshore Wind Performance

As at 31 December 2022, the Company held an operational onshore wind portfolio of 135 installations , comprising 109 small scale turbines (55-250kW) and 26 turbines (850kW-2.3MW), with an aggregated capacity 58.36MW.

During the reporting period, the portfolio generated 64.42GWh, -21.7% below forecasts. This was largely due to continued reduced availability of 3 turbines at Delabole Wind Farm. As a result, the Investment Adviser elected to replace the O&M provider in December 2022; following this, all faulty turbines returned to service within 4 weeks. Significant O&M LDs are expected to be recovered for the underperformance.

Compared to the UK 2o-year mean, national average windspeeds were down 10% during the first three months of the period (July - September 2022), and down 6% during the whole six month reporting period, further impacting generation. The average onsite windspeeds were 6% higher than the previous year (FY 2021/22), a period of historically low wind resource.

Table 2. Aggregated Wind Portfolio Performance, H1 2022/23

 
                                      H1          H1        Delta to        H1       Delta 22/23 to 
                                    2022/23     2022/23    Forecast (%    2021/22    21/22 Actual (% 
                                    Actual     Forecast      Change       Actual2        change) 
 ===============================  ==========  ==========  ============  ==========  ================ 
   Portfolio Total Installed         58.36       58.36          -          30.01         94.47% 
      Capacity (MW) 
     ===========================  ==========  ==========  ============  ==========  ================ 
   Total Generation (MWh)           64,392      82,182       -21.65%      29,888         115.45% 
  ==============================  ==========  ==========  ============  ==========  ================ 
   Generation Yield                1,103.36    1,408.18      -21.65%      995.92         10.79% 
      (MWh/MW) 
     ===========================  ==========  ==========  ============  ==========  ================ 
   Average Revenue (1)             GBP203.59   GBP197.78      2.93%      GBP199.84        1.87% 
   (GBP/MWh) 
  ==============================  ==========  ==========  ============  ==========  ================ 
 
 

Notes to Table 2.

1. Average Revenue 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

2. Includes 17.4MW of onshore wind assets acquired in January 2022, not included in the published 2021/22 interim results (performance data now available to 1 July 2022)

The portfolio achieved a Generation Yield of 1,103.36 MWh per MW of installed capacity, equivalent to a 10.8% increase to FY 2021/22, largely due to the improved wind resource.

Despite lower than forecast generation, the portfolio provided a total revenue of GBP13.1m, with an average revenue per MWh of GBP203.59, +2.9% above expected levels, due to significantly higher wholesale power prices.

Onshore Wind Optimisation & Enhancement Activity

In Northern Ireland, 17 of the 29 small-scale turbines have been identified for repowering with replacement EWT 250kW turbines. These assets will be repowered to increase efficiency and output, whilst maintaining their respective NIRO accreditation status.

As at 31 December 2022, 4 turbines have been repowered and returned to operation, with a further 9 having received planning approval for repowering, with a new 25-year term. By end-February 2023, an additional 2 turbines will be repowered with the EWT model, and further 3 planned for repowering before 30 June 2023. The remaining projects have planning applications submitted to the relevant Local Planning Authority.

General Portfolio

OFGEM Audits

As part of the industry-wide audits of FiT and RO-accredited generating assets, the Investment Adviser and Asset Manager have been working closely with the regulator on those assets (randomly) selected for audit. All of the Company's assets to have completed OFGEM audits to date have been classified as 'satisfactory'.

Health & Safety Activities

The Investment Adviser continues to ensure H&S awareness, policies, processes and procedures remain at the forefront of every activity around the portfolio. H&S policies and logs are reviewed at least annually. All main contractors (including asset management and O&M providers) are audited annually by a qualified third-party specialist consultant, with new retained contractors (associated with operational projects acquired by BSIF, for example) audited immediately following acquisition.

   4.    Power Purchase Agreements 

The Company maintained its strategy of fixing power price contracts for periods between 12 and 36 months, with most contracts continuing to be struck for a minimum of 18 months. As at 31 December 2022, the average term of the fixed-price PPAs across the portfolio is 28.4 months (FY 2021/22: 25.8 months).

Contract renewals are spread evenly throughout any 12-month period, with competitive tender processes involving several offtakers run for each PPA renewal in the 3 month period prior to the commencement of a new fixing period. PPA counterparties are selected on a competitive basis, but with a clear focus on achieving value and diversification of counterparty risk.

The Investment Adviser continues to believe this is the best strategy for shareholders, who are looking for stable revenues and forecastable, sustainable dividends, and provides very high visibility of revenues over the next few years, where other strategies do not. This approach delivered almost a decade of sector leading dividend cover (covered by in year earnings and post debt amortisation).

As at 31 December 2022, the Company has a price confidence level of 92% to June 2023 and c.90% to December 2023 over the pricing of both power and subsidy revenue streams.

The ability of the Company to capture the wholesale power market prices when they are at their highest is reflected in the BSIF average seasonal weighted power price. The average seasonal weighted power price for the 12 months ending 31 December 2022 has increased by 70.75% from the year ended 31 December 2021, from GBP50.30 per MWh to GBP85.80 per MWh. These values contain price fixes made from up to two years prior.

The impact of power prices on NAV is set out in the valuations section.

During the period, the wholesale market continued to offer opportunities to fix contracts, up to 36 months in tenure, at historically high prices. As shown below, those contracts fixed during the reporting period (aggregated capacity: 140MWp) were at prices significantly above the portfolio average.

Chart 1. PPA Fixed Power Prices (Average Vs Average for Fixes completed during Reporting Period)

 
                                       1 Jan    1 July   1 Jan    1 Jul 
                        Price as at:    23       23       24       24 
     BSIF Portfolio Weighted Average 
            Contract Price (GBP/MWh)   189.14   169.72   183.51   167.39 
                                      -------  -------  -------  ------- 
       Weighted Average for Contract 
   Prices fixed during the reporting 
                    period (GBP/MWh)   523.16   293.56   311.98   210.23 
                                      -------  -------  -------  ------- 
 

The Investment Adviser notes that the majority of the gains from these high PPA fixes will be offset by the impact of the Electricity Generator Levy ("the Levy"), a temporary 45% tax on the extraordinary returns made by electricity generators late last year 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.

   6.    Power Market Summary 

Power markets reached record highs in August 2022, as Russia's continuing war against Ukraine exacerbated concerns surrounding gas supplies to Europe ahead of Winter 2023.

Chart 2. UK Natural Gas & Wholesale Power Prices (1 July 2020 - 31 December 2022)

[chart]

Source data: Bloomberg

As a result, power prices within the UK remained extremely volatile throughout the period, predominantly following the same patterns as the gas market, as shown in Chart 2, with day-ahead baseload power prices reaching extreme highs on 25 August and 9 December, at GBP565/MWh and GBP654.65/MWh, respectively.

However, high gas prices during the 2022 summer attracted strong LNG deliveries to Europe amid periods of reduced consumption which allowed EU countries to enter the winter season with gas stocks at 89% of capacity, above the EU target for 1 November 2022. This in turn eased concerns about shortages for winter, putting downward pressure on both European gas prices.

Whilst season ahead pricing has fallen from the highs of H1 22/23, in the absence of hydrocarbons from Russia both gas and coal markets remain tight, and expectations remain that energy prices will be considerably higher than historic long term averages.

   7.    Construction Programme 

As at the end of the Period, BSIF had 340 MW solar and 125 MW battery storage assets that are fully consented and are in pre-construction. The projects have connection dates between 2023 and 2028. In addition, the first development to enter the construction phase is the Yelvertoft 49MW Solar PV project, which signed a fixed price EPC contract with Bouygues in September 2022 and is targeting operation in Q4 2023.

As the EPC agreements 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. For further information relating to the Company's wider ESG activity, please refer to the ESG section below.

Projects with CfDs

In July 2022, the Investment Adviser successfully secured CfDs on 62.4MW of ready to build PV plants (Yelvertoft 49.9MW, Romsey 6.5MW and Oulton 6.0MW). By securing a CfD contract, the plants will benefit from index linked revenues (to CPI) over a 15 year duration at the AR4 solar PV strike price of GBP45.99/MWh (in 2012 equivalent prices), or GBP57.48/MWh in 2022. The contracts commence from 31 March 2025, at which point the strike price referenced above will include inflation from 2023 and 2024.

The Investment Adviser is monitoring the upcoming allocation round (AR5).

   8.    Development Programme - Outline of developments and valuation approach 

The Investment Adviser has been pursuing its development strategy since 2019 to enable BSIF to continue to be a key player in the UK renewable energy market. Since this time, a portfolio of approximately 950 MW of solar and over 400 MW of batteries has been built up across 28 projects. At any one time, outstanding commitments to fund development projects are less than 1% of GAV.

Currently, no value is attributed to projects without planning consent. However, 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 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 discernable value beyond the direct costs of development.

The current pipeline status and valuation is summarised in the graphic below.

Current pipeline status and valuation

[chart]

   9.    Analysis of underlying earnings 

The total generation and revenue earned (including ROC recycle estimate) in the 6 months to 31 December 2022 by the Company's portfolio, split by subsidy regime, is outlined below.

 
 Subsidy Regime    Generation   PPA Revenue         Regulated 
                        (MWh)        (GBPm)    Revenue (GBPm) 
       FiT             32,021           2.7               5.7 
                  -----------  ------------  ---------------- 
     4.0 ROC            6,269           0.9               1.5 
                  -----------  ------------  ---------------- 
     2.0 ROC           12,366           0.7               1.3 
                  -----------  ------------  ---------------- 
     1.6 ROC           55,835           6.6               5.4 
                  -----------  ------------  ---------------- 
     1.4 ROC          134,474          11.3              14.0 
                  -----------  ------------  ---------------- 
     1.3 ROC           33,482           4.6               2.7 
                  -----------  ------------  ---------------- 
     1.2 ROC           65,816           6.7               5.2 
                  -----------  ------------  ---------------- 
     1.0 ROC           14,953           1.5               0.9 
                  -----------  ------------  ---------------- 
     0.9 ROC           36,611           5.0               1.9 
                  -----------  ------------  ---------------- 
      Total           391,827          40.0              38.6 
                  -----------  ------------  ---------------- 
 

The Company includes ROC Recycle assumptions within its long term forecasts and applies a market based approach on recognition within any current financial period, including prudent estimates within its accounts where there is clear evidence that participants are attaching value to ROC Recycle for the current accounting period.

In October 2022, Ofgem announced the value for ROC Recycle for the period April 2021 to March 2022 (CP20) was GBP7.04/ROC (equivalent to 13.9% of CP20 ROC buyout prices). This was slightly ahead of the 12.5% ROC Recycle estimate the Company had recognised in its 30 June 2022 Financial Statements.

The key drivers behind the changes in Underlying Earnings between H1 2021/22 and H1 2022/23 are the combined effects of the acquisitions within the period and higher PPA pricing.

Underlying Portfolio Earnings

 
                                   Half year    Half year    Full year   Full year 
                                    period to    period to       to          to 
                                    31 Dec 22    31 Dec 21    30 June     30 June 
                                                                 22          21 
                                      (GBPm)       (GBPm)      (GBPm)      (GBPm) 
 Portfolio Revenue                       78.6         40.0       111.4        73.1 
                                  -----------  -----------  ----------  ---------- 
 Liquidated damages 
  and Other Revenue*                      0.8          0.3         1.6         2.0 
                                  -----------  -----------  ----------  ---------- 
 Net Earnings from Acquisitions 
  in the period                           0.0          0.0         0.0         5.1 
                                  -----------  -----------  ----------  ---------- 
 Portfolio Income                        79.4         40.3       113.0        80.2 
                                  -----------  -----------  ----------  ---------- 
 Portfolio Costs                        -16.1        -11.0       -27.8       -17.6 
                                  -----------  -----------  ----------  ---------- 
 Project Finance Interest 
  Costs                                  -5.5         -1.0        -4.7        -1.8 
                                  -----------  -----------  ----------  ---------- 
 Total Portfolio Income 
  Earned                                 57.8         28.3        80.5        60.8 
                                  -----------  -----------  ----------  ---------- 
 Group Operating Costs(#) 
  **                                     -4.6         -4.5        -8.3        -7.5 
                                  -----------  -----------  ----------  ---------- 
 Group Debt Costs                        -1.8         -2.4        -5.4        -4.7 
                                  -----------  -----------  ----------  ---------- 
 Underlying Earnings                     51.4         21.4        66.8        48.6 
                                  -----------  -----------  ----------  ---------- 
 Group Debt Repayments                  -13.2         -8.6       -13.8        -9.3 
                                  -----------  -----------  ----------  ---------- 
 Underlying Earnings 
  available for distribution             38.2         12.8        53.0        39.3 
                                  -----------  -----------  ----------  ---------- 
 
 
                             Half year    Half year    Full year   Full year 
                                 to           to           to          to 
                              31 Dec 22    31 Dec 21    30 June     30 June 
                                                           22          21 
                                (GBPm)       (GBPm)      (GBPm)      (GBPm) 
 Brought forward reserves          20.9         13.4        13.4         8.4 
                            -----------  -----------  ----------  ---------- 
 Total funds available 
  for distribution -1              59.1         26.2        66.4        47.7 
--------------------------  -----------  -----------  ----------  ---------- 
 Target distribution***             N/A          N/A        45.2        34.3 
--------------------------  -----------  -----------  ----------  ---------- 
 
 Actual Distribution 
  -2                               12.8         10.1        45.5        34.3 
                            -----------  -----------  ----------  ---------- 
 Underlying Earnings 
  carried forward 
  (1-2)                             N/A          N/A        20.9        13.4 
                            -----------  -----------  ----------  ---------- 
 

*Other Revenue includes insurance proceeds, ROC Recycle late payment and Mutualisation, O&M settlement agreements and rebates received

#Includes the Company, BR1 and BSIFIL (the UK HoldCos) and any tax charges within the UK HoldCos.

**Excludes one-off transaction costs and the release of up-front fees related to the Company's debt facilities

***Target distribution is based on funds required for total target dividend for each financial period.

The table below presents the underlying earnings on a per share basis.

 
                             Half year     Half year     Full year     Full year 
                             period to     period to         to            to 
                             31 Dec 22     31 Dec 21      30 June       30 June 
                                                             22            21 
 Target Distribution 
  - GBPm                            N/A           N/A          45.2          34.3 
                           ------------  ------------  ------------  ------------ 
 Total funds available 
  for distribution 
  (inc. reserves) 
  - GBPm                           59.1          26.2          66.4          47.7 
                           ------------  ------------  ------------  ------------ 
 Average number of 
  shares in the period*     611,452,217   496,067,602   554,042,715   429,266,617 
                           ------------  ------------  ------------  ------------ 
 Target Dividend 
  (pps)                             N/A           N/A          8.16          8.00 
                           ------------  ------------  ------------  ------------ 
 Total funds available 
  for distribution 
  (pps) - 1                        9.65          5.24         12.22         11.19 
                           ------------  ------------  ------------  ------------ 
 Total Dividend Declared 
  for the period (pps)** 
  - 2                              2.10          2.03          8.20          8.00 
                           ------------  ------------  ------------  ------------ 
 Reserves carried 
  forward 
  (pps) *** - 1-2                   N/A           N/A          3.39          2.67 
                           ------------  ------------  ------------  ------------ 
 

*Average number of shares is calculated based on shares in issue at the time each dividend was declared.

**Half year period to 31 Dec 2022 dividend of 2.10pps declared 23 Jan 2023, with a payment date on or around 3 March 2023.

***Reserves carried forward are based on the shares in issue at the point of Annual Accounts publication (being c.611m shares for 30 June 2022 and c.496m shares for 30 June 2021).

10. NAV and Valuation of the Portfolio

The Investment Adviser is responsible for advising the Board in determining the Directors' Valuation.

Formal valuations are carried out on a six-monthly basis at 31 December and 30 June each year, with the Company committed to commissioning an independent review as and when the Board believes it benefits Shareholders.

Following consultation with the Investment Adviser, the Directors' Valuation adopted for the portfolio as at 31 December 2022 was GBP987.6m (30 June 2022, GBP939.9m).

The table below shows a breakdown of the Directors' valuations over the last four reporting periods:

 
 Valuation Component (GBPm)                                Dec 2022   June 2022   Dec 2021   June 2021 
 Enterprise Portfolio DCF value (EV)                        1,222.2     1,180.6      861.2       770.1 
                                                          ---------  ----------  ---------  ---------- 
 Consented Solar and Battery Storage Development rights        30.4        13.8        7.3         1.8 
                                                          ---------  ----------  ---------  ---------- 
 Deduction of Project Co debt                                -410.1      -390.3     -119.3      -119.8 
                                                          ---------  ----------  ---------  ---------- 
 Project Net Current Assets                                   145.1       135.8       36.5        42.4 
                                                          ---------  ----------  ---------  ---------- 
 Directors' Valuation                                         987.6       939.9      785.7       694.5 
                                                          ---------  ----------  ---------  ---------- 
 Portfolio Size (MWp)                                         812.6       766.2      625.6       613.0 
                                                          ---------  ----------  ---------  ---------- 
 

Discounting Methodology

Competition for operational assets remains high and so multiples for subsidised solar assets have not materially changed from those in June 2022 (being between c.GBP1.25m/MW and c.GBP1.45m/MW) for comparable portfolios to the Company's.

The Directors' valuation is benchmarked against precedent market transactions and compiled using Discounted Cash Flow methodology, under IPEV Valuation guidelines and using a levered equity discount rate based on the Company's capital structure.

Refer to Note 7 of the unaudited interim financial statements for further details.

Key factors behind the Directors' Valuation

There have been a number of key factors that have been considered in the Investment Adviser's recommendation to the Directors' Valuation (and which are quantified in the NAV movement chart below):

(i) The inclusion of the new 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;

(ii) The inflation forecast for 2023 was raised from 3.4% in June 2022 to 5.5% in September 2022, reflecting expectations from forecasters that declines from the highs of 2022 would be more gradual than previously expected; and

(iii) The levered equity discount rate has been increased to 7.25% (6.75% in June 2022 and 6.00% December 2021) with the discount rate for asset lives in excess of 30 years increasing to 8.75% (8.00% in June 2022 and 7.50% in December 2021). This is a result of increases over the period in both the Bank of England base rate (rising from 1.25% as at 30 June 2022 to 3.5% as at 31 December 2022) and 15 year debt yields (c.2.5% as at 30 June 2022 to c.4.0% as at 31 December 2022).

By reflecting the core factors above within the Directors' Valuation for 31 December 2022, the EV of the portfolio is GBP1,222.2m (June 2022: GBP1,180.6m) with the effective price for the solar component holding steady at GBP1.38m/MW (June 2022: GBP1.38m/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.

Valuation Assumptions - Further detail

Debt

Refer to note 7 of the unaudited interim financial statements.

Further details of the third-party debt can be found below in the Financing section.

Power Price

The blended forecast of three leading consultants used within the latest Directors' Valuation, as shown in the graph below, is based on forecasts released in the quarter to December 2022. For illustration purposes, the graph below also includes the blended curve used in the Company's June 2022 Annual accounts.

The curves used in the 31 December 2022 Directors' Valuation reflect the following key updates:

1. Short-term European fuel prices - gas and coal - rose since June 2022 amid ongoing concerns about supply disruptions due to the war in Ukraine with a similar trend reflected in the wholesale power price curve;

2. Higher renewable generation capacity deployment levels in the medium term (notably c.35GW offshore wind, c.22GW onshore wind and c.22GW solar by 2030) as the UK strives to meet its net zero targets and fully decarbonise its power system by 2035; and

3. Annual demand for power in Great Britain, driven principally by electrification of heat and transport, is expected to rise from 310TWh in 2023 to 404TWh by 2035.

[chart]

[chart]

The main contributors to the increase in the Directors Valuation from 30 June 2022 to 31 December 2022 were an increase in power price forecast curves provided by the Company's three independent advisers (18.1pps), a new acquisition (9.3pps), change in development portfolio valuation (2.5pps) and updated near-term inflation assumptions (0.8pps).

Directors' Valuation movement

 
                                                             (GBPmillion)            As % 
                                                                             of valuation 
-----------------------------  --------------  ----  -----  -------------  -------------- 
 30 June 2022 Valuation                                             939.9 
-----------------------------------  --------  ----  --------------------  -------------- 
 New investments acquired                                            59.4 
-----------------------------------  --------  ----  --------------------  -------------- 
 Rebased Valuation                                                  999.3 
-----------------------------------  --------------  --------------------  -------------- 
 
 Development uplift                            17.9                                  1.8% 
                                                                                    (2.6) 
 Cash receipts from portfolio                (25.7)                                     % 
 Date change, degradation, O&M                                                      (3.4) 
  updates                                    (34.0)                                     % 
 Power curve updates (incl. PPAs)             122.7                                12.3 % 
 Inflation updates                              4.1                                 0.4 % 
 Discount rate change                        (23.4)                                (2.3)% 
 Levy tax impact                             (87.2)                                (8.7)% 
 Balance of portfolio return                   13.9                                  1.4% 
 31 December 2022 Valuation                                         987.6          (1.1)% 
---------------------------------------------  -----------  -------------  -------------- 
 
 

There have been no material changes to assumptions regarding the future performance or cost optimisation of the portfolio when compared to the Directors' Valuation of 30 June 2022.

On the basis of these key assumptions, the Board believes there remains further scope for NAV enhancement from the potential extensions of asset life for further projects in the portfolio, as well as cost optimisation on long term O&M fees.

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 at Period End 
            Category                        31                 30 June                      31                 30 June 
                                      December                    2022                December                    2021 
                                          2022                  (GBPm)                    2021                  (GBPm) 
                                        (GBPm)                                          (GBPm) 
                         ---------------------  ----------------------  ----------------------  ---------------------- 
            Directors' 
             Valuation                   987.6                   939.9                   785.7                   694.5 
                         ---------------------  ----------------------  ----------------------  ---------------------- 
            Portfolio 
             Holding 
             Company 
             Working 
             Capital                       2.9                  (13.6)                    37.8                    26.4 
                         ---------------------  ----------------------  ----------------------  ---------------------- 
            Portfolio 
             Holding 
             Company 
             Debt                      (121.0)                  (70.0)                 (214.7)                 (250.6) 
                         ---------------------  ----------------------  ----------------------  ---------------------- 
            Financial 
             Assets at 
             Fair Value 
             per 
             Balance 
             sheet                       869.5                   856.3                   608.8                   470.3 
                         ---------------------  ----------------------  ----------------------  ---------------------- 
            Gross Asset 
             Value                     1,400.6                 1,316.7                   942.7                   840.7 
                         ---------------------  ----------------------  ----------------------  ---------------------- 
            Gearing (% 
             GAV*)                         38%                     35%                     35%                     44% 
                         ---------------------  ----------------------  ----------------------  ---------------------- 
 

* GAV is the Financial Assets, as at 31 December 2022, at Fair Value of GBP869.5m plus RCF of GBP121m and third party portfolio debt of GBP410.1m (giving total debt of GBP531.1m).

Directors' Valuation sensitivities

Valuation sensitivities are set out in tabular form in note 7 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.

[chart]

   11.   Financing 

Revolving Credit Facility

On 11 May 2022, the Company agreed a new and enlarged GBP100 million revolving credit facility ("RCF"), provided equally by RBSI and Santander UK, maturing in May 2024 (with an option to extend to May 2025). On 22 December 2022 an accordion loan facility of GBP70 million was agreed with the lenders, with a maturity of September 2023.

As at 31 December 2022 the Company's subsidiary had drawn GBP121m from its RCF.

External Debt

Excluding the Company's RCF, total outstanding loans to 3(rd) party lenders as at 31 December 2022 is GBP410.1m, 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 2.9%. For completeness, this excludes the Macquarie debt as the acquisition of the 46.4MWp solar portfolio only occurred at the end of the period.

The table below outlines core details of all debt facilities within the Company, excluding the RCF, which is detailed above.

 
 Lender                        Outstanding Amount            Maturity                      Secured against 
                               (December 2022) 
 NatWest - 3yr term loan       GBP110m                       Sep 2023 (75% hedged at a     141.7MW solar portfolio 
                                                             swap rate of 0.31% until 
                                                             2038) 
                              ----------------------------  ----------------------------  ---------------------------- 
 Project finance loan with     GBP8.2m                       Sep 2029                      5MW solar asset 
 BayernLB 
                              ----------------------------  ----------------------------  ---------------------------- 
 BayernLB, Clydesdale, KfW -   GBP55.6m (BayernLB),          Dec 2033 to Jun 2034          93.2MW solar and wind 
 15yr amortising loans         GBP10.1m (KfW), GBP8.1m                                     portfolio 
                               (Clydesdale) 
                              ----------------------------  ----------------------------  ---------------------------- 
 Aviva - 18yr amortising       GBP88.8m fixed, GBP64.5m      Sep 2034                      401.2MW solar portfolio 
 loan                          index linked 
                              ----------------------------  ----------------------------  ---------------------------- 
 Macquarie - 15yr amortising   GBP7.5m fixed, GBP20.0m       Mar 2035                      46.4MW solar portfolio 
 loan                          index linked 
                              ----------------------------  ----------------------------  ---------------------------- 
 Gravis - 15yr amortising      GBP37.3m                      Jun 2035                      47.5MW solar and wind 
 loan                                                                                      portfolio 
                              ----------------------------  ----------------------------  ---------------------------- 
 Total                         GBP410.1m 
                              ----------------------------  ----------------------------  ---------------------------- 
 

NatWest 3yr term loan maturity

The Company is in the process of refinancing the 3 year term loan which is due to mature in September 2023. It is expected that the loan will be refinanced into longer term debt and will additionally support the construction of the Yelvertoft project.

GAV Leverage

The Group's total outstanding debt, as at 31 December 2022, is c.GBP531.1 million and its leverage stands at c.38% of GAV (35% as at 30 June 22), within the 35% - 45% preferred range the Directors have previously outlined as desirable for the Company.

11. Market Developments

UK renewable generation capacity and deployment

Latest government data shows that UK solar photovoltaic (PV) capacity stands at around 14.1GWp, across c.1.2 million installations. Of this amount, around 7.3GWp (c.52% of the total solar capacity in the UK) and 5.1GWp (37%) is accredited under the RO and FiT schemes, respectively, and c.1.7GWp (12%) is unaccredited. Onshore and offshore wind installed capacity stands at around 14.7GW and 13.9GW, respectively.

The UK has just under 2.1GW of operational battery storage capacity, according to data from energy association RenewableUK.

The UK's total renewable generation capacity is projected to continue to rise over the coming years as the government strives to meet its net zero targets. In July 2022, the UK government awarded support for c.10.8GW of new build renewable generation capacity through its Contracts for Difference renewable subsidy scheme - with c.7GW awarded for offshore wind projects, c.2.2GW for solar and c.888MW for onshore wind.

The chart below illustrates the distribution of total installed capacity across different renewable generation technologies at the end of the third quarter (the latest data available at the time of this report) compared with a year earlier.

[chart]

Source: UK government Department for Business, Energy & Industrial Strategy *Anaerobic Digestion includes sewage sludge digestion, animal biomass

Secondary market transactions and subsidy-free activity

Transactional activity in the UK renewables market has remained high, with acquisitions continuing to take place across the established technologies of solar (c.83MW of transactions in the period) and wind (c.1.8GW offshore wind across several shares of sites and c.69MW onshore wind).

Activity in the UK subsidy-free market has also continued at pace, with development activity being 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 and onshore wind in the most recent CfD auction round.

Estimates from Solar Power Media indicate that there is now over 79GWp of large-scale solar projects in the development/ready-to-build phase (June 2022: 41GWp) and c.11.6GWp awaiting or under construction as at mid- January 2023.

Converting this significant pipeline into operational solar projects over the next five years is dependent on mitigation of construction costs and supply chain challenges - both of which have been features in the aftermath of the Covid pandemic.

With 708MWp of operational solar capacity, the Company maintains a strong position within the UK solar market, owning about 7.4% of the country's utility-scale solar PV capacity. As an established and experienced market participant, this predominantly regulated revenue base provides a strong foundation for continued growth of the Company through both primary and secondary investment in solar, storage and wind.

12. Regulatory Environment

The regulatory environment remains under the spotlight as the government looks to manage soaring energy costs and increase energy security. Key themes are outlined below.

Electricity Generator Levy

The UK Chancellor announced at the Autumn Statement in November 2022 the introduction of a new temporary 45% tax - the Levy - is on the high revenues earned by electricity generators following sharp rises in commodity markets, driven by conflict and geopolitical events.

The Levy will be effective from 1 January 2023 until 31 March 2028. It replaces the proposal for the Cost Plus Revenue Limit which was announced in October 2022, and will apply 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.

Extraordinary returns will be calculated in relation to a CPI linked benchmark price, with the initial benchmark set at GBP75/MWh until April 2024.

The Levy will not apply to revenue sources from renewable obligation certificates or renewable energy guarantees of origin, CfDs with the Low Carbon Contracts Company, feed-in tariff generation and export tariff payments. Revenues from storage - including battery technologies, pumped hydroelectric storage, and innovative storage technologies such as hydrogen - and grid stabilisation will also not be subject to the Levy either, except for hybrid assets where generators will need to identify revenues from generation.

Update on Contracts for Differences (CfD)

In mid-December 2022, the UK government published its draft allocation framework for the next CfD allocation round 5 (AR5).

Details on the technology pot structures, delivery years and administrative strike prices were released. AR5 will contain two technology pots, compared with three from allocation round 4 (AR4). The pot reshuffle means that offshore wind and remote island wind technologies will now compete with other established technologies in pot 1, which include solar photovoltaic (above 5MW) and onshore wind. The implications of this scope change are likely to be clearer once further details on the auction parameters, including capacity caps per technology, are released in March 2023 prior to the opening of the AR5 application window in the same month.

Future CfD allocation rounds are still on track to run annually, rather the previous format of every two years, as per the Government's announcement in February 2022.

The Government has also opened a consultation on potential changes for allocation round 6 (due to open in 2024) and beyond. Consultation topics include possible changes to the definition of floating offshore wind, inclusion of multipurpose interconnectors and including CfDs for repowering projects. The consultation closed on 7 February 2023.

UK Carbon Market

In the Autumn Budget, the UK government confirmed the Carbon Price Floor (CPS) would be frozen for a further year at GBP18/tonne of CO2 equivalent for 2024/25. It also promised to engage with industry and conduct a review of the CPS beyond the announced rates. Separately, an initial review of the UK Emissions Trading System (UK ETS) is planned to commence this year to assess the whole system performance during the first half of the first phase of the scheme, which runs from 2021 - 2025. Any necessary changes will be implemented by 2026.

The carbon price - comprising the UK ETS and CPS combined - makes up a small portion of the total variable costs incurred by marginal plant generators in the UK's wholesale power market.

Review of Electricity Market Arrangements

The government launched its Review of Electricity Market Arrangements (REMA) consultation in July 2022. REMA is considering a range of potential market reforms including nodal pricing along with a wide range of additional options covering changes to low carbon investment, flexibility, operability, and capacity adequacy. The initial stage of the consultation closed in October 2022. The government is expected to provide a REMA update to the market by March 2023.

 
 
 
   Bluefield Partners LLP 
 27 February 2023 
 

Environmental, Social and Governance Report

   1.     Introduction from the Chair 

ESG stands firmly at the forefront of the investor agenda. In response to growing appetite amongst the investment community to identify and integrate ESG considerations into decision-making, regulators around the world have hastened efforts to introduce mandatory non-financial disclosure. As such, we saw Level 2 disclosure requirements of the Sustainable Finance Disclosure Regulation (SFDR) come into effect in January 2023. On this, I am pleased to say that following a recent assessment, the Company's current portfolio is deemed 100% aligned with the EU Taxonomy and is classified as an Article 8 Fund. There has also been increased focus on biodiversity and its consideration within investment, including milestone agreements made at COP15. The Company will continue to follow the progress of biodiversity frameworks, such as the Task Force on Nature-related Financial Disclosures (TNFD), over the coming year.

Following the launch of the Company's ESG strategy, work is underway to fulfil its first-year commitments. ESG provides a framework through which the Company can deliver environmental and social gain whilst also taking account of its own adverse impacts. The Board looks forward to continuing to make progress to achieve our ESG ambition and our desire both to deliver renewable energy and to do so responsibly.

John Scott,

Chair

   2.    ESG Highlights 

Estimated annual figures based on forecasted generation data for the period 1 July 2022 - 30 June 2023

Ø Over 847 GWh of renewable energy generation

Ø Over 163,000 tonnes of CO2e savings [1]

Ø Equivalent of over 292,000 houses powered with renewable energy[2]

Ø Over GBP200,000 to be paid to community benefit schemes

Interim Achievements

Ø Completed a climate risk and vulnerability assessment (CRVA) in line with recommendations from the Task Force on Climate-related Financial Disclosures (TCFD)

Ø Achieved 100% alignment with the EU Taxonomy and an Article 8 fund [3]

Ø Adopted and published a Sustainable Investment Policy

   3.    The Company's ESG Strategy 

The Company published its first ESG strategy within its 2022 Annual Report. The Company is proud to have developed its approach and embraced a critically self-reflective practice to discover, define and articulate an ESG strategy that reflects stakeholder expectations, and which will deliver a positive impact across its portfolio of investments.

Commitments & KPIs

Commitments and KPIs have been developed to enable the Company to monitor and evidence its ESG performance. These were adopted by the Board in August 2022 and will be reviewed by the Board annually, to ensure they remain aligned to the evolving ESG landscape. Data collection is ongoing to enable the Company to first report against its KPIs later in 2023. Please refer to the Company's 2022 Annual Report for a full breakdown of commitments and KPIs.

Governance

ESG is considered by the Board as part of every Board meeting and in all investment decisions, and the Board are responsible for oversight of ESG risks and opportunities, including in relation to climate. Figure 1 presents the Company's ESG and climate governance structure:

Figure 1 - the Company's ESG and Climate Governance Structure

[chart]

In recognition of the increased scrutiny applied to ESG, the Board has recently established an ESG committee, chaired by Meriel Lenfestey. The principal function of the Committee is to provide a forum for mutual discussion, support and challenge to the Investment Adviser with respect to ESG and climate matters. The first Committee meeting took place in November 2022 and the Committee will meet at least once a year moving forward. Establishment of the Committee will support the delivery of the Company's ESG strategy and wider ESG ambitions.

During the reporting period, the Company adopted and published a Sustainable Investment Policy, available on its website: bluefieldsif.com . The Company will develop additional policies, including a Sustainable Procurement Policy and Supplier Code of Conduct, over coming months.

Accreditations

In recognition of its positive environmental impact, the Company has been awarded the following accreditations:[4](,[5],[6])

Ø Guernsey Green Fund

Ø TISE Sustainable

Ø LSE Green Economy Mark

   4.    Responsible Investment 

On behalf of the Company, the Investment Adviser undertakes detailed due diligence on each investment opportunity, including in relation to ESG and climate risks and opportunities. Please refer to the Company's Sustainable Investment Policy, available on its website, for a full breakdown of how sustainability risks are integrated into the Company's investment process: bluefieldsif.com .

Principles for Responsible Investment

The Principles for Responsible Investment (PRI) are a set of voluntary investment principles which promote the integration of ESG considerations into investment practice. The Investment Adviser has been signatory to the PRI since 2019.

   5.    Regulatory Update 

Sustainable Finance Disclosure Regulation

The Company has elected to adopt an Article 8 classification under the Sustainable Finance Disclosure Regulation (SFDR). Given the nature of the Company's investments, Article 9 classification has been considered. However, there is currently insufficient detail on the level of regulatory scrutiny Article 9 funds will be subject to compared to Article 8. As the requirements and expectations of the SFDR become clearer, the Company will review whether Article 8 classification remains appropriate.

For the purposes of Article 8, the environmental characteristics promoted by the Company are to reduce reliance on fossil fuels and facilitate the UK transition to renewable and sustainable methods of energy generation. Please refer to the 'Climate Change Mitigation' section of the Company's 2022 Annual Report and the Company's Article 23 pre-contractual disclosure, available on its website, to see how the Company has met its environmental characteristics over the reporting period: bluefieldsif.com/esg/sustainable-finance-disclosure-regulation/ .

The Company is currently undertaking an analysis of its portfolio of assets to understand the Principal Adverse Impacts (PAIs) of its investment decisions on sustainability factors, by reference to the relevant sustainability indicators set out in the SFDR Regulatory Technical Standards (RTS). The Company will publish its first PAI statement before the deadline of 30 June 2023, which will be available in the section titled 'Sustainability-related disclosures' on the Company's website.

Please note that, as part of the Company's implementation of the SFDR Regulatory Technical Standards, the Company's Article 23 pre-contractual disclosure was updated on 22 December 2022. This involved the deletion of the sections titled 'Promotion of environmental and social characteristics' and 'Taxonomy-alignment', and the addition of the SFDR annex to provide the relevant sustainability-related information in the format of the mandated template. A section titled 'Consideration of principal adverse impacts of investment decisions on sustainability factors' was also added to inform investors of the Company's approach to implementing the PAI requirements. These changes are intended to comply with the Company's regulatory obligations and provide greater information to investors about the Company's sustainability profile and attributes.

The most recent versions of the Company's sustainability-related disclosures are available on its website: bluefieldsif.com/esg/sustainable-finance-disclosure-regulation/

EU Taxonomy

The Company considers that its investments substantially contribute to the environmental objective of Climate Change Mitigation. During the reporting period, the Company aimed to achieve this objective through its production of clean, renewable energy, and by investing in new renewable energy infrastructure and energy storage facilities.

The Company engaged an external consultant to undertake a review to determine the portfolio's alignment to the EU Taxonomy. The results of the assessment concluded that 100% of the current portfolio is taxonomy-aligned. The assessment was conducted in relation to the 2022 calendar year and included the following economic activities:

-- Electricity generation using solar photovoltaic technology

-- Electricity generation from wind power

-- Installation, maintenance, and repair of renewable energy technologies

It should be noted that the economic activity of 'Storage of electricity' was excluded from this assessment as the only constructed battery projects currently within the Company's portfolio are offline and not yet in use (and, if operational, would not represent a material proportion of revenues). This economic activity will therefore form part of the Company's future pipeline of work.

The Company acknowledges that work will be required to maintain this level of alignment and is committed to continual improvement in its ESG approach, in line with the commitments made as part of its ESG strategy. For further information on the methodology used to conduct the EU Taxonomy assessment, or how the Company is meeting and monitoring its environmental characteristics, please refer to the Company's website: bluefieldsif.com/esg/sustainable-finance-disclosure-regulation/ .

Task Force on Climate-related Financial Disclosures

As a renewable energy fund, climate change poses both opportunities and risks to the Company. Climate-related considerations form a key element of the Company's ESG strategy, helping ensure that climate is considered across the investment lifecycle, including pre-investment due diligence, asset management and reporting.

Although the Company does not currently fall within the scope of the FCA's mandatory reporting requirement, it has chosen to undertake TCFD reporting on a voluntary basis. The Company's first TCFD disclosure was presented within the 2022 Annual Accounts.

   6.    Key Activity Update 

Climate Risk and Vulnerability Assessment (CRVA)

During summer 2022, the Company undertook a climate screening exercise to identify potential climate-related risks and opportunities. This considered solar, wind and battery storage assets, in addition to construction activities. Identified potential climate-related risks included extreme heat, flooding and storms.

Building on these findings, during the interim period the Company undertook a Climate Risk and Vulnerability Assessment (CRVA), to assess the materiality of these physical climate risks on each of the Company's economic activities. The assessment included data from the Intergovernmental Panel on Climate Change (IPCC) reports (CMIP5) and representative concentration pathways (RCP2.6, RCP4.5, RCP8.5), and included at least 10-to-30-year climate projection scenarios.

The results of the assessment will be used as part of the scenario analysis exercise that the Company is currently undertaking, helping increase the resilience of the Company's climate strategy over time.

Bluefield Partners LLP

27 February 2023

Statement of Principal and Emerging Risks and Uncertainties for the Remaining Six Months of the year to 30 June 2023

As described in the Company's annual financial statements as at 30 June 2022 (with the exception of portfolio construction risk), the Company's principal and emerging risks and uncertainties include the following:

   --      Portfolio acquisition risk; 
   --      Portfolio construction risk; 
   --      Supply chain risks; 
   --      Valuation error; 
   --      Depreciation of NAV; 
   --      Physical and transitional climate-related risks; 
   --      Changing electricity market conditions; 
   --      Changes in tax regime; 
   --      Changes to Government plans; 
   --      Cyber risk, and 
   --      Adverse publicity. 

During the period since 30 June 2022, the Board added portfolio construction risk and elevated supply chain risk to principal risks. The addition of these risks to the Company's principal risks is driven by the commencement of construction of the Yelvertoft project.

The Board has considered the potential impact of portfolio construction risk to be poorly managed construction leading to environmental damage and the use of components that have not been responsibly sourced. These risks are being mitigated by the development of responsible procurement and construction policies.

The potential impact of supply chain risk has been considered as the availability and affordability of equipment and spare parts due to global supply chain issues that could reduce plant availability and delay construction projects. The Board considers the risk is mitigated by global trade agreements, however certain tariffs and fees may apply on goods from the EU. The Investment Adviser should monitor accordingly and advise of any issues or changes to financial forecasts in this regard. Equipment has been stock piled over the winter for planned refurbishments.

The Board believes that these risks are unchanged in respect of the remaining six months of the year to 30 June 2023.

Further information in relation to these principal risks and uncertainties may be found on pages 15 to 19 of the Company's annual financial statements as at 30 June 2022.

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.

Risks including emerging risks are mitigated and managed by the Board through continual review, policy setting and regular reviews 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 carried out a formal review of the risk matrix at the Audit and Risk Committee meeting held on 28 November 2022. The Board relies on periodic reports provided by the Investment Adviser and Administrator regarding risks that the Company faces. When required, experts will be employed to gather information, including tax advisers, legal advisers, and environmental advisers.

Directors' Statement of Responsibilities

The Directors are responsible for preparing the Interim Report and Unaudited Condensed Interim Financial Statements in accordance with applicable regulations. The Directors confirm that to the best of their knowledge:

-- the Unaudited Condensed Interim Financial Statements have been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the European Union; and

-- the interim management report which includes the Chair's Statement, Report of the Investment Adviser and Statement of Principal and Emerging Risks and Uncertainties for the remaining six months of the year to 30 June 2023 includes a fair review of the information required by:

a. DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the Unaudited Condensed Interim Financial Statements; and a description of the principal risks and uncertainties for the remaining six months of the financial year; and

b. DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related party transactions that have taken place during the first six months of the financial year and that have materially affected the financial position or performance of the Company during that period; and any changes in the related party transactions described in the last annual report that could do so.

The Board is 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.

On behalf of the Board

 
 
 
   Paul Le Page       Meriel Lenfestey 
 Director           Director 
 27 February 2023   27 February 2023 
 

Independent Review Report to Bluefield Solar Income Fund Limited

Conclusion

We have been engaged by Bluefield Solar Income Fund Limited (the "Company") to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 December 2022 of the Company, which comprises the unaudited condensed statements of financial position, comprehensive income, changes in equity, cash flows and the related explanatory notes.

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 December 2022 is not prepared, in all material respects, in accordance with IAS 34 Interim Financial Reporting as adopted by the EU and the Disclosure Guidance and Transparency Rules ("the DTR") of the UK's Financial Conduct Authority ("the UK FCA").

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity ("ISRE (UK) 2410") issued by the Financial Reporting Council for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. We read the other information contained in the half-yearly financial report and consider whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusions relating to going concern

Based on our review procedures, which are less extensive than those performed in an audit as described in the Scope of review section of this report, nothing has come to our attention to suggest that the directors have inappropriately adopted the going concern basis of accounting or that the directors have identified material uncertainties relating to going concern that are not appropriately disclosed.

This conclusion is based on the review procedures performed in accordance with ISRE (UK) 2410. However future events or conditions may cause the Company to cease to continue as a going concern, and the above conclusions are not a guarantee that the Company will continue in operation.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim financial report in accordance with the DTR of the UK FCA.

As disclosed in note 2, the annual financial statements of the Company are prepared in accordance with International Financial Reporting Standards as adopted by the EU. The directors are responsible for preparing the condensed set of financial statements included in the half-yearly financial report in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.

In preparing the half-yearly financial report, the directors are responsible for 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.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review. Our conclusion, including our conclusions relating to going concern, are based on procedures that are less extensive than audit procedures, as described in the scope of review paragraph of this report.

The purpose of our review work and to whom we owe our responsibilities

This report is made solely to the Company in accordance with the terms of our engagement letter to assist the Company in meeting the requirements of the DTR of the UK FCA. Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this 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 for our review work, for this report, or for the conclusions we have reached.

Barry Ryan

for and on behalf of KPMG Channel Islands Limited

Chartered Accountants, Guernsey

27 February 2023

Unaudited Condensed Statement of Financial Position

As at 31 December 2022

 
                                                                      31 December 2022   30 June 2022 
                                                                             Unaudited        Audited 
                                                               Note            GBP'000        GBP'000 
------------------------------------------------------------  -----  -----------------  ------------- 
 ASSETS 
 Non-current assets 
 Financial assets held at fair value through profit or loss     7              869,488        856,380 
 Total non-current assets                                                      869,488        856,380 
------------------------------------------------------------  -----  -----------------  ------------- 
 
 Current assets 
 Trade and other receivables                                    8                1,275            882 
 Cash and cash equivalents                                      9                  631          1,619 
 Total current assets                                                            1,906          2,501 
------------------------------------------------------------  -----  -----------------  ------------- 
 
 TOTAL ASSETS                                                                  871,394        858,881 
------------------------------------------------------------  -----  -----------------  ------------- 
 
 LIABILITIES 
 Current liabilities 
 Other payables and accrued expenses                            10                 675            490 
------------------------------------------------------------  -----  -----------------  ------------- 
 Total current liabilities                                                         675            490 
------------------------------------------------------------  -----  -----------------  ------------- 
 
 TOTAL LIABILITIES                                                                 675            490 
------------------------------------------------------------  -----  -----------------  ------------- 
 
 NET ASSETS                                                                    870,719        858,391 
------------------------------------------------------------  -----  -----------------  ------------- 
 
 EQUITY 
 Share capital                                                                 663,809        663,809 
 Retained earnings                                                             206,910        194,582 
 TOTAL EQUITY                                                   12             870,719        858,391 
------------------------------------------------------------  -----  -----------------  ------------- 
 
 Number of Ordinary Shares in issue 
  at period/year end                                            12         611,452,217    611,452,217 
------------------------------------------------------------  -----  -----------------  ------------- 
 
 Net Asset Value per Ordinary Share (pence)                     6               142.40         140.39 
------------------------------------------------------------  -----  -----------------  ------------- 
 

These unaudited condensed interim financial statements were approved and authorised for issue by the Board of Directors on 27 February 2023 and signed on their behalf by:

 
 
 
   Paul Le Page       Meriel Lenfestey 
 Director           Director 
 27 February 2023   27 February 2023 
 

The accompanying notes form an integral part of these unaudited condensed interim financial statements.

Unaudited Condensed Statement of Comprehensive Income

For the six months ended 31 December 2022

 
                                                                                   Six months ended   Six months ended 
                                                                                   31 December 2022   31 December 2021 
                                                                                          Unaudited          Unaudited 
                                                                            Note            GBP'000            GBP'000 
-------------------------------------------------------------------------  -----  -----------------  ----------------- 
 Income 
 Income from investments                                                     4                  437                408 
                                                                                                437                408 
 
 Net gains on financial assets held at fair value through profit or loss     7               38,408             54,103 
-------------------------------------------------------------------------  -----  -----------------  ----------------- 
 Operating income                                                                            38,845             54,511 
-------------------------------------------------------------------------  -----  -----------------  ----------------- 
 
 Expenses 
 Administrative expenses                                                     5                1,203                812 
 Operating expenses                                                                           1,203                812 
-------------------------------------------------------------------------  -----  -----------------  ----------------- 
 
 Operating profit                                                                            37,642             53,699 
-------------------------------------------------------------------------  -----  -----------------  ----------------- 
 
 Total comprehensive income 
  for the period                                                                             37,642             53,699 
-------------------------------------------------------------------------  -----  -----------------  ----------------- 
 
 Attributable to: 
 Owners of the Company                                                                       37,642             53,699 
 
 Earnings per share: 
 Basic and diluted (pence)                                                   11                6.16              11.05 
-------------------------------------------------------------------------  -----  -----------------  ----------------- 
 
 

All items within the above statement have been derived from continuing activities.

The accompanying notes form an integral part of these unaudited condensed interim financial statements.

Unaudited Condensed Statement of Changes in Equity

For the six months ended 31 December 2022

 
                                                            Number 
                                                                of 
                                                          Ordinary                    Retained 
                                                Note        Shares   Share capital    earnings   Total equity 
                                                                           GBP'000     GBP'000        GBP'000 
-------------------------------------------  -------  ------------  --------------  ----------  ------------- 
 Shareholders' equity at 1 July 2022                   611,452,217         663,809     194,582        858,391 
-------------------------------------------  -------  ------------  --------------  ----------  ------------- 
 
 Dividends paid                               12,13              -               -    (25,314)       (25,314) 
 Total comprehensive income for the period                       -               -      37,642         37,642 
 
 Shareholders' equity at 31 December 2022              611,452,217         663,809     206,910        870,719 
-------------------------------------------  -------  ------------  --------------  ----------  ------------- 
 

For the six months ended 31 December 2021

 
                                         Number 
                                             of 
                                       Ordinary                    Retained 
                             Note        Shares   Share capital    earnings   Total equity 
                                                        GBP'000     GBP'000        GBP'000 
------------------------  -------  ------------  --------------  ----------  ------------- 
 Shareholders' equity 
  at 1 July 2021                    406,999,622         413,215      58,210        471,425 
------------------------  -------  ------------  --------------  ----------  ------------- 
 
 Shares issued during 
  the period                 12      89,067,980         105,100           -        105,100 
 Share issue costs           12               -         (2,188)           -        (2,188) 
 Dividends paid            12,13              -               -    (18,061)       (18,061) 
 Total comprehensive 
  income for the period                       -               -      53,699         53,699 
 
 Shareholders' equity 
  at 31 December 2021               496,067,602         516,127      93,848        609,975 
------------------------  -------  ------------  --------------  ----------  ------------- 
 

The accompanying notes form an integral part of these unaudited condensed interim financial statements.

Unaudited Condensed Statement of Cash Flows

For the six months ended 31 December 2022

 
                                                                                   Six months ended   Six months ended 
                                                                                   31 December 2022   31 December 2021 
                                                                                          Unaudited          Unaudited 
                                                                           Note             GBP'000            GBP'000 
------------------------------------------------------------------------  ------  -----------------  ----------------- 
 
 Cash flows from operating activities 
 Total comprehensive income for the period                                                   37,642             53,699 
 Adjustments: 
 Increase in trade and other receivables                                                      (393)              (427) 
 Increase in other payables and accrued expenses                                                185                 40 
 Net gains on financial assets held at fair value through profit or loss     7             (38,408)           (54,103) 
 Net cash used in operating activities*                                                       (974)              (791) 
------------------------------------------------------------------------  ------  -----------------  ----------------- 
 
 Cash flows from investing activities 
 Purchase of financial assets held at fair value through profit or loss                           -          (102,600) 
 Receipts from unconsolidated subsidiary**                                   7               25,300             18,262 
 Net cash generated from/ (used in) investing activities                                     25,300           (84,338) 
------------------------------------------------------------------------  ------  -----------------  ----------------- 
 
 Cash flows from financing activities 
 Proceeds from issue of Ordinary Shares                                     12                    -            103,450 
 Issue costs paid                                                           12                    -              (538) 
 Dividends paid                                                            12,13           (25,314)           (18,061) 
 Net cash (used in)/generated from financing activities                                    (25,314)             84,851 
------------------------------------------------------------------------  ------  -----------------  ----------------- 
 
 Net decrease in cash and cash equivalents                                                    (988)              (278) 
 Cash and cash equivalents at the start of the period                                         1,619                775 
 
 Cash and cash equivalents at the end of the period                          9                  631                497 
------------------------------------------------------------------------  ------  -----------------  ----------------- 
 

The accompanying notes form an integral part of these unaudited condensed interim financial statements.

*Net cash used in operating activities includes GBP437,500 (31 December 2021: GBP407,517) of investment income.

**Receipts from unconsolidated subsidiary includes GBP6.2 million (31 December 2021: GBP5.3 million) of interest.

Notes to the Unaudited Condensed Interim Financial Statements

For the six months ended 31 December 2022

   1.     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 is regulated by the GFSC as a registered closed-ended collective investment scheme.

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. The Company also has the ability to invest a minority of its share capital into wind, hydro and energy storage assets.

The Company has appointed Bluefield Partners LLP as its Investment Adviser.

2. Accounting policies

a) Basis of preparation

The financial statements, included in this interim report, have been prepared in accordance with IAS 34 'Interim Financial Reporting', as adopted by the EU and the DTR. These financial statements comprise only the results of the Company as all of its subsidiaries are measured at fair value as explained in Note 2.c. The financial statements have been prepared on a basis that is consistent with accounting policies applied in the preparation of the Company's annual financial statements for the year ended 30 June 2022, approved for issue on 29 September 2022.

These financial statements have been prepared under the historical cost convention with the exception of financial assets held at fair value through profit or loss and in accordance with the provisions of the DTR.

These financial statements do not include all information and disclosures required in the annual financial statements and should be read in conjunction with the Company's audited financial statements for the year ended 30 June 2022, which were prepared under full IFRS requirements and the DTRs of the UK FCA.

Seasonal and cyclical variations

Although the bulk of the Company's electricity generation occurs during the summer months when the days are longer, the Company's results do not vary significantly during reporting periods as a result of seasonal activity.

b) Going concern

The Directors, in their consideration of going concern, have reviewed cash flow forecasts prepared by the Investment Adviser, future projects in the pipeline and the performances of the current solar and wind plants in operation. The conflict in Ukraine continues to have a significant impact on the macro-economic environment in which the Company operates. The Board and Investment Adviser take account of the consequences of the confilct as part of the going concern assessment.

The Board has also considered the likelihood of the Company being asked to discontinue operations in its mandatory five year continuation vote that is due at the 2023 AGM and regards this as very unlikely, given the strong performance of the Company and the support which it has received from its major shareholders. In assessing the going concern status of the Company, the Board has also considered the re-financing of the NatWest term loan, maturing in September 2023, and the interest rate swaps for 75% of the balance (being GBP82.5m) in place until 2037. The Investment Adviser is currently in the process of refinancing into longer term debt, which will additionally support the construction of the Yelvertoft project.

The Board has considered the Directors' Valuation, which uses a blend of power price forecasts from leading industry consultants. These forecasts are based on updated analysis on European fuels and carbon forward prices as well as the expected evolution of the UK's overall power supply and demand position in the longer term. Electricity prices continued to be at elevated levels during the period, with UK day-ahead base-load price rising to around GBP232/MWh on average in the six months to 31 December 2022, up from c.GBP176/MWh in the six months from 1 January to 30 June 2022 and c.GBP166/MWh in the six months from 1 July to 31 December 2021.

The Directors have concluded that it is appropriate to adopt the going concern basis of accounting in preparing these financial statements.

c) Accounting for subsidiaries

The Board considers that the Company is an investment entity. In accordance with IFRS 10, all subsidiaries are recognised at fair value through profit and loss.

d) 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, 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.

For management purposes, the Company is engaged in a single segment of business, being investment in renewable energy infrastructure assets via SPVs, and in one geographical area, the UK.

e) Fair value of subsidiary

The Company holds all of the shares in the subsidiary, BR1, which is a holding vehicle used to hold the Company's 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, inclusive of their intermediary holding companies, are valued semi-annually as described in Note 7 based on referencing comparable transactions supported by discounted cash flow analysis and are referred to as the Directors' Valuation.

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 or complexity or area where assumptions and estimates are significant to the financial statements has been identified as the valuation of the portfolio of investments held by BR1 (see Note 7).

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 7, the Board believes it is appropriate for the Company's portfolio to be benchmarked on a GBPm / MW basis against comparable portfolio transactions and on this basis the weighted average discount rate increased to 7.25% (6.75% in June 2022), which reflects the return hurdles in the market for lowly levered assets with high levels of regulated income.

   4.    Income from investments 
 
                                                 Six months ended   Six months ended 
                                                 31 December 2022   31 December 2021 
                                                          GBP'000            GBP'000 
 Monitoring fee in relation to loans supplied                 437                408 
                                                              437                408 
                                                =================  ================= 
 

The Company provides monitoring and loan administration services to BR1 for which an annual fee is charged and is payable in arrears.

   5.    Administrative expenses 
 
                                                Six months ended   Six months ended 
                                                31 December 2022 
                                                                   31 December 2021 
                                                         GBP'000            GBP'000 
 Investment advisory base fee (see Note 14)                  397                236 
 Administration fees                                         289                168 
 Legal and professional fees                                 140                 87 
 Directors' remuneration (see Note 14)                       137                123 
 Audit fees                                                   53                 47 
 Regulatory Fees                                              50                 27 
 Non-audit fees (interim review)                              45                 40 
 Registrar fees                                               35                 25 
 Broker fees                                                  25                 25 
 Insurance                                                    12                 11 
 Listing fees                                                  3                 12 
 Other expenses                                               17                 11 
                                                           1,203                812 
                                              ==================  ================= 
 
   6.    Net Asset Value per Ordinary Share 

The calculation of NAV per Ordinary Share is arrived at by dividing the total net assets of the Company as at the unaudited condensed statement of financial position date by the number of Ordinary Shares of the Company at that date.

   7.    Financial assets held at fair value through profit or loss 
 
                                Six months ended   Twelve months ended 
                                31 December 2022          30 June 2022 
                                           Total                 Total 
                                         GBP'000               GBP'000 
 Opening balance (Level 3)               856,380               470,282 
 Additions                                     -               250,282 
 Change in fair value                     13,108               135,816 
 Closing balance (Level 3)               869,488               856,380 
                               =================  ==================== 
 

Investments at fair value through profit or loss comprise the fair value of the investment portfolio, which is valued semi-annually by the Directors, 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 and loss in the Unaudited Condensed Statement of Financial Position is shown below.

 
                                       31 December 
                                              2022   30 June 2022 
                                             Total          Total 
                                           GBP'000        GBP'000 
 Investment portfolio, Directors' 
  Valuation                                987,630        939,948 
 
 Immediate Holding Company 
   Cash                                     25,321         13,102 
   Working capital                        (22,463)       (26,670) 
   Debt                                  (121,000)       (70,000) 
                                      ------------  ------------- 
                                         (118,142)       (83,568) 
 
 Financial assets at fair value 
  through profit or loss                   869,488        856,380 
                                      ============  ============= 
 
 
 Analysis of net gains on financial assets held at fair value through profit or loss (per 
  unaudited condensed statement of comprehensive income) 
                                                                               Six months ended   Six months ended 
                                                                               31 December 2022   31 December 2021 
                                                                                        GBP'000            GBP'000 
 
 Unrealised change in fair value of financial assets held at fair value 
  through profit or loss                                                                 13,108             35,841 
 
 Cash receipts from unconsolidated subsidiary*                                           25,300             18,262 
 
 Net gains on financial assets held at fair value through profit and loss                38,408             54,103 
                                                                              =================  ================= 
 

*Comprising of repayment of loans and Eurobond interest

Fair value measurements

Financial assets and financial liabilities are classified in their entirety into only one of the following three 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);

-- 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 instruments carried at fair value are the investments held by the Company, through BR1, which are fair valued at each reporting date. The Company's investments have been classified within Level 3 as BR1's investments are not traded and are valued using unobservable inputs.

Transfers during the period

There have been no transfers between levels during the six month period ended 31 December 2022. Any transfers between the levels will be accounted for on the last day of each financial period. Due to the nature of investments, these are always expected to be classified as Level 3.

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 2022.

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 be 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 GBP/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 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, irradiation forecasts, average wind speeds, operational costs, asset life 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 recent years.

This period sees the inclusion of the new 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 late last year 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 has sought external advice from its legal and tax advisers on how to model the Levy within the valuation methodology.

Given the fact discount rates are subjective, there is sensitivity within these to the interpretation of factors outlined above.

Judgement is used by the Board in determining the weighted average discount rate of 7.25% (6.75% as at 30 June 2022), with three key factors that have impacted the adoption of this rate outlined below:

a. Transaction values have remained consistent at c.GBP1.25-1.45/MW for large scale solar portfolios and which the Board have used to determine that an effective price of GBP1.38/MW is an appropriate basis for the valuation of the BSIF solar portfolio as at 31 December 2022.

b. Inclusion of the latest blended long term power forecasts from the Company's three providers.

c. Inclusion of an uplift with respect to asset extensions of 15 years on a subset (530 MW) of the portfolio.

The debt assumptions within the valuation reflect all third-party loans within the Group's capital structure as at the valuation date. Interest rates and repayment profiles are matched to the terms of each loan. In the case of any short-term financing, conservative assumptions are applied with respect to interest rates and repayment profiles post maturity. As at 31 December 2022, the Group's short term debt consisted of a GBP110m term loan with NatWest, maturing in September 2023, and the conversion assumption within the valuation is aligned to the percentage of the loan that has been hedged (being 75% with 17-year swaps at a rate of 0.31% until 2037). The interest rate applied to the converted balance (being GBP82.5m) is 3.0%. In addition, the Company has a small project finance loan of GBP8.2m, provided by BayernLB and fully amortising until maturity in 2029, secured against Durrants, a 5 MW FiT plant located on the Isle of Wight.

In order to smooth the sensitivity of the valuation to forecast timing or the opinion taken by a single forecast, the Board continues to adopt the application of a blended power curve from three leading forecasters.

The fair value of operational SPVs is calculated on a discounted cash flow basis in accordance with the IPEV Valuation Guidelines. The Investment Adviser produces fair value calculations on a semi-annual basis 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 Board considers the changes in inputs to be within a reasonable expected range based on its 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.

 
                                                     31 December 2022                           30 June 2022 
                                       -----------------------------------------  ------------------------------------ 
                                            Change in fair                              Change in fair 
                                                     value                                       value 
                                             of Directors'     Change in NAV per         of Directors'   Change in NAV 
                                                 Valuation                 share             Valuation       per share 
    Input             Change in input                 GBPm               (pence)                  GBPm         (pence) 
-------------------  ----------------  -------------------  --------------------  --------------------  -------------- 
 Discount rate                 + 0.5%               (20.9)                (3.41)                (21.8)          (3.57) 
------------------- 
                               - 0.5%                 18.8                  3.08                  23.1            3.77 
-------------------  ----------------  -------------------  --------------------  --------------------  -------------- 
 Power prices                    +10%                 53.7                  8.78                  62.2           10.17 
------------------- 
                                 -10%               (53.7)                (8.78)                (63.8)         (10.43) 
-------------------  ----------------  -------------------  --------------------  --------------------  -------------- 
 Inflation rate               + 0.50%                 23.5                  3.85                  25.0            4.09 
------------------- 
                              - 0.50%               (23.5)                (3.85)                (26.1)          (4.28) 
-------------------  ----------------  -------------------  --------------------  --------------------  -------------- 
 Energy yield             10 year P90              (104.9)               (17.15)               (100.2)         (16.39) 
------------------- 
                          10 year P10                105.6                 17.27                 100.5           16.43 
-------------------  ----------------  -------------------  --------------------  --------------------  -------------- 
 Operational costs               +10%               (10.9)                (1.78)                (10.5)          (1.72) 
------------------- 
                                 -10%                 10.9                  1.78                  10.5            1.72 
-------------------  ----------------  -------------------  --------------------  --------------------  -------------- 
 

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 
                                                             Place Barton Farm Solar Park 
 HF Solar Limited                                      100   Limited                                               100 
 Hoback Solar Limited                                  100   Willows Farm Solar Limited                            100 
 Littlebourne Solar Farm Limited                       100   Southwick Solar Farm 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 Ltd                                     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 Lake 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 Ltd                         100 
 Grange Solar Limited                                  100   Corby Solar Limited                                   100 
 Hall Farm 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 Limited                              100   KS SPV 5 Limited                                      100 
 East Farm Solar Park Limited                          100   WSE Hartford Wood Limited                             100 
 Galton Manor Solar Park Limited                       100   Mauxhall Farm Energy Park Limited                     100 
 Good Energy Creathorne Farm Solar 
  Park (003) Limited                                   100   Wind Energy Holdings Limited                          100 
 Good Energy Lower End Farm Solar                      100   Wind Energy Scotland (Fourteen                        100 
 Park (026) Limited                                          Arce Fields) Limited 
 Good Energy Woolbridge Solar Park                     100   Wind Energy Scotland (Birkwood                        100 
 (010) Limited                                               Mains) Limited 
 Good Energy Rook Wood Solar Park                            Wind Energy Scotland (Holmhead) 
  (057) Limited                                        100   Limited                                               100 
 Good Energy Carloggas Solar Park 
  (009) Limited                                        100   Arena Capital MP Limited                              100 
 Good Energy Cross Road Plantation 
  Solar Park (028) Limited                             100   Moscliff Power 5 Limited                              100 
 Good Energy Delabole Windfarm 
  Limited                                              100   Mosscliff Power 10 Limited                            100 
 Good Energy Hampole Windfarm 
  Limited                                              100   Mosscliff Power 2 Limited                             100 
 Good Energy Generating Assets No.1 
  Limited                                              100   Mosscliff Power 3 Limited                             100 
 Good Energy Holding Company No.1 
  Limited                                              100   Mosscliff Power 4 Limited                             100 
 Aisling Renewables Ltd                                100   Mosscliff Power 6 Limited                             100 
 Arena Wind Beragh Limited                             100   Mosscliff Power 7 Limited                             100 
 Arena Wind Camlough Limited                           100   Mosscliff Power Limited                               100 
 Arena Wind Cullybackey Limited                        100   E2 Energy PLC                                         100 
 Arena Wind Dungorman Limited                          100   Wind Energy One Limited                               100 
 Arena Wind Holdings Limited                           100   Wind Energy Two Limited                               100 
 Arena Wind Killeenan Limited                          100   New Road Wind Limited                                 100 
 Arena Wind Mowhan Limited                             100   Yelvertoft Solar Farm Limited                         100 
 Arena Wind Mullanmore Limited                         100   Peradon Solar Farm Limited                             60 
 Arena Wind (NI) Limited                               100   Lower Tean Leys Solar Farm Limited                     60 
 Ash Renewables No 3 Limited                           100   Lower Mays Solar Farm Limited                          60 
 Ash Renewables No 4 Limited                           100   Leeming Solar Farm Limited                             60 
 Ash Renewables No 5 Limited                           100   Wallace Wood Solar Farm Limited                        60 
 Ash Renewables No 6 Limited                           100   Sweet Briar Solar Farm Limited                         60 
 Carmoney Energy Limited                               100   BF31 WHF Solar Limited                                100 
 Errigal Energy Limited                                100   BF27 BF Solar Limited                                 100 
 Galley Energy Limited                                 100   BF13A TF Solar Limited                                100 
 Oak Renewables 2 Limited                              100   HW Solar Farm Limited                                 100 
 Oak Renewables Limited                                100   AR108 Bolt Solar Farm Limited                         100 
 S&E Wind Energy Limited                               100   BF33C LHF Solar Limited                               100 
 Arena Capital Partners Limited                        100   AR006 GF Solar Limited                                100 
 Boston RE Ltd                                         100   Whitton Solar Limited                                 100 
 DC21 Earth SPV Limited                                100   BF16D BHF Solar Limited                               100 
 E5 Energy Limited                                     100   BF33E BHF Solar Limited                               100 
 E6 Energy Limited                                     100   Twineham Energy Limited                                60 
 E7 Energy Limited                                     100   Sheepwash Lane Energy Barn Limited                    100 
                                                             Whitehouse Farm Energy Barn 
 Hallmark Powergen 3 Limited                           100   Limited                                               100 
 Warren Wind Limited                                   100   Bluefield Durrants GmBH                               100 
 Wind Energy Three Limited                             100   Trickey Warren Solar Limited                          100 
 Lightning 1 Energy Park Limited                       100   LPF UK Equityco Limited                               100 
 Abbots Ann Farm Solar Park Limited                    100   LPF UK Solar Limited                                  100 
 Canada Farm Solar Park Limited                        100   LPF Kinetica UK Limited                               100 
 Crockbaravally Wind Holdco Limited                    100   Kinetica 846 Limited                                  100 
 Crockbaravally Wind Farm Limited                      100   Kinetica 868 Limited                                  100 
 Dayfields Solar Limited                               100 
 Farm Power Apollo Limited                             100 
 Freathy Solar Park Limited                            100 
 IREEL FIT TopCo Limited                               100 
 IREEL FIT HoldCo Limited                              100 
 IREEL Wind TopCo Limited                              100 
 IREEL Solar HoldCo Limited                            100 
 IREL Solar HoldCo Limited                             100 
 Ladyhole Solar Limited                                100 
 Morton Wood Solar Limited                             100 
 Nanteague Solar Limited                               100 
 Newton Down Wind HoldCo Limited                       100 
 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 
 
 
 

8. Trade and other receivables

 
                                            31 December 2022   30 June 2022 
                                                     GBP'000        GBP'000 
 Current assets 
 Monitoring fees receivable (see Note 4)               1,272            834 
 Other receivables                                         3             43 
 Prepayments                                               -              5 
                                                       1,275            882 
                                           =================  ============= 
 

There are no material past due or impaired receivable balances outstanding at the period end, the probability of default of BSIFIL and BR1 was considered low and so no allowance has been recognised based on 12-month expected credit loss as any impairment would be insignificant.

The Board considers that the carrying amount of all receivables approximates to their fair value.

9. 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 amounts of these assets approximate their fair value.

10. Other payables and accrued expenses

 
                                           31 December 2022   30 June 2022 
                                                    GBP'000        GBP'000 
 Current liabilities 
 Investment advisory fees (see Note 14)                 349            121 
 Administration fees                                    146            204 
 Directors' Fees (see Note 14)                           75             60 
 Audit fees                                              50             95 
 Other payables                                          55             10 
                                                        675            490 
                                          =================  ============= 
 

The Company has financial risk management policies in place to ensure that all payables are paid within the agreed credit period. The Board considers that the carrying amount of all payables approximates to their fair value.

11. Earnings per share

 
                                                                                   Six months ended   Six months ended 
                                                                                   31 December 2022   31 December 2021 
 
 Profit attributable to Shareholders of the Company                                   GBP37,642,084      GBP53,699,532 
 Weighted average number of Ordinary Shares in issue                                    611,452,217        485,902,235 
 Basic and diluted earnings from continuing operations and profit for the period 
  (pence per 
  share)                                                                                       6.16              11.05 
                                                                                  -----------------  ----------------- 
 

12. 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.

 
                            Six months ended         Year ended 
 Share capital              31 December 2022       30 June 2022 
                                   Number of          Number of 
                             Ordinary Shares    Ordinary Shares 
 
 Opening balance                 611,452,217        406,999,622 
 Shares issued for cash                    -        204,452,595 
 Closing balance                 611,452,217        611,452,217 
                          ==================  ================= 
 
 
                                     Six months ended      Year ended 
   Shareholders' equity              31 December 2022    30 June 2022 
                                              GBP'000         GBP'000 
 
 Opening balance                              858,391         471,425 
 Ordinary Shares issued for cash                    -         255,100 
 Share issue costs                                  -         (4,506) 
 Dividends paid                              (25,314)        (38,201) 
 Total comprehensive income                    37,642         174,573 
 Closing balance                              870,719         858,391 
                                   ==================  ============== 
 

Dividends declared and paid in the period are disclosed in Note 13.

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 Shares also have the right to receive all income attributable to those shares and participate in dividends 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.

Retained earnings

Retained earnings comprise of accumulated retained earnings as detailed in the unaudited condensed statement of changes in equity.

13. Dividends

On 2 August 2022, the Board declared a third interim dividend of GBP12,534,770, in respect of the year ended 30 June 2022 , equating to 2.05pps (third interim dividend in respect of the year ended 30 June 2021: 2.00pps), which was paid on 31 August 2022 to Shareholders on the register on 12 August 2022.

On 30 September 2022, the Board approved a fourth interim dividend of GBP12,779,351 in respect of the year ended 30 June 2022, equating to 2.09pps (fourth interim dividend in respect of the year ended 30 June 2021: 2.00pps), which was paid on 4 November 2022 to Shareholders on the register on 14 October 2022.

Post period end, on 23 January 2023, the Board declared its first interim dividend of GBP12,840,497, in respect of year ending 30 June 2023, equating to 2.10pps (first interim dividend in respect of the year ended 30 June 2022: 2.03pps), which will be paid on 3 March 2023 to Shareholders on the register on 3 February 2023.

14. Related Party Transactions and Directors' Remuneration

In the opinion of the Directors, the Company has no immediate or ultimate controlling party.

The total Directors' fees expense for the period amounted to GBP136,965 (31 December 2021: GBP122,439 ) of which GBP74,760 was outstanding at 31 December 2022 (30 June 2022: GBP59,750).

Remuneration paid to each Director is as follows:

 
                      31 December 2022   31 December 2021 
                               GBP'000            GBP'000 
 John Scott                         24                 20 
 Michael Gibbons                    10                N/A 
 Paul Le Page                       26                 23 
 John Rennocks                      32                 31 
 Meriel Lenfestey                   23                 20 
 Elizabeth Burne                    22                  9 
 Laurence McNairn                  N/A                 20 
                     -----------------  ----------------- 
                                   137                123 
                     =================  ================= 
 

The number of Ordinary Shares held by each Director is as follows:

 
                      31 December 2022   31 December 2021 
 John Scott*                   625,619            512,436 
 Michael Gibbons                     -                N/A 
 Paul Le Page                   35,000             35,000 
 John Rennocks*                320,388            316,011 
 Meriel Lenfestey                7,693                  - 
 Elizabeth Burne                15,000                  - 
 Laurence McNairn                  N/A            441,764 
                             1,003,700          1,305,211 
                     =================  ================= 
 

*Includes shares held by PCAs.

John Scott and John Rennocks are Directors of BR1. Neil Wood and James Armstrong, who are partners of the Investment Adviser, are also Directors of BSIFIL and BR1.

Fees paid during the period by SPVs to BSL, a company which has the same ownership as that of the Investment Adviser totalled GBP1,971,264 (31 December 2021: GBP1,489,243).

Fees paid during the period by SPVs to BOL, a company which has the same ownership as that of the Investment Adviser totalled GBP3,706,826 (31 December 2021: GBP2,168,452).

Fees paid during the period by SPVs to BRD, a company which has the same ownership as that of the Investment Adviser, totalled GBP379,295 (31 December 2021: GBP200,396).

Under the terms of the Investment Advisory Agreement, the Investment Adviser is entitled to a base fee. The base fee is payable quarterly in arrears in cash, at a rate equivalent to 0.80% per annum of the NAV up to and including GBP750,000,000, 0.75% per annum of the NAV above GBP750,000,000 and up to and including GBP1,000,000,000 and 0.65% per annum of the NAV above GBP1,000,000,000. The base fee will be calculated on the NAV reported in the most recent quarterly NAV calculation as at the date of payment.

The Company, BSIFIL's and BR1's investment advisory fees for the period amounted to GBP3,650,104 (31 December 2021: GBP2,420,685) of which GBP774,179 (30 June 2022: GBP494,485) was outstanding at the period end and is to be settled in cash. The investment advisory fees for the period attributable to the Company amounted to GBP397,329 (31 December 2021: GBP235,817) of which GBP349,022 (30 June 2022: GBP121,549) was outstanding at the period end.

The Company's loan monitoring fee income for the period, due from its subsidiary BR1, amounted to GBP437,500 (31 December 2021: GBP407,517) of which GBP1,271,387 was outstanding at the period end (30 June 2022: GBP833,887).

15. Risk Management Policies and Procedures

As at 31 December 2022 there has been no change to financial instruments risk to those described in the financial statements of 30 June 2022.

16. Subsequent events

On 23 January 2023, the Board declared its first interim dividend of GBP12,840,497, in respect of the year ending 30 June 2023, equating to 2.10pps (first interim dividend in respect of the year ended 30 June 2022: 2.03pps), which will be paid on 3 March 2023 to Shareholders on the register on 3 February 2023.

On 22 February 2023, John Rennocks, who since the Company's launch in 2013 served as Chair until 29 November 2022 and then served as non-executive director, retired from the Board. The Company extends its thanks to Mr Rennocks for his hard work and dedication during his time in office. His input has been invaluable and the Company wishes him well in his retirement.

Glossary of Defined Terms

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 Manager

AIFMD means the Alternative Investment Fund Management Directive

Articles means the Memorandum of 29 May 2013 as amended and the 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

BEIS means the Department for Business, Energy & Industrial Strategy

BEPS means Base erosion and profit shifting

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 Ltd 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

BSIFIL means Bluefield SIF Investments 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

Company means Bluefield Solar Income Fund Limited (see BSIF)

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

C Shares means Ordinary Shares approved for issue at no par value in the Company

CSR means Corporate Social Responsibility

CP means Compliance Period

CPIH means Consumer Price Index including owner occupiers' housing costs

DCF means Discounted Cash Flow

DECC means the Department of Energy and Climate Change

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 the gross value of the SPV investments held by BSIFIL, including their holding companies

DNO means Distribution Network Operator

DSCR means Long Term Debt Service Cover Ratio calculated as net operating income as a multiple of debt obligations due within one year

DTR means the Disclosure Guidance and Transparency Rules of the UK's Financial Conduct Authority

EBITDA means earnings before interest, tax, depreciation and amortisation

EGM means Extraordinary General Meeting

EIS means Enterprise Investment Scheme

EPC means Engineering, Procurement & Construction

EPS means Earning per share

ESG means Environmental, Social and Governance

EU means the European Union

EV means enterprise valuation

FAC means Final Acceptance Certificate

FATCA means the Foreign Account Tax Compliance Act

Financial Statements means the unaudited condensed interim financial statements

FiT means Feed-in Tariff

GAV means Gross Asset Value on investment basis including debt held at SPV level

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

Group means Bluefield Solar Income Fund Limited, Bluefield Renewables 1 Limited and its subsidiaries

Guernsey Code means the Guernsey Financial Services Commission Finance Sector Code of Corporate Governance

GWh means Gigawatt hour

GWp 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

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 means The International Valuation Standards Council

KPI means Key Performance Indicators

KPMG means KPMG Channel Islands Limited (see Auditor)

kW means Kilowatt (a unit of power equal to one thousand watts)

kWh means Kilowatt hour

kWp means Kilowatt peak

Law means Companies (Guernsey) Law, 2008 as amended (see Companies Law)

LCOE means Levelised Cost of Electricity: average unit cost of electricity over the lifetime of a generating asset expressed on a net present cost basis

LD means liquidated damages

LIBOR means London Interbank Offered Rate

Listing Rules means the set of FCA rules which must be followed by all companies listed in the UK

LSE means London Stock Exchange plc

LTF agreement means Long Term Financing agreement with Aviva Investors

Macquarie means Macquarie Bank Limited

Main Market means the main securities market of the London Stock Exchange

Mutualisation Rebate means the additional payments made when a shortfall occurs if a supplier is unable to meet its obligation under the RO Buy-Out Scheme

MW means Megawatt (a unit of power equal to one million watts)

MWh means Megawatt hour

MWp means Megawatt peak

NatWest means NatWest International plc

NAV means Net Asset Value as defined in the prospectus

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

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

PCA means Persons Closely Associated

PPA means Power Purchase Agreement

pps means pence per Ordinary Share

PR means Performance Ratio (the ratio of the actual and theoretically possible energy outputs)

PV means Photovoltaic

RBSI means Royal Bank of Scotland International plc

RCF means Revolving Credit Facility

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 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

SDG means the United Nations Sustainable Development Goals

SFDR means Sustainable Finance Disclosure Regulation

SONIA means Sterling Over Night Indexed Average

SPA means Share Purchase Agreement

SPV means a Special Purpose Vehicle which hold the Company's investment portfolio of underlying operating assets

Sterling means the Great British pound currency

TISE means The International Stock Exchange (based in the Channel Islands)

TWh means Terawatt hour

UK means the United Kingdom of Great Britain and Northern Ireland

UK Code means the UK 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.

Alternative Performance Measures (Unaudited)

 
 APM                     Definition                Purpose                     Calculation 
 Total return            The percentage            A key measure               The change in NAV 
                          increase/(decrease)       of the success             for the period plus 
                          in NAV, inclusive         of the Investment          any dividends paid 
                          of dividends paid,        Adviser's investment       divided by the initial 
                          in the reporting          strategy.                  NAV. 
                          period.                                              (142.40-140.39+2.05+2.09)/140.39=4.4% 
                        ------------------------  --------------------------  ---------------------------------------- 
 Total Shareholder       The percentage            A measure of the            The change in share 
  Return                  increase/(decrease)       return that could          price for the period 
                          in share price,           have been obtained         plus any dividends 
                          inclusive of dividends    by holding a share         paid divided by 
                          paid, in the reporting    over the reporting         the initial share 
                          period.                   period.                    price. 
                                                                               (136.0-131.0+2.05+2.09)/131.0=7.0% 
                                                                               The measure excludes 
                                                                               transaction costs. 
                        ------------------------  --------------------------  ---------------------------------------- 
 Total Dividends         This is the sum           A measure of the            The linear sum of 
  Declared                of the dividends          income that the             each dividend declared 
  in Period               that the Board            company has paid            in the reporting 
                          has declared relating     to shareholders             period. 
                          to the reporting          that can be compared 
                          period.                   to the Company's 
                                                    target dividend. 
                        ------------------------  --------------------------  ---------------------------------------- 
 Underlying              Total net income          A measure to link           Total income of 
  Earnings                of the Company's          the underlying              the Company's portfolio 
                          investment portfolio.     financial performance       minus Group operating 
                                                    of the operational          costs minus Group 
                                                    projects to the             debt costs. 
                                                    dividends declared 
                                                    and paid by the 
                                                    Company. 
                        ------------------------  --------------------------  ---------------------------------------- 
 Market Capitalisation   The total value           This is a key               The price per share 
                          of the Company's          indicator of the            multiplied by the 
                          issued share capital.     Company's liquidity.        number of shares 
                                                                                in issue. 
                        ------------------------  --------------------------  ---------------------------------------- 
 NAV per                 The Company's             A measure of the            The net assets attributable 
  Ordinary                closing NAV per           value of one Ordinary       to Ordinary Shares 
  Share                   share at the period       Share.                      on the statement 
                          end.                                                  of financial position 
                                                                                (GBP870.7m) divided 
                                                                                by the number of 
                                                                                ordinary shares 
                                                                                in issue (611,452,217) 
                                                                                as at the calculation 
                                                                                date. 
                        ------------------------  --------------------------  ---------------------------------------- 
 Sale of                 The total proportion      A measure to understand     The amount of revenue 
  Electricity             of revenue generated      the proportion              attributable to 
                          by the Company's          of revenue attributable     electricity sales 
                          portfolio that            to sales of electricity.    divided by the total 
                          is attributable                                       revenue generated 
                          to electricity                                        by the Company's 
                          sales.                                                portfolio, expressed 
                                                                                as a percentage. 
                        ------------------------  --------------------------  ---------------------------------------- 
 Total Revenue           Total net income          A measure to outline        Total income of 
                          of the Company's          the total revenue           the Company's portfolio 
                          investment portfolio.     of the portfolio            owned for the period. 
                                                    on per MW basis. 
                        ------------------------  --------------------------  ---------------------------------------- 
 PPA Revenue             Revenue generated         A measure to outline        Total revenue from 
                          through PPAs.             the revenue earned          all power price 
                                                    by the portfolio            sales during the 
                                                    from power sales.           period from the 
                                                                                Company's portfolio. 
                        ------------------------  --------------------------  ---------------------------------------- 
 Regulated               Revenue generated         A measure to outline        Total revenue from 
  Revenue                 from the sale             the revenue earned          all subsidy income 
                          of FiTs and ROCs.         by the portfolio            earned during the 
                                                    from government             period from the 
                                                    subsidies.                  Company's portfolio. 
                        ------------------------  --------------------------  ---------------------------------------- 
 
 
 Ongoing             The recurring             A measure of the            Calculated in accordance 
  charges             costs that the            minimum gross               with the AIC methodology 
  ratio               Company and BR1           profit that the             detailed in the table 
                      has incurred during       Company needs               below. 
                      the period excluding      to produce to 
                      performance fees          make a positive 
                      and one off legal         return for Shareholders. 
                      and professional 
                      fees expressed 
                      as a percentage 
                      of the Company's 
                      average NAV for 
                      the period. 
 Weighted            A relative indicator      A measure of the            Total Regulated Revenue 
  Average             of the regulatory         Company's portfolio         received by the portfolio 
  ROC                 revenues within           earnings as a               divided by the product 
                      a renewable portfolio.    proportion of               of the current market 
                                                its assets.                 value of a ROC and 
                                                                            the annual generation 
                                                                            capacity of the portfolio. 
                    ------------------------  --------------------------  ------------------------------ 
 Weighted            The average operational   A measure of the            The sum of the product 
  Average             life of the Company's     Company's progress          of each plant's operational 
  Life                portfolio.                in extending the            capacity in MW and 
                                                life of its portfolio       the plant's expected 
                                                beyond the end              life divided by the 
                                                of the subsidy              total portfolio capacity 
                                                regime in 2036.             in MW. 
                    ------------------------  --------------------------  ------------------------------ 
 Directors'          The gross value           An estimate of              A reconciliation of 
  Valuation           of the SPV Investments    the sum that would          the Directors' Valuation 
                      held by BR1, including    be realised if              to Financial assets 
                      their holding             the Company's               at fair value through 
                      companies minus           portfolio was               profit and loss is 
                      Project level             sold on a willing           shown in Note 7 of 
                      debt.                     buyer, willing              the financial statements. 
                                                seller basis. 
                    ------------------------  --------------------------  ------------------------------ 
 Gross Asset         The Market Value          A measure of the            The total assets attributable 
  Value               of all Assets             total value of              to Ordinary Shares 
                      within the Company.       the Company's               on the Statement of 
                                                Assets.                     Financial Position. 
                    ------------------------  --------------------------  ------------------------------ 
 Total Outstanding   The total outstanding     A measure that              The sum of the Sterling 
  Debt                balances of all           is used to establish        equivalent values 
                      debt held within          the Company's               of all loans held 
                      the Company and           level of gearing.           within the Company. 
                      its subsidiaries. 
                    ------------------------  --------------------------  ------------------------------ 
 
 
 Ongoing Charges                Six month period to 31 December 2022 
                                    The Company           BR1      Total 
                                        GBP'000       GBP'000    GBP'000 
-----------------------------  ----------------  ------------  --------- 
 Fees to Investment 
  Adviser                                   397         3,253      3,650 
 Legal and professional 
  fees*                                     160            47        207 
 Administration fees                        289             -        289 
 Directors' remuneration                    137             7        144 
 Audit fees                                  53            10         63 
 Other ongoing expenses                     142            13        155 
 
 Total ongoing expenses                   1,178         3,330      4,508 
                               ----------------  ------------  --------- 
 
 Average NAV                                                     871,051 
 
 Annualised Ongoing Charges (using AIC methodology)                1.04% 
                                                               --------- 
 

* Includes non-audit fee (interim review)

General Information

 
 
   Board of Directors (all non-executive) 
   John Scott (Chair and Chair of Nomination Committee) 
   Elizabeth Burne (Chair of Management Engagement and Service 
   Providers Committee) 
   Michael Gibbons CBE (Senior Independent Director) (appointed 
   7 October 2022) 
   Meriel Lenfestey (Chair of Environmental, Social and Governance 
   Committee) 
   Paul Le Page (Chair of Audit and Risk Committee) 
   John Rennocks (retired 22 February 2023) 
          Registered Office            Investment Adviser 
              PO Box 286                Bluefield Partners LLP 
       Floor 2, Trafalgar Court         6 New Street Square 
      Les Banques, St Peter Port        London, EC4A 3BF 
          Guernsey, GY1 4LY 
 
   Administrator, Company Secretary     Sponsor, Broker and Financial 
        and Designated Manager          Adviser 
  Ocorian Administration (Guernsey)     Numis Securities Limited 
               Limited                  45 Gresham Street 
       Floor 2, Trafalgar Court         London, EC2V 7BF 
      Les Banques, St Peter Port 
          Guernsey, GY1 4LY 
 
         Independent Auditor            Legal Advisers to the Company 
     KPMG Channel Islands Limited       (as to English law) 
  Glategny Court, Glategny Esplanade    Norton Rose Fulbright LLP 
            St Peter Port               3 More London Riverside 
          Guernsey, GY1 1WR             London, SE1 2AQ 
 
              Registrar                 Legal Advisers to the Company 
   Link Market Services (Guernsey)      (as to Guernsey law) 
               Limited                  Carey Olsen 
          Mont Crevelt House            PO Box 98, Carey House 
      Bulwer Avenue, St Sampson         Les Banques, St Peter Port 
          Guernsey, GY2 4LH             Guernsey, GY1 4BZ 
 
                                        Principal Bankers 
   Receiving Agent and UK Transfer      NatWest International plc 
                Agent                   35 High Street 
     Link Asset Services Limited        St Peter Port 
             The Registry               Guernsey, GY1 4BE 
     34 Beckenham Road, Beckenham 
            Kent, BR3 4TU 
 

[1] Based on generation data aligned with the appropriate Government CO2e conversion factor

[2] Based on Ofgem's Typical Domestic Consumption Values

[3] Please refer to the Company's sustainability disclosures for further information, available on its website: bluefieldsif.com

[4] https://www.londonstockexchange.com/raise-finance/equity/green-economy-mark

[5] https://tisegroup.com/sustainable

[6] https://www.gfsc.gg/industry-sectors/investment/guernsey-green-fund

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February 28, 2023 02:00 ET (07:00 GMT)

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