Foresight Solar
Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
About us
Foresight Solar is a closed‑end
investmentcompany with
approximately£1 billion deployed
ina diversified portfolio of solarfarms
and battery storage assets.
The sustainability-focused fund contributes to a lower-carbon future by investing in
and managing approximately 2 GW of operational and under-development renewable
energy infrastructure, primarily in the UnitedKingdom and mainlandEurope.
In this report
Chair's statement Investment Manager's report Sustainability
Contents
Strategic Report
Highlights 1
Investment proposition 2
Business model 3
Company structure 4
Chair’s statement 6
Investment Manager’s report 10
Sustainability 40
Risk and risk management 51
Going concern and viability statement 58
Task Force on Climate-related Financial Disclosures 60
Financial review 69
Alternative Performance Measures (APMs) 79
Governance
Board of Directors 83
Corporate Governance report 84
Management Engagement Committee report 91
Nomination Committee report 93
Audit and Risk Committee report 97
Directors’ Remuneration Report 101
Directors’ report 103
Statement of Directors’ responsibilities 107
Financial Statements
Independent Auditor's report 109
Statement of profit and loss
and other comprehensive income 116
Statement of financial position 117
Statement of changes in equity 118
Statement of cash flows 119
Notes to the Financial Statements 120
AIFMD disclosures (unaudited) 154
Advisors 155
Glossary of terms 156
Foresight Solar Fund Limited (FSFL) was awarded the Green Economy Mark
in2019. This recognises companies that derive 50% or more of their revenues
fromenvironmental solutions.
Read more on page 6 Read more on page 10 Read more on page 40
Front cover: Shotwick, UK
Highlights
As at 31 December 2025
Investment objectives
Key performance indicators (KPIs)
1
Deliver sustainable,
progressive quarterly
dividends
8.10p
Target dividend per share for 2026
(Full year to 31 December 2025: 8.10p)
1.1x
Estimated net dividend
cover for2026
2
Preserve and enhance
capital value
£545.9m
Net asset value (NAV)
(31 December 2024: £634.4m)
99.2p
NAV per share
(31 December 2024: 112.3p)
6.4%
Annualised total NAV
return since IPO
(31 December 2024: 7.4%)
2.8%
Annualised total shareholder
returnsince IPO
(31 December 2024: 3.8%)
Develop further
portfolio diversification
994 MW
Operational portfolio capacity
(As at 31 December 2025)
989 MWp
Proprietary development pipeline
(As at 31 December 2025)
Contribute to global
decarbonisation goals
1,038 GWh
Renewable electricity generated
3
(31 December 2024: 1,009 GWh)
0.10 tCO2e/£m
invested
Carbon footprint
(31 December 2024: 0.31 tCO
2
e/
£m invested)
1. Refer to the Alternative Performance Measures (APMs) shown on page 79 for more
details and definitions of the terms used in this report.
2. Net dividend cover calculated solely from operating cash flow generated in the
period. (See details on page 78.)
3. Generation figures have been adjusted, where relevant, for events in which
compensation has been, or will be, received.
Continued operational excellence
A sunny UK drove output above budget in Foresight Solar’s
main market, partially offsetting lower generation in Spain
andAustralia caused by higher‑than‑expected curtailment.
UK review boosts outlook
Independent technicalanalysis validated key assumptions,
raised production forecasts, supported longer asset lives,
reinforcing the portfolio’s reliable performance and outlook.
Resilient dividend cover
Robust operations and effective hedging contributed to
1.3x dividend cover in 2025. Production year‑to‑date and
contracted revenues hedges are expected to provide 1.0x
cover for 2026.
Balanced valuation
The UK portfolio’s £0.97m/MW valuation reflects realistic
assumptions supported by market evidence, giving the
Boardconfidence in a fair and balanced methodology.
Corporate action progress
The Board delivered reduced investment management
fees, active buybacks and continued the pursuit of strategic
options. Divestment update expected in due course.
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
1
Foresight Solar invests in solar and battery storage assets to build income and drive capital growth.
Underpinned by a progressive dividend, the Company can hold assets to generate cash or dispose
of projects to capture the financial uplift for shareholders.
Investment proposition
Income and growth
Read more on page 17
12.6%
dividend yield
(as at 31 December 2025)
Geographic diversification
As nations transition to lower-carbon
economies, Foresight Solar’s strategic
focus on the UK and mainland Europe
gives shareholders exposure to
distinct support mechanisms, different
regulatory frameworks and varying
levels of irradiation. The continental
footprint allows FSFL to, at the
sametime, maximise returns and
mitigate risks.
Read more on page 15
75%
of Foresight Solar's installed
capacity is in the UK
FSFL has consistently met its target
of delivering steady income with a
progressive dividend and regular
quarterly payments. Looking ahead,
the development pipeline offers
the potential to improve returns.
As assets achieve planning consent
and potentially progress through
construction to operation, they will
provide the opportunity to realise
gains via sales or generate long-term
yield through operations.
Operational excellence
The Company has outperformed its
production forecasts in its core UK
market most years since starting
operations in 2013. The Investment
Manager’s dedicated portfolio
team was involved in the initial
acquisition and construction efforts
to ensure asset quality and has since
tracked and overseen performance,
maintained availability and delivered
value uplifts.
Read more on page 29
9 out 12 years
outperformance forthe
UKportfolio
Investment Manager
Foresight Group is a leading real
assets Investment Manager with
offices in seven countries and more
than 185 infrastructure professionals.
The firm has the international scale
and the local networks to play an
important role in the adoption of
renewables, support the energy
transition and directly contribute to
Foresight Solar’s long‑term success.
Read more on page 11
£10.9bn
of infrastructure assets under
management
1
1. Data accurate as per Foresight Group’s latest results.
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
2
Business model
What
we do
Foresight Solar is a
sustainability-focused
investment company that
aims to deliver an attractive
yield alongside long-term NAV
growth by developing, building
and operating utility-scale solar
and battery storage assets.
How we
create value
Identify, acquire
The Investment Manager leverages its global footprint and local
networks to source opportunities at different stages of development.
These are screened for suitability and potential targets are subject
to due diligence to assess risks, confirm valuation assumptions
and review sustainability considerations. Investment approval is
multi‑level and culminates with Board sign‑off.
Sustainability considerations
Environmental, social and governance criteria are integral in any
investment assessment. The Investment Manager undertakes a
thorough analysis for every asset.
Develop, build
There is a focus on opportunity identification and risk mitigation
to maximise risk‑adjusted returns for shareholders. The Company
actively manages projects, employing strategic analyses to combine
development, construction and maintenance determinations with
efficient balance sheet management. Foresight Solar partners with
experienced counterparties to build and manage projects, and to
secure future pipeline.
Sustainability considerations
Operations and maintenance providers monitor and manage the
day-to-day performance, including sustainability KPIs, of each asset
inthe portfolio and report to the Investment Manager.
Operate, enhance Hold/exit, recycle
The value
we create
Financial benefits
£92.8m
distributed from underlying
assets in 2025
£438.4m
returned to shareholders
individends and buybacks
since IPO
Environmental benefits
1,038 GWh
of clean energy generated in
2025
1
381,748
UK homes powered for a year
359,880
tCO2e
avoided compared to
country‑specific grid intensity
Social benefits
£254,131
contributed to local
communities in 2025
Foresight Solar seeks to ensure optimal operational availability
and maximise revenue potential with an active power price hedging
strategy. The portfolio is regularly assessed for opportunities to
improve performance, both operational and financial, and to better
meet sustainability objectives. The Investment Manager consistently
seeks to capture the value identified for the benefit of shareholders
and its strong operational track record has delivered tangible value
since listing.
Sustainability considerations
Measuring KPIs from as early as the due diligence phase, the
Investment Manager is able to continually seek and execute on
improvement opportunities across the portfolio.
The Company’s strategy involves mostly holding assets for cash
yield and delivering long‑term NAV growth by bringing projects from
development to construction and then operation. Foresight Solar
may generate additional value by selling assets at favourable prices.
The Investment Manager and the Board evaluate these opportunities
carefully, reviewing assets’ potential to generate returns over time.
Sustainability considerations
Sales proceeds will typically be used to repay debt or to
invest in assets with attractive risk‑adjusted returns, including
development-stage options that grow the Company’s pipeline and
provide upside potential.
1. Generation figures have been
adjusted, where relevant, for
events in which compensation has
been, or will be, received.
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
3
Company structure
Foresight Solar Fund Limited (FSFL) is a closed-end company
with an indefinite life. It was incorporated in Jersey
under the Companies (Jersey) Law 1991, as amended on
13August2013, with registration number 113721.
The Company's Initial Public Offering on the London Stock
Exchange on 24 October 2013 raised £150 million, creating
the UK's largest listed solar investment trust at the time. As at
31 December 2025, there were 550,239,207 ordinary shares
in circulation and another 59,719,513 were held in treasury.
As an investment company, Foresight Solar has no direct
employees and outsources its operations to a few key
serviceproviders. It makes investments through intermediate
holding companies and underlying project vehicles/special
purpose vehicles.
Significant shareholders
FSFL's shareholders include a mix of institutional and
retail investors. Those with more than a 5% holding as at
31December 2025 were:
Investor
Shareholding
in fund %
Schroders 8.45%
Hargreaves Lansdown 6.74%
Blackmead Infrastructure
1
6.42%
Gravis 5.68%
BlackRock 5.51%
Total 32.80%
1. Blackmead Infrastructure is a vehicle independently managed by Foresight Group
for the benefit of its investors.
Operating structure and key service providers:
Shareholders
Holdcos
Intermediate
holding companies
Assets
Project special
purpose vehicles
Short and
long-term
debt providers
Management
services
Foresight Asset
Management
Shareholder
loans, equity
investment
Shareholder loan
repayments,
equity
distributions
Shareholder loan
repayments,
equity
distributions
Dividends,
buybacks
Investment
Manager
Foresight Group
Company
Secretary &
Administrator
JTC
Corporate brokers
Jefferies, Singer
Public relations
Sodali & Co
Auditor
KPMG
Registrar
Computershare
Legal advisors
Dickson Minto, Ogier
Foresight Solar
Fund Limited
Advisors
Equity
investment
Shareholder
loans, equity
investment
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
4
Investment objective
Foresight Solar’s objective is to provide investors with a
sustainable, progressive quarterly dividend and enhanced
capital value, whilst facilitating climate change mitigation and
the transition to a lower‑carbon economy.
Investment policy and strategy
In summary, the Company pursues its investment objective
by acquiring, managing and selling solar and battery energy
storage system (BESS) assets at different stages of maturity.
(The full investment policy is outlined from page 103.)
FSFL’s aim is to build a diversified portfolio with majority or
minority ownership. When investing in a stake of less than
100%, Foresight Solar secures its rights through shareholder
agreements and other legal transaction documents.
Investments may be made in equity, debt or intermediate
instruments but not in securities traded on an investment
exchange. To optimise returns, the Company is permitted to
invest money held for working capital in cash deposits, gilts
and money market funds.
Operationally, each solar power plant in the portfolio enters
a power purchase agreement (PPA) with a creditworthy
offtaker. Under these contracts, the special purpose vehicles
(SPVs) sell electricity and, in some cases, green certificates
to the buyer. Not all PPAs include mechanisms such as fixed
prices or price floors, allowing the Company to retain some
exposure to merchant power prices.
Investment restrictions
To diversify its portfolio and spread risk, there are limitations
to Foresight Solar’s investment universe and approach:
ș Geography: Investments outside the UK are limited to 25%
of Gross Asset Value (GAV)
ș Leverage: Total gearing, calculated as overall Company
borrowing as a percentage of GAV, will not exceed 50%
at the time of drawdown. The Board intends to limit
long‑term gearing to 40% of GAV
ș Portfolio composition: No single asset shall exceed 30%
of GAV post‑acquisition. If the investment is an additional
stake in an existing asset, the combined value should not
exceed 30%
ș Stage: Foresight Solar is allowed to deploy no more than
5% of GAV in development‑stage projects. These assets
are characterised as pre-construction solar or BESS
opportunities that may not yet have all necessary rights
for build-out and operation, but have a delivery plan and
reasonable viability to secure them. Similarly, projects
under construction are limited to 25% of GAV
ș Technology: The Company may only invest in utility-scale
battery storage up to a limit of 10% of GAV
Any material change to the investment policy will require
the prior approval of shareholders by way of an ordinary
resolution, in accordance with the Listing Rules.
Alternative Investment Fund Management Directive
(AIFMD)
Although the Company is located outside the European
Economic Area, its marketing activities in the UK are subject
to regulation implemented under the AIFMD and the National
Private Placement Regime.
The AIFMD, as implemented across the European Union (EU)
and in the UK, aims to harmonise the regulation of Alternative
Investment Fund Managers (AIFMs), as well as impose
obligations on firms that manage or distribute alternative
investment funds in the EU or the UK or that market shares
insuch funds to EU or UK investors.
Under the AIFMD, the Company is self-managed and acts as
its own AIFM.
Company structure continued
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
5
Chair's statement
“ In 2026, we will continue to work
with shareholders to find acceptable
solutions and ways to improve our
share price performance.”
Tony Roper
Chair
2025 was a challenging year for the renewable energy
investment trust sector.
Despite regulatory headwinds and persistent discounts,
Foresight Solar delivered solid operational performance
and made progress on key strategic priorities. We advanced
our development pipeline, strengthened our balance sheet,
and took decisive steps to protect long-term value for
shareholders.
Operational performance
Overall, the global portfolio delivered another year of stable
operations, generating 1,038 GWh of electricity, slightly
below budget – mostly due to curtailment in Spain and
Australia. The UK portfolio outperformed base case by 3.4%,
benefiting from above‑budget irradiation. (Read more on
page14.)
With this year’s results, our core UK market has now
outperformed forecasts in nine of the past 12 years, a track
record of operational excellence we are proud of.
To ensure our long-term assumptions remain appropriate, we
commissioned independent technical experts to conduct a
detailed review of the UK portfolio. Their analysis recognises
the thorough operational oversight, and we have adjusted
our forecasts for assumed technical performance and asset
lives based on their results. Whilst some peers have revised
down their production forecasts in recent years, we are
proud to have third‑party validation of higher‑than‑expected
generation. These updates support the portfolio’s key
valuation drivers and provide confidence in future forecast
production. (Read more on page 35.)
In terms of new developments, the connection of Sandridge
BESS builds on the success of the Lorca portfolio in Spain.
The completion of this UK battery storage project once again
proves our capability to bring plants through construction
into operation and creates financial upside for shareholders.
(Read more onpage 19.)
Financial results
Our active power price hedging strategy continues to serve
us well. The approach supported an average realised price of
£82.57/MWh in the UK during 2025 and supported the 1.3x
dividend cover. (Read more on page 29.)
Based on our track record, I am pleased to announce a target
dividend of 8.10 pence per share (pps) for 2026. Considering
our latest projections, we expect dividend cover from cash
generated and net of debt repayments to be 1.1x for the
coming year, in line with the historic average.
With this year’s results, our core UK
market has now outperformed forecasts
in nine of the past 12 years, a track record
of operational excellence we are proud of.
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
6
Chair’s statement continued
Financial results continued
On a P50 generation basis, this quarter's production and
contracted revenues should be enough to provide 1.0x
dividend cover for 2026. The portfolio’s merchant exposure
should then provide additional upside as energy prices
remain elevated.
We are cognisant of the sector discussion surrounding
long‑term dividend sustainability. At the current share price,
FSFL is yielding over 13% on a fully covered dividend. Having
carefully considered the appropriateness of our payouts, we
concluded that, for 2026, it was best to maintain the dividend
target. We recognise the importance of cash yield to our
investors and remain committed to a progressive dividend
strategy. Increasing the dividend now, however, would not be
sustainable or in shareholders’ long‑term interests. Holding
the target gives us more flexibility to allocate surplus cash,
including to build dividend cover for future periods.
We continued to return cash through our share buyback
programme, one of the largest in the sector. It reflects our
confidence in the portfolio and the benefits are threefold: it
allows us to redeploy capital at attractive returns, supports
stronger dividend cover over time, and delivers net asset
value accretion for shareholders.
Whilst operational performance was positive, declining
power prices and lower valuations of our Australian holdings
resulted in a net asset value decline of 14.0% over the year.
This underlines the importance of our capital allocation
strategy, including balanced investment into growth
opportunities to protect the NAV over the medium to long
term. (Read more onpage 33.)
We were disappointed to report a tax adjustment in our third
quarter NAV update, in November. Since that announcement,
the Investment Manager and the tax advisor finalised their
reviews, and we presented the detail of the analyses in
our fourth quarter update. Based on assurances from the
Investment Manager and its advisors, the Board believes all
our UK tax affairs have been comprehensively reviewed and
our long‑term projections updated accordingly.
Despite the negative impact on NAV, we believe the UK
portfolio valuation of £0.97m/MW for a portfolio with
inflation‑linked, subsidy‑backed revenues and a strong
operating track record is in line with the market.
Balance sheet discipline has been a core tenet of our
operations. The revolving credit facility was renegotiated
to address near-term strategic priorities and improve cost
efficiency, with projected savings of £1 million over the term
of the facility. The portfolio‑level debt’s amortising schedule
is aligned with the life of the subsidies, and we are diligently
paying it down. We have kept gearing within the Board’s
40% target and comfortably under the 50% limit set in the
Company’s Articles of Association. (Read more onpage70.)
Foresight Solar’s operating costs, especially at the asset
level, are regularly reviewed and represent good value,
benchmarking well against the peer group.
Market environment
The UK renewable infrastructure sector faced mixed signals
in 2025. The conclusion of the UK government’s Review
of Electricity Market Arrangements removed the risk of
zonal pricing, and new Financial Conduct Authority rules on
Consumer Composite Investments may broaden the appeal
ofthe investment trust market.
At the same time, changes to the inflation indexation
mechanism for Renewables Obligation Certificates and the
Feed‑in Tariff, combined with a difficult economic backdrop
and unsuccessful corporate actions, contributed to weaker
sentiment across the sector.
Foresight Solar was not immune. Our share price reached
a low of 62.4 pence in December, representing a discount
of almost 40% to NAV. After trading at an average discount
of more than 10% during 2025, we will hold another
discontinuation vote at the upcoming Annual General Meeting
in June.
The Board remains fully committed to addressing the share
price discount to net asset value and delivering the best
possible outcome for shareholders. This was a key part of
our Board discussions during the year.
Based on our consistent track record, Iam
pleased to announce a target dividend of
8.10 pence per share (pps) for 2026.
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
7
Chair’s statement continued
Corporate activity
In March, we agreed a revised fee arrangement with the
Investment Manager, reducing costs for investors and better
aligning long‑term interests. (Read more on page 78.)
In September, along with the Investment Manager, the Board
determined that proceeding with the sale of the Australian
assets would not offer sufficient value due to the deterioration
in the local market for solar portfolios. We will wait until
conditions improve to restart the sale process.
Nevertheless, the divestment programme of an additional
75 MW of operational solar is on track, and we look forward
to updating investors soon. We will deploy the proceeds in
accordance with our capital allocation strategy, considering,
at the time, returns to shareholders, paying down debt and
reinvesting in opportunities that offer higher returns.
The Investment Manager is encouraged by a steady flow
of high-quality opportunities, especially in the Company’s
main market, that may allow us to recycle capital into
new development or construction projects to enhance the
portfolio’s revenue profile over time. The results of Allocation
Round (AR) 7 and the launch of AR8 in the UK were positive
signals for the sector. They are likely to expand the pipeline
of attractive early-stage investment opportunities in the
country and support capital recycling over the year.
Strategy and outlook
Recycling capital remains central to our ability to increase
total returns whilst maintaining a dependable income stream.
I am encouraged by the progress of our development
pipeline, giving us options on how best to deploy capital. We
can either sell early‑stage projects to capture value or build
them out and operate them for yield. (Read more onpage 17.)
Going forward, this will be core to our income and growth
strategy. We plan to sell assets and rotate that released
capital into development or construction projects that can
boost the portfolio’s earnings over time.
Despite the challenges of 2025, the sector fundamentals are
compelling. The drive for energy security and affordability
and decarbonisation continues to strengthen, and solar
remains one of the most cost‑effective and reliable sources of
electricity. We are confident the Company is well positioned
to benefit from these long‑term trends.
As we drafted this report, another conflict erupted in the
Middle East, threatening more tragedy, introducing renewed
volatility into natural gas markets, and causing knock-on
effects on electricity prices. On a business level, we were
nimble to capitalise on short-term price movements and
hedge production at levels that build on dividend cover.
The extent of any sustained impact on prices, however, will
depend on how long the conflict lasts.
Discontinuation vote
Last year, my predecessor wrote about the need for change
in the renewable energy investment trust sector. The Board
evaluated various opportunities which culminated in a
formal proposal that we were unable to ultimately advance,
and those discussions were terminated. We recognise that
any public market solution inevitably involves complex
considerations and differing vested interests but continue
to evaluate all potential options to maximise value for
shareholders.
We have considered – and continue to investigate – private
market solutions. In parallel, we are also looking into options
to unlock cash within the portfolio to support reinvestment
and enhance our income‑generating capacity.
Investors value Foresight Solar's attractive income and
growth proposition, but it is clear they want larger, more
liquid vehicles. A subscale investment trust without access
tofresh capital to fund growth has limited options to scale
and is generally restricted to merging or selling its portfolio.
It is also clear, as we and our peers are finding out, that
making material disposals at attractive prices takes time,
requires preparation and demands careful marketing.
Recycling capital remains central to our
ability to increase total returns whilst
maintaining a dependable income stream.
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
8
Los Picos, Spain
Discontinuation vote continued
A vote for discontinuation at the Company’s upcoming AGM
in June could, therefore, result in a sub‑optimal outcome
for shareholders. An immediate sale of the entire portfolio,
particularly under time pressure, could be perceived as a
forced process and may not achieve attractive value.
That said, the Board recognises the imperative to find a
suitable solution for all shareholders in a timely manner.
Weplan to update investors further with the publication
ofour upcoming AGM circular.
Governance and leadership
We said farewell to Ross Driver in 2025. We want to thank
him for his contribution and wish him well for his next chapter.
The Investment Manager continues to provide strong support
to the Board whilst the final arrangements are finalised for
his replacement to start in April. The depth of the dedicated
Foresight Solar team gives us confidence in their ability to
deliver on our strategy.
We also acknowledge the long‑standing service of Alex
Ohlsson and Chris Ambler, who stepped down from the
Board during the year. My fellow Directors and I remain
committed to acting in shareholders’ best interests and
advancing the Company’s strategic priorities.
Lastly, I want to thank our shareholders for your engagement
during this challenging time. Your support is appreciated.
Closing remarks
Foresight Solar's business model remains robust.
Theportfolio is operating at a high standard, steadily
generating cash to pay the dividend. We are increasing our
capabilities to create additional value from development
and construction of assets, and this is an area in which we
forecast more activity this year.
We enter 2026 with clear priorities: closing the share price
discount, strengthening future dividend cover, evolving our
development pipeline, and continuing to manage the portfolio
to maximise returns.
I look forward to working closely with my fellow Directors,
the Investment Manager and our investors as we navigate
theyear ahead.
Tony Roper
Chair
23 March 2025
Chair’s statement continued
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
9
Paddock Wood, UK
Investment
Manager's report
What's in this section:
11Investment Manager
13Key investment metrics
14Key operational metrics
15Portfolio overview
20Q&A with the Fund Manager
23Market context
25Power prices
29Operational review
33Net asset value
37Portfolio
£545.9m
Net asset value
(as at 31 December 2025)
£0.97m/MW
UK portfolio valuation
(as at 31 December 2025)
6.0x
EV/EBITDA ratio
(as at 31 December 2025)
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
10
Foresight Group, the Company’s
Investment Manager, advises
the Board on the formulation of
the investment strategy and is
responsible for its execution. This
includes sourcing and structuring
new transactions, managing assets
through development, construction
and operations, as well as optimising
the portfolio’s revenue stack and
capital structure. Foresight Group is
also responsible for risk management.
Founded in 1984, Foresight Group is a leading listed real
assets, public and private equity investment manager. More
than 55% of Foresight Group’s real assets are invested in
climate solutions and the firm has an established focus on
responsible investing, aiming to provide attractive returns to
institutional and retail investors in public and hard-to-access
private markets.
Foresight Group manages hundreds of infrastructure assets
with a focus on renewable energy generation, including
solar, onshore wind, bioenergy and energy‑from‑waste.
The firm also manages renewable energy‑enabling sites,
energy efficiency management solutions, social and core
infrastructure projects, and sustainable forestry assets on
behalf of its clients.
The real assets division consisted of almost 200 investment,
portfolio and technical professionals as at 30September
2025 – the latest publicly available data.
1
Theteam is
comprised of:
ș An investment management team responsible for
originating, assessing and pricing assets, managing due
diligence and executing transactions
ș An asset management team with expertise across
electrical and civil engineering, finance and legal
disciplines that oversees day-to-day portfolio operations
ș A sustainability team that contributes to every phase of
the investment and asset management processes and is
responsible for integrating and monitoring best practices
The second pillar of Foresight Group’s business, private
equity, manages some £2 billion in 26 investment vehicles
across the UK and Ireland. The division reviews more than
3,000 business plans each year and currently supports a
portfolio of over 250 small and medium‑sized enterprises.
The third pillar, Foresight Capital Management, is responsible
for seven differentiated strategies investing in listed
companies with a sustainability focus around the world,
managing £1.1 billion in assets.
Foresight Group operates in six countries in Europe and in
Australia with total assets under management of £13.7 billion.
Foresight Group Holdings Limited listed on the London Stock
Exchange in February 2021 and was admitted to the FTSE
250 in September 2023.
Investment Manager
Investment Manager’s report
£13.7bn
assets under
management
450+
infrastructure
assets under
management
185+
investment,
commercial
and technical
professionals
5.0 GW
total green energy
technology
capacity
1. All data on this page is accurate as per Foresight Group's latest results.
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
11
Investment Manager’s report continued
Investment Manager
Key people
Toby Virno
Fund Manager
Background
Toby joined Foresight Group in
2018 and brings over a decade of
experience in the investment and
financing of renewable energy assets
and projects, particularly in solar PV
and battery energy storage systems.
As a core member of the full-time
Foresight Solar team, he plays
an integral role in supporting the
successful delivery of the Company’s
investment mandate.
Gary Fraser
CEO of Foresight Group
Background
As CEO and a member of the Board of
Directors, Gary brings more than 30
years of experience in providing and
guiding specialist financial input across
corporate, portfolio and investment
trust decisions.
Before joining Foresight, he served
as Company Secretary at F&C Asset
Management, where he focused on
financial, legal and tax compliance,
technical and financial reporting, and
corporate finance. His earlier career
included roles at EY in audit and risk
assurance.
Additional team members
David Goodwin
Head of Fund Finance
Background
David joined Foresight Group in
2020 and has more than 12 years
of experience in renewable energy
finance, including almost a decade
working with listed investment
vehicles. A qualified accountant, he
plays a valuable role in supporting the
Company’s financial management and
governance.
Julian Elsworth
Portfolio Director
Background
Julian joined Foresight Group in 2013.
A Chartered Engineer with more than
20 years of experience in renewables,
he oversees the technical and
commercial performance of Foresight
Solar's portfolio. Julian has been
involved with the portfolio’s assets
from construction and now focuses
on optimising performance, managing
key supply chain relationships and
contributing to the procurement of new
solar assets. Before joining Foresight,
he was a consultant at WSP Group,
advising on the design, optimisation
and operation of renewable energy
projects.
Matheus Fierro
Head of Investor Relations
andCommunications
Background
Matheus joined Foresight Group
in 2023 to lead the Company’s
shareholder engagement, reporting
and public relations activities. With
more than a decade of experience
across capital markets and financial
services, he contributes to strengthen
Foresight Solar's narrative and market
positioning while broadening its reach
with institutional and retail investors.
Prior to Foresight, Matheus held
roles at UBS Asset Management and
Brunswick Group.
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
12
Key investment metrics
Investment Manager’s report continued
Year ended
31 December
2025
Year ended
31 December
2024
Net asset value (NAV) £545.9m £634.4m
NAV per share 99.2p 112.3p
Dividend per share declared for the year 8.10p 8.00p
Annualised total NAV return since IPO 6.4% 7.4%
Gross Asset Value (GAV) £928.2m £1,044.7m
Share price 64.4p 77.0p
Ordinary shares in circulation¹ 550,239,207 564,856,642
Market capitalisation £354.4m £434.9m
Annualised total shareholder return since IPO 2.8% 3.8%
UK portfolio valuation £0.97m/MW £1.10m/MW
Cash flow from operations £56.7m £61.7m
Earnings before interest, taxes, depreciation and amortisation (EBITDA) £112.2m £105.4m
Net debt/EBITDA 2.9x 3.2x
Enterprise value (EV)/EBITDA 6.0x 7.4x
1. During the period, 14,617,435 shares were repurchased and are held in treasury. Further details on page 143.
Paddock Wood, UK
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
13
Key operational metrics
Year ended 31 December 2025 Year ended 31 December 2024
Operational
capacity (MW)¹
Total
generation
(GWh)²
Budgeted
generation
(GWh)
Generation
variance in
relation to
base case³
Irradiation
variance in
relation to base
case
Operational
capacity (MW)
Total
generation
(GWh)²
Budgeted
generation
(GWh)
Generation
variance in
relation to
base case³
Irradiation
variance in
relation to
base case
United Kingdom 748 690 667 3.4% 10.1% 723 630 670 (6.0)% (4.7)%
Spain 76 118 139 (15.0)% (2.3)% 76 144 139 3.6% (2.5)%
Australia 170 230 245 (6.2)% (2.4)% 170 235 276 (14.7)% (4.8)%
Global portfolio 994 1,038 1,051 (1.3)% 4.9% 969 1,009 1,085 (7.0)% (4.5)%
1. Includes battery energy storage systems capacity.
2. Generation numbers include distribution network operators' (DNOs) outages outside Foresight Solar's control. Removing network operators' unforeseen stoppages, total generation for the global portfolio to 31 December 2025 would have been 2.6% higher at 1,064 GWh.
3. Generation figures have been adjusted, where relevant, for events in which compensation has been, or will be, received.
Investment Manager’s report continued
Paddock Wood, UK
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
14
Portfolio overview
Investment Manager’s report continued
As at 31 December 2025, Foresight Solar's global operational portfolio comprised 59 assets with a combined net peak capacity of 994 MW, supported by a growing proprietary development
pipeline of solar andbattery storage projects.
In the UK, the Company operated 50 solar sites with 723 MW of installed capacity and held a 50% interest in Sandridge, a 50 MW/50 MWh battery energy storage system (BESS). In addition,
FSFLowned a 50% holding in one pre‑construction storage project with 50 MW/50 MWh capacity. Internationally, the portfolio included stakes in four operational solar farms in Australia
(equivalentto 170 MW) and in a further four inSpain(equivalent to 76 MW). (See the full portfolio composition from page 37.)
Almost all UK solar assets are accredited under the Renewables Obligation (RO) scheme, with Yardwall the sole exception under the Feed‑in Tariff (FiT) scheme. Sandridge BESS operates
predominantlyonamerchant basis, though it has secured revenues with an attractive 15‑year capacity market contract.
The Australian assets benefit from Large‑scale Generation Certificates (LGCs), whilst the Spanish assets are supported by long‑term power purchase agreements (PPAs) rather than subsidies.
ThesePPAs, secured with creditworthy counterparties, provide strong revenue visibility and cover approximately 70% of the portfolio’s output. Virgen del Carmen agreed a 10‑year offtake
contractwith Shell in September 2020, and the Lorca portfolio (Los Llanos, Los Picos and Las Salinas) entered a similar agreement with Statkraft in December 2021.
Foresight Solar continued to expand its development activities, establishing a pipeline of 867 MW across multiple early‑stage solar and storage projects, alongside the in‑house development
of122MW of BESS in Australia. These well‑structured opportunities enhance growth potential, broaden investment optionality and support long‑term shareholder value.
Country Technology Status¹ Number of assets Capacity (MW) Primary revenue
UK Solar Operational 50 723 Subsidy and PPA
BESS
Operational 1 25 Merchant sales
Pre-construction 1 25 —
Spain
Solar
Operational 4 76 PPA
Development 6 467 —
BESS Development
2
3 400 —
Australia Solar Operational 4 170 Subsidy and PPA
BESS Development 2 122 —
Total
Solar
Operational 58 969
Development and construction 6 467
BESS
Operational 1 25
Development and construction 6 547
Combined total
Solar and
BESS
Operational 59 994
Development and construction 12 1,014
1. Development assets are characterised as pre‑construction solar or BESS opportunities that may not yet have all necessary rights for build‑out and operation, but have a delivery plan and reasonable viability to secure them.
2. The agreement with Chelion Iberia does not include a limit to projects leading up to a total of 400 MW target of battery storage development.
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
15
Revenue structure
The Company generates income by producing and exporting
electricity to the grid. Revenue is primarily earned through
electricity sales to third‑party offtakers, either under
fixed‑price arrangements or at market rates, as well as
through regulatory support mechanisms available in the
geographies where FSFL operates.
To manage exposure to power price volatility, Foresight
Solar employs a proactive hedging strategy that combines
fixed‑price sales agreements with financial instruments. This
approach improves revenue stability by securing prices for
a portion of forecast generation over the short and medium
term. For example, the Company may lock in prices for part
of its summer output to help support dividend targets, whilst
retaining some merchant exposure in winter months to benefit
from potential seasonal price upside.
Revenues from subsidies, fixed‑price power purchase
agreements and hedging instruments are classified as
contracted due to their high degree of certainty. Electricity
sold on a day-ahead basis is considered merchant or
uncontracted.
During 2025, approximately 51% of revenue was generated
from subsidies, with the remaining 49% coming from
electricity sales (31 December 2024: 40% and 60%,
respectively). With most fixed‑price arrangements secured
through PPAs, 86% of revenue in the period was contracted
and 14% was merchant (31 December 2024: 89% and 11%,
respectively). On a net present value basis, contracted
revenue accounts for 43% of total forecast income over the
full investment period as at 31 December 2025.
Divestments
Battery storage
Foresight Solar sold its 50% stake in Lunanhead, a
50MW battery storage asset in Perthshire, Scotland
to anindependent third party at a price in line with the
30June2025 carrying value. The Investment Manager
continues to explore options for Clayfords, another 50 MW
BESS project in which the Company has a 50% holding.
According to analyst estimates, recent regulatory changes
have effectively reduced battery capacity in the connection
queue to 83 GW. Of that total, 34 GW will have a connection
date before 2030, with much of the rest likely to be
abandoned. The Investment Manager has met all necessary
planning and pre-construction milestones to secure the
project's grid connection offer, ensuring it can move ahead.
The Board remains confident in the long‑term investment
case for battery storage, particularly when paired with
intermittent solar generation. With its portfolio, FSFL is acting
opportunistically to protect value and maintain its disciplined
capital allocation approach.
Operational solar
The Board started a process to sell an additional 75 MW
of operational solar projects. The Directors appointed
financial advisors in the summer and good progress has been
made, with market feedback underscoring the appeal of
well‑structured portfolios with attractive revenue profiles.
The divestment would crystallise value and release cash to
be deployed according to the Company's capital allocation
strategy, considering, at the time of closing, returning cash to
shareholders, reducing debt and reinvesting in development
and construction‑stage projects with higher return potential.
This phase of the divestment programme underscores the
Directors’ commitment to protecting value for investors
whilst following a strategy of selectively realising assets to
recycle capital and potentially reinvesting in development
or construction projects that can strengthen the portfolio’s
long‑term revenue profile.
The Board looks forward to providing a further update in
duecourse.
Australian portfolio
Higher bond yields and ongoing curtailment reduced appetite
for renewables transactions. Investors have become more
selective, favouring opportunities that offer clear follow‑on
deployment potential rather than standalone assets.
Although the Board received a small number of bids for
theAustralian portfolio, none were deemed deliverable.
TheDirectors judged that these offers did not represent best
value for shareholders and chose not to proceed with them.
They remain committed to divesting this non-core portfolio
torelease capital in an orderly and protective manner.
In the meantime, the Investment Manager is focused on
enhancing the portfolio’s strategic and financial position,
including progressing discussions with lenders to put the
portfolio on a sustainable footing, as well as advancing
thetwo co‑located BESS developments.
Investment Manager’s report continued
Portfolio overview
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
16
Development pipeline
Unlike purchasing consented rights from developers or having
the right of first offer, Foresight Solar is the holder of the
rights to its development pipeline. This means the Company
can capture the financial benefit of projects’ evolution for its
shareholders.
The proprietary development pipeline is a key component
of Foresight Solar's income and growth strategy. As the
operational portfolio generates cash to fund the dividend,
the development and construction projects provide the
optionality for the Company to either sell these early-stage
assets and capture value or build and operate them for yield.
The solar and battery storage plants that mature from the
pipeline will have the potential to secure attractive long-term
contracted revenues, such as corporate PPAs in Spain and
Contracts for Difference in the UK, and contribute to enhance
the global portfolio’s revenue profile over time.
Chelion portfolio
Throughout the year, the Investment Manager continued to
monitor node availability and submitted applications for
grid capacity under its agreement with Chelion Iberia, which
provides the opportunity to co-invest in up to 400 MW of
development‑stage battery storage projects in Spain. Under
this arrangement, Foresight Solar commits capital only once
projects are confirmed to be viable.
The Company has already secured capacity for four projects,
totalling 80 MW, across different locations ― an important
milestone on the road to becoming ready to build. The
Investment Manager is now reviewing the most effective
pathways to progress these sites.
Spain’s BESS market is evolving quickly as the government
seeks to integrate additional storage into the grid and
competition for connection to the network has increased
materially. In response, distribution and transmission
operators have opted to make offers to a bigger number of
smaller projects, rather than to fewer, larger sites.
Foresight Solar recognises that not every early-stage
opportunity will progress to construction and operation, and
a degree of attrition is expected when building a proprietary
development pipeline. Its agreements are structured to
reflect those models, with conditions in place to protect the
Company’s interests.
Investment Manager’s report continued
Portfolio overview
Los Picos, Spain
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
17
Development pipeline continued
Cuerva portfolio
Muel, the 55 MW solar project emerging from the 467 MWp
development pipeline in Spain, has been materially derisked
after securing its planning and environmental approvals and
is now approaching ready‑to‑build status. Whilst final permits
are being completed, the Investment Manager is assessing the
potential for battery co-location and monitoring PPA pricing
to optimise the asset's long‑term value.
Once the construction permit is granted, the Board will
consider the most value-enhancing option, either selling the
asset to crystallise returns or, subject to available funding,
proceeding to construction to capture additional value once
it becomes operational.
Grid auctions in Spain, which historically played a central
role in allocating capacity for new renewable projects, are
now unlikely to proceed under their original framework.
This potentially impacts the other five projects in the Cuerva
portfolio, which were awaiting grid connection offers.
Attrition is a normal feature in early-stage development and
Foresight Solar accounted for this in its investment case. In an
example of prudent deal structuring for downside protection,
the agreement with the Company's development partner is
both cross‑collateralised and backdated. This structure gives
Foresight Solar the option to apply its initial, low single-digit
millions initial investment towards the remaining capital
required to complete Muel’s development, without incurring
additional costs. This approach allows the project to continue
progressing whilst safeguarding value for shareholders.
Investment Manager’s report continued
Portfolio overview
Proprietary development pipeline
Indicative development lifecycle: Investment and valuation
Ready to
Build (RTB)
Commercial
Operations Date
(COD)
Operation
Construction
Development
Realisation
Realisation
Target development pipeline
2500
2000
1500
1000
500
0
Current pipeline
Targeted pipeline
Up to 400 MW Spanish BESS
467 MW Spanish solar
Valuation
0.00x
1.25x
3.75x
1.06x
1.20x 1.25x 1.30x 1.35x 1.40x
Grid connection offered
Permissions and permitting secured
Ready to Build (RTB)
1
1
2
2
3
3
4
4
Commercial Operations Date (COD)
-4 -3 -2 -1 0 1 2 3 4
Years of operation
Value-enhancing milestones
Cumulative equity requirement Equity requirement
Cumulative equity distributionsEquity valuation
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
18
Paddock Wood, UK
Building value for income and growth
Battery energy storage systems (BESS) naturally
complement intermittent renewables and are becoming
essential as power systems decarbonise.
Sandridge BESS marked Foresight Solar’s entry
into a second technology when it was acquired at
the pre‑construction stage in 2021. Since then, the
Investment Manager’s specialist team has led the
build and ran a competitive process to select the most
suitable route‑to‑market provider.
The asset came into operation in late 2025, triggering a
move in valuation from cost to a discounted cash flow.
Thistransition generated a 0.4 pence per share uplift
to the Company’s net asset value.
Sandridge BESS – and the earlier Lorca portfolio,
which the Company built, optimised and realised value
from in Spain – exemplifies Foresight Solar’s balanced
income and growthstrategy.
This is the opportunity that the Board targets with the
proprietary development pipeline, capturing value
at planning, again at construction, and once more at
operations. At each stage, FSFL can choose to take
profits and recycle capital or retain assets for yield to
support the dividend.
Construction progress
Sandridge BESS
The 50 MW, one-hour lithium-ion battery began operating
in late 2025 and is now contributing to revenues for the
currentyear.
Located next to its namesake solar farm in Wiltshire,
Sandridge BESS was Foresight Solar’s first storage
investment. The Company acquired a 50% stake in 2021,
partnering with Foresight Environmental Infrastructure (FGEN).
Despite delays caused by the local distribution network
finishing associated grid infrastructure reinforcement works,
the plant is now fully energised and importing and exporting
power as designed. Its performance will be reflected in
upcoming reports.
Investment Manager’s report continued
Portfolio overview
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
19
Toby Virno
Fund Manager of Foresight Solar
Toby answers the tough questions that
weighed on investor sentiment. He
explains there is room for optimism as
the Board and the Investment Manager
respond to headwinds, and highlights the
steps taken to strengthen the portfolio and
improve performance.
Question: You’ve been working on divestments and have
already delivered on the first phase of the process. When
should investors expect an update?
Toby Virno: We moved quickly on the first phase with the sale
of a 50% stake in Lorca, which delivered a 21% premium to
the then holding value and helped us reduce debt. We were
disciplined in disposing of one of our pre-construction BESS
projects that did not meet the threshold to be taken through
construction.
Market conditions have evolved, especially in Australia,
where it simply is not a seller’s market today. As Australia
is no longer core for us, we will return to that sale when
conditions improve and value is clearer.
We have committed to selling a further 75 MW of capacity
and look forward to updating shareholders soon.
The goal is always to act when the timing supports value, not
just speed.
Q&A with the Fund Manager: Foresight Solar's fundamentals remain strong
Investment Manager’s report continued
Q: You’ve built a development pipeline of almost 1 GW
andhave stated interest in growing it to as much as 3 GW.
Will you develop and build all that capacity?
TV: Our pipeline is a strategic asset, but it is not a
commitment to build everything. To continue delivering
dependable income whilst increasing returns, we need to
recycle capital and the pipeline creates those opportunities.
Our development model is capital‑light by design. We’ll
originate and derisk projects, but we won’t necessarily
construct or hold all of them. The strength of the pipeline is
that it gives us choices. We can sell early to crystallise value
or selectively build and hold for yield.
We should also be clear that not every project will
progress, and that’s built into our expectations. Even with
ordinary attrition, we target double-digit returns across the
programme. The proprietary development pipeline is key to
our model of efficient capital recycling. It will provide new
projects to be funded with gains from sales of optimised
assets.
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
20
Q: Below-zero electricity prices, especially at peak
renewable generation periods, are becoming more common.
Are you concerned about curtailment in Spain or England?
TV: Curtailment in Spain has increased as more solar has
come online. 2025 saw record levels, and forecasts suggest
it could reach around 50% of renewable generation by
2028. It’s something we monitor closely, and we’re working
proactively to mitigate the risk.
Our Spanish assets benefit from long‑term PPAs covering
roughly 70% of production, which protects revenue during
volatile market periods. Spain is also moving fast to integrate
storage, and we’re leaning into that, prioritising standalone
options and exploring hybridisation of our operational solar
assets to improve returns and flexibility.
In the UK, curtailment is less of a concern for our operational
portfolio. Production variations in our portfolio tend to reflect
irradiation fluctuations or local distribution network operator
(DNO) issues rather than structural constraints. The UK’s rapid
battery rollout is also helping stabilise the system and limit
curtailment risk.
Q: The government in the UK recently changed the inflation
indexation mechanism for its flagship support schemes. Are
you concerned about the long-term sustainability of the
dividend?
TV: Unfortunately, the move from RPI to CPI indexation from
April 2026 does soften the inflation uplift on RO and FiT
revenues to the end of this decade, when a change to CPIH
was already scheduled. That has been reflected in our NAV
and dividend cover projections. Even so, the Board remains
confident in the sustainability of the dividend under our
current model.
That said, we need to be realistic about the structural
environment. Lower long‑term power price expectations and
the gradual run‑off of subsidy revenues are both likely to
affect dividend cover.
Income is central to why investors own Foresight Solar
shares, and with the fund already yielding close to 13%, large
increases would not be prudent. Keeping dividend growth
limited in the near term allows us to preserve flexibility and
protect the long‑term income profile.
This challenging backdrop also underlines the importance
of continuing to invest to promote future revenue growth –
something our capital recycling programme looks to address.
Q: What does the future of the Foresight Solar team
looklike?
TV: Ross Driver stepped down in November 2025 to pursue
new opportunities, and we are grateful for his contribution
over the years. The core team remains in place, and our
commitment to delivering strong outcomes for shareholders
has not changed.
We are already advanced in the process to appoint a senior
replacement. Will Morgan, a fund manager with over 20 years
of experience and extensive expertise in renewable energy,
will join us in April 2026. We look forward to working with him
and introducing him to our investors.
Investment Manager’s report continued
Q&A with the Fund Manager: Foresight Solar's fundamentals remain strong
Trehawke, UK
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
21
Q: It has been a challenging period for renewable energy
investment trusts. Looking forward, what can investors get
excited about with Foresight Solar?
TV: It has certainly been a tough market, but the fundamentals
of our portfolio are strong. Our assets are generating power,
producing cash and supporting an attractive dividend.
We are taking the right steps to enhance that resilience,
repowering sites where it adds value, strengthening revenue
visibility through hedging, and maintaining discipline on costs.
Our operating expenses remain among the lowest in the sector,
and the benefits of that efficiency flow directly to shareholders.
We have also improved the balance sheet with a resized and
extended revolving credit facility and gearing closed the year
at 41.2% of GAV, comfortably below the 50% policy limit.
Combined with diligent capital recycling, that puts us in a
solid position relative to peers.
Looking ahead, we are assessing construction opportunities in
the UK to reposition the portfolio and capture the advantages
of attractive revenue structures, such as Contracts for
Difference. Foresight Solar continues to benefit from access
to Foresight Group's pipeline and we are encouraged by a
steady flow of high‑quality opportunities, especially in the
Company's core markets. We are intent on delivering on the
capital recycling programme to then access opportunities
that enhance portfolio revenues and, ultimately, shareholder
returns.
Taken together, our strong operational delivery and our
ongoing corporate actions to narrow the share price discount
to NAV place us in a robust and competitive position in the
sector. (Read more about the efforts to reduce the discount in
the Chair's statement from page 6.)
Stepping back, the energy transition is only accelerating.
We have the team, the development pipeline and the
operational platform to capture that long-term opportunity
whilst continuing to deliver the dependable income our
shareholders expect.
Investment Manager’s report continued
Q&A with the Fund Manager: Foresight Solar's fundamentals remain strong
£m
0
35
25
20
10
15
5
30
0%
35.0%
25.0%
20.0%
10.0%
15.0%
5.0%
30.0%
2026 2028 2029 20312030
Project-level debt repayment Portfolio gearing (RHS)
2027
20362032
2033 2034 2035
2040
2037 2038 2039
%
£m
0
100
80
40
60
20
120
140
2026 2028 2029 20312030
Fixed revenue Merchant revenue
2027
20362032
2033 2034 2035
2040
2037 2038 2039
UK portfolio gearing profile
1
UK portfolio revenue profile
1
1. Graphs show assets operating for their entire useful lives with no reinvestment intothe portfolio.
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
22
United Kingdom
The UK solar sector moved forward during a year shaped
by mixed policy adjustments, evolving market structures and
wider economic uncertainty. Momentum on new‑build solar
remained solid, even as the government moved to update
legacy support schemes and refine how the power system
should operate.
A major milestone was the government’s decision on the
Renewables Obligation and Feed‑in Tariff consultation,
confirming an immediate switch from Retail Price Index (RPI)
to Consumer Price Index (CPI) indexation from April 2026.
This avoided the more damaging “freeze-and-catch-up”
proposal but still marked a meaningful retrospective change
that has unsettled parts of the industry and its observers.
The outcome underscored concerns about confidence, with
investors mindful of historic international precedents where
sudden rule changes proved disruptive.
Long-delayed electricity market reforms also took shape,
with the government concluding its Review of Electricity
Market Arrangements and choosing to retain a single
national electricity price rather than moving to locational
pricing. Efforts will focus instead on more predictable
network charges and stronger system operations, measures
aimed at improving efficiency whilst keeping the investment
environment coherent and investable.
Progress on grid reform also continued, with Ofgem, the
energy regulator for Great Britain, approving measures to
clear inactive projects from the connections queue and
introducing firmer readiness assessments. These steps are
designed to reduce delays and speed up delivery of projects
that are genuinely ready to build.
On the financial support front, solar enjoyed strong success
in the Contract for Difference Allocation Round (AR) 6, which
awarded 3.3 GW of new capacity. In February 2026, the
government announced results for AR 7, procuring a record
4.9 GW of solar capacity with a cleared strike price of
£65.23/MWh (in 2024 figures).
For investors, broader market conditions created headwinds.
The run-up to the Autumn Budget brought heightened
volatility across UK assets, with uncertainty over tax and
fiscal policy widening discounts across many investment
trusts as gilt yields rose and risk appetite weakened.
Escalating tensions in the Middle East from late February
2026 introduced renewed volatility into natural gas markets.
Short-term prices rose but longer-term impacts will depend
on how long disruption to energy supply routes last.
At the macro level, market consensus anticipated a gradual
decline in interest rates through 2026, assuming inflation
continued easing. This expected shift should, in time, help
support valuations and financing conditions across the
infrastructure sector. The airstrikes in Iran and other countries
in the region, however, made market participants second-
guess early assumptions and blurred the path forward for
theyear.
Regardless of the temporary turbulence, opportunities remain
strongest for investors and developers with scale, technical
capability and diversified revenue models. The government’s
launch of AR8 in March was a positive signal for the sector,
expected to expand the pipeline of attractive early‑stage UK
investment opportunities and support capital recycling over
the year.
Investment Manager’s report continued
Market context
Paddock Wood, UK
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
23
Spain is on track to achieve the government’s target of
76 GW of installed solar capacity by 2030. Investment in
grid connection infrastructure will be key to avoid network
congestion and accelerate the process.
The high solar penetration has led to increased curtailment
and more frequent negative wholesale prices, particularly
during periods of peak production. Revenue cannibalisation
is becoming more pronounced, reflecting the maturity of the
market and emphasising the importance of storage, route-to-
market optimisation and diversified generation profiles.
For investors, these conditions underscore the transition
underway: Spain is moving from a market driven primarily by
headline capacity growth to one in which system integration,
flexibility and operational excellence create the strongest
investment advantages.
Experienced investors with a local presence and strong
technical, operational and regulatory capabilities are best
placed to capture opportunities in this complex landscape.
Australia
By late 2025, Australia had installed more than 4.3 million
small-scale solar systems, delivering almost 28 GW of
rooftop capacity nationwide. This rapid expansion, combined
with the slower‑than‑anticipated retirement of coal‑fired
power stations, has reshaped daytime demand patterns.
As rooftop arrays continued to surge, regulators increasingly
shifted their focus towards self-consumption and grid
flexibility measures. State governments tightened export
incentives in an effort to manage midday oversupply, a move
designed to alleviate pressure on the network and, over
time, reduce the persistent curtailment faced by utility-scale
generators.
Despite these interventions, the market remained volatile.
Negative wholesale prices became more frequent across
the National Electricity Market, and several regions set new
minimum demand records. South Australia’s grid even dipped
to -14 MW, a globally rare occurrence that underscores the
scale of solar penetration.
Against this backdrop, hybrid solar plus battery
portfolios have emerged as a central pillar of Australia’s
decarbonisation strategy. Their ability to mitigate price
volatility, reduce exposure to curtailment, and deliver
renewable output has made them an increasingly attractive
proposition for investors seeking resilient, future-proofed
infrastructure assets.
United Kingdom continued
Combining solar with storage, improving operational
performance, and pursuing repowering or life‑extension
strategies will help to sustain returns, especially as indexation
changes refocus attention on efficient asset management.
Those able to target higher‑value projects and maintain a
balanced income mix will be best positioned to capture
stable, inflation‑related returns as the UK continues its shift
towards cleaner energy.
Spain
April’s blackout was the defining factor in Spain’s electricity
market in 2025. The outage revealed structural weaknesses
in voltage control, system flexibility and grid stability that the
government has committed to resolve.
Policymakers have responded decisively, signalling a pivot
towards ensuring renewable generation is accompanied by
storage, advanced grid management technologies and new
operational standards.
This supportive policy and regulatory environment have
shaped the country’s renewable investment landscape,
driving record installation volumes.
New renewable capacity reached 11.1 GW, of which solar
accounted for nearly 90%. Total installed solar capacity
reached 49 GW, establishing the technology as the main
contributor to the country’s generation mix for the first
time. Renewable energy now represents more than 70% of
the country's total installed capacity, with solar the leading
contributor.
Investment Manager’s report continued
Market context
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
24
Subsidy revenue
The buy‑out price for Renewables Obligation Certificates,
one of the United Kingdom’s main support mechanisms
for large‑scale renewable electricity projects, for the
2025/26 annual compliance period increased to £67.06
(2024/25: £64.73). The change reflected the average monthly
percentage move in the Consumer Price Index, a common
measure of inflation, during 2025. On average, Foresight Solar
received 1.39 ROC/MWh across the UK portfolio.
Meanwhile, the 2025/26 Feed‑in Tariff rate for Yardwall, the
only UK asset to which the RO scheme does not apply, was
£98.70/MWh (2024/25: £95.30/MWh).
In January 2026, the UK government released the outcome of
its consultation on changing the inflation indexation for the RO
and FiT schemes. From April, annual adjustments will move
from RPI to the CPI. According to the Department for Energy
Security and Net Zero, this shift brings these schemes in line
with other government contracts and is expected to save
households about £4 a year on their electricity bills.
In Australia, the average Large‑scale Generation Certificate
price secured by the portfolio in 2025 was A$10.47 per
certificate, lower than the A$18.60 registered in the prior
year. The drop was fundamentally caused by a supply and
demand imbalance.
United Kingdom
Throughout the year, Foresight Solar benefited from its
active hedging strategy, securing attractive power prices and
strengthening income visibility to support the dividend. PPA
fixes agreed in 2022 still provided valuable price certainty,
with fixed rates above the prevailing wholesale market. As a
result, the UK portfolio achieved an average realised price of
£82.57/MWh across both fixed arrangements and merchant
exposure – slightly above the 2025 N2EX average but below
the £91.00/MWh the UK portfolio realised in 2024.
Power prices
Investment Manager’s report continued
Paddock Wood, UK
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
25
United Kingdom continued
Price forecasts
The Investment Manager uses forward-looking power price
forecasts to estimate the portfolio’s future income for
valuation. For UK solar assets, this is based on a blended
average of three independent consultants’ forecasts, adjusted
to reflect the Investment Manager's expected capture price
discounts for solar generation.
Where fixed‑price contracts are in place, those contracted
rates replace the blended forecast for the duration of the
agreement. For sites with subsidy guarantees that end before
the asset’s assumed economic life, the blended forecast is
applied for the remaining years.
In the UK, power price forecasts decreased because of the
fall in natural gas prices. The most significant drop happens
between 2026 and 2030, a period for which the Company is
actively seeking to increase its contracted revenues at prices
accretive to dividend cover.
Investment Manager’s report continued
Power prices
2026
£/MWh
2030 2035
2050
20452040
December 2024 June 2025 December 2025
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0
10
90
40
60
20
70
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30
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0
10
90
£/MWh
40
60
20
2026 2030 2035
2050
20452040
December 2025
wholesale
December 2025 Foresight Solar
capture price estimate
UK wholesale power price forecasts
1
UK wholesale vs solar capture power price forecasts
1
Source: Foresight Solar Fund Limited.
1. Power price forecasts reflect real 2025 prices.
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
26
Spain
The first half of 2025 brought sustained low – and often
negative – midday wholesale prices as exceptional early‑year
rainfall pushed hydro reservoirs near capacity, forcing
hydro generation into the market and amplifying oversupply
alongside rising solar output. This combination created strong
price compression in midday hours and led to increased
curtailment of solar plants. Negative or zero prices are
becoming structural: Spain recorded more than 500 hours
ofzero or negative pricing across the year.
As temperatures rose in summer, demand increased but
midday softness persisted, whilst tighter evening conditions
created wider intraday swings. In the second half of the year,
volatility intensified, negative price events remained frequent,
and daily swings reached extremes – up to €228/MWh on
17 September, when prices ranged from €27/MWh to €255/
MWh. Average wholesale prices for the year, however,
remained around €65/MWh, well below historical norms,
underscoring that price weakness extended beyond isolated
negative events.
On the positive side, market design reforms began to reshape
trading behaviour. Spain’s shift to 15‑minute settlement in
intraday markets in March and in the day-ahead market
from June sharpened price signals around the solar ramp.
This created clearer opportunities for storage to arbitrage
between negative midday prices and higher evening peaks,
with spreads surpassing €150/MWh at times.
Investment Manager’s report continued
Power prices
Spain wholesale power price forecasts
1
Price forecasts
Near and medium-term forecasts for the Spanish power
market weakened due to changes in natural gas price
expectations. As renewable capacity continues to grow,
consultants have refined their view of capture price
discounts. Whilst estimates still vary widely, the consensus
is that discounts will rise over time, and this is increasingly
reflected in the modelling. At the year end, the average
capture discount forecast for the life of the Spanish portfolio
stood at 48%.
The Investment Manager will continue to base assumptions
on independent consultants’ forecasts. Once sufficient
operating data has been collected, the Company will begin
to incorporate the portfolio’s realised capture discounts into
itsmodelling.
Over the three years that Foresight Solar’s Spanish assets
have been operational, these realised discounts have steadily
increased – though they remain in line with consultants'
forecasts.
The rising share of renewables on the grid reinforces the case
for accelerating the deployment of battery storage. BESS can
help smooth network imbalances and capture the growing
spread between low midday prices and higher evening peaks,
supporting both system stability and value creation.
Source: Foresight Solar Fund Limited.
1. Power price forecasts reflect real 2025 prices.
70
80
30
50
0
10
90
€/MWh
40
60
20
2026 2030 2035
2050
20452040
December 2024 June 2025 December 2025
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
27
Australia
The National Electricity Market (NEM) saw a pronounced
easing in wholesale electricity prices over 2025. By
December, the NEM-wide average price for the year had
fallen to A$48/MWh, almost 50% lower than the
A$91.80/MWh recorded in 2024, reflecting strong renewable
generation, higher daytime curtailment and softer gas prices.
Queensland and New South Wales experienced some of
the steepest year-on-year declines, driven by lower gas
generation costs and the continued rise of rooftop solar,
which reduced daytime operational demand. In Victoria,
periods of weaker‑than‑expected wind output contributed
tosharper price movements during evening peaks.
Price forecasts
Lower solar dispatch-weighted average price forecasts for
2025 reflect both structural shifts in the NEM and the pace of
recent market developments. Stronger supply expectations
are a key factor: several gigawatts of new solar capacity
advanced to financial close or early construction during the
year, supported by accelerated project commitments and
state‑led procurement programmes. This growing pipeline
points to increasing midday oversupply, particularly in
Queensland, where solar penetration is already high.
Forecasts also now capture curtailment risk more explicitly.
Grid congestion in parts of Queensland and Victoria, coupled
with delays to planned network upgrades, has raised
concerns about the consistency of network access for solar
generators. At the same time, slow progress on approvals for
large‑scale storage has tempered short‑term expectations
for value capture. Batteries remain essential to the system’s
evolution, playing a critical role in shifting excess midday
generation into higher-value evening periods and helping the
market absorb rising renewable output.
Investment Manager’s report continued
Power prices
70
80
30
50
0
10
90
A$/MWh
40
60
20
2026 2030 2035
2050
20452040
December 2024 June 2025 December 2025
2026 2030 2035
2050
20452040
December 2024 June 2025 December 2025
A$/MWh
70
80
30
50
0
10
90
40
60
20
Queensland wholesale power price forecasts
1
Victoria wholesale power price forecasts
1
Source: Foresight Solar Fund Limited.
1. Power price forecasts reflect real 2025 prices.
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
28
Investment Manager’s report continued
Global portfolio performance
Strong solar resource in the UK contributed to irradiation
4.9% above the base case, helping keep generation for the
global portfolio only 1.3% below expectations. Performance
would have been even stronger were it not for grid outages
in Foresight Solar’s main market, along with below-budget
irradiation and curtailment issues in Spain and Australia.
Status of contracted revenues
The Investment Manager monitors opportunities to enter
newarrangements to fix and to hedge prices for years ahead.
This active approach to power price management is designed
to provide revenue certainty and to support dividend cover,
whilst preserving some exposure to market upside.
In the 12 months to 31 December 2025, the Company
continued to secure dividend-accretive hedges for years
ahead, building on its existing subsidy income. The Investment
Manager took advantage of market volatility in February
and March 2026 to further the hedged position, lifting total
contracted revenues to 87% for 2026, 75% for 2027 and 63%
for 2028 at average prices of £75.76/MWh, £70.51/MWh and
£74.27/MWh, respectively. Of the total now hedged, part of
the position is under fixed‑volume baseload agreements, with
the remainder structured as pay‑as‑produced.
On a P50 basis, the Company expects to achieve 1.0x
dividend cover for 2026 solely from production so far in the
first quarter and the 87% of contracted revenues for the year.
The remaining 13% of uncontracted revenues will provide
market exposure and potential upside at a time of higher
energy prices.
Longer term, as power prices drift back towards historic
averages, Foresight Solar’s dividend cover is likely to settle
around the 1.0x to 1.1x range seen before the pandemic.
Jan 2025 Feb 2025 Apr 2025 May 2025 Jul 2025Jun 2025
Production (Budget)Production (Compensated)
UK
Spain
Australia
Irradiation (Actual) Irradiation (Budget)
Mar 2025
Aug 2025
Sep 2025 Oct 2025 Nov 2025 Dec 2025
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
0
20
60
40
80
100
140
120
180
160
200
kWh/m
2
MWh
Global portfolio: Monthly production and irradiation
Operational review
60
40
20
0
80
100
%
2026
Contracted revenue (PPA)Contracted revenue (subsidy) Merchant revenue
2027 20292028
Revenue profile breakdown
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
29
United Kingdom portfolio performance
The UK assets outperformed expectations, with electricity generation 3.4% ahead of base case after adjusting for minor compensation payments received from operation and maintenance
(O&M) counterparties and insurance providers. If not for unplanned network outages, production would have been even better. Strong solar resource contributed to the above‑budget generation.
Irradiationwas 10.1% higher than expected during the period.
Irradiation and
production
against budget
Year ended
31 December
2014
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31 December
2015
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31 December
2016
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31 December
2017
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2018
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31 December
2025
Irradiation +1.8% +0.6% +0.2% (2.2)% +6.4% +3.8% +8.5% +0.6% +9.4% +2.1% (4.7)% +10.1%
Production +1.4% +4.5% (4.0)% (4.6)% +4.9% +3.9% +8.4% +1.0% +8.6% +0.7% (6.0)% +3.4%
Investment Manager’s report continued
Operational review
In the UK, distributed generators cannot claim compensation
for lost revenue during network outages under the terms
of their connection agreements. Compensation rules are
designed for end users, and payments are triggered when
customers lose supply, not when producers are unable to
export. Outages are treated as an operational risk and there
isno route to recover losses from periods when the grid is
unavailable.
That is partly why the Management Services provider
continues to build strong working relationships with DNOs,
regularly negotiating to shorten planned outages or shift them
to periods of lower irradiation. When longer interruptions
are expected and pose a risk of significant disruption, the
Management Services provider increases engagement
and, where necessary, escalates the issue – as occurred
throughout2025.
Excluding network outages, UK production
during the period would have been better
at 7.4% above base case.
As more assets move beyond their first decade of operation,
targeted initiatives to uphold operational excellence become
increasingly important. As part of this preventative approach,
FSFL is upgrading inverters across several sites. Following
a successful first phase, the next stage of works began in
the autumn of 2025, complemented by a rolling repairs
programme.
Pen Y Cae: Revamping for efficiency
When Foresight Solar listed in 2013, it was the largest fund
of its kind and quickly built a 50-site UK portfolio, including
some of the country’s biggest solar plants at the time. As
several sites now enter their 13th year of operation, the
Management Services provider is addressing the natural
technical challenges that come with long‑life infrastructure.
As assets age, key components, such as inverters and
modules, may need replacing. That's when a lifecycle
investment strategy becomes even more critical to
maximising generation assets' performance.
This is what is underway at Pen Y Cae, a 7 MW plant in
Wales. The project claimed new, more efficient panels under
warranty. The installations will boost performance and
prepare the site for the end of its subsidy period in the next
10 years. With half the work complete, Pen Y Cae recorded
its best monthly performance in three years in December
2025.
Current UK rules limit capacity changes at subsidy-backed
sites, meaning capacity must be kept in line with original
specifications for any repowering that happens during the
support period. These constraints will lift once subsidies
end, creating potential future upside across the portfolio.
Replaced inverters are being repurposed to strengthen
performance and maintain availability across the portfolio in
a spare parts strategy that has benefited theCompany.
In parallel, the Investment Manager is carrying out panel
replacements at a couple of sites after successfully resolving
warranty claims with module manufacturers. (Read more in
the Pen Y Cae case study below.)
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
30
Investment Manager’s report continued
Operational review
Bilsthorpe, UK
United Kingdom portfolio performance continued
Health and safety
There were five reportable accidents across the portfolio in
2025. The Management Services provider addressed them
all promptly and there were no injuries or material damage to
equipment.
Incidents are reviewed regularly, with insights used to raise
awareness, inform operational improvements and help
mitigate future risks.
Security
During the year, three thefts affected asset performance
and a fourth site experienced a minor break‑in. At Welbeck,
Copley and Gedling, significant amounts of DC string cable
were stolen. At Shotwick, intruders entered the site but
caused no damage.
Remediation plans were developed for the affected plants,
and the O&M providers completed the necessary works.
Insurance claims have been submitted to cover material
damage and any associated production losses for the three
impacted sites.
The Management Services provider continues to work
closely with service providers to ensure security systems
offer appropriate protection and that response times remain
effective. Where needed, upgrades to site security are being
prioritised.
On cyber security, the Management Services provider
upgraded specific hardware across assets in 2024 to
strengthen resilience. Protecting the portfolio remains
anongoing priority. The provider is now working with a
third-party consultant to assess potential risks across sites,
and any vulnerabilities identified through this process will be
addressed promptly.
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
31
Spain portfolio performance
Operational performance across the four Spanish sites was
impacted by growing curtailment, with electricity generation
15% below budget as recorded irradiation was 2.3% lower
than expected.
Despite resilient operational performance in the first quarter
of 2025, negative prices forced plants to disconnect from
thegrid.
The implementation of the Automatic Power Reduction
System, a management protocol designed to enhance
flexibility and stability in the Spanish network as renewable
penetration increases, limited the impact of DNO outages
and allowed the portfolio to continue generating with small
capacity reductions.
Battery storage is a natural complement to intermittent
renewables and will play a key role in Spain's transition to
a lower‑carbon economy. The Board and the Investment
Manager are looking for opportunities to future-proof assets
and improve returns. This includes the analysis ofco‑located
BESS on operating plants and the development of a
proprietary pipeline of storage projects.
With the Lorca portfolio’s Final Acceptance Certificate
secured, a new O&M contract was agreed, reducing the
running costs for the three assets.
Australia portfolio performance
Although production met expectations in the first half of
2025, the four Australian plants finished the year 6.2% below
budget, with irradiation 2.4% under forecasts. The shortfall
was driven mainly by higher‑than‑expected curtailment
across the portfolio.
Curtailment occurs when the network cannot absorb all the
electricity a plant produces, forcing it offline and reducing
revenues.
Lower near-term revenues have put pressure on the plants'
debt cover ratios, and several projects breached their
covenants related to facilities of approximately £34.4
million and net asset value of roughly £13.5 million. This was
proactively addressed through engagement with lenders,
providing stability to negotiate a solution that works for all
parties.
The Board remains confident of reaching a solution and the
Investment Manager is working closely with the banks to put
the portfolio on a sustainable footing ahead of a planned
refinancing at the expiry of the mini‑perm facilities. (The loans
subject to refinancing in 2026 and 2027 are disclosed in the
debt position table on page 72.) An element of uncertainty
has been considered in the year-end valuation, including
additional curtailment assumptions.
The challenging environment for utility-scale solar has
affected a multitude of projects in the country and many are
in a similar position.
At the same time, the Investment Manager is assessing the
best way to progress the development of the two co-located
BESS projects. Batteries can help mitigate curtailment and
would improve the long-term appeal and resilience of the
Australian portfolio.
Investment Manager’s report continued
Operational review
Las Salinas, Spain
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
32
Valuation methodology
The Investment Manager provides the Board with fair value
estimates of Foresight Solar’s assets each quarter. These
valuations draw on long-term forecasts and a wide set of
assumptions, which means they are generally unaffected
by short-term market movements, economic volatility or
temporary operational issues. It is material shifts in long‑term
expectations that tend to drive the most significant changes
in value.
Fair value is assessed using discounted cash flow (DCF)
analysis from the start of operations or the date of
acquisition. For assets still in development or under
construction, valuations are held at the lower of cost or net
realisable value until commissioning. Any revenues or costs
incurred during construction or commissioning are excluded
from the DCF calculation when determining fair value.
The Board reviews and challenges the Investment Manager’s
recommended assumptions before approving the portfolio
valuation.
This methodology follows IFRS 13 and aligns with the
International Private Equity and Venture Capital Valuation
(IPEV) Guidelines. (See page 125 for more detail.)
The changes to assumptions made during 2025, including to
energy yields, lifecycle investments, useful economic lives
and capture discounts, are described in the Movements in
NAV section, starting on this page.
Discount rates
The Investment Manager regularly reviews the portfolio’s
discount rates to ensure they reflect the Company’s risk
profile and remain aligned with market conditions. This
assessment draws on comparable transaction data, analysis
of the risk premium above the risk-free rate, and advice from
independent third‑party experts.
Following this review, the weighted average levered
discountrate for the portfolio increased to 8.12%
(31December 2024: 7.88%). The change was driven by
a 195-basis points (bps) uplift in the rate applied to the
Australian assets to reflect the challenging market for solar
portfolios and long-term increases in government bond
yields, taking them to 10.23% (31 December 2024: 8.29%).
The discount rates for the Spanish assets were also raised by
75bps to 7.27% (31 December 2024: 6.52%) to adjust for local
market conditions.
Discount rates for the UK remained unchanged at 8.00%.
Asset lives
At 31 December 2025, the UK portfolio had an expected
weighted average life of 36.8 years from commissioning
(31 December 2024: 31.3 years). After accounting for time
already in operation, this equates to a remaining useful life
ofaround 26 years (31 December 2024: 21 years).
The assumed useful economic lives for the international
portfolio remained stable at 40 years for the Spanish
assets (31December 2024: 40 years) and 37 years for the
Australiansites (31 December 2024: 37 years)
1
.
The Investment Manager has a successful track record of
securing lease extensions across the portfolio, and it will
continue this work in the years ahead. Extending leases
unlocks longer operating lives for assets, which in turn
supports higher asset values and strengthens the Company’s
long‑term outlook. This proactive approach reflects the
Board’s commitment to safeguarding and enhancing
shareholder value over time.
Investment Manager’s report continued
Inflation
Income from the portfolio, particularly in the UK, is correlated
to inflation both through subsidies and exposure to energy
prices.
For valuation purposes, the Company forecasts CPI will be
2.5% to 2030, falling to 2.25% from 2031; and RPI will be 3.5%
in 2026, dropping to 3% between 2027 and 2030, and then to
2.25% from 2031.
Movements in NAV
Foresight Solar’s NAV per share decreased to 99.2 pence in
2024 from 112.3 pence in the previous year. A breakdown
in the movement is shown in the graph on the next page and
described below.
Dividends paid
The Company paid £44.9 million in dividends during the year
to 31 December 2025.
Fund costs
Total costs were £8.9 million, mainly driven bymanagement
fees and finance costs.
The Investment Manager's new fee structure resulted in more
than £1.0 million in savings for shareholders in 2025.
Other adjustments
Working capital movements resulted in a £2.9 million outflow.
Net asset value
1. Technical asset lives for the Spanish and Australian assets are measured from the date of commissioning. As a result, the annual roll‑forward in the DCF model does not affect the
remaining asset life assumptions.
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
33
Movements in NAV continued
Share buybacks
Foresight Solar deployed £11.2 million in the year to
repurchase more than 14.5 million shares. Because this stock
bought below holding value, the buybacks were accretive to
NAV per share.
Time value
Updating the valuation to reflect the passage of time resulted
in a £45.9 million uplift, as future cash flows were discounted
over a shorter period.
Project actuals
This reflects actual portfolio performance versus the
modelled forecast. Most of the £4.8 million negative
movement relates to revenue underperformance across the
four Australian assets.
Macroeconomic movements
Macroeconomic movements are made up of currency rate
fluctuations, which increased the sterling value of Australian
and Spanish assets, the inclusion of actual inflation rates into
valuations, and updated CPI and RPI forecasts. Combined,
these changes added £7.0 million.
Australian portfolio write-down
Given market challenges, the Company increased discount
rates by 195bps and applied an additional 30% curtailment
for the next three and a half years, above consultants'
forecasts, leading to the £16.9 million downside.
Power price forecasts
The Company uses a blended average of quarterly consultant
forecasts to estimate long‑term power prices, adjusted
to reflect the Investment Manager's expected capture
price discounts for solar generation. Updated forecasts
acrosstheUK, Australia and Spain resulted in a £19.5 million
lower valuation impact.
ROC/FiT inflation indexation
The UK government changed the inflation indexation
mechanism for its RO and FiT support schemes to CPI
from RPI starting in April 2026. The move affects assumed
inflation to the end of the decade, when a transition to CPIH
was already planned. As CPI is typically lower than RPI, this
decision reduced the valuation by £9.5 million, in line with the
Company's original estimate.
REGOs
The Company reduced near and long‑term REGO price
assumptions due to softer market conditions, culminating
in the £7.1 million change. Near‑term revenues remain
protected by fixed‑price PPAs.
Sandridge BESS commissioning
Valuing Foresight Solar's first operational battery storage
asset on a discounted cash flow added £1.9 million.
480
520
540
500
600
580
640
620
560
£m
pence per share
Dividends
paid
-8.1p
Fund
costs
-1.6p
Other
adj
-0.5p
Share
buybacks
+0.9p
Project
actuals
-0.9p
ROC/FiT
indexation
-1.7p
Energy
yields
+3.9p
Asset
lives
+3.3p
Capture
discounts
-1.9p
Tax
review
-9.1p
Macroeconomic
movements
+1.3p
Time
value
+8.3p
Power
price
forecasts
-3.5p
Australian
portfolio
write-down
-3.1p
Lifecycle
investments
+1.5p
NAV:
December
2025
99.2p
Other
-0.9p
REGOs
-1.3p
Sandridge
BESS
commissioning
+0.4p
NAV:
December
2024
112.3p
(£44.9m)
(£8.9m)
(£2.9m)
(£11.2m)
(£4.8m)
(£16.9m)
(£19.5m)
(£9.5m)
(£7.1m)
(£10.4m)
(£50.3m)
(£4.8m)
£45.9m
£7.0m
£21.7m
£1.9m
£8.0m
£18.2m
£634.4m
£545.9m
Movements in net asset value
Investment Manager’s report continued
Net asset value
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
34
Additional consideration was applied by factoring associated
transaction costs for lease extensions and excluding life
extensions with a low completion probability.
Capture discounts
Foresight Solar reviews its capture price discounts
regularly. Near‑term discounts are based on Investment
Manager expectations informed by realised portfolio data.
Expectations of increased solar build‑out in the coming years
led to a higher long‑term discount and a downside of £10.4
million.
Tax review
Foresight Solar, with the support of a leading advisor,
engaged with HMRC about its group tax structure. This
process concluded with an agreement covering historic
submissions, as well as the methodology to be applied over
coming years. The terms strengthened certainty around
transfer pricing arrangements.
As part of the review, however, it became clear that
forecast tax payments needed to be increased to reflect
higher‑than‑expected taxable income under the agreed
approach. The analysis also showed that tax payable for
prior years exceeded the amounts previously paid on
account.
These additional historical tax liabilities will be settled with
cash already reserved within the structure and operational
cash flows. Dividends are still expected to remain fully
covered.
The total negative impact of the tax review on Foresight
Solar's net asset value was £50.3 million.
Other portfolio valuation adjustments
Other updates across the portfolio, including minor working
capital movements, resulted in a £2.8 million reduction.
Investment Manager’s report continued
Net asset value
Movements in NAV continued
Energy yields
In the second half of 2025, the Company commissioned an
independent technical advisor to undertake a detailed review
of UK solar performance data and produce an updated
long‑term energy yield forecast. The results supported
Foresight Solar’s long-standing view that the portfolio
continues to operate to a high standard, with expected
production increasing relative to previous forecasts and
translating to a £21.7 million upside to NAV.
The findings will be incorporated into future budgets, with
performance monitored against the revised production
targets.
Lifecycle investments
The independent technical review also assessed the
portfolio’s expected lifecycle capital expenditure, including
planned investments required to maintain performance and
support long‑term operational reliability.
Updated site‑specific forecasts were produced for the UK
portfolio, reflecting installed equipment specifications and
local environmental conditions. These revised assumptions
have been incorporated into the valuation models and
indicate a reduction in forecast lifecycle costs, resulting in a
positive impact of £8.0 million on valuation.
Asset lives
The independent technical review highlighted that, with
continued focus on operational excellence, Foresight Solar's
UK solar portfolio remains well positioned to deliver reliable,
clean power for many years to come.
Reflecting this strengthened outlook, which added
£18.2million to NAV, the valuation now assumes that most
UK assets will operate for the shorter of their planning expiry
or 40 years. The Company remains confident in its ability to
extend leases to support this targeted operating life.
Technical inputs: Yields and assetvalues
An energy yield assessment estimates how much
electricity a solar farm will generate each year by
modelling long-term irradiance, technical performance
and operational losses. Meanwhile, an economic life
assessment determines how many years assets can
continue operating profitably after accounting for
degradation, O&M costs, reinvestment needs, expected
revenue, planning permission and leases.
These analyses are generally undertaken by reputed
independent technical advisors to gauge how and
how long a plant can operate, ensuring valuations
reflect realistic asset longevity and informed decisions
on sales, reinvestment, refinancing, and end‑of‑life
strategy.
If these technical inputs are revised upward, there
are expected benefits for investors. Higher forecast
generation increases expected annual cash flows,
whilst a longer economic life extends those potential
cash flows further into the future, lifting NAV, improving
dividend cover, and strengthening resilience under
downside scenarios.
Foresight Solar’s UK portfolio has a track record of
strong operational performance, providing practical
evidence that the assets have consistently met or
exceeded expectations. The updated technical analysis
is based on those years of operational performance data.
This information helps reduce forecasting uncertainty,
validates assumptions around degradation and
availability, and supports confidence in both higher
forward yields and longer economic lives.
The upward net asset value revisions are, therefore,
grounded in demonstrated performance, enhancing
credibility and generating value for investors.
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
35
Valuation sensitivities
Where possible, assumptions are based on observable
market and technical data. In many cases, such as forward
power prices, independent advisors are used to provide
evidenced information, enabling the Investment Manager to
adopt a reasonable approach.
The chart on this page shows the impact per share of
changes in key valuation assumptions on NAV. All sensitivities
are calculated independently of each other.
The Investment Manager has set out the inputs which it has
ascertained would have a material effect on the NAV in note
16 to the Financial Statements.
United Kingdom portfolio valuation
The table on this page demonstrates the breakdown of
Foresight Solar’s UK portfolio valuation in £m/MW over
recent periods.
The reduction in 2025 was driven by a lower portfolio value,
which was affected by changes to power price forecasts,
inflation indexation of subsidies and the tax review. There
were also repayments of amortising and revolving debt
facilities.
Investment Manager’s report continued
Net asset value
NAV per share
-25p -20p 25p20p-10p 10p-5p 5p—
Exchange rate
(+/-20%)
Operating costs
(+/-10%)
Tax ra te
(+/-1%)
-15p 15p
Inflation rate
(-/+1.0%)
£46.4m
£(41.1)m
£15.9m
£(16.3)m
£12.0m
£(12.0)m
£4.7m£(4.7)m
Power prices
(-/+20%)
Discount rates
(+/-0.5%)
Energy yield
(-/+10%)
£20.7m
£81.1m
£97.0m
£(19.3)m
£(82.7)m
£(104.0)m
Impact on NAV and NAV per share
31 December
2025
30 June
2025
31 December
2024
30 June
2024
Portfolio value £480.7m £536.0m £543.7m £584.2m
Cash held £25.4m £16.1m £18.9m £25.4m
Portfolio equity valuation £455.3m £519.9m £524.8m £558.8m
Debt £248.8m £265.0m £271.7m £283.1m
Enterprise valuation £704.1m £784.9m £796.5m £841.9m
Capacity (MWp) 723.1 MW 723.1 MW 723.1 MW 723.1 MW
£m/MWp 0.97 1.09 1.10 1.16
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
36
Shotwick, UK
Asset
Capacity (MW) Status Connection
date
Revenue
type
UK solar
Abbey Fields 5 Operational March 2016 ROC/Electricity sales
Abergelli 8 Operational March 2015 ROC/Electricity sales
Atherstone 15 Operational March 2015 ROC/Electricity sales
Bilsthorpe 6 Operational November 2014 ROC/Electricity sales
Bournemouth 37 Operational September 2014 ROC/Electricity sales
Bulls Head 5 Operational September 2014 ROC/Electricity sales
Castle Eaton 18 Operational March 2014 ROC/Electricity sales
Coombeshead 10 Operational December 2014 ROC/Electricity sales
Copley 30 Operational December 2015 ROC/Electricity sales
Crow Trees 5 Operational February 2016 ROC/Electricity sales
Cuckoo Grove 6 Operational March 2015 ROC/Electricity sales
Field House 6 Operational March 2016 ROC/Electricity sales
Fields Farm 5 Operational March 2016 ROC/Electricity sales
Gedling 6 Operational March 2015 ROC/Electricity sales
High Penn 10 Operational March 2014 ROC/Electricity sales
Highfields 12 Operational March 2014 ROC/Electricity sales
Homeland 13 Operational March 2014 ROC/Electricity sales
Hunter’s Race 10 Operational July 2014 ROC/Electricity sales
Kencot Hill 37 Operational September 2014 ROC/Electricity sales
Landmead 46 Operational December 2014 ROC/Electricity sales
Lindridge 5 Operational January 2016 ROC/Electricity sales
Manor Farm 14 Operational October 2015 ROC/Electricity sales
Marsh Farm 9 Operational March 2015 ROC/Electricity sales
Membury 16 Operational March 2015 ROC/Electricity sales
Misson 5 Operational March 2016 ROC/Electricity sales
Nowhere 8 Operational March 2015 ROC/Electricity sales
Paddock Wood 9 Operational March 2015 ROC/Electricity sales
Park Farm 13 Operational March 2015 ROC/Electricity sales
Pen Y Cae 7 Operational March 2015 ROC/Electricity sales
Portfolio
Investment Manager’s report continued
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
37
Asset
Capacity (MW) Status Connection
date
Revenue
type
UK solar
Pitworthy 16 Operational March 2014 ROC/Electricity sales
Playters 8 Operational October 2015 ROC/Electricity sales
Port Farm 35 Operational March 2015 ROC/Electricity sales
Roskrow 9 Operational March 2015 ROC/Electricity sales
Sandridge 50 Operational March 2016 ROC/Electricity sales
Sawmills 7 Operational March 2015 ROC/Electricity sales
Sheepbridge 5 Operational December 2015 ROC/Electricity sales
Shotwick 72 Operational March 2016 ROC/Electricity sales
Southam 10 Operational March 2015 ROC/Electricity sales
Spriggs Farm 12 Operational March 2014 ROC/Electricity sales
Steventon 10 Operational June 2014 ROC/Electricity sales
SV Ash 8 Operational March 2015 ROC/Electricity sales
Tengore 4 Operational February 2015 ROC/Electricity sales
Trehawke 11 Operational March 2014 ROC/Electricity sales
Upper Huntingford 8 Operational October 2015 ROC/Electricity sales
Verwood 21 Operational February 2015 ROC/Electricity sales
Wally Corner 5 Operational March 2017 ROC/Electricity sales
Welbeck 11 Operational July 2014 ROC/Electricity sales
Wymeswold 34 Operational March 2013 ROC/Electricity sales
Yarburgh 8 Operational November 2015 ROC/Electricity sales
Yardwall 3 Operational June 2015 FiT/Electricity sales
UK BESS
Clayfords 25
1
Pre-construction — Merchant
Sandridge BESS 25
2
Operational August 2025 Merchant
Operational sub-total 748
Construction and pre-construction sub-total 25
Investment Manager’s report continued
Portfolio
Sandridge, UK
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
38
Asset
Capacity (MW) Status Connection
date
Revenue
type
Spain solar
Cuerva pipeline 467 Development — Merchant
Lorca portfolio
Los Llanos 25
3
Operational August 2022
Long-term PPA/
Electricity sales
Los Picos 10
3
Las Salinas 15
3
Virgen del Carmen
26 Operational November 2022
Long-term PPA/
Electricity sales
Spain BESS
Chelion pipeline 400 Development — Merchant
Operational sub-total 76
Development sub-total 867
Australia solar
Bannerton 53
4
Operational July 2018 LGC/Long-term PPA
Longreach 17 Operational March 2018 LGC/Long-term PPA
Oakey 1 30 Operational February 2019 LGC/Long-term PPA
Oakey 2 70 Operational May 2019 LGC/Electricity sales
Australia BESS
Bannerton BESS 42
4
Development — Merchant
Oakey 1 BESS 80 Development — Merchant
Operational sub-total 170
Development sub-total 122
Operational total 994
Construction and pre-construction total 25
Development total 989
Investment Manager’s report continued
Portfolio
1. Accounts for the 50% stake the Company holds of Clayfords (50 MW).
2. Accounts for the 50% stake the Company holds of Sandridge BESS (50 MW).
3. Accounts for the 50% stake the Company holds in the Lorca portfolio (100 MW).
4. Accounts for the 48.5% stake the Company holds of Bannerton (110 MW).
Longreach, Australia
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
39
What's in this section:
41Foreword from the Chair
43Approach to sustainability
45Environment
45Key sustainability metrics
46Case studies
49Local communities
50Supply chain
Sustainability
Highlights to 31 December 2025
1,038 GWh
of clean electricity
generated
381,748
UK homes powered
359,880
tCO2e
avoided compared to
country-specific grid
Paddock Wood, UK
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
40
This marks my first sustainability foreword as Chair, and I
am pleased to reflect on Foresight Solar’s strong progress
throughout 2025. They were 12 months defined by disciplined
operational performance, a maturing sustainability strategy
and a continued contribution to the energy transition. I am
proud of what the Company has achieved.
Foresight Solar delivered another robust year of clean
energy generation – a clear measure of success of our
sustainability strategy. Based on UK benchmarks, our
contribution to the decarbonised power system supported
electricity demand equivalent to almost 400,000 typical UK
homes. Our assets continued to operate at good availability,
benefiting from rigorous asset management and targeted
optimisation measures. Alongside our operating portfolio, our
development pipeline is starting to yield results, delivering
on the potential to enhance long-term value creation and
positioning the Company strongly for the years ahead.
Reporting and integration
Sustainability is fully embedded in our investment processes,
asset operations and Board oversight. Environmental,
social and governance (ESG) factors guide our decisions,
ensuring resilience and long‑term value for shareholders.
The Investment Manager is strengthening data collection
and analysis to support transparent reporting and informed
decision‑making.
Whilst the FCA’s Sustainability Disclosure Requirements
do not apply to FSFL, we maintained our commitment to
equivalence, reflecting the expectations of our investors.
Wealso continue to prepare for the forthcoming UK
Sustainability Reporting Standards. As market expectations
continue to rise, we await the results of the ongoing
consultation with the expectation that the new rules will
apply from 1 January 2027.
Biodiversity and natural capital
Our biodiversity initiatives continued to move forward during
the year. After reviewing the 50 assets in the UK portfolio
and prioritising 13 for detailed ecological assessment, we
are now moving towards the design and implementation
of site‑specific enhancements, capable of generating
biodiversity units aligned with England’s Biodiversity Net Gain
requirement. These efforts not only support nature recovery
but also reinforce the long‑term stewardship of our sites.
Board diversity and governance
Strong governance is central to our long‑term success. I am
pleased that our Board composition reflects an equal balance
of perspectives, with two female and two male Directors, a
gender split that highlights the breadth of experience and
insight guiding Foresight Solar. Diversity in backgrounds and
viewpoints strengthens decision-making, supporting resilience
and accountability.
Tony Roper
Chair
1.89 kWh/
share
of energy generated
from renewable
sources
654.04
tCO
2
e/share
avoided compared
tocountry-specific
grid intensity
Foreword from the Chair
Sustainability
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
41
Sustainability-linked revolving credit facility (RCF)
We concluded the refinancing of our sustainability‑linked
RCF. The facility’s KPI‑dependent structure strengthens the
alignment between financial outcomes and ESG performance
and demonstrates our commitment to embedding
sustainability within the capital framework. The resized and
extended facility will also deliver savings of approximately
£1million over its term.
Looking ahead
We enhanced the credibility of our reporting, moving to
reasonable assurance of key sustainability data in 2025, which
we intend to maintain annually. (Read more on page 45.)
We also undertook emissions lifecycle assessments across
representative assets to better quantify the embedded
carbon associated with manufacturing, transport, operations
and end‑of‑life processes. This work confirmed the significant
net contribution of the portfolio and validated the metrics
used in the calculations of our environmental footprint.
As this is my first sustainability foreword, I want to emphasise
how encouraged I am by Foresight Solar’s achievements.
Our approach to ESG integration, nature stewardship and
reporting demonstrates our commitment to best practices
and accountability.
With a development pipeline, disciplined governance and
an unwavering commitment to delivering positive societal
outcomes, I am confident that Foresight Solar will continue
tobuild on its success.
Tony Roper
Chair
23 March 2026
Sustainability continued
Foreword from the Chair
Paddock Wood, UK
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
42
Sustainability and environmental considerations are
central to Foresight Solar’s strategy, shaping both its
investment decisions and day‑to‑day asset management.
FSFL supports climate change mitigation whilst identifying
sustainability-related risks and opportunities across the
portfolio. A core part of this approach is the ability to
quantify, measure and enhance the impact of its activities.
To track and evaluate progress, the Investment Manager’s
Sustainable Infrastructure Investment Strategy focuses on:
ș Developing investment strategies informed by long-term
global sustainability themes, including climate risks and
nature-related opportunities
ș Conducting sustainability due diligence aligned with
regulatory standards and frameworks
ș Monitoring and managing sustainability performance using
portfolio-level data and analysis
ș Reporting transparently to all relevant stakeholders
Tracking progress
Given the nature of its operations, the Company is well
positioned to meet the expectations of investors seeking
positive environmental and social outcomes alongside
attractive financial returns.
These inherent sustainability characteristics, combined with
FSFL’s London listing and shareholder profile, led the Board
to pursue equivalency with the Financial Conduct Authority’s
Sustainability Focus label – even though the Sustainability
Disclosure Requirements currently apply only to
UK‑domiciled vehicles. Foresight Solar has voluntarily sought
alignment as a matter of best practice and has published
its pre-contractual and consumer-facing disclosures on its
website.
To obtain a label, the FCA requires investment trusts to define
clear, measurable KPIs that evidence the contribution of their
assets to sustainability objectives.
Foresight Solar invests exclusively in solar and battery
storage assets, both recognised as eligible activities under
the EU Taxonomy. The Company’s Taxonomy alignment, set
out below, is based on an internal assessment of each project
against the technical screening criteria, including the Do No
Significant Harm and Minimum Safeguards requirements.
At portfolio level, the metrics quantify Foresight Solar’s
contribution to decarbonising the electricity system.
TheCompany intends to grow its operational solar and
BESS capacity, and as its proprietary development pipeline
matures, FSFL will bring additional renewable energy assets
ontothe grid.
Alongside the KPIs that track progress against its investment
objective, Foresight Solar also reports quantitatively against
the UN Sustainable Development Goals (SDGs) and their
underlying targets, demonstrating its commitment to creating
environmental and social value. The SDGs, a set of 17 global
objectives to be achieved by 2030, are a key driver of the
Company’s investment activities.
The tables on this and the following page show FSFL’s
performance against the KPIs linked to its investment
objective and its contributions to the relevant SDGs and
associated targets.
Approach to sustainability
Sustainability continued
Investment objective KPIs
Company
Maintain a minimum 70% alignment with an authoritative taxonomy
which will demonstrate the sustainability of the underlying assets 100%
Portfolio (in MW) Solar Battery storage
Operational (total renewable energy capacity added) United Kingdom 723 25
Spain
125
1
—
Australia 170 —
Total 1,043
Developed (total renewable energy capacity enabled) United Kingdom — —
Spain — —
Total —
1. Includes the 50 MW stake sold in the Lorca portfolio.
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
43
Sustainability continued
Approach to sustainability
Sustainable impact reporting
Foresight Solar’s contributions to the SDGs reflect the size of its portfolio and the renewable energy it generates over any given period. Fluctuations in these factors directly influence the KPIs shown
below, as higher electricity production results in greater impact, whilst lower output reduces it.
Good health
and well-being
Affordable and
clean energy
Industry, innovation
and infrastructure
Climate
action
Life
on land
Foresight Solar contributes by reducing
pollution and emissions through the
installation and management of clean
energy generation assets.
Foresight Solar contributes by reducing
reliance on fossil fuels through
investment in renewable energy
generation.
Foresight Solar contributes by
future‑proofing energy systems through
investment in generation assets using
the latest technologies to maximise
electrical output.
Foresight Solar contributes by raising
awareness and improving institutional
knowledge on climate change mitigation.
Foresight Solar contributes
by preserving the integrity of
land it uses through investment
in low-polluting technologies
and introducing active asset
management initiatives that
improve biodiversity.
556,589kg
NOx (nitrous oxide) avoided vs
energy generation from gas
(FY 2024: 535,820kg)
1,038 GWh
Renewable energy generated
(FY 2024: 1,009 GWh)
994 MW
Renewable energy
capacity connected to
theelectricity grid
(FY 2024: 969 MW)
359,880 tCO2e
Emissions avoided compared
to country-specific
grid intensity
(FY 2024: 351,451 tCO
2
e)
88,626 TOE
avoided
Tonnes of oil equivalent
contributed to the
avoidance of fossil fuel use
(FY 2024: 85,319 TOE)
9,689kg
PM10 (μm10 particulate matter)
avoided
(FY 2024: 9,327kg)
381,748
UK homes powered for a year
(FY 2024: 367,504)
408,165kg
SOx (sulphur dioxide) avoided
(FY 2024: 392,935kg)
4,432kg
PM2.5 (μm2.5 particulate
matter) avoided
(FY 2024: 4,266kg)
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
44
Key sustainability metrics
GHG emissions
0.00 tCO2e
Scope 1
(FY 2024: 4.56 tCO
2
e)
76.53 tCO2e
Scope 2
(FY 2024: 194.81 tCO
2
e)
101,164.82 tCO2e
Scope 3
1
(FY 2024: 102,567.54 tCO
2
e)
Environmental footprint
0.10 tCO2e/£m invested
Carbon footprint
(FY 2024: 0.31 tCO
2
e/£m invested)
0.26 tCO2e/£m revenue
Weighted Average Carbon Intensity (WACI)
of investee companies
(FY 2024: 1.03 tCO
2
e/£m revenue)
Share of renewable energy consumption and production
98%
of assets with a renewables tariff
for on-site consumption
(FY 2024: 98%)
94%
of overall portfolio consumption
from renewable sources
(FY 2024: 85%)
100%
of energy generated from
renewable sources
(FY 2024: 100%)
Sustainability metrics per outstanding share
1.89 kWh/share
(FY 2024: 1.79 kWh/share)
654.04 gCO2e avoided/share
(FY 2024: 622.2 gCO
2
e avoided/share)
1. Data quality is assessed to be Data Quality 4.
Environment
Emissions reporting
Although Foresight Solar’s assets deliver a significant and
measurable contribution to the energy transition, industrial
decarbonisation and nature recovery, the operation and
maintenance of the portfolio still generate emissions.
To minimise its carbon footprint, the Company continues to
reduce Scope 1 and Scope 2 emissions, which are under its
direct control. As a result, avoided emissions remain more
than three times higher than FSFL’s own greenhouse gas
output, creating a substantial net benefit.
Operational performance in 2025 was as planned and Scope
1 emissions were, therefore, negligible. The Company also
sources electricity for most of its assets from green sources.
Whilst the sites generate renewable power, they still require
grid electricity to run on-site equipment, and the move to
clean tariffs has sharply reduced emissions since Scope 2
reporting began in 2021. In recent years, Scope 2 emissions
have stabilised at a low level and are expected to fluctuate
modestly as the portfolio evolves.
Further work is underway to better understand and reduce
Scope 3 emissions, those associated with third-party
providers. The Investment Manager is engaging with Foresight
Solar’s partners to measure their carbon footprints and
assess their plans for emissions reduction.
Data assurance
The Investment Manager worked with Aardvark Certification
to undertake independent, third-party reasonable assurance
in accordance with ISAE 3000. The analysis centred on the
processes in place to collect sustainability data and analyse
the validity of the information being presented.
Sustainability continued
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
45
Sustainability continued
Case study: Measuring the full carbon impact of solar power
As expectations around climate reporting continue to
rise, investors are looking beyond operational emissions
to understand the full carbon footprint of renewable
infrastructure. To meet shareholder expectations and
strengthen the transparency of its disclosures, Foresight Solar
commissioned a lifecycle carbon assessment (LCA) of two of
its UK solar farms.
The study aimed to:
ș Quantify the full lifecycle emissions of two contrasting
solar farms
ș Test how closely real-world performance aligns with
global benchmarks
ș Provide additional confidence in the environmental
benefits we report on
An independent advisor was commissioned to conduct
detailed LCAs of Sandridge, in Wiltshire, and Misson, in South
Yorkshire. Together, these sites offer a representative view of
the Company’s portfolio in a core market, reflecting variations
in size, geography and generation.
Historically, Foresight Solar used the Intergovernmental Panel
on Climate Change’s median lifecycle emissions factor for
utility-scale solar, widely regarded as a trusted benchmark,
to estimate avoided emissions. However, as investors’
requirements evolve, a more detailed picture of our assets’
carbon performance became necessary.
The LCA followed ISO 14040 and ISO 14044 standards
with a full “cradle-to-grave” review, covering raw material
extraction, component manufacturing, construction,
operation and end‑of‑life treatment. Primary Foresight Solar
data was supplemented with established secondary datasets,
ensuring a robust, best practice methodology.
Two sites, one story
Sandridge (50 MW, Wiltshire): A large site benefiting
from economies of scale and strong irradiation levels.
Misson (5 MW, South Yorkshire): A smaller northern
asset included in the analysis to capture the higher
endof potential lifecycle emission intensities.
These contrasting sites were selected to reflect the
widest realistic range of carbon performance across
the Company’s UK operations.
Despite differences between the two plants, the overall
conclusions are clear:
ș Lifecycle carbon intensities fall comfortably within
established IPCC ranges, reinforcing solar PV’s
strong low‑carbon profile
ș Larger assets tend to achieve lower emissions per
unit of electricity, benefiting from scale efficiencies
ș Both plants deliver meaningful net carbon savings
over their lifetime, with embedded emissions offset
through clean generation
ș Most lifecycle emissions originate in manufacturing,
highlighting the importance of supply chain
decarbonisation
A clear conclusion
The carbon performance of Sandridge and Misson
aligns closely with international benchmarks, reinforcing
confidence in FSFL’s reporting and the long‑term
climate benefits of solar power. This study confirms that
solar continues to be a scalable, resilient and genuinely
low-carbon solution, supporting the ongoing transition
towards cleaner energy.
Paddock Wood, UK
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
46
Sustainability continued
Case study: Geospatial data supporting nature and climate risk management
Foresight Group partnered with consultancy Frontierra to
develop a nature and climate reporting platform designed to
enhance investment due diligence, portfolio management and
sustainability disclosures.
Supported by the UK Space Agency’s Unlocking Space for
Business programme, the platform brings together satellite
imagery, geospatial analytics, and proprietary algorithms to
assess nature and climate-related opportunities and risks at
both asset and portfolio levels.
Key capabilities include:
ș Satellite and geospatial data to identify climate and
nature-related opportunities and risks
ș Proprietary algorithms, enabling rapid analysis across
single assets or entire portfolios
ș Reportable metrics aligned with recognised industry
frameworks
Benefits and applications
The platform enables more proactive and informed
decision-making by delivering:
ș Comprehensive risk assessments using diverse datasets
across assets and portfolios
ș Enhanced sustainability compliance, with tools to
identify and manage material climate and nature-related
opportunities and risks
ș Improved reporting aligned with frameworks such as TCFD
and TNFD
ș Instant, site‑specific insights through automated asset‑level
reports
Foresight Solar’s portfolio is now integrated into the platform.
This ensures outputs directly support investment and
management decisions, from identifying climate risks during
due diligence to mapping which assets face the highest
exposure to hazards, such as flooding. The location‑based
approach helps teams target mitigation measures, protect
value and prioritise strategic action.
Opportunities and risks assessment
The platform assesses a wide range of inputs, including:
ș Physical climate hazards
ș Water‑related risks such as drought, flooding, changing
precipitation and sea level rise
ș Temperature-related risks, including heat stress
andwildfires
ș Soil-related risks like erosion, degradation
andlandslides
ș Wind-related risks such as storms and shifting
windpatterns
ș Nature-related aspects
ș Protected areas
ș Biodiversity hotspots
ș Critical habitats
ș Habitat connectivity
Portfolio-level insights
Fund-level reports compare assets in relation to
nature-positive opportunities and risks, helping teams
prioritise management actions. These insights highlight where
opportunities exist to enhance biodiversity value and where
mitigation is needed.
Asset-level insights
Detailed site‑specific reports assess exposure to physical
climate risks, nature-related pressures and opportunities
for nature‑positive land management. Interactive mapping
layers show proximity to protected areas, surrounding land
use, biodiversity intactness and forest loss – supporting clear,
evidence‑based decision‑making at a granular level.
Sawmills
The 31.19‑hectare solar farm in Devon is surrounded
mainly by agricultural land and has relatively low
exposure to physical climate hazards.
The image below illustrates how the platform’s
mapping and reporting tool operates. It shows the
geospatial overview of climate and nature-related
factors in and around the asset, allowing the Investment
Manager to view key hazards identified, associated
risks, recommended mitigations and potential
nature‑positive opportunities.
Together, these outputs demonstrate how complex
spatial data is transformed into clear, actionable
insights, supporting stronger risk management and
long‑term value protection across the portfolio.
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
47
Sustainability continued
Case study: Conservation-led habitat enhancements
At the Lorca sites in Granada, southern Spain, Foresight
Solar is enhancing local biodiversity through practical,
nature‑positive measures.
These interventions, which include the installation of ponds
and purpose-built bird nesting houses, support surrounding
ecosystems and strengthen operational resilience. During the
dry summer months, for example, the ponds help suppress
the dust that risks reducing efficiency by settling on panels.
A major focus of this work has been the recovery of the
lesser kestrel (Falco naumanni), a small migratory falcon
whose population in the region has declined sharply due to
habitat loss, reduced prey availability and the disappearance
of traditional nesting sites.
In partnership with conservation specialists DEMA and
the Junta de Andalucía, Foresight Solar is contributing
to a structured seven-year programme to establish a
self‑sustaining colony within the Lorca portfolio.
The programme uses DEMA’s “Ambiente de Colonia”
method, in which captive-bred chicks are introduced into
a purpose-built colony and supported by non-releasable
adult females that help replicate natural social cues. The
site is equipped with CCTV and monitored daily, allowing
conservation experts to study behaviour, fledging rates and
habitat use.
The first full release season in 2025 delivered encouraging
results:
ș 50 captive-bred chicks introduced
ș 50 chicks successfully fledged
ș Wild lesser kestrels observed visiting as soon as the first
nest boxes opened, indicating strong habitat suitability
Early co‑benefits are already emerging. A pair of European
rollers successfully used an artificial nest installed alongside
the kestrel infrastructure, demonstrating that well-designed
enhancements can benefit multiple species without affecting
energy generation.
These outcomes highlight the potential for targeted
conservation measures to be integrated directly into
operational solar assets. As monitoring continues and
returning kestrels are tracked in future seasons, the
programme will offer valuable evidence on how long‑term,
nature-positive management can improve biodiversity whilst
supporting resilient asset performance.
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
48
Local impact with community benefits payments
In 2025, Foresight Solar contributed over £254,000 to local
communities in the UK. This money is used in myriad ways by
regional authorities to improve the lives of residents near the
Company’s operational sites.
From education and wellbeing to nature, heritage, community
infrastructure and essential services, these contributions
reflect a long‑term commitment, delivering community value
for up to 40 years through the power of clean energy.
Culture and entertainment
Three Legged Cross is a village in Dorset, situated
between Verwood to the north and West Moors to
the south. Part of the wider Verwood civil parish, the
residential community is surrounded by countryside,
with a distinct village centre and nearby greenbelt land
shaped by its rural setting.
Foresight Solar continued to support a wide range
of local initiatives, benefiting residents through its
partnership with the 3LX Community Fund.
During 2025, the project donated more than £20,000,
enabling grants that strengthened educational, cultural,
and environmental projects across the area.
Funding supported the Friends of Three Legged Cross
First & Nursery School with new notebooks and data
loggers, improving learning resources for students.
Grants also benefited Verwood Concert Brass and
the Verwood Pantomime Society, promoting music
and the performing arts in the community. Additional
support went to Verwoodians on Waste and the
Verwood Foodbank, reinforcing sustainability efforts
and providing essential warm-product assistance to
vulnerable households.
Since its creation in 2014, the 3LX Community Fund
has distributed over £168,000 to 29 local groups,
evidencing Foresight Solar’s long-term commitment to
fostering community wellbeing.
Sustainability continued
Local communities
Education and opportunity
Foresight Solar has continued to strengthen its
commitment to education and community impact
through its partnership with Earth Energy Education, an
organisation that delivers hands-on learning focused on
renewable energy, climate change and biodiversity.
Earth Energy Education works with schools, colleges
and universities across the UK, providing site
visits, workshops, and curriculum-linked Science,
Technology, Engineering and Mathematics (STEM)
resources designed to help students understand how
renewable energy systems work and why they matter.
Their programmes emphasise experiential learning,
taking pupils out of the classroom to see real-world
engineering and environmental management in action.
In 2025, the partnership enabled over 1,200 students
to deepen their understanding of renewable energy
and biodiversity through immersive educational
experiences. Fifteen primary schools and one college
engaged directly with learning programmes that
showcased how FSFL’s solar assets are powering a
more sustainable future. Twenty on‑site visits were
hosted across eight sites, giving students a unique
opportunity to explore solar infrastructure first‑hand.
In addition, 29 in-school, hands-on STEM sessions were
delivered, bringing interactive and practical learning
directly to classrooms.
Through Earth Energy Education, Foresight Solar
continues to inspire the next generation of engineers,
scientists and environmental stewards, ensuring young
people gain the skills and knowledge necessary to
thrive in a low‑carbon world.
Paddock Wood, UK
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
49
Solving the complex sustainability risks present in global
supply chains is not straightforward. To address these
challenges effectively, the Investment Manager applies a
layered and proactive approach that combines strategic
decision-making, rigorous due diligence and collaborative
industry engagement. Key elements include:
ș Selected geographies – Prioritising markets with strong
regulatory frameworks that support responsible business
practices
ș Robust internal due diligence – Assessing key
counterparties and their governance structures at project
level to ensure risks are understood and managed early
ș Supplier Code of Conduct – Contractually requiring
suppliers to adhere to the UN Guiding Principles on
Business and Human Rights and the OECD Guidelines for
Multinational Enterprises
ș Direct supplier engagement – Working closely with
primary, secondary and tertiary suppliers to understand
their own supply chain oversight and risk mitigation
processes
ș Enhanced due diligence – Commissioning specialist
third-party auditors to undertake on-site assessments of
higher-risk suppliers and facilities
ș Collaboration – Partnering with industry peers to drive
more consistent and effective engagement with key
suppliers
ș Ethixbase – Using this specialised service to assess and
monitor suppliers’ regulatory and sustainability risk
profiles through independent data and analysis
As an investment trust managed by Foresight Group, the
Company’s policies and practices relating to modern
slavery and human trafficking are covered by the Investment
Manager’s Modern Slavery Act statement. The statement
outlines Foresight Group’s approach to supply chain due
diligence, staff training, recruitment and employee welfare
and is available on the firm’s website.
Sustainability continued
Supply chain
Lorca, Spain
Click or scan to read
the statement
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
50
Paddock Wood, UK
Risk and risk management
Foresight Solar operates in a dynamic environment where
a range of risks can influence its valuation, reputation and
operational performance. The Board defines the level of risk
the Company is willing to take in pursuit of its investment
objectives, and the Directors regularly reflect on how these
risks may evolve over time.
The Investment Manager and the Administrator have a
comprehensive risk management framework to reduce the
likelihood and the potential impact of principal and emerging
risks. The Company relies on the Investment Manager’s
internal systems and controls and on external providers, such
as the Administrator, to effectively manage risk across the
portfolio and maintain an up‑to‑date risk register.
The Audit and Risk Committee oversees the risk management
framework and reviews the risk register and risk management
throughout the year. Key developments are reported to
the Board each quarter, and the Directors undertake a
comprehensive review of the framework at leastannually to
ensure it remains effective and appropriate.
Principal risks
The most significant risk continues to be market sentiment
towards the renewable energy infrastructure investment
trust sector, which affects the Company’s ability to access
capital. Higher interest rates and the relative attractiveness
of fixed‑income markets have placed sustained pressure on
share prices across the sector, and Foresight Solar’s shares
have traded at a discount to NAV for three years. Whilst the
Board remains confident in the underlying valuation of the
portfolio, the discount signals a demand for higher returns
and contributes to the cost and availability of financing.
To mitigate these pressures, the Board has prioritised capital
allocation decisions that support shareholder value, including
debt reduction and returning cash.
The Company continues to monitor potential changes in
the UK’s energy policy environment. Although the result of
the Review of Electricity Market Arrangements and the new
Consumer Composite Investment regulations were seemingly
favourable, the decision to change the inflation indexation
mechanism for the Renewables Obligation and Feed‑in
Tariff schemes was damaging to renewables. The upcoming
consultation on Fixed Price Certificates brings further
uncertainty.
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
51
Principal risks continued
Electricity price forecasts remain mixed. Although the
portfolio's exposure is mitigated against short‑term volatility
through its active hedging approach, the Company continues
to manage future exposure to maintain revenue visibility and
support dividendcover.
The ongoing discount to NAV restricts the Company’s ability
to raise new equity to invest for growth. The proprietary
development pipeline is key to delivering on Foresight Solar’s
investment objective. Recycling capital from asset sales will
better support the portfolio’s long-term revenue as FSFL
targets investments into development or construction-stage
projects. There is, however, a natural period before new
assets are able to contribute to dividendcover – potentially
putting pressure on dividend cover – and highlighting the
relevance of timing of execution.
The table below outlines the most relevant principal risks as
at 31 December 2025. A summary of each principal risk and
related mitigations appears in the following pages.
Principal risk Risk trend
Access to capital
Regulatory change, including changes to subsidies —
Near and long-term energy prices
Dividend pressure
Portfolio performance —
Liquidity of investments —
Fund performance —
Counterparty risk —
Financial gearing
Development and construction —
Additional information that should be considered before
investing can be found in the Company’s prospectus at
foresightsolar.com/reports-and-publications.
Risk and risk management continued
Emerging risks
Emerging risks are less predictable but can have meaningful
long‑term implications. TheBoard reviews these risks
regularly with support from theInvestment Manager, the
Administrator and externaladvisors.
Geopolitical developments remain a significant area of
uncertainty. Recent shifts in policy in the United States –
characterised by more protectionist trade measures and
sudden pivots – have the potential to heighten global tensions,
disrupt supply chains, and affect the cost of equipment and
the appetite for renewable energy projects. These pressures
compound an already challenging macroeconomic backdrop
in the UK. Market volatility and steep discounts to NAV across
the investment trust sector have also created opportunities
for activist investors, a trend the Board continues to monitor.
Escalating tensions in the Middle East from late February
2026 have had an impact in natural gas markets, influencing
electricity prices. Whilst short‑term price movements were
observed, the extent of any sustained impact on gas prices
and on inflation will depend on how long disruption to
regional energy supply routes persists.
Climate-related risks are an increasingly prominent area of
focus. Changing weather patterns and more frequent extreme
events may affect asset performance over time. As part of the
Company’s climate‑related financial disclosures, the Board
is deepening its assessment of how these changes could
influence operational outcomes and long‑term value. (See the
Task Force on Climate-related Financial Disclosures section,
from page 60, for more details.)
Click here or scan to
read the prospectus
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
52
Risk Risk summary Mitigation Trend and outlook
Access to
capital
Market conditions remained difficult. Weak investor sentiment
pushed sector share prices to record lows and most renewable
infrastructure trusts, including Foresight Solar, currently have
limited access to new equity.
From 2021 to 2023, central banks raised interest rates rapidly
to curb inflation. Higher risk‑free returns made fixed‑income
assets more attractive, shifting investor demand away from listed
infrastructure. This widened the gap between asset values and the
returns investors expected, contributing to sustained share price
discounts.
Prolonged weakness in demand for FSFL shares may restrict the
Company’s ability to raise capital, limiting growth opportunities
and putting long‑term pressure on NAV.
The Company continues to take a disciplined approach to capital
allocation. The Board paused significant new investment activity
and is prioritising strengthening the balance sheet. This includes
reducing debt and returning capital to shareholders through
buybacks, which enhance value for existing investors.
The Investment Manager is overseeing a capital recycling
programme. Proceeds from the first phase were used to repay the
RCF and future divestment proceeds will be directed to further
debt reduction, returns to shareholders and selected reinvestment
opportunities.
The Board and the Investment Manager are
comfortable the Company’s valuations reflect realistic
assumptions.
Elevated interest rates continue to influence investor
behaviour, and discounts across the listed renewables
sector remain wide. The Company aims to remain
well positioned relative to peers, and any future
reduction in UK benchmark rates would likely support
an improvement in the share price, subject to the Bank
of England’s assessment of inflation and growth. The
recent conflict in the Middle East, however, has made
rate cuts in 2026 less likely.
The Investment Manager and the Board remain focused
on reducing the share price discount to NAV. Directors
continue to analyse all options available, including
consolidation.
Regulatory
change,
including changes
to subsidies
Shifts in political priorities can influence the level and stability of
subsidies for renewable energy. Changes – whether prospective or
applied retrospectively – could materially affect renewable assets’
returns.
Although subsidy regimes are supported by government policy,
they remain exposed to political pressures. The UK government
has recently decided to change the inflation indexation mechanism
for RO and FiT schemes. Its upcoming consultation on Fixed Price
Certificates risks further damage to the sector.
Adverse policy changes, particularly with retrospective effect, can
negatively impact the valuation of the Company’s assets and its
ability to achieve targeted returns.
The Investment Manager closely monitors regulatory and political
developments. The Investment Manager holds regular discussions
with peers and government stakeholders to anticipate potential
changes and mitigate downside risk. Recognising that direct
influence on policy may be limited, the Investment Manager
participates in industry groups and trade associations that
represent the sector’s interests and engage proactively with
policymakers.
Energy policy continues to attract significant political
attention, influenced by energy affordability, security
of supply and net zero commitments. Substantial
investment is required to deliver decarbonisation
goals, and the government elected in July 2024 has
signalled broad support for renewable deployment.
Whilst this reduces the likelihood of major market
upheaval, economic pressures may still prompt
policymakers to consider measures – such as the ones
leading to inflation indexation changes for the RO and
FiT schemes – that affect the sector.
Risk and risk management continued
Increase Decrease No change
Principal risk outline
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
53
Risk Risk summary Mitigation Trend and outlook
Near-term
energy prices
The market sets price received for electricity generated by
solar assets. Short‑term movements can, therefore, affect the
Company’s revenues and, inturn, its ability to maintain dividend
payments.
Power prices respond to a range of factors, including changes
in supply, demand and regulatory conditions. If market prices
fall, the value of electricity sold by Foresight Solar’s assets may
decline, affecting financial performance.
A sharp drop in unhedged power prices could reduce cash
generation, limiting the Company’s capacity to fully fund dividends.
To manage near-term price volatility, FSFL actively hedges a
significant portion of expected production. The strategy aims
to reduce sensitivity to fluctuating wholesale prices by securing
fixed‑price sales agreements and using financial instruments. The
Company targets:
ș Minimum 60% of expected annual revenue to be contracted
ș Target of 75% contracted on a rolling two‑year basis
Foresight Solar has already secured more than the 60% minimum
threshold for several years ahead, and the Board considers there
to be limited downside risk in locking in additional volumes at
attractive rates.
Forward electricity prices have stabilised and are now
closer to long-term averages following the volatility
triggered by Russia’s invasion of Ukraine. However,
the market remains vulnerable to external shocks and
geopolitical tensions could still drive prices higher.
Long-term
energy prices
Reductions in long-term power price forecasts could materially
affect the Company’s NAV and its ability to meet future obligations,
including dividend payments.
Forecasts typically assume that large-scale deployment of
renewable generation will limit real power price growth over time.
A greater‑than‑expected fall in long‑term power curves could
significantly reduce Foresight Solar’s NAV in the near term and
weaken dividend cover over the medium to long term.
The Company uses a range of tools to manage long-dated price
exposure, including PPAs and financial hedges. Whilst power
purchase agreements allow prices to be fixed several years
ahead, liquidity drops beyond a certain point. Financial hedges
provide access to counterparties with differentiated appetites
and a broader set of structures. A growing corporate PPA market
offers longer‑term offtake agreements.
Despite these avenues, a substantial decline in long-term curves
would be reflected in both PPA prices and financial hedges.
To ensure a balanced outlook, FSFL bases its assumptions on a
blend of forecasts from three specialist long-term power price
providers, projecting out to 2050.
Long-term forecasts remain inherently uncertain given
their sensitivity to future supply, demand and market
design.
Continued investment in renewable generation will
require sufficiently strong long‑term price signals,
particularly as the UK works towards its net zero goals.
Risk and risk management continued
Principal risk outline
Increase Decrease No change
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
54
Risk Risk summary Mitigation Trend and outlook
Dividend
pressure
Foresight Solar is committed to delivering a sustainable,
progressive dividend. A shortfall in cash, driven by lower revenues
or higher costs, could challenge its ability to meet payments.
The Company has paid every quarterly dividend since listing in
2013. Missing a payment would likely erode investor confidence,
put downward pressure on the share price, and weaken the
Company's ability to execute its strategy.
The Investment Manager routinely evaluates factors that could
influence dividend sustainability and regularly reports to the
Board. The Directors review the Company’s financial position and
assess short to medium-term solvency before declaring each
dividend.
When recommending any financial commitment, the Investment
Manager considers the potential impact on dividend capacity.
The Investment Manager also undertakes forward-looking analysis
of annual dividend increases, taking account of market conditions,
performance and the macroeconomic environment, before making
recommendations to the Directors.
The Company’s active hedging strategy supports
short‑term dividend cover. However, forward power
prices are normalising following Russia's invasion of
Ukraine. Gas and power market outlooks suggest
dividend increases are likely to remain modest.
From April 2026, UK subsidy indexation will shift to CPI.
The Consumer Price Index has historically been lower
than RPI, reducing revenues in comparison to previous
budgets. The government will also consult on fixed‑
price contracts, and its decision may have a negative
effect on the renewable infrastructure investment
trustsector.
Success in the Company's divestment programme may
lead to lower dividend cover in the near term.
Portfolio
performance
The Company’s operating assets may underperform against
budgeted expectations.
A range of factors can affect asset performance, including
technical issues, grid constraints, low irradiation or assumptions
that prove overly optimistic. Localised problems can sometimes
have an outsized impact, particularly in specific regions.
If a material share of the portfolio underperforms or experiences
prolonged downtime, Foresight Solar may face reduced
cash generation, affecting its ability to meet commitments to
shareholders and creditors.
Diversification remains the primary defence against systemic
underperformance. The portfolio is diversified across
geographies, technologies, revenue sources, equipment providers
and offtakers, reducing reliance on any single factor.
The Investment Manager closely monitors the performance
of O&M contractors, uses multiple providers and periodically
re‑tenders services to maintain quality standards. Active asset
management also includes a structured spare parts strategy
and regular engagement with distribution network operators to
minimise downtime.
As the UK portfolio operates into its second decade,
the Company is undertaking essential lifecycle works,
including major component replacements. A robust
lifecycle plan and well-developed spare parts strategy
help manage expected downtime and preserve
long‑term performance. Maintaining strong oversight
of these works will remain a key focus as the portfolio
matures.
Liquidity of
investments
Infrastructure assets are inherently illiquid, and their saleability
depends on factors outside the Company’s control, including
market conditions, buyer demand and regulatory developments.
The Company’s investments may be difficult to sell or realise at the
desired price or time. This could hinder execution of planned exits,
delay capital redeployment and limit progress against strategic
objectives.
Shareholders have expressed a desire for FSFL to exit Australia,
making successful divestment a key objective. The Company has
launched a broader divestment programme, creating heightened
expectations for timely realisations.
The Investment Manager keeps the Board regularly informed of
liquidity considerations. Multiple sale processes are progressing
across markets to increase the likelihood of successful exits.
Regular disposals are expected to play an increasingly
important role in FSFL’s strategy by supporting capital
recycling and strengthening the portfolio’s contracted
revenue profile.
High-quality solar assets, particularly those with
inflation‑linked revenues, continue to remain attractive
to long‑term investors. However, certain markets have
faced reduced investor appetite for solar portfolios.
The Board hopes to have an update for investors soon.
Risk and risk management continued
Principal risk outline
Increase Decrease No change
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
55
Risk Risk summary Mitigation Trend and outlook
Fund
performance
The Company may underperform its peer group, leading to
reduced investor confidence.
Delivering the investment objective in a competitive market
requires strong strategic decision-making by the Investment
Manager and close oversight from the Board. Recent market
conditions have intensified comparisons between funds,
increasing scrutiny of corporate actions and heightening calls for
consolidation and takeover risk.
If investor confidence weakens, demand for FSFL shares may fall
further, limiting the ability to raise capital for new investments.
This would constrain growth and add long‑term pressure on NAV.
The Investment Manager is responsible for executing the
Company’s mandate, with ongoing Board oversight. Foresight
Group continuously tracks performance relative to peers,
supported by brokers and the Administrator, and reports regularly
to the Directors. The Board also reviews delivery through the
Management Engagement Committee.
Despite challenging macroeconomic conditions, the Board and the
Investment Manager have taken proactive steps that differentiate
FSFL from peers. These include disciplined capital allocation,
targeted asset disposals, meaningful debt reduction and returning
capital to shareholders.
Investor sentiment remains weak, with sector-wide
share prices reaching record lows and persistent
discounts. This environment affects all peers and
has contributed to a rise in investor activism and
calls for further action. In response, the Directors
have expanded the divestment programme and are
evaluating all available options to deliver the best
outcome for shareholders.
The Company will face a discontinuation vote at
the June 2026 AGM, following a period of trading at
a discount of more than 10% during 2025. Should
shareholders vote in favour of change, the Board
willbe required to bring forward proposals within
three months.
The recent tax review negatively impacted NAV and
may affect demand for FSFL shares.
Counterparty
risk
The Company’s key contractual counterparties may fail or
underperform, limiting their ability to meet their obligations.
Foresight Solar relies on third-party specialists for construction,
operations and maintenance, PPAs and financial hedging. Higher
interest rates have increased borrowing costs for many businesses,
placing pressure on balance sheets and heightening the need to
monitor counterparties for signs of financial stress.
If a counterparty fails and contractual protections prove
insufficient, Foresight Solar may need to assume responsibility
for services at additional cost, potentially affecting financial
performance and timelines.
Counterparty risk is a central consideration when the Investment
Manager structures procurement and contracting. Contractor
selection includes assessment of credit ratings, financial strength
and payment history, and contracts often include parent
company guarantees or performance bonds to provide downside
protection. Whilst these measures limit exposure, the failure of a
contractor during construction would still likely result in delays.
The Investment Manager regularly benchmarks service providers
and re‑tenders key contracts. Agreements contain termination
clauses for insolvency or poor performance and are typically
limited to terms of no more than five years without a review.
Replacement risk is mitigated by strong market competition. In
the event of a PPA provider failing, for example, the Company
could likely secure a new agreement quickly, albeit potentially at
less favourable prices. Financial hedges also provide access to
counterparties with differentiated appetites and a broader set of
structures.
Supplier diversification is also maintained to avoid over‑reliance
on any single counterparty.
As existing debt arrangements mature, the impact of
higher borrowing costs is expected to become more
visible in counterparties’ financial positions. UK tax
increases – including higher employment-related costs
– may also be passed through in pricing. Counterparty
risk is likely to remain elevated if interest rates stay
higher for longer, with weaknesses potentially emerging
over the next few years.
Risk and risk management continued
Principal risk outline
Increase Decrease No change
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
56
Risk Risk summary Mitigation Trend and outlook
Financial
gearing
The Company’s subsidiaries and investments use third-party debt
facilities. If project cash flows fall short, there is a greater risk of
difficulty meeting repayments or losses. Foresight Solar may also
be unable to refinance existing borrowings on comparable terms,
if at all.
Shareholder returns are partly supported by the availability of
project finance. Any shift in lender appetite or pricing can influence
returns. The recent rise in interest rates increased refinancing risk
and the cost of variable rate debt, including the RCF. A material
rise in interest rates could make short-term facilities, such as the
RCF, significantly more expensive at refinancing. Higher discount
rates also reduce portfolio valuations, increasing gearing as a
proportion of NAV and GAV.
Lower cash generation at asset level may affect the ability to
service debt, resulting in lock‑ups, defaults or repossessions. At an
extreme, it may reduce the Company’s capacity to fund dividends.
The Investment Manager uses interest rate hedging to limit
exposure to benchmark rate movements, with at least 80%
of outstanding debt hedged to reduce cash flow volatility. All
long‑term debt is fully hedged. For short‑term variable rate
borrowings, the Company extended the multi‑currency RCF to
2028 and reduced its size, estimating savings of £1 million during
the facility’s term. It has also substituted sterling exposure for
euro, capturing lower Euribor rates.
A detailed review has confirmed that existing debt terms remain
favourable, and the Investment Manager does not expect to
secure better rates in a “higher‑for‑longer” environment. Once
facilities are in place, the Investment Manager closely monitors
covenants across all debt structures to identify and mitigate
risks early.
Although interest rates began to ease in late 2024, they
are not expected to return to the unusually low levels
seen in the 2010s. The Investment Manager reflects
this in refinancing assumptions to ensure a prudent,
forward‑looking approach.
The Australian portfolio's non-recourse facilities are
approaching expiry in 2026 and 2027 (as disclosed
in the debt position table on page 72) against a
challenging market backdrop. As renewable electricity
generation capacity grows, zero or negative price
instances are likely to increase, putting pressure on
standalone solar assets' revenues and, consequently,
debt repayments. The Investment Manager and Board
are conscious of the portfolio's refinancing risk.
Development
and
construction
Early‑stage projects naturally carry higher risk than operational
assets. They face several challenges outside the Company’s
control, including securing land rights and permits, delays to
construction, workmanship issues, and grid connection delays.
These factors can prevent projects from generating power – and
revenue – on schedule.
Failure to obtain permits can render a project unviable, whilst
prolonged construction or grid delays may reduce returns.
Some projects may also have debt service obligations or PPA
commitments during the build phase, which could create financial
pressure if revenues are delayed.
The Company has allocated limited capital to secure its
proprietary development pipeline. Agreements are often
success‑based and cross‑collateralised to reduce downside risk.
The Investment Manager has set realistic expectations for project
progression and does not assume full conversion across the
pipeline.
Development and construction activities are delivered by
specialist third parties, which introduces a degree of delegated
risk. This is mitigated through carefully negotiated contracts that
place responsibility for delivery on the contractor. Protections
include performance bonds, milestone-linked payments and
retention mechanisms. However, these measures cannot address
delays in grid connections, which remain the responsibility of the
distribution network operator.
The Investment Manager employs experienced in‑house
development and construction management professionals
to oversee project delivery, monitor milestones and ensure
specifications are met. As the portfolio increasingly incorporates
early-stage assets, additional resources have been added to
strengthen oversight.
Government support for renewable generation in the
UK and mainland Europe continues to stimulate a
strong supply of development‑stage projects, although
prices have risen alongside demand. Encouragingly,
more contractors have returned to the UK market as
deployment accelerates, increasing competition and
helping support delivery capacity.
Risk and risk management continued
Principal risk outline
Increase Decrease No change
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
57
Foresight Solar’s business activities, together with the
factors likely to affect its future development, performance
and position, are set out in this report. The Company’s
financial position, including its financial performance, cash
flows, liquidity and borrowing facilities, are referred to in the
Chair’s statement (from page 6), Investment Manager’s report
(starting on page 10) and Notes to the Financial Statements
(see page 120).
The Financial Statements (from page 116) also include
Foresight Solar’s objectives, policies and procedures for
managing its capital, its financial risk management objectives
and its exposure to credit and liquidity risks.
A detailed evaluation of the cash flow impact for the going
concern assessment period took into consideration the
following individual scenarios:
1. All investments consistently generate a P90 level (90%
probability of exceeding expected production over a
10‑year period) of electricity output. The Directors deem
this is an appropriate, market standard stress test, with a
relevant example being historically low irradiation in the
UK throughout the year. This is corroborated by data from
the Department of Energy Security and Net Zero showing
that 2024 had the lowest number of sun hours since the
Company’s IPO in 2013.
2. Power prices reduce by 20% across the portfolio. Despite
the current conflict in the Middle East and its impact
on global oil and power prices, this downside scenario
represents decreasing merchant power prices and historic
oil, gas and electricity price volatility.
3. The PPA provider that the Group is most exposed to fails
to settle merchant revenue under the PPA contract. This
downside scenario represents the risk of insolvencies
of PPA counterparties in response to the high number of
energy company insolvencies during the last three years
because of the high power price market.
4. A combination of scenarios 1 and 2.
If any of these sensitivities or scenarios were to materialise,
the Company could still meet its target dividend per share for
2026. However, the Directors would continue to periodically
review whether paying the dividend would be appropriate
considering the potential for reduced cash flow.
The sensitised forecasts show that operating costs would still
be covered, but the cash balance would fall gradually during
the going concern assessment period, albeit without causing
any operational issues.
The evaluation demonstrated that Foresight Solar would
be able to meet its liabilities without breaching any debt
covenants and could continue to satisfy the dividend target
for 2026.
Going concern
The Directors are confident that the Company will have
sufficient funds to continue to meet its liabilities as they fall
due for the going concern assessment period and have,
therefore, prepared the Financial Statements on a going
concern basis. The Directors can also confirm no material
uncertainties in relation to going concern exist.
The Directors have considered the discontinuation vote to
be proposed at the Company’s AGM in June 2026, triggered
by the shares trading at an average discount to NAV greater
than 10% for the year, in line with the Company’s Articles
of Association. The Directors have listened to shareholder
feedback, assessed the possible outcomes of the vote
and, as a result, are satisfied with the basis of preparation
of the Financial Statements. The Directors continue to
actively engage with shareholders and, regardless of the
discontinuation vote outcome, will continue to engage with
shareholders beyond the AGM in June 2026. The Directors
will continue to refine the strategy of the Company to deliver
results to shareholders, whilst targeting a reduction to the
trading discount to NAV.
The going concern assessment has been prepared over a
period of 18 months from the balance sheet date of the
audited Annual Financial Statements in March 2026 (the going
concern assessment period).
Going concern and viability statement
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
58
Viability statement
The Directors confirm that they have a reasonable
expectation the Company will be able to continue operating
and meet its liabilities as they fall due through to 2030.
In accordance with the UK Corporate Governance Code,
the Board has assessed Foresight Solar’s viability over a
five‑year period to 31 December 2030 on the basis that
it has significant long‑term fixed, power‑price‑hedged
and subsidised revenues and long‑term debt in place.
The Directors have also considered the refinancing of the
revolving credit facility, which matures in February 2028.
TheBoard are confident the facility will be refinanced ahead
of the maturity date.
This is the period the Directors focused on during the
strategic planning process and is considered reasonable for a
business of the Company’s size and nature. Whilst the Board
has no reason to believe the Company will not be viable over
a longer period, the Directors believe this presents readers
of the Annual Report with a reasonable degree of confidence
whilst still providing a longer‑term perspective.
The Board considers the Company’s ability to raise debt
and equity and deploy capital. As part of this process, the
Directors have considered the ongoing viability of Foresight
Solar’s long‑term and short‑term debt strategies.
The current macroeconomic environment in which
the Company operates has challenged the long-term
sustainability of the traditional business model. Specifically,
high interest rates and access to capital. Due to the
Company’s shares trading at a discount to NAV, there is
an inability to raise capital due to unacceptable dilution of
existing shareholders. As such, it is no longer viable to apply
the business model of using the RCF to fund acquisitions
and subsequently repay the RCF with raised equity. To
address the reduced access to capital, FSFL has an ongoing
divestment programme implemented to recycle capital
through asset sales and also deploys a development pipeline
to bring projects through to construction or completion
to generate cash upon sale. The intention is to use the
divestments and development portfolio to fund future
developments or acquisitions without the need to draw on
additional debt.
The Directors have carried out a robust assessment of
the emerging and principal risks facing the Company,
including those that would threaten its business model,
future performance, solvency and liquidity. The Directors
have considered the emerging and principal risks, identified
from page 51, in relation to the Company’s resilience over
a five‑year period. In doing so, the Board believes the key
direct principal risks to Foresight Solar’s financial viability
are: changes to the level of political support for subsidies
across the Company’s markets, energy prices and the impact
of climate and changes to weather patterns.
In addition to these principal risks, the Directors have
also specifically reviewed the share price performance of
Foresight Solar, which could trigger further discontinuation
votes during the five‑year period, as well as sustainability‑
related risks that consider environmental, social and
governance factors in line with the recommendations of the
Task Force on Climate-related Financial Disclosures (TCFD),
discussed in detail from page 60.
Going concern and viability statement continued
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
59
Climate change-related risk
Climate change, once viewed as a non‑financial matter,
carries clear implications for long-term investment
performance. Foresight Solar’s portfolio contributes
meaningfully to the UK’s decarbonisation efforts, and the
Investment Manager continues to assess how climate-related
risks and opportunities may affect the Company’s assets
overtime.
Climate considerations are embedded across FSFL’s
governance, strategy and risk management frameworks.
For the year ended 31 December 2025, the Company has
prepared disclosures aligned with the recommendations
of the Task Force on Climate-related Financial Disclosures
(TCFD).
With the International Sustainability Standards Board’s
standards now in place, national regulators are determining
how and when to adopt them. The government is progressing
work on the UK Sustainability Reporting Standards,
intended to support consistent disclosures going forward. A
consultation on the new regulation closed in March 2026 and
final rules are expected in the second half of the year. The
new regime is slated to take effect for accounting periods
beginning on or after 1 January 2027.
Until these new requirements are fully implemented,
organisations are encouraged to continue reporting in line
with the established TCFD framework.
Governance
Board governance
The Board works closely with the Investment Manager to
set FSFL’s strategy, monitor performance and approve new
initiatives. A core part of its role is ensuring that sustainability
considerations – and the frameworks used to manage them
– are embedded throughout investment and operational
decision‑making.
The Directors hold ultimate responsibility for the Company’s
climate‑related risks and opportunities. They determine
the risk appetite for new investments and oversee how
risks within the existing portfolio are managed. As part of
this oversight, the Management Engagement Committee
reviews the Investment Manager’s approach to tracking
climate‑related risks and opportunities each year.
The Board meets at least quarterly with the Investment
Manager to discuss strategic opportunities and risks.
Climate-related risks are included in the Business Risk
Assessment, monitored regularly, and reflected in both
Company strategy and day‑to‑day asset operations.
Role of the Investment Manager
When assessing new opportunities, the Investment Manager’s
Investment Committee evaluates climate-related market,
regulatory and physical risks, as well as any associated
opportunities. Each potential investment is reviewed through
a series of increasingly detailed meetings before approval.
The Investment Manager is responsible for monitoring
sustainability and climate-related issues across the portfolio
and ensuring these are incorporated into investment, asset
management and reporting processes. Foresight Group’s
in-house sustainability team supports due diligence, engaging
third‑party specialists when needed, for example, to audit
supply chains.
Material sustainability topics are assessed at the asset level
for all potential infrastructure investments. Pre‑investment
due diligence and ongoing monitoring follow regulatory
requirements and recognised sustainability frameworks.
Role of Management Services
Foresight Solar’s management services team monitors
performance and associated risks, including climate-related
factors that may create new opportunities or affect long‑term
forecasts. This involves site inspections and escalation of any
issues that may signal broader systemic risk.
The team also takes proactive steps to mitigate emerging
risks. For example, on certain sites, it has installed cooling
systems on transformers in response to higher temperatures
and changing irradiation patterns.
The Investment Manager is responsible for collecting the
portfolio’s sustainability performance data, including Scope
1 and Scope 2 emissions, enabling the Company to track
aspects of its climate impact.
Understanding and reducing Scope 3 emissions remains a
developing area. As these emissions arise from third‑party
suppliers, progress relies on working with partners to
measure and reduce their carbon footprints. For this
report, Scope 3 emissions have been calculated using
the Partnership for Carbon Accounting Financials (PCAF)
methodology and its sector and geography‑specific emissions
factors.
Task Force on Climate‑related Financial Disclosures
Governance Strategy Risk management Metrics andtargets
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
60
Task Force on Climate‑related Financial Disclosures continued
Strategy
Impacts of climate-related risks and opportunities
Climate change brings both risks and opportunities. Foresight
Solar aims to capture the benefits of the energy transition,
particularly through the growth of solar and battery storage
technologies.
The table on the following pages outlines the key
climate‑related risks and opportunities identified across the
short, medium and long term.
Strategy
In the near and medium term, renewable energy is expected
to continue receiving political and public support as
economies shift away from fossil fuels in a bid to ensure
energy affordability and security – especially in Europe.
Regulatory and planning environments for solar and battery
storage in Foresight Solar’s core markets are also progressing
favourably.
The transition to a lower-carbon economy provides a
supportive backdrop for growth, assuming the Company
can continue sourcing investments with attractive returns
and balanced risk profiles. However, rapid deployment of
renewable generation can also create challenges. Too much
solar and wind capacity may lead to network congestion,
curtailment, or price cannibalisation. FSFL’s active power
price hedging strategy helps manage these risks, but they
remain important considerations.
Financial planning
Financial performance can be affected by climate‑related
impacts. They may cause, for example, greater power
price volatility. A prolonged fall in electricity prices would
affect merchant revenues from the generating portfolio.
The Company secures a significant portion of income
through fixed‑price agreements up to five years ahead,
whilst maintaining some merchant exposure to benefit from
potential price rises.
A rapid build-out of renewable generation could contribute
toprice cannibalisation, and forecasters currently expect
limited real power price growth over the medium to long
term. If prices were to fall below expectations, many new
projects could become uneconomic, prompting a natural
rebalancing of development.
Foresight Solar’s sustainability-linked credit facility also
presents an opportunity to reduce borrowing costs by
meeting specific criteria. As investor interest in sustainability
strengthens, enhanced reporting and strong performance
may help clean energy companies differentiate themselves
and attract more capital.
Existing portfolio
More frequent extreme weather events present physical risks
to Foresight Solar’s assets. In the UK, the higher potential
for severe flooding has become a concern in recent years,
whilst Spain is expected to face more frequent droughts.
Toaddressthis, the Investment Manager undertakes flood
risk assessments and detailed geolocation analysis
as part ofongoing due diligence and site management.
Governance Strategy Risk management Metrics andtargets
Higher temperatures also affect solar performance, as panel
efficiency falls and equipment can experience heat stress.
FSFL has already seen such impacts at certain sites, where
additional cooling equipment has been installed on inverters
and transformers. The Investment Manager anticipates similar
interventions will be required elsewhere as temperatures
continue to rise.
At the same time, the retirement of coal and nuclear
baseload generation – and their replacement with intermittent
renewables – will likely increase power price volatility.
Thisvolatility is beneficial for battery storage projects, which
depend on price differentials for arbitrage revenue.
Over the long term, the Company monitors technological
innovation to ensure its assets remain competitive.
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
61
S S F EM L
Short term (0-3 years) Strategy Financial planning Existing portfolioMedium term (3-10 years) Long term (10+ years)
Climate-related opportunities
Opportunity Description
Time
period Impact Investment Manager response
UK and European PPA markets
mature further
ș Driven by the potential to lock in prices whilst supporting climate
action, a stronger competitive market for offtakers emerges, offering
more opportunities and selection.
S
M
S
F
E
ș The Company would enter new, advantageous contracts to sell its
electricity production and capitalise on demand for corporate PPAs.
ș Countries are growing their solar capabilities. The Investment
Manager has strong presence, deep expertise and extensive networks
to help the Company capitalise on these opportunities.
Continued build-out of renewables
leads to mature battery storage
markets
ș Need for infrastructure to help balance renewables' intermittent
generation and offer more grid flexibility may drive demand for BESS.
ș Increased penetration of renewable generation leads to more volatility
in electricity markets, resulting in the need for more battery storage to
balance and stabilise the grid.
S
M
S
F
ș More volatile wholesale energy prices may provide additional revenue
opportunities via arbitrage trading for BESS.
ș Growth will result in more established business models and reliable
revenues around the globe.
Technological developments
complement the existing portfolio
ș Advances in new and existing technologies, both in solar generation
and battery storage, improve scale and/or efficiency of current
installed capacity.
M
L
S
E
ș Innovations may have a direct effect on existing projects, improving
revenues, extending asset lives and/or lowering costs.
ș The Company could also benefit from improvements for future
projects, realising better returns for shareholders.
Climate emergency sparks more
supportive regulatory and planning
frameworks
ș A favourable regulatory environment with lower barriers to building
renewable infrastructure may facilitate optimisations and extensions
of existing assets and open the door to even more opportunities.
M
L
S
E
ș Initiatives such as BESS co‑location, lease extensions and plant
updates can lead to NAV growth and lengthen asset life.
ș Ultimately, making these easier to deliver can provide more resilience
and ensure longevity of the Company.
Electrification of the economy
happens faster than expected
ș Regulatory support and technological developments accelerate the
electrification of industrial processes and of residential infrastructure,
increasing the demand for renewable electricity.
M S
E
ș A reliable installed portfolio with a strong track record is a
competitive advantage for the Company to capitalise on increased
demand.
ș The Investment Manager’s experience with power purchase
agreements and other offtake structures is another positive factor.
Task Force on Climate‑related Financial Disclosures continued
Governance Strategy Risk management Metrics andtargets
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
62
S S F EM L
Short term (0-3 years) Strategy Financial planning Existing portfolioMedium term (3-10 years) Long term (10+ years)
Task Force on Climate‑related Financial Disclosures continued
Climate-related risks
Risk Description
Time
period Impact Investment Manager response
Warmer winters lead to lower
power prices
ș Climate-driven changes in prevailing seasonal temperatures may
result in permanent changes in electricity demand for heating, for
example, reducing demand across seasons and impacting prices at
times of the year.
ș This could result in less predictable, more volatile market pricing.
M
L
S
F
E
ș The portfolio’s geographic diversification and strategic composition,
with two technologies, provide some resilience to changing power
prices.
ș Increased market volatility promotes the case for storage assets,
which realise greater trading revenues during periods of heightened
volatility.
Over-deployment of renewables
disrupts electricity networks
ș Favourable policy and regulatory support leads to overbuild of
renewable capacity, resulting in a backlog of projects waiting for
connection to the grid and, later, lower electricity prices.
ș Low power prices might affect investor appetite because of insufficient
returns, limiting capital available to continue the build-out of
renewables.
ș Regulators and policymakers may intervene in markets, changing the
established pricing structures due to new dynamics.
S
M
S
F
E
ș The portfolio’s composition and its geographic dispersion reflect
adiversified set of solar and battery storage assets by location and
points of connection.
ș Foresight Solar participates in regulatory discussions to try to
influence policy and minimise potential negative effects.
Technological developments
displace existing renewables assets
ș Government and commercial incentives drive breakthrough innovation
and cause existing assets to be outdated or displaced because of
obsolescence or inefficiency.
M
L
S
E
ș Innovations would take time to deploy at sufficient scale to render
the portfolio obsolete. The Investment Manager follows these
advances closely and would be able to explore updated opportunities
in that period.
ș New, more efficient renewable generation or storage systems also
present an opportunity. The Company has the experience to invest
in these technologies once they are market proven.
More frequent extreme weather
events cause damage to assets or
negatively impact production
ș Climate change is making extreme weather events, such as storms,
floods, droughts, bush fires and high heat, more frequent, potentially
causing delays to site construction or resulting in damage that reduces
generation at operational plants.
S
M
L
S
F
E
ș The Investment Manager assesses the full range of physical weather
risks during due diligence prior to the closing of transactions and
during the acquisition process.
ș A location’s susceptibility to impacts from weather events are taken
into consideration during the investment process to limit the effects
from extreme events.
Changing climate patterns
fundamentally alter the availability
of renewable resource
ș Unpredictable and unprecedented changes to weather patterns affect
the provision of sunlight because of, for example, excessive cloud
cover or smoke from wildfires.
S
M
L
S
F
ș Before any investment decision is made, the Investment Manager
maps sustainability risks and opportunities.
ș Construction decisions take into consideration geographical diversity,
which ensures the portfolio’s exposure to any one market is limited.
If chronic patterns persist, models can be updated and markets can
be reviewed.
Governance Strategy Risk management Metrics andtargets
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
63
Climate-related scenarios and resilience
Overview
Since the 2022 Annual Report, Foresight Solar has worked
with S&P Global Climanomics to assess a range of
potential future climate scenarios. The platform provides
comprehensive modelling across four options, incorporating
both physical and transition risks as well as climate-related
opportunities.
Climanomics bases its analysis on the Intergovernmental
Panel on Climate Change’s (IPCC) Shared Socioeconomic
Pathways (SSPs). The SSPs outline how greenhouse gas
emissions, socioeconomic trends and demographic changes
may evolve and what these combined factors could mean for
global temperature rises.
The four core scenarios can be summarised as:
ș SSP 1: Aggressive mitigation, global emissions fall to Net
Zero by 2050; temperatures rise by 1.3°C to 2.4°C by
2100
ș SSP 2: Emissions stabilise to 2050 before declining;
temperatures rise by 2.1°C to 3.5°C
ș SSP 3: Limited mitigation, emissions double by 2100;
temperatures rise by 2.8°C to 4.6°C
ș SSP 4: Low mitigation, emissions triple by 2075;
temperatures rise by 3.3°C to 5.7°C
Task Force on Climate‑related Financial Disclosures continued
Methodology
Climanomics integrates high-resolution geographic, climate,
economic and sector‑specific data with the SSPs to
quantify climate risk. The platform assesses both risks and
opportunities for each scenario and produces asset‑specific
outputs that can be fed into the Company’s valuation model
to estimate potential financial impacts.
Risk and opportunity categories align fully with the TCFD
framework:
Physical risk: Assesses exposure to acute and chronic
hazards including extreme temperatures, drought, wildfire,
flooding, water stress and tropical storms
Transition risk: Evaluates hazards linked to the shift to
a low-carbon economy, including litigation, reputational,
technological and market changes
Opportunity modelling: Identifies potential benefits from
improved resource efficiency, energy sourcing, market
changes and resilience measures
Climanomics estimates the direct financial impact of each
hazard on each asset type. Vulnerability is defined through
detailed “impact functions”, derived from peer-reviewed and
government‑published research. These functions reflect how
a given technology responds to specific climate variables.
Although scenario analysis continues to evolve, Foresight
Solar remains committed to using leading methodologies and
will update its approach in line with advances in science and
climate data.
Verwood, UK
Governance Strategy Risk management Metrics andtargets
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
64
Climate-related scenarios and resilience continued
Estimates
Using SSP 2 as the central case, considered the most likely
pathway based on current global emissions, the chart
illustrates the estimated financial impacts under the remaining
three scenarios in relation to the central case
1
:
Under the SSP 2 central case, global temperatures rise by
more than 2°C by 2100. Whilst this would have grave global
implications, the modelling suggests a limited financial
effect on the portfolio. A less severe but now unlikely SSP
1 scenario would result in a gain of 1.35pps to NAV. Under
SSP 3, in which temperatures approach a 3°C rise, impacts
turn negative, with a projected downside of 1.41pps. In the
most extreme forecast, SSP 4, the potential loss steepens to
4.22pps to net asset value.
Results for 2025 should be interpreted in the context that
the proportion of assets exposed to physical climate risk
remains unchanged from 2024. The year‑on‑year movement
in quantified potential financial impact is driven primarily
by updated underlying asset valuations, which alter the
monetary value at risk without signalling any change in the
underlying risk profile.
1. The opportunity scenario analysis results tend to be less variable than the risk data
results, so using the latest Coupled Model Intercomparison Project 5 information
will not have materially influenced estimates.
Task Force on Climate‑related Financial Disclosures continued
2.0%
0.0%
0.5%
1.0%
1.5%
-2.0%
-2.5%
-1.5%
-1.0%
-0.5%
2025 2030 2035 2040 2045 2050
2055
Net Impact Delta SSP3-7.0 vs Central Net Impact Delta SSP2-4.5 vs Central Net Impact Delta SSP5-8.5 vs Central Net Impact Delta - SSP1-2.6 vs Central
Projected climate change-related impact on Foresight Solar’s portfolio
Source: Foresight Solar Fund Limited.
Governance Strategy Risk management Metrics andtargets
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
65
Risk management
Risk framework
The Investment Manager is responsible for developing and
maintaining the framework that ensures climate-related
opportunities and risks are systematically identified, assessed
and managed.
This framework is built around a robust three lines of defence
model, ensuring that asset resilience is considered from the
earliest stages of due diligence:
ș First line: Foresight Group’s real assets team regularly
monitors risks, identifying, assessing and mitigating issues
through established controls
ș Second line: The Investment Manager’s risk function
oversees the overall risk management approach,
maintaining the risk taxonomy and register, determining
material risks and managing risk events through the Risk
Committee
ș Third line: An internal audit function is being established
and is expected to become operational in due course.
Until then, the existing arrangements remain effective in
identifying, monitoring and reporting risks
Risks are also captured in the Company’s Business Risk
Assessment and reviewed by the Audit and Risk Committee.
Relevant physical risks are mapped on a heatmap, and a
suite of analytical tools is used to assess vulnerability and
determine appropriate mitigation measures.
Task Force on Climate‑related Financial Disclosures continued
As is industry standard, Foresight Solar’s climate-related risks can be categorised in two principal ways:
Transition risks: Related to the transition to a lower-carbon economy
Policy and legal Technology Market Reputation
Description
ș Increased pricing
of greenhouse gas
emissions
ș Enhanced emissions
reporting obligations
ș Mandates on, and
regulation of, existing
products and services
ș Exposure to litigation
ș Substitution of existing
products and services
with lower emissions
options
ș Costs to transition
to lower emissions
technology
ș Changing customer
behaviour
ș Uncertainty in market
signals
ș Increased cost of raw
materials
ș Increased competition
for solar and battery
assets
ș Shifts in consumer
preferences
ș Stigmatisation of sector
ș Increased stakeholder
concern or negative
stakeholder feedback
Physical risks: Related to the physical impacts of climate change
Temperature related Wind related Water related Solid mass related
Chronic
ș Changing temperatures
ș Heat stress
ș Changing wind patterns ș Changing precipitation
patterns
ș Landslide
Acute
ș Heat wave
ș Wildfire
ș Storm ș Heavy precipitation
ș Flood
Probability
5
Almost certain
4 Likely
Changing
precipitation patterns
Changing temperatures
Heat stress
Heat wave
3 Possible
Storm Changing wind patterns
2 Unlikely
Heavy precipitation
Flood
Wildfire
1
Rare
Landslide
1 Negligible 2 Minor 3 Major 4 Hazardous 5 Catastrophic
Impact
Governance Strategy Risk management Metrics andtargets
Financial Statements
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Annual Report and Financial Statements
for the year ended 31 December 2025
66
Risk management continued
Managing climate risk
All potential investments are assessed to ensure they
meet the Investment Manager’s definition of sustainable
infrastructure and that climate-related risks are fully
understood and managed.
Every solar or battery storage asset must contribute to
measurable sustainability objectives and demonstrate that
itsclimate resilience has been evaluated.
Pre-investment due diligence is structured around rigorous
regulatory requirements and recognised frameworks,
including the SASB Standards, EU Taxonomy and the
ParisAgreement.
During the investment process, the Investment Manager
establishes each asset’s sustainability credentials.
Climate-related risks must be clearly assessed and
appropriately addressed in the final submission to the
Investment Committee, accompanied by any necessary
riskre‑profiling or mitigation measures.
Once an investment is completed, the asset is formally
handed over to the management services team, which
assumes responsibility for ongoing identification, assessment
and management of climate‑related risks and opportunities.
Task Force on Climate‑related Financial Disclosures continued
Shotwick, UK
Governance Strategy Risk management Metrics andtargets
Financial Statements
Governance
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Annual Report and Financial Statements
for the year ended 31 December 2025
67
Metrics and targets
TCFD core metrics
Foresight Solar reports its quantitative exposure to climate‑related risk using internationally recognised core metrics.
In line with the Financial Conduct Authority's guidance, these metrics are calculated using Scope 1 and Scope 2 emissions.
Applying thecore metrics enables the Company to compare performance across its assets and benchmark against its wider peer
group.
Absolute emissions
The Greenhouse Gas Protocol categorises emissions into Scope 1, 2 and 3. Quarterly sustainability data collected at asset level
allows FSFL to calculate Scope 1 and Scope 2 emissions accurately.
Scope 1 Scope 2 Scope 3
ș All direct emissions from the activities
under the Company's control.
ș Includes fuel combustion on site such
as gas boilers, fleet vehicles and
air‑conditioning leaks.
ș Emissions from the production of energy
the Company uses.
ș Indirect emissions from the Company's
electricity purchases and use.
ș All other indirect emissions occurring
from sources that are not owned or
controlled.
ș Includes purchased goods and services,
business travel, employee commuting,
waste disposal, use of sold products,
transportation, distribution and
investments.
The Investment Manager continues to strengthen engagement with key suppliers to improve visibility of the Company’s Scope
3 emissions, which originate within the supply chain. For this report, Scope 3 has been estimated using the PCAF methodology,
applying sector and geography‑specific emissions factors. (The full Scope 1, 2 and 3 emissions calculations are outlined on page45.)
Sustainable impact reporting
Foresight Solar tracks its sustainable impact against the UN Sustainable Development Goals. The metrics (presented on page 44)
highlight the environmental and social benefits generated by the Company’s investments.
The analysis includes estimates of the portfolio’s decarbonisation impact, aligned with the IFI Harmonised GHG Accounting
methodology. It also draws on lifecycle emissions intensity data from the IPCC’s Special Report on Renewable Energy
1
, which
provides median lifecycle CO
2
intensity figures for renewable technologies, measured in kgCO
2
e/MWh.
The Company intends to grow its sustainable impact alongside its portfolio, ensuring it continues to contribute meaningfully
tothedecarbonisation agenda.
1. Annex III: https://www.ipcc.ch/site/assets/uploads/2018/02/ipcc_wg3_ar5_annex‑iii.pdf.
Task Force on Climate‑related Financial Disclosures continued
Governance Strategy Risk management Metrics andtargets
Targets
Foresight Solar regularly evaluates the sustainability
performance of its assets, tracking trends over time and
identifying where operational improvements may be required.
This ongoing assessment helps build a deeper understanding
of the portfolio’s sustainability profile.
Short-term targets
The Investment Manager set two key goals for the year ended
31 December 2025:
ș Complete Scope 3 emissions calculations
ș Conduct a full climate scenario analysis with external
consultants (the results from this exercise are available
onpage 65)
Both objectives were achieved. The insights gained are
helping the Company better understand its environmental
footprint and the potential effects of climate change on its
portfolio. These conclusions will inform the development
of future targets relating to climate-related risks and
opportunities.
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
68
Foresight Solar applies IFRS 10 and the Investment Entities:
Amendments to IFRS 10, IFRS 12 and IAS 28. Under this
framework, investment entities measure all subsidiaries that
are themselves investment entities at fair value. In line with
this requirement, the Company recognises its wholly owned
direct subsidiary, Foresight Solar (UK Hold Co) Limited, as an
investment measured at fair value through profit or loss.
This approach means that, rather than consolidating the
intermediate holding companies, their working capital
balances and borrowings are reflected within the overall
fairvalue of the Company’s investments.
The Group’s intermediate holding companies carry out
activities that directly support the management of the
investment portfolio and are considered incidental to the
Company’s broader investment operations.
Together, the Company and its intermediate holdings (the
Group) held interests in 60 assets. These assets generate
returns through interest on loans, equity dividends, loan
repayments and equity redemptions.
For the full Financial Statements – including the profit and
lossaccount and cash flow statement – please refer to
page116 of this report.
Further details on the basis of accounting and the
Company’sstructure can be found in the Notes to the
Financial Statements, starting on page 120.
Net assets
Net assets as at 31 December 2025 decreased 14.0% to £545.9 million, from £634.4 million at 31 December 2024. Thereduction
was driven by lower power price forecasts, inflation indexation changes to UK subsidies and a tax review for the country's
portfolio, as well as lower valuations for the Australian sites. A detailed breakdown of the NAV movements is provided inthe
Investment Manager's report from page 33.
The Company's net assets comprise a £871.2 million portfolio of solar and battery storage assets across the UK, Australia and
Spain, and £61.9 million of Group cash balances. These are offset by £309.6 million of long‑term debt, £72.7 million drawn under
the revolving credit facility, and other net liabilities of £4.9 million.
Analysis of the Group's net assets at 31 December 2025
All amounts presented in £million (except when noted)
31 December
2025
31 December
2024
Gross portfolio value
1
871.2 981.2
Intermediate holding companies’ cash 60.3 66.3
Intermediate holding companies’ long-term debt (309.6) (336.9)
Intermediate holding companies’ revolving credit facility (72.7) (73.4)
Intermediate holding companies’ other liabilities (4.4) (4.6)
Fair value of the Company’s investment in portfolio² 544.8 632.6
Company’s cash 1.6 2.0
Company’s other net liabilities (0.5) (0.2)
Net asset value 545.9 634.4
Ordinary shares in circulation 550,239,207 564,856,642
Net asset value per share 99.2p 112.3p
1. Classified as the gross fair value of the underlying assets in the portfolio.
2. Equal to investments held at fair value through profit or loss and interest receivable as per the statement of financial position on page 117.
Financial review
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
69
Third-party debt arrangements and gearing position
Total outstanding debt including the RCF was £382.3 million, representing 40.0% of GAV. The net debt position, after deducting
existing cash balances, was £320.4 million.
Summary of cost of capital and gearing
Year ended
31 December
2025
Year ended
31December
2024
NAV (£m) 545.9 634.4
Long-term debt (£m) 309.6 336.9
Short-term RCF debt (£m) 72.7 73.4
Outstanding debt (£m) 382.3 410.3
GAV (£m) 928.2 1,044.7
Cash (£m) 61.9 68.3
Gearing 41.2% 39.3%
Long-term gearing 33.4% 32.3%
Net debt gearing (after deducting cash) 34.5% 32.7%
Weighted cost of long-term debt 3.6% 4.1%
Weighted cost of short-term RCF debt 5.2% 6.6%
Long-term facilities
As at 31 December 2025, of the £309.6 million long‑term
debt, a total of £76.5 million was linked to inflation
(31December 2024: £336.9 million and £84.7 million).
The cost of these inflation‑linked facilities is expected
toincrease over time according to the Company's annual
Retail Price Index expectations of 3.0% in the medium
term and 2.25% from 2030 onwards.
FSFL's long-term debt is fully hedged against interest
rateriskthrough the use of swaps.
Revolving credit facility
As at 31 December 2025, Foresight Solar had drawn
£72.7million of its revolving credit facility, leaving
£26.1million undrawn. Of this remaining headroom,
£1.2million was allocated to letters of credit.
In May 2025, the RCF was both reduced and extended.
The multi‑currency facility was resized from £150.0 million
to £100.0 million, and its maturity was extended by two
years to 2028. The lower overall commitment is expected
to deliver fee savings of approximately £1.0 million over
the life of the facility.
The RCF is drawn in both sterling and euro to manage
exposure to SONIA and to benefit from the lower interest
costs on the euro tranche compared with the sterling
tranche. The size of the euro drawdown aligns with the
valuation of the Spanish operational portfolio, providing
anatural hedge against currency movements.
During the year, the RCF balance decreased
by £0.7million, reflecting repayments of £3.0
million and theimpact of £2.3million of adverse
currencymovements.
Financial review continued
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
70
Foreign exchange
The Company is exposed to foreign exchange movements
arising from its investments in Australia and Spain. To help
manage this risk, it implements an economic hedging strategy
designed to limit the impact of currency fluctuations and
reduce volatility in both equity returns and distributable
cashflows.
Foreign exchange hedging is not applied to the underlying
cost of equity investments, reflecting Foresight Solar’s
long‑term investment horizon. However, a natural hedge
exists through the euro‑denominated tranche of the
RCF, which offsets part of the exposure linked to the
Spanishportfolio.
For the Australian assets, FSFL has implemented a rolling
two‑year forward‑contract strategy, covering approximately
75% of the expected distributable foreign currency cash flows
at project level. No cash flow hedges are currently inplace
for the Spanish assets, as their euro‑denominated cash flows
are utilised to service interest payments on the euro tranche
of the RCF.
The Company reviews its foreign exchange strategy
on a regular basis to mitigate short-term volatility in
sterling‑denominated cash flows and to ensure that
hedginginstruments remain cost‑effective.
Debt structure
1
Foresight Solar Fund Limited (Jersey)
Foresight Solar (UK Hold Co) Limited
RCF Debtco
Includes £100 million RCF
FS Holdco 1 FS Holdco 2 FS Holdco 3 FS Holdco 4
Project Investments Project Investments Project Investments Project Investments
Includes first 16 UK
asset acquisitions.
Original long‑term debt
facility of £160 million
Includes 28 assets
following refinancing
in August 2019.
Original long‑term debt
facility of £170 million at
FS Debtco
Includes six assets.
Original long‑term debt
facilities of £45.1 million
Includes Australian
and Spanish assets
and respective debt at
project level
1. Simplified for illustrative purposes. For outstanding debt balances please refer to the table on page 72.
Financial review continued
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
71
Financial review continued
Debt structure
1
continued
The following table summarises debt position as at 31 December 2025:
Borrower Holding vehicle Provider Facility type Outstanding (m) Maturity Hedging Applicable rate
FS Holdco FS Holdco
MIDIS Fixed rate, fully amortising £43.8 Mar-34 N/A 3.78%
MIDIS
1
Inflation linked, fully amortising £53.7 Mar-34 N/A RPI Index + 1.08%
Total £97.5
FS Debtco SMBC/Helaba Term loan, fully amortising £126.0 Mar-36 100%
SONIA + 1.30% (margin step to
1.35% in 2029)
Total
2
£126.0
Second Generation Portfolio 1 FS Holdco 3 MIDIS
Fixed rate, fully amortising £2.5 Aug-34 N/A 4.40%
Inflation linked, fully amortising £22.8 Aug-34 N/A RPI Index + 1.70%
Total £25.3
Global Solar Energy 27
SL (Lorca)
FS Holdco 4 BayernLB
3,6
Term loan €10.8 Dec-31 100%
Double tranche: €8.7m at 1.61% fixed rate,
€2.4m at Euribor + 210bps
Foresight Solar Australia Pty Ltd
FS Holdco 4
CEFC
4
Term loan A$34.3 Jun‑26 N/A
Base rate (0.96375%) +
margin (2.00%)
Longreach ANZ/Deutsche Term loan A$16.4 Apr-27 100% BBSY Base rate + margin (1.20%)
Oakey 1 ANZ/Deutsche Term loan A$26.6 Apr-27 100% BBSY Base rate + margin (1.20%)
Oakey 2 Finco Pty Ltd CEFC Term loan A$26.3 Mar-26 N/A Base rate (4.30%) + 2.25%
Total
5
A$103.6
Total long-term debt
3,5
£309.6
FS RCF Debtco FS (UK Hold Co)
AIB, Barclays,
Lloyds
Revolving credit
£28.8 May-28 0% SONIA + 1.9%
€50.3 May-28 0% EURIBOR + 1.9%
Total short-term debt £72.7
Total outstanding debt £382.3
1. Nominal loan balance as at 31 December 2025 with the applicable RPI applied.
2. Interest rate swap for 100% of the outstanding debt.
3. EUR/GBP exchange rate of 0.8731 as at 31 December 2025.
4. Bannerton debt prorated for Company's share of asset ownership.
5. AUD/GBP exchange rate of 0.4958 as at 31 December 2025.
6. Lorca portfolio debt prorated for Company's share of asset ownership.
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
72
Debt structure
1
continued
Foresight Solar has no exposure to benchmark interest rate
movements in the UK, Australia or Spain on its long-term
debt, as these facilities are fully hedged through interest rate
swaps. Exposure to interest rate volatility is limited to the
revolving credit facility, which represents 19.0% of total debt.
In the UK, the sterling-denominated long-term facility priced
over SONIA is fully hedged, with interest rate swaps in place
covering 100% of the outstanding balance for the duration of
the loan.
In Australia, the CEFC-provided debt facilities carry no
exposure to the Bank Bill Swap Bid Rate (BBSY), as interest
rates were fixed at financial close or at the point of loan
extension. The remaining Australian debt facilities are also
hedged with interest rate swaps, structured over a notional
tenor of 20 years and decreasing in nominal value over time.
Lower near-term revenues have put pressure on the plants'
debt cover ratios, and several projects breached their
covenants related to facilities of approximately £34.4
million and net asset value of roughly £13.5 million. This was
proactively addressed through engagement with lenders,
providing stability to negotiate a solution that works for all
parties.
Financial review continued
The Board remains confident of reaching a solution and
the Investment Manager is working closely with the banks
to put the portfolio on a sustainable footing. (The loans
subject to refinancing in 2026 and 2027 are disclosed in the
debt position table on the previous page.) An element of
uncertainty has been considered in the year-end valuation,
including additional curtailment assumptions.
In Spain, the Euribor-linked facility is similarly protected, with
swaps in place hedging 100% of the outstanding balance
throughout the term of the loan.
Company profit and loss
For the year ended 31 December 2025, the Company
recorded a loss after tax of £32.4 million, equivalent
to 5.8pence per share (31 December 2024: profit of
£3.0millionor 0.5 pence per share).
The operating loss on the fair value of investments for the
period was £18.7 million.
This reflected £28.9 million of interest received on the
Foresight Solar (UK Hold Co) loan notes and £47.5 million
ofnet losses on investments held at fair value.
Operating expenses totalled £6.9 million, in line with
expectations. These comprised £5.0 million of investment
management fees and £1.8 million of other operating
expenses.
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
73
Financial review continued
Combined profit and loss of the underlyinginvestments
The underlying investments in the UK, Spain and Australia generated earnings before interest, taxes, depreciation and amortisation (EBITDA) of £112.2 million for the year to 31December 2025,
inline with expectations.
Across the global portfolio, the assets delivered £139.9million of revenue. In the UK, subsidised revenue wassupported by generation 3.4% above forecast. Wholesale revenue, meanwhile,
was 1% lower than expected. Favourable irradiance in the UK was offset by weaker performance in Spain and Australia, largely driven by network outages, economic curtailment and instances
of low or negative pricing.
Operating expenditure for the year totalled £27.7 million, broadly in line with contractual arrangements, several of which were renegotiated during the period.
For the year ended
31 December
2025
Dividend
cover
reference
UK
£m
Australia
$m¹
Spain
€m²
Combined
£m
2024
Combined
£m
Revenue of underlying investments
Wholesale revenue 59.1 8.7 4.0 66.8 66.9
Subsidised revenue³ 69.2 2.0 0.0 70.2 63.3
Other income 2.8 0.3 0.0 2.9 2.8
Total revenue of underlying investments 131.1 11.0 4.0 139.9 133.0
Operating expenditure
O&M contracted (6.2) (1.7) (0.4) (7.4) (6.7)
O&M variable (2.1) (0.6) — (2.4) (1.5)
Other operating expenditure (15.1) (3.1) (1.5) (17.9) (19.4)
Total operating expenditure (23.4) (5.4) (1.9) (27.7) (27.6)
EBITDA A 107.7 5.6 2.1 112.2 105.4
1. The profit and loss accounts of the Australian assets are combined based on the Company's ownership, using an average AUD/GBP exchange rate of 0.4958.
2. The profit and loss accounts of the Spanish assets are combined using an average EUR/GBP exchange rate of 0.8731.
3. Subsidised revenue consists of ROCs, ROC recycle, Feed‑in Tariff, embedded benefits and LGCs.
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
74
Financial review continued
EBITDA to cash distributions
The table in this section reconciles EBITDA to the cash
distributions from the underlying SPVs by adjusting for
working capital movements and timings of working capital.
There is typically a lag of up to three months between
revenue being earned and the cash being received from the
SPVs. As a result, working capital movements naturally create
differences between earnings measures and cash measures.
In periods of rising energy prices, these working capital
balances tend to increase as receivables grow, widening the
gap between earnings and cash. The opposite effect occurs
when energy prices fall.
During the year, working capital movements mainly reflected
cash retained within UK projects to support upcoming
lifecycle works, partly offset by cash injections into the
Australia portfolio.
Movements in retained cash for lifecycle and capital
expenditure amounted to £2.6 million. In the prior year, they
were driven by a comprehensive review and re‑profiling of
the portfolio’s long‑term lifecycle requirements and expected
future capital expenditure. This exercise was validated
by an independent technical advisor, who confirmed the
appropriateness of the revised profile.
Other cash adjustments were driven by the timing of VAT and
other tax payments in the UK and Spain.
Project debt service reflects the principal and interest
payments made by SGP 1, Lorca, and the Australian assets.
All amounts presented in £million
Dividend
cover
reference
Year ended
31 December
2025
Year ended
31 December
2024
EBITDA A 112.2 105.4
Adjustments:
Corporation tax (10.0) (6.4)
Interest earned 0.6 0.8
Working capital 1.6 3.1
Movement in retained cash for lifecycle and capex (2.6) 6.5
Other 1.9 0.7
Free cash before project debt service 103.7 110.1
Project debt service (10.9) (9.4)
Cash distributions from underlying investments B 92.8 100.7
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
75
Company and intermediate holding
companies'cash flows
During the year to 31 December 2025, the underlying
investments distributed £92.8 million to the intermediate
holding companies.
These cash distributions fund long-term debt servicing,
financing costs, and the operating and administrative
expenses of the Company and its intermediate holding
companies. They also support the dividends paid to
shareholders.
The revised investment management fee structure came
into effect from 1 March 2025, resulting in approximately
£1million of investor savings in relation to the previous
arrangement.
Acquisition costs of £2.0 million relate to investment in
theoperational UK battery storage project Sandridge BESS,
the development-stage Spanish solar pipeline asset Muel,
and the Spanish BESS development pipeline.
Debt arrangement fees of £0.8 million were paid in May
2025 following the refinancing of the RCF. The remaining
£1.3 million reflects transaction costs associated with
the divestment of the Australian portfolio and fees for
implementing power hedges during the year.
Debt resizing payments of £1.1 million reduced the loan
principals for Oakey 1 and Longreach to support covenant
compliance. Elevated curtailment and grid outages during
theyear put pressure on near‑term project revenues,
makingthe pre‑payments necessary.
Over the course of 2025, Foresight Solar repurchased
14.6million shares under its £60 million buyback programme.
The repurchases delivered 0.5 pence per share of NAV
accretion. Since the programme began in May 2023,
the Company deployed approximately £53.0 million to
31December 2025, resultingin a cumulative 3.1 pence
pershare uplift to NAV.
All amounts presented in £million
Dividend
cover
reference
Year ended
31 December
2025
Year ended
31 December
2024
Cash distributions from underlying investments B 92.8 100.7
Administrative expenses (2.3) (2.7)
Directors' fees and expenses (0.4) (0.3)
Investment management fees (5.0) (6.3)
Financing costs (9.1) (10.3)
Repayments of long-term debt facilities (19.4) (19.4)
Cash flow from operations C 56.6 61.7
Acquisition and disposals of assets (2.0) (4.1)
Debt arrangement, refinancing, performance and transaction fees (2.1) (4.1)
Gross divestment proceeds 1.2 —
Net drawings and repayments of RCF (3.0) —
Share buyback (11.2) (22.5)
Other (1.1) 0.9
Dividends paid in cash to shareholders D (44.9) (44.7)
Cash movement in the period (6.4) (12.8)
Opening Group cash balance 68.3 81.2
Closing Group cash balance 61.9 68.3
Financial review continued
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
76
Dividend cover
Total dividends of £44.9 million were paid during the year
ended 31 December 2025. Compared with the relevant
net cashflowsfrom operations of £56.7 million and net of
debt repayments, these dividends were covered 1.26 times
(31December2024:1.38 times).
As energy prices settle back towards historic norms,
Foresight Solar’s dividend cover is expected to return to
pre‑pandemic levels of around 1.0x to 1.1x. The exceptional
price volatility seen between 2020 and 2023 – first during
the COVID‑19 pandemic and later following Russia’s invasion
of Ukraine – led to swings in the Company’s revenues and
reduced income visibility, making this expected normalisation
a consequence of a return to stability.
Dividend cover
Dividend
cover reference
2025
£m
2024
£m
Cash flow from operations C 56.6 61.7
Dividends paid in cash to shareholders D (44.9) (44.7)
Dividend cover C/-D 1.26 1.38
Financial review continued
Dividend payments
Foresight Solar has met all its dividend targets since its initial
public offering and maintains a progressive dividend policy,
aiming to deliver sustainable growth in shareholder payouts
over time.
For the 2025 financial year, the Board has declared a payout
of 8.10 pence per share. To date, it has paid the first three
interim dividends of 2.025 pence per share, amounting to
£33.6 million.
Including the distributions made during the year, FSFL has
returned £385.5 million to shareholders since listing on
the LondonStock Exchange in 2013. Considering dividend
payments made after year end, total distributions since IPO
amount to £396.6 million.
Dividend timetable for the 2025 financial year
Dividend Amount Status Payment date
Interim 1 2.025p Paid 22 August 2025
Interim 2 2.025p Paid 24 November 2025
Interim 3 2.025p Paid 20 February 2026
Interim 4 2.025p Targeted 22 May 2026
Total 8.100p
On 13 February 2026, the Company announced its final interim dividend relating to 2025 of 2.025 pence per share.
Dividend timetable - Final Date
Ex‑dividend date 23 April 2026
Record date 24 April 2026
Dividend payment date 22 May 2026
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
77
Ongoing charges
The ongoing charges ratio for the year to 31 December
2025 was 1.15% (31 December 2024: 1.17%). This has
been calculated inaccordance with the methodology
recommended by the Association of Investment Companies.
Management services fees charged at project level on an
arm’s-length basis by Foresight Asset Management Limited,
a subsidiary of Foresight Group LLP, are excluded from the
ongoing charges ratio.
Ongoing charges
FSFL
£'000
UK Hold Co
£'000
Total
£'000
Investment management fees 5,020 — 5,020
Directors' fees 321 — 321
Administration fees 257 18 275
Audit and tax fees 219 58 277
Other legal and professional fees 469 34 503
Other ongoing expenses 302 — 302
Total 6,588 110 6,698
Average NAV (£m) 583.8
Ongoing charges ratio 1.15%
Net asset value (NAV) £m
31 March 2025 620.9
30 June 2025 603.8
30 September 2025 564.5
31 December 2025 545.9
Average 583.8
Financial review continued
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
78
The Directors assess Foresight Solar’s performance using a number of APMs that are not defined under IFRS. These measures are not always comparable with similar companies, and, therefore,
thetable below connects them to relevant GAAP definitions in the Financial Statements from page 116.
APM Purpose Calculation APM value Reconciliation to IFRS (where applicable)
Annualised total NAV
return since IPO
Annualised measure of financial performance,
indicating the movement of the value of the
Company's assets since IPO and expressed as
a percentage.
Closing NAV per ordinary share as at
31December 2025 plus all dividends paid
since IPO assumed reinvested, divided by
the NAV at IPO, to the power of one over
thenumber of years since IPO.
6.4% The calculation uses the closing NAV per
ordinary share as per the statement of
financial position on page 117.
Annualised total
shareholder return since
IPO
Annualised measure of financial performance,
indicating the total return derived from
holding the stock since IPO and expressed as
a percentage.
Closing share price as at 31 December 2025
plus all dividends paid since IPO assumed
reinvested, divided by the share price at IPO,
to the power of one over the number of years
since IPO.
2.8% The calculation does not have an IFRS
equivalent, but uses the closing share price
as per the key investment metrics table on
page 13.
Cash distributions from
underlying investments
A measure of financial performance from
theunderlying portfolio.
Total cash received from investments in
theperiod.
£92.8 million The calculation uses combined cash flows
of the Company and Group entities and,
therefore, does not have an IFRS equivalent.
Dividend cover A measure of excess cash generated by
theCompany's investments after payment of
the dividend.
Net operating cash flow relating to the period
divided by dividend paid within the period,
including potential scrip dividend impact.
1.26x The calculation uses the dividend paid as
shown in the statement of changes in equity
divided by cash flow from operations. The
calculation uses cash flows of the Company
and Group entities and, therefore, does not
have an IFRS equivalent.
Earnings before interest,
taxes, depreciation and
amortisation (EBITDA)
A measure to indicate cash flow and business
performance, allowing for a comparable
figure between businesses.
Operating revenue minus operating expenses,
with total operating profit as a proxy for
EBITDA.
£112.2 million The calculation uses total combined revenue
of underlying investments and subtracts total
expenditure, as per the combined profit and
loss of the underlying investments on page 74.
Alternative Performance Measures (APMs)
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
79
APM Purpose Calculation APM value Reconciliation to IFRS (where applicable)
Enterprise value (EV) A measure to determine a company’s total
value, a more comprehensive alternative to
market capitalisation.
The sum of market capitalisation as at
31December 2025 and total outstanding
debt minus cash (and cash equivalents).
£674.8 million The calculation uses Group entities’ debt and
Group-wide cash balances and, therefore,
does not have an IFRS equivalent. The
calculation uses market capitalisation from
page 13, the total outstanding debt on page
70 and the closing cash balance on page 76.
Gearing A measure of financial risk on the Company's
balance sheet.
Total third-party debt of the Group entities as
a percentage of GAV.
41.2% The calculation uses the net asset value as
per the statement of financial position on
page 117. It also uses the total outstanding
debt on page 70, which does not have an IFRS
equivalent.
Gross Asset Value (GAV) A measure of the value of the Company's total
assets.
The sum of the Company's total assets
as shown on the statement of financial
position and the total debt of the Group and
underlying investments.
£928.2 million The calculation uses the net asset value as
per the statement of financial position on
page 117. It also uses the total outstanding
debt on page 70, which does not have an IFRS
equivalent.
Market capitalisation Provides an indication of the size of the
Company.
Closing share price as at 31 December 2025
multiplied by the closing number of ordinary
shares in circulation.
£354.4 million The calculation uses the closing share price
as per the key investment metrics table on
page 13 and the closing number of ordinary
shares as per note 17 of the Financial
Statements on page 143.
NAV per ordinary share A measure of the value of one ordinary share. The net assets divided by the number of
ordinary shares.
99.2 pence As per the closing NAV per ordinary share
and as per the statement of financial position
on page 117.
Ongoing charges ratio A measure of the annual reduction in
shareholder returns because of operational
expenses based on historical data.
Total ongoing expenses including Investment
Manager fees, legal and professional fees,
administration fees, Directors' fees and audit
fees expressed as a percentage of average
NAV through the period.
1.15% The calculation does not have an IFRS
equivalent. Detailed calculation on page 80 of
Foresight Solar's 2024 Annual Report.
Alternative Performance Measures (APMs) continued
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
80
APM Purpose Calculation APM value Reconciliation to IFRS (where applicable)
Total NAV return A measure of financial performance indicating
the movement of the value of the Company’s
assets in the year and expressed as a
percentage.
Closing NAV per share as at 31 December
2025 plus all dividends paid in the year
assumed reinvested, divided by the NAV
at 31December 2024, expressed as a
percentage.
(4.8)% The calculation uses the net asset value as
per the statement of financial position on
page 117 and the cash dividends paid as per
the statement of changes in equity on page
118.
Total shareholder return Annualised measure of financial performance,
indicating the total return derived from
holding the stock in the year and expressed
as a percentage.
Closing share price as at 31 December
2025 plus all dividends paid in the year
assumed reinvested, divided by the share
price at 31December 2024, expressed as a
percentage.
(7.5)% The calculation uses the closing share price
as per the key investment metrics table on
page 13 and the cash dividends paid as per
the statement of changes in equity on page
118.
Alternative Performance Measures (APMs) continued
Financial Statements
Governance
Strategic ReportForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
81
What's in this section:
83Board of Directors
84Corporate Governance report
91Management Engagement Committee report
93Nomination Committee report
97Audit and Risk Committee report
101Directors’ Remuneration report
103Directors’ report
107Statement of Directors’ responsibilities
Governance
Bournemouth, UK
Financial Statements
Foresight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
82
Governance
Strategic Report
The Directors are responsible for setting Foresight Solar’s investment policy, providing overall
oversight of the Company’s activities and monitoring its performance.
Anthony (Tony) Roper
Chair
Paul Masterton
Senior Independent Director
Ann Markey
Non-Executive Director
Lynn Cleary
Non-Executive Director
Background
Mr Roper has 30 years of experience making and
managing infrastructure investments. He was part
of the team that created InfraRed Capital Partners
and oversaw the launch of TRIG on the London
Stock Exchange.
Tony was appointed to Foresight Solar's Board on
21 November 2024.
Background
Mr Masterton has nearly 20 years’ experience
as a non‑executive director and chair covering
finance, infrastructure, property development
and insurance, including a decade with 3i
Infrastructure.
Paul was appointed to Foresight Solar's Board on
21 November 2024.
Background
Ms Markey is an experienced business leader
and NED with a strong financial background. She
has deep expertise in the electricity industry,
particularly in thermal and renewable generation.
Ann was appointed to Foresight Solar's Board on
4 September 2020.
Background
Ms Cleary is an experienced senior executive
with vast financial knowledge. The former CFO
of the Royal Bank of Scotland International, she
is an influential member of the Channel Islands’
business community.
Lynn was appointed to Foresight Solar's Board on
18 September 2023.
External directorships
abrdn European Logistics Income plc (public),
SDCL Efficiency Income Trust plc (public).
External directorships
Intact Insurance, Jersey Water (public).
External directorships
The Land Development Agency DAC.
External directorships
Treasury Advisory Panel for the Government
of Jersey, Board of the Ports of Jersey, Jersey
Financial Services Commission.
Committees
M (Chair)
N
R
Committees
A
M
N
R (Chair)
Committees Committees
Board of Directors
M N
N
N
N
R R R
A AM M
M
AR
A
Audit and Risk Committee
M
Management Engagement Committee
N
Nomination Committee
R
Remuneration Committee Chair
Click here or scan for
the full Board biographies
83
Foresight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
Strategic Report
Governance
Financial Statements
On behalf of the Board, I am pleased to introduce Foresight
Solar’s Corporate Governance Statement for the year ended
31 December 2025.
Board leadership
The Board has overall responsibility for managing the
Company’s affairs and ensuring its long‑term sustainable
success.
The Board is made up of four Independent Non‑Executive
Directors. (Their profiles are set out on page 83). Following
adetailed review, the Nomination Committee has confirmed
the Board’s independence and autonomy. (More detail on
thisanalysis can be found from page 93.)
The Board evaluates its effectiveness each year. As part
ofthis process, Directors confirm they have sufficient time
to discharge their duties, with further detail provided in the
Nomination Committee report. The Directors believe they
collectively bring the right balance of skills, experience and
knowledge to oversee Foresight Solar’s affairs and act in the
best interests of its stakeholders. Diversity of background
and perspective is a key consideration in new appointments.
Board operation
The Board is accountable to shareholders for the effective
management of the Company. Meetings take place at least
quarterly, with additional sessions scheduled as required.
During the year under review, 10 ad hoc meetings were held
in addition to the four regular quarterly sessions.
The uncustomary number of ad hoc meetings in 2025 was to
ensure Directors responded to developments and explored
ways to deliver the best possible outcome for shareholders.
These discussions covered a range of topics, from corporate
action to divestments, from capital recycling to capital
allocation priorities. The Board also reviewed internal
controls and debated the tax review.
At each regular meeting, the Board reviews Foresight Solar’s
performance against its investment objectives and assesses
activity since the previous gathering to ensure adherence
to the investment policy and guidelines. When changes are
required, the Directors review and, if so decided, approve
them.
Typical quarterly meeting agenda:
ș Investment Manager update:
ș Market commentary, including economic and political
developments
ș Portfolio overview and performance, including hedging
book management
ș Independent power price forecasts
ș Financial performance, including cash flow analysis
anddividend cover forecasts
ș Pipeline activity, acquisitions and disposals
ș Health and safety
ș Gearing and debt compliance
ș Shareholder and analyst feedback
ș Sustainability reporting
ș Changes to the risk register
ș Broker commentary:
ș Market update
ș Share price performance versus peers
ș Sales and trading insights
ș Compliance and governance updates:
ș Compliance monitoring
ș Regulatory and governance developments
The Investment Management Agreement sets out the matters
delegated to the Investment Manager, such as day-to-day
portfolio management and the thresholds above which
Boardapproval is required.
“ Foresight Solar’s Board drives
long‑term, sustainable valuefor
shareholders and society. Directors
set strategy, oversee performance
and key providers, and ensure
compliance and transparent
reporting.”
Tony Roper
Chair
Corporate Governance report
Board leadership and company purpose
Financial Statements
Governance
Strategic Report
Foresight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
84
Corporate Governance report continued
Board leadership and company purpose
Board operation continued
New Directors receive a formal induction, and all Directors
participate in an annual training programme covering relevant
business and regulatory topics. Details of Directors’ duties
are provided on appointment and updated as required.
Purpose and culture
Foresight Solar’s purpose is to provide investors with a
sustainable, progressive quarterly dividend and long-term
capital growth, whilst contributing to climate change
mitigation and the transition to a lower‑carbon economy.
The Company’s culture is built around openness, integrity
and transparency. It supports constructive challenge of the
Investment Manager, encourages active engagement with
stakeholders and ensures key service providers are held
accountable. With support from the Investment Manager, the
Board aims to continually strengthen FSFL’s ability to deliver
attractive financial returns alongside positive environmental
and social outcomes.
Governance
The Board continues to enhance its governance framework,
working closely with the Company Secretary to ensure
policies and procedures remain current and effective.
Statement of compliance with the AIC Code
Foresight Solar is a member of the Association of Investment
Companies (AIC) and reports against the AIC Corporate
Governance Code. The AIC Code incorporates the relevant
requirements of the UK Corporate Governance Code whilst
addressing the specific needs of investment companies.
The Board considers the AIC Code, endorsed by the Financial Reporting Council and supported by the Jersey Financial Services
Commission, to be more relevant to shareholders than the UK Code. FSFL has, therefore, applied the principles and complied
with the provisions of the AIC Code.
AIFM Directive
Foresight Solar is classified as a self‑managed non‑EEA AIF under the Alternative Investment Fund Managers Regulation 2013
and the AIFM Directive. Neither the Company nor the Investment Manager is required to seek authorisation. The Board retains
responsibility for most risk management and portfolio management functions, exercised through its committee structure.
Foresight Solar’s governance structure supports its purpose and bolsters itsculture and
sustainability initiatives.
Governance framework:
The role of the Board and division of responsibilities
Foresight Solar’s Board of Directors oversees the Investment Manager in delivering the Company’s purpose, engages with key
stakeholders to understand how it can best represent their interests, and works closely with the main service providers to
maintain strong operational performance.
Whilst meeting their statutory responsibilities, Directors seek to balance scrutiny, challenge and support of the Investment
Manager to deliver exceptional performance.
Board roles Role overview
Chair Leads the Board and is responsible for its overall effectiveness.
Senior Independent Director (SID) Provides a sounding board for the Chair and serves as an intermediary for the
other Directors and shareholders.
Non-Executive Director (NED) Offers constructive challenge and strategic guidance, as well as delivering
specialist advice and holding service providers to account.
Company Secretary Supports the Board and ensures the Company has the policies, processes,
information, time and resources needed to function effectively and efficiently.
Financial Statements
Governance
Strategic Report
Foresight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
85
Corporate Governance report continued
Board leadership and company purpose
Board committees
The Board has four standing committees ― Audit and Risk, Management Engagement,
Remuneration and Nomination ― each with formal terms of reference. These set out how
recommendations should be made to the Board. Copies are available on request from the
Company Secretary.
The responsibilities and memberships of each committee are described below:
Audit and Risk Management Engagement
Ensures Foresight Solar maintains the highest
standards of integrity, financial reporting,
internal and risk management systems,
sustainability reporting and corporate
governance.
Reviews the performance of the Investment
Manager, as well as evaluating other key
service providers.
Composition:
Ann Markey (Chair)
Lynn Cleary
Paul Masterton
Composition:
Tony Roper (Chair)
Ann Markey
Paul Masterton
Lynn Cleary
Nomination Remuneration
Leads the process for appointments,
evaluation, succession planning, and
ensuring a diverse candidate pipeline.
Develops remuneration policies and
practices that support the Company’s
strategy and promote its long‑term success.
Composition:
Lynn Cleary (Chair)
Ann Markey
Tony Roper
Paul Masterton
Composition:
Paul Masterton (Chair)
Lynn Cleary
Ann Markey
Tony Roper
Reports from the Company’s committees are available from page 91.
Directors’ attendance at the regular Board, committee and ad hoc meetings:
Board Audit and Risk
Management
Engagement Remuneration Nomination Ad hoc
Tony Roper 4/4 9/10
3
2/2 1/1
3
1/1
3
10/10
Paul Masterton 4/4 10/10
2/2
4
1/1 1/1
3
10/10
Ann Markey 4/4 10/10 2/2
1/1
3
1/1 10/10
Lynn Cleary 4/4 10/10 2/2 1/1 1/1 9/10
Alex Ohlsson¹ 3/4
5/10
3
1/2 1/1
3
1/1 7/10
Chris Ambler² 2/4 5/10 1/2 1/1 1/1 6/10
1. Alex Ohlsson stepped down from the Board on 16 September 2025.
2. Chris Ambler stepped down from the Board on 17 June 2025.
3. Committee meeting attended by invitation.
4. One committee meeting attended by invitation and another as a committee member.
Financial Statements
Governance
Strategic Report
Foresight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
86
Corporate Governance report continued
Board leadership and company purpose
Stakeholders
Directors must act in good faith and promote Foresight
Solar’s long‑term success for the benefit of its stakeholders.
Fostering strong relationships and considering various
perspectives is central to decision‑making and is expected to
enhance shareholder value over time.
Although the Company does not have employees, the
Boardhas identified its key stakeholder groups and allocates
appropriate resources to understanding their views. The
Investment Manager, brokers and Company Secretary act
as the primary points of contact, gathering feedback and
ensuring relevant insights are communicated to the Directors.
On a regular basis, the Board considers matters relating to:
ș Long-term consequences of decisions
ș Fair and equal treatment of shareholders
ș Relationships with suppliers, customers and other
stakeholders
ș The Company’s impact on local communities and the
environment
ș The importance of maintaining high standards of conduct
A description of Foresight Solar’s main stakeholder groups,
their interests and how the Board has considered them when
making determinations is provided in the following pages.
Engaging with shareholders
Shareholders are the Company’s primary stakeholders,
and Board decisions are made with a clear focus on their
long‑term interests. Foresight Solar maintains regular
dialogue with investors, relying on the Investment Manager
and the brokers. Directors actively welcome views and have
routinely made themselves available to meet and speak with
shareholders.
During the year, the Board, the Investment Manager and
thebrokers held multiple meetings with existing shareholders
representing more than 40% of the issued share capital,
aswell as with prospective investors. Discussions centred
onthe challenging macroeconomic environment, its impact
on the business, the actions being taken to address the
shareprice discount to net asset value, and the prospect
ofsector consolidation.
Investors expressed concern about FSFL’s business model
ina higher interest rate environment, noting that the discount
has widened over the past three years. In response, the
Company outlined its income and growth strategy, provided
updates on its phased divestment programme, including the
rationale for pausing the sale of the Australian portfolio, and
expanded on the benefits of its share buyback programme.
Company representatives also reinforced the importance
ofcapital recycling to enhance the portfolio’s revenue profile
over time and highlighted the benefits of refocusing on the
core markets of UK and mainland Europe.
The average share price discount of more than 10% during
2024 triggered a discontinuation vote at the Annual General
Meeting in June 2025. The result reflected the dissatisfaction
of some shareholders seeking a faster return of capital.
Inresponse, the Board expanded the buyback programme
and accelerated its review of strategic options.
Under the Company’s Articles, another discontinuation
will happen at the upcoming AGM in 2026. The Board is
remains mindful of the share price discount and is committed
to providing the best possible outcome for a majority of
investors. The Directors expect to provide further details
to the market in due course. More information about the
resolutions will be provided in the Notice of AGM to be
published soon.
In addition to gathering feedback through regular meetings,
Foresight Solar again engaged an independent consultant
in 2025 to conduct a perception audit. The survey covered
a range of topics, including performance, governance and
strategy, and offered shareholders an impartial channel to
express their views. The Board considers these insights a
valuable planning tool, helping to strengthen communication
with the market and providing an objective assessment of
how the Company’s investment proposition is understood.
The findings inform decision‑making and strategy
development, particularly in the context of Directors' work to
address the share price discount relative to NAV.
The Board encourages a culture of integrity and openness, one that values diversity
and that is responsive to the views of the Company’s stakeholders.
Financial Statements
Governance
Strategic Report
Foresight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
87
Shareholders
ș Institutional and
retail shareholders
75
meetings with
investors
Lenders
ș Banks
10
debt providers to the
Company and its SPVs
Investment
Manager
ș Foresight Group
12‑year
partnership with the
Investment Manager
Engagement and communication Engagement and communication Engagement and communication
ș Hosted the Annual General Meeting.
ș Held regular conversations, attended investor meetings and
conducted roadshows.
ș Addressed current and prospective retail investors with exclusive
meetings and ad hoc messages.
ș Responded to queries on financial, strategic and sustainability
topics.
ș Commissioned an independent investor survey to assess
shareholders' views.
ș Presented financial updates, including Annual and Interim
reports and factsheets.
ș Published announcements via RNS.
ș Updated the dedicated Foresight Solar website.
ș Maintained the Company’s LinkedIn page to foster two-way,
digital communication.
ș Updated regularly on covenant compliance and
cash flow positioning.
ș Engaged in refinancing discussions.
ș Communicated the need for a revised fee agreement to
reflect market conditions and further align interests with
shareholders.
ș Assessed the Investment Manager’s contractual relationship
and its performance.
ș Monitored the effectiveness of the parameters for delegated
authority tomake investment decisions.
ș Oversaw internal controls arrangements.
ș Held regular and ad hoc meetings to discuss Company
business.
ș Hosted a Strategy Day to discuss and agree Foresight Solar’s
position and measures to further its competitiveness.
ș Debated the potential impacts of government measures, such
as inflation indexation changes to ROCs.
Results and decisions Results and decisions Results and decisions
ș Declared dividend target of 8.10pps for 2025.
ș Expanded a share buyback programme of up to £60 million.
ș Returned £56 million to shareholders between dividends and
stock repurchases.
ș Announced a new investment management fee structure, delivering
significant savings for investors and more closely aligning interests
with shareholders.
ș Continued to analyse – and actively explore – options to address
shareholder concerns, return capital and improve liquidity.
ș Progressed the phased divestment programme of more than
200 MW ofsolar and BESS projects.
ș Reduced the RCF to £100 million and extended its maturity date to
February 2028.
ș Delivered positively on the RCF’s sustainability metrics.
ș Agreed a revised fee arrangement to lower costs for shareholders.
ș Established the Investment Manager maintains robust internal
controls.
ș Confirmed the continued appropriateness of the Investment
Manager’s delegated authority to make investment decisions.
ș Determined the continued appointment of Foresight Group was in
the best interest of shareholders.
Corporate Governance report continued
Board leadership and company purpose
Engaging with shareholders continued
Financial Statements
Governance
Strategic Report
Foresight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
88
Corporate Governance report continued
Board leadership and company purpose
Engaging with shareholders continued
Service providers
ș Administrator and
Company Secretary
ș Joint corporate
brokers
ș Legal advisors
ș Public relations agency
ș Tax advisors
7
service provider
reviews
Regulators
ș Jersey Financial
Services
Commission
22
interactions with
the JFSC
Asset-level
counterparties
ș Supply chain
counterparties
ș Landowners
ș O&M contractors
ș PPA offtakers
60+
different providers
Engagement and communication Engagement and communication Engagement and communication
ș Held regular meetings, calls and interactions on strategic actions.
ș Consulted on regulatory, governance, accounting and
taxation matters.
ș Monitored the internal controls of the Administrator and
of the Company Secretary.
ș Engaged with journalists, built brand awareness and enhanced
Foresight Solar’s reputation.
ș Highlighted the Company’s resilient operational and financial
performance to incentivise investors to buy shares.
ș Conducted annual service provider performance reviews.
ș Oversaw service providers to ensure successful operations and
regulatory reporting.
ș Interacted with the JFSC to ensure legal and financial compliance.
ș Focused engagement on value-enhancement opportunities,
including rationalisation of service provision for cost savings and/
or improved services.
ș Hosted calls with O&M providers to ensure adequate oversight of
portfolio operations.
ș Maintained contact with the owners of the land on which Foresight
Solar’s assets operate.
ș Kept emphasis on internal control frameworks to ensure they are
robust and effective.
ș Maintained scrutiny of, and resource allocated to, emerging risks.
Results and decisions Results and decisions Results and decisions
ș Retained services of all key service providers. ș Took appropriate measures and guaranteed compliance. ș Re-evaluated contracts to improve service levels and reduce
costs.
ș Implemented value‑enhancement projects to improve portfolio
operations.
ș Engaged with select landowners to extend asset leases.
ș Grew commercial relationships through development
opportunities.
Financial Statements
Governance
Strategic Report
Foresight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
89
Local communities
ș Local authorities
and agencies
ș Area residents
£254,131
contributions made
tocommunities
Engagement and communication
ș Interacted with local authorities to ensure safe and compliant
assetoperations.
ș Conducted educational site visits for schools and colleges.
Results and decisions
ș Contributed £254,131 to local community funds.
Tony Roper
Chair
23 March 2026
Corporate Governance report continued
Board leadership and company purpose
Engaging with shareholders continued
Wymeswold, UK
Financial Statements
Governance
Strategic Report
Foresight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
90
Overview
The Management Engagement Committee meets at least once
a year to review the performance, terms of appointment and
fees of the Investment Manager and key service providers.
Indoing so, the Committee supports the Board in ensuring
high-quality service delivery, value for money and alignment
with shareholder interests.
Roles and responsibilities
The Committee is responsible for:
ș Reviewing the Investment Manager’s terms of appointment
and remuneration
ș Assessing the Investment Manager’s performance and
holding it accountable for service delivery under the
Investment Management Agreement
ș Reviewing the terms of appointment and fees of key
service providers, including the Company Secretary,
Administrator, registrar, legal advisors, public relations
advisors, and brokers
ș Monitoring the performance of key service providers
and ensuring that agreed service levels are met
Review of the Investment Manager
In assessing the Investment Manager’s performance,
theCommittee considers a range of qualitative and
quantitative factors, including:
ș The Company’s performance relative to peers
ș The Investment Manager’s fees and overall value
formoney
ș The Investment Manager’s stewardship of the portfolio
and delivery against the Company’s income, growth
anddividend objectives
ș The effectiveness of Foresight Group in supporting the
Board and contributing to the fulfilment of Foresight
Solar’s purpose
Following a detailed review, the Committee concluded
that ongoing retention of Foresight Group remains in the
Company’s best interests, whilst recognising the importance
of continued constructive challenge.
Against a testing macroeconomic backdrop, the Committee
placed particular emphasis on the alignment of the
Investment Manager’s remuneration with shareholder
interests. The Board engaged with Foresight Group on the fee
structure early in the year and agreed a revised arrangement,
effective from 1 March 2025. The new fee is calculated
using an equal weighting of market capitalisation and NAV,
strengthening alignment with shareholder value creation. A
new Investment Management Agreement was signed and the
new structure resulted in savings of more than £1 million in
the first year.
Throughout 2025, the Directors heard clearly from investors
that they wished the Company to exit Australia and refocus
on the UK and mainland Europe. The divestment of the
Australian portfolio will be a central part to the 200 MW of
disposals currently in train. In agreement with the Investment
Manager, the Board concluded it was best topause that
process to preserve value. We will return to themarket once
conditions improve.
“ The Committee is responsible for
reviewing the performance of key
service providers, especially the
Investment Manager, to ensure the
Company is effectively supported.”
Tony Roper
Chair of the Management Engagement Committee
Management Engagement Committee report
Membership:
Tony Roper
Paul Masterton
Ann Markey
Lynn Cleary
Financial Statements
Governance
Strategic Report
Foresight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
91
[•]
Management Engagement Committee report continued
Review of the Investment Manager continued
In March 2025, we unveiled another phase of the divestment
programme, committing to sell 75 MW of operational
solar. That is progressing and the Board will provide an
update soon. Once completed, proceeds will be deployed
in accordance with the Company's capital allocation
policy, which balances capital returns, debt repayments
and recycling cash into development or construction
opportunities offering higher returns.
Following guidance from the Investment Manager and a
leading tax advisor, the Company concluded voluntary
discussions with HM Revenue & Customs on the appropriate
tax treatment of certain historic financing matters within
its structure. HMRC indicated that additional historical tax
should be recognised and forecast future tax payable needed
to be increased. These adjustments were reflected in the NAV
reductions announced in Foresight Solar’s third and fourth
quarter trading updates, totalling a £50.3 million downside.
After the period end, the Investment Manager and advisor
finalised their analyses and provided assurances to the Board
that the agreed adjustments bring this matter to a close and
provide clarity over both past obligations and the tax position
going forward.
The persistent share price discount to NAV remains a key
concern for shareholders and for Directors. Working with
the Investment Manager and the brokers, the Board has
introduced several initiatives aimed at addressing the
discount and creating the conditions for future growth. Whilst
the broader market environment continues to weigh on
investor sentiment, the Investment Manager and the brokers
are actively developing further actions as the Board assesses
all options to reduce the discount.
Review of key service providers
The Committee also reviewed the performance and fees of
the Company Secretary and Administrator, brokers, legal
advisors, public relations advisors, and registrar. As part of
this work, the Committee oversaw the review, update and
signing of a new services agreement with JTC, ensuring the
Company’s secretarial and administrative support remains
robust. TheCommittee was satisfied that services met
expectations and that fees remained in line with budget
and contractual terms. In the cases in which potential
performance improvements were identified, these have been
and are being addressed collaboratively.
Overall, the Committee considered that fees were broadly
in line with market rates for comparable listed investment
companies.
Conclusion
Taking account of its detailed assessments, the Committee
determined that continuing the Investment Manager’s
appointment is in the best interests of the Company and
itsshareholders. The Board has ratified this decision.
Tony Roper
Chair of the Management Engagement Committee
23 March 2026
Verwood, UK
Financial Statements
Governance
Strategic Report
Foresight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
92
Membership:
Lynn Cleary
Ann Markey
Tony Roper
Paul Masterton
Overview
The Nomination Committee leads the selection and
appointment of new Directors, oversees succession planning
and ensures that Foresight Solar maintains a diverse pipeline
of candidates. The Committee also leads the annual Board
performance evaluation and monitors the balance of skills,
experience and knowledge among Directors.
Roles and responsibilities
The Committee is responsible for:
ș Leading the process for new Board appointments
ș Ensuring orderly succession for the Board and its
committees
ș Developing a diverse and inclusive candidate pipeline
ș Managing the annual Board, committee and Director
effectiveness review
Introduction
The Committee ensures that the Company applies formal,
rigorous and transparent processes when considering
new appointments. Succession planning is underpinned by
objective and merit‑based criteria, supporting diversity of
gender, social and ethnic backgrounds, as well as a broad
range of skills and personal strengths.
To maintain an effective Board, the Directors undertake
an annual review of their collective skills, experience and
knowledge, allowing the Committee to plan for future needs.
Appointments and succession planning
During the year, Chris Ambler decided not to stand for
re‑election at the AGM, and Alex Ohlsson confirmed his
intention to retire in September 2025 after more than a
decade as Chair and Non‑Executive Director. The Board
is extremely grateful to both fortheir long‑standing
service, commitment and contribution to Foresight Solar’s
development.
As part of the Board’s phased succession plan, Paul
Masterton and Tony Roper were appointed to the Board in
November 2024 and elected by shareholders at the June
2025 AGM. Upon Chris’ and Alex’s planned retirements, Paul
and Tony succeeded them as Senior Independent Director
and Chair, respectively, in line with the previously outlined
succession plan. These transitions were managed to ensure
continuity and support an orderly handover.
The Committee is satisfied that the Board’s current
composition, balance of skills and breadth of competencies
remain appropriate to support Foresight Solar’s strategic
priorities. In due course, and in line with the next phase of our
succession plan, the Committee will oversee a search fora
fifth, Jersey‑based Non‑Executive Director, with timing and
details to be announced when appropriate.
“ The Committee is responsible
forensuring rigorous and
transparent procedures, along
withobjective selection criteria
forBoard appointments and
succession plans.”
Lynn Cleary
Chair of the Nomination Committee
Nomination Committee report
Composition, succession and evaluation
Financial Statements
Governance
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Annual Report and Financial Statements
for the year ended 31 December 2025
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Nomination Committee report continued
Composition, succession and evaluation
Board and committee composition
The Committee reviewed the Board’s composition and concluded that the Directors work effectively together and provide the right balance of skills, experience and expertise to support the
Company’s strategy.
Directors’ and Investment Manager’s skills matrix
Skills and expertise
Strategy
Listed
investment
companies
Capital markets
and corporate
finance
Renewable
energy industry
Infrastructure
transactions and
investments
Development
and construction
Risk
management
Health
and safety Sustainability
Stakeholder
engagement
Tony Roper
Paul Masterton
Ann Markey
Lynn Cleary
Foresight Group
Key Expertise Experience Limited experience
To maintain this balance, the Committee recommended the following changes during the year.
ș Ann Markey to join the Remuneration Committee
ș Paul Masterton to join the Nomination and Management Engagement committees
ș Tony Roper to chair the Management Engagement Committee and join the Nomination and Remuneration committees
The Board is currently comprised of four Non‑Executive Directors. The aim is to increase to five and, on achieving this, committee composition will be reviewed to ensure an appropriate balance
of responsibilities and perspectives. In the interim, all Directors serve on the Nomination and Remuneration committees, supporting efficient decision‑making and ensuring that relevant insights are
shared across the Board.
In any case, committee composition is regularly reviewed to ensure alignment with Foresight Solar’s evolving needs and Directors’ workloads.
To support effective oversight, the Committee considered the expected time commitment for Directors. Based on scheduled meetings and committee attendance, as well as preparation time,
the anticipated commitment for each Director is between 12 and 15 days per year, which remains appropriate for the Company’s size, structure and governance needs. However, the challenging
macroeconomic environment has demanded substantially greater involvement in 2025. Directors dedicated considerable additional time to ensure decisions resulted in the best possible outcome
for shareholders, and this elevated level of engagement will continue whilst sector‑wide pressures persist.
The Committee also reviewed Directors’ external appointments to ensure each member has sufficient capacity to carry out their duties. In this context, the Committee is mindful of Tony Roper’s
wider responsibilities and is aware that some stakeholders consider the number of external positions when assessing capacity. abrdn European Logistics Income plc has announced its managed
Financial Statements
Governance
Strategic Report
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Annual Report and Financial Statements
for the year ended 31 December 2025
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Nomination Committee report continued
Composition, succession and evaluation
wind‑down, with directors overseeing the final stages of an orderly sale of assets and return of
capital to shareholders expected to complete in 2026. The associated workload is expected
to lessen as the process evolves. Since joining the Board of Foresight Solar in 2024, Tony has
made a meaningful contribution to its oversight and decision-making, attending all regular and
ad hoc meetings. The Committee is satisfied he continues to have the time and focus required to
serve FSFL effectively.
Board performance review
The Board conducts an annual evaluation of its own performance and that of its committees
and individual Directors. In 2025, the review was externally facilitated by Cyclico, a specialist
consultancy, and undertaken by means of a structured questionnaire, one-to-one interviews
and observation of a quarterly cycle of meetings.
The Committee was pleased to note positive conclusions:
ș Focus on Board effectiveness, particularly in strategic oversight and shareholder
engagement
ș Realistic perception of external challenges, such as share price discount and capital
constraints
ș Commitment to maximising long‑term shareholder value
The review highlighted areas for development, including streamlining administrative processes,
advancing succession planning, strengthening valuation oversight and deepening senior-level
engagement with the Investment Manager. The Committee will monitor progress on these
priorities throughout 2026 and will provide an update in next year’s report. In line with best
practice, the Board intends to commission its next externally facilitated evaluation in 2028, with
internal reviews taking place in the intervening years.
Overall, the evaluation confirmed the Board continues to operate effectively despite a
challenging external environment. Directors were found to display strong leadership, high
levels of engagement and a clear strategic focus. The review also reinforced the strength
of the working relationship with the Investment Manager. The Board, its committees and
individual Directors, including the Chair, were all assessed as performing well and contributing
constructively to the Company’s long‑term objectives.
Directors’ professional development
Directors receive full information on their duties and obligations on appointment and are kept
informed of changes in relevant regulation and governance expectations.
A structured induction programme ensures new Directors quickly gain an understanding of the
Company, its policies and regulatory environment. Ongoing updates on internal controls, risk
management and statutory requirements form part of regular Board business.
Directors also participate in an annual training programme and attend external seminars as
appropriate.
As Directors of a Jersey‑regulated fund, each Board member must undertake at least 25 hours
of continuing professional development each year. All Directors met this requirement in 2025.
Diversity
The Company has adopted a Board Diversity Policy, reviewed annually by the Committee,
to support Foresight Solar’s commitment to improving representation. Diversity is a key
consideration in Board appointments and committee leadership. Notably, the Chair of the
Auditand Risk Committee is a female Director.
Following Chris’ and Alex’s resignations, the Board now comprises 50% women. However,
the Board currently lacks ethnic diversity – a fact that was raised by shareholders during the
year. The Committee recognises this imbalance and will seek to address it during the next
recruitment round, subject to the availability of suitably qualified candidates.
Financial Statements
Governance
Strategic Report
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Annual Report and Financial Statements
for the year ended 31 December 2025
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Nomination Committee report continued
Composition, succession and evaluation
Diversity continued
Earlier phases of the succession plan focused on UK and European candidates. For the next
appointment, the Committee intends to secure a Jersey‑resident Director. Despite the narrower
pool, the Committee remains committed to attracting the strongest and most diverse field of
candidates possible.
Board member diversity
Number of
Board members
Percentage of
the Board
Number of
senior
positions¹
Male 2 50% 2
Female 2 50% 1
Number of
Board members
Percentage of
the Board
Number of
senior
positions¹
White British or other White
(including minority-white groups) 4 100% 3
1. Chair, Senior Independent Director and Chair of the Audit and Risk Committee.
Conflicts of interest
Directors are required to notify the Company Secretary of any actual or potential conflicts of
interest as soon as they arise. Only Directors without a material interest in a matter take part
inrelated decisions.
External appointments are monitored and Directors must seek approval before taking on new
roles. The Board also reviews Directors’ shareholdings in the Company at each scheduled
meeting and remains satisfied that these holdings do not compromise their independence
orobjectivity.
Re-election of Directors
At the 2025 AGM, Ann, Paul, Tony and I were elected or re-elected, each receiving more than
95% of votes in favour. The Directors will stand for re‑election at the upcoming June Annual
General Meeting.
Lynn Cleary
Chair of the Nomination Committee
23 March 2026
Financial Statements
Governance
Strategic Report
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Annual Report and Financial Statements
for the year ended 31 December 2025
96
Membership:
Ann Markey
Lynn Cleary
Paul Masterton
“ The Committee ensures
Foresight Solar maintains the
highest standards of integrity,
financial reporting, internal and
risk management systems, and
corporate governance.”
Ann Markey
Chair of the Audit and Risk Committee
Overview
The Audit and Risk Committee supports the Board by
providing independent oversight of Foresight Solar’s financial
reporting, risk management and internal control framework.
The Committee reviews the quarterly net asset value and
the integrity of the Annual and Interim Financial Statements,
oversees the external audit, and monitors the effectiveness of
the Company’s risk and control environment. It also reviews
FSFL’s sustainability practices and reporting. In doing so, it
seeks to ensure that Foresight Solar maintains high standards
of governance, transparency and accountability.
Roles and responsibilities
The Committee is responsible for:
ș Reviewing the quarterly net asset value and recommending
its approval
ș Monitoring the integrity of the Financial Statements and
recommending their approval
ș Reviewing the effectiveness of the Company’s internal
control and risk management systems
ș Recommending the appointment or reappointment of
theexternal Auditor
ș Overseeing the external Auditor’s performance and
independence
ș Implementing and reviewing the policy on non-audit
services
ș Reviewing Foresight Solar’s sustainability practices
andrelated reporting
Introduction
The Committee operates under terms of reference approved
by the Board, which are reviewed annually to reflect updates
to the AIC Code and the UK Corporate Governance Code.
The Committee Chair is a Chartered Accountant, and the
Board is satisfied that she brings recent and relevant financial
experience. All members are independent and are not
involved in the preparation of Foresight Solar’s Financial
Statements.
The Committee met 10 times in 2025, in line with the
Company’s reporting cycle. Regular attendees include other
Directors, representatives of the Investment Manager, the
Administrator and the external Auditor. Whilst the Committee
reports to the Board, ultimate responsibility for the Annual
and Interim Financial Statements remains with the full Board.
During the year, the Committee continued to strengthen the
Company’s risk management and internal control framework.
It also began assessing the impact of recent changes to
governance codes and is working with the Investment
Manager, Administrator and Compliance Officer to further
enhance assurance processes. The Committee maintains an
open and constructive relationship with the external Auditor.
KPMG LLP completed the 2025 external audit and has not
provided non‑audit services. JTC (Jersey) Limited prepares
tax returns following approval of the Financial Statements.
Audit and Risk Committee report
Audit, risk and internal control
Financial Statements
Governance
Strategic Report
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Annual Report and Financial Statements
for the year ended 31 December 2025
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Audit and Risk Committee report continued
Audit, risk and internal control
Significant issues considered
The Committee focused on the following key areas of
judgement in relation to the Annual Financial Statements:
ș Valuation of unquoted investments: This is the principal
area of audit risk and was discussed with the Investment
Manager and the Auditor at both planning and completion
stages. The Committee also considers it in the reviews of
the quarterly NAV and Financial Statements
ș Taxation: A material issue arose during the valuation
process for the third quarter net asset value and a first
adjustment was made. A second material adjustment was
necessary in the fourth quarter. The Committee oversaw
the output of the tax review and related assurances
ș Going concern and the viability statement: These
documents were reviewed against the Company’s financial
position, capital resources and operating environment
Valuation of unquoted investments
The Company’s unquoted investment represents a 100%
controlling interest in Foresight Solar (UK Hold Co) Limited,
a non‑consolidated subsidiary measured at fair value.
Themajority of UK Hold Co’s underlying assets are held in
companies for which no quoted market prices are available.
All of the Company’s controlling interests are held through UK
Hold Co, which in turn holds investments in FS Top Holdco 1
Limited (FS Topco 1), FS Top Holdco 2 Limited (FS Topco 2),
FS Holdco 3 Limited (FS Holdco 3) (held through RCF Debtco
Limited), FS Holdco 4 Limited (FS Holdco 4) and a 50% interest
in Foresight Battery Storage Holdings Limited (FBSHL). Further
detail is provided in Note 1 to the Financial Statements.
FS Topco 1 holds an indirect 100% controlling interest in FS
Holdco Limited (FS Holdco). FS Topco 2 holds an indirect
100% controlling interest in FS Debtco Limited (FS Debtco).
FS Holdco 3 holds an indirect 100% controlling interest in
Second Generation Portfolio 1 Limited (SGP1). Each of these
entities is also a non-consolidated subsidiary measured at
fair value, with valuations based on the fair value of their net
assets.
The assets of FS Holdco, FS Debtco, SGP1, and FS Holdco
4 comprise investments for which there are no quoted
market prices. These valuations are, therefore, derived using
discounted cash‑flow methodologies. Meanwhile, FBSHL’s
pre-construction investment is carried at the lower of cost or
net realisable value.
The Committee reviewed and challenged valuation
assumptions, methodologies and sensitivities prepared by the
Investment Manager (summarised in note 16 to the Financial
Statements). This involved considerations of changes to
several assumptions, including useful economic lives, energy
yield assessments, lifecycle investments and solar capture
discounts. It also involved considerations of the valuation
of non-UK assets and appropriate discount rates for its
portfolio.
The Investment Manager confirmed the underlying valuation
has been calculated on a consistent basis throughout the
year – other than when there was a change in assumptions
– and in accordance with industry guidelines, taking account
of the latest available information about investee companies
and current market data.
The Committee was satisfied that valuations were prepared
consistently, appropriately and in line with industry guidance.
Taxation
The Investment Manager informed the Directors of a tax
issue that required an adjustment in the third quarter NAV. At
that stage, the proposed change reflected the best available
estimate, based on ongoing work with a leading tax advisor.
Recognising that further analysis was still needed, the Board
sought as much assurance as could reasonably be provided
at the time.
Once the review was completed, a further adjustment was
required in the fourth quarter to reflect higher tax liabilities,
both historical and projected. This outcome has been
extremely disappointing.
When the issue first emerged in the third quarter NAV, the
Directors requested a series of actions by the Investment
Manager to fully understand its extent and ensure it
was addressed appropriately. This included reviewing
relevant processes, undertaking a root-cause analysis,
and commissioning an independent audit of tax treatment
within the valuation model, as well as a review of the overall
financial model. This work has now substantially concluded,
and the Committee has received the necessary assurances.
The Investment Manager has implemented improved
processes and is continuing to strengthen internal controls
inresponse.
In addition, the Committee met directly with the tax advisors
that contributed to the review and received assurance
over the material accuracy of historical liabilities and the
appropriateness of the tax treatment reflected in the fourth
quarter valuation.
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Annual Report and Financial Statements
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Audit and Risk Committee report continued
Audit, risk and internal control
Annual Financial Statements
The Investment Manager confirmed it was unaware of any
material misstatements in the Company’s financial reporting.
After reviewing reports from both the Investment Manager
and the Auditor, the Committee concluded that key areas of
judgement were properly addressed and that the significant
assumptions used in determining the value of assets and
liabilities have been properly appraised and are sufficiently
robust.
The Committee also reviewed the Annual Report, including
the use of Alternative Performance Measures, to improve
presentation and facilitate understanding.
The Committee determined that the Annual Report and
Financial Statements are fair, balanced and understandable,
and provide shareholders with the information needed to
assess Foresight Solar’s position, performance, business
model and strategy.
External Auditor
In reviewing the effectiveness of the external audit, the
Committee:
ș Discussed audit planning, scope and key areas of focus
ș Assessed the level of challenge applied by the Auditor
ș Reviewed the quality of engagement between the Auditor,
the Investment Manager and the Administrator
The Committee concluded KPMG delivered a high-quality
and effective audit, demonstrating appropriate professional
scepticism and sector understanding. KPMG’s independence
and objectivity were confirmed through their internal
declarations and the absence of non-audit work to the
Company or any other entity in the Group.
The Committee confirms that Foresight Solar complied with
the requirements of the Statutory Audit Services for Large
Companies Market Investigation Order 2014 throughout the
year. All matters relating to the external audit – including the
appointment of the Auditor, audit engagement terms, and the
approval of non-audit services – were overseen in line with
the order’s provisions. No compliance issues were identified.
On the Committee’s recommendation, the Board will propose
KPMG’s reappointment at the June 2026 AGM.
Internal control and risk management
The Board retains overall responsibility for the Company's
internal controls and for the review of their effectiveness.
These internal control systems are designed to meet the
Company's needs and to manage, rather than eliminate, risk.
Financial administration is delegated to JTC, as accountant
and administrator, supported by documented controls and
processes to ensure accuracy of financial information and
safeguarding of assets.
The Investment Manager operates a continuous process for
identifying, assessing and managing risks, including those
managed by the Company's Compliance Officer. A detailed
Business Risk Assessment and risk matrix are maintained
and reviewed regularly by the Committee and the Board.
These cover strategic, operational, financial, reporting and
compliance risks, including emerging risks.
The Investment Manager also operates a system of internal
controls that support key processes relevant to the Company
and its subsidiaries.
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Annual Report and Financial Statements
for the year ended 31 December 2025
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Audit and Risk Committee report continued
Audit, risk and internal control
Internal control and risk management continued
The Committee reviewed the effectiveness of the internal
control and risk management systems and reported its
conclusions to the Board, which was satisfied with their
overall effectiveness – other than in relation to the tax
review, for which the Investment Manager has assured the
Board has been addressed. In 2026, the Committee will
continue to work with the Investment Manager, Administrator
and Compliance Officer to further enhance reporting and
assurance processes.
The Committee also assessed the need for an internal
audit function and concluded that existing arrangements,
including controls operated by the Investment Manager and
Administrator and oversight from the Committee provide
adequate assurance at this time. It noted that the Investment
Manager is establishing an internal audit function and
the Committee will explore how this unit can assist with
assurance for the Company.
Implementation of Provision 34 of the AIC Code
The Committee already oversees Foresight Solar’s risk
management and internal control framework. During 2025,
it began preparing for the new requirements introduced
under Provision 34 of the AIC Corporate Governance Code,
which will apply for the 2026 year end. Provision 34 requires
the Board to describe how it monitors internal controls
and risk management processes, and to provide an explicit
declaration on the effectiveness of material controls at the
balance sheet date.
In anticipation of issuing this first declaration, the Committee
is undertaking a structured review of the Company’s principal
and emerging risks, together with the material controls
spanning financial, operational, reporting and compliance
areas. This work also includes reviewing the related
assurances that support the Board’s assessment. Through
this process, the Committee aims to ensure that Foresight
Solar is well prepared to deliver a clear, evidence-based
statement that fully meets the expectations of Provision 34.
Other matters
The Committee remains committed to continuously enhancing
the quality and transparency of the Company’s reporting.
As part of this commitment, an independent firm conducted
a limited assurance review of the sustainability disclosures
included in the 2024 Annual Report, in line with ISAE 3000.
For the 2025 reporting year, the same firm was engaged
to perform a reasonable assurance review of the key
sustainability metrics presented in this report. Their
conclusion was that these sustainability metrics were, in all
material respects, prepared in accordance with the relevant
standards, methodologies and recommendations. (Read more
on page 45.)
Ann Markey
Chair of the Audit and Risk Committee
23 March 2026
Southam, UK
Financial Statements
Governance
Strategic Report
Foresight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
100
Membership:
Paul Masterton
Lynn Cleary
Ann Markey
Tony Roper
Overview
The Remuneration Committee is responsible for setting
and overseeing the policy on Non‑Executive Director
compensation. In carrying out its work, the Committee
ensures that remuneration is transparent, fair, aligned
withForesight Solar’s strategy and sufficient to attract
andretain Directors with the skills and experience
neededtosupport the Company’s long‑term success.
Roles and responsibilities
The Committee’s key responsibilities are to:
ș Set remuneration policies and practices that support
theCompany’s strategy
ș Determine the remuneration policy for Non‑Executive
Directors
ș Decide individual Director fees within the limits set out
intheArticles of Association
Introduction
This Remuneration Report has been prepared in accordance
with the AIC Code. An ordinary resolution to approve it
willbe put to shareholders at the Annual General Meeting
inJune2026.
Remuneration policy
Remuneration for Non‑Executive Directors is set to:
ș Reflect the complexity of the Company’s operations
ș Recognise the time commitment and responsibilities
associated with the role
ș Support the recruitment and retention of high-calibre
individuals
ș Remain transparent and aligned with best practice
The Committee recommends the remuneration policy,
oversees its implementation and ensures that all payments
are made in accordance with the agreed framework.
Consistent with UK investment company practice,
Director remuneration does not include share options or
performance‑related elements.
Foresight Solar’s Articles of Association cap total aggregate
annual fees at £400,000. Directors are paid quarterly in
arrears and are entitled to reimbursement of reasonable
expenses incurred on FSFL business. The Company
alsomaintains directors’ and officers’ liability insurance.
Directors do not have service contracts. Under their letters
of appointment, they may resign by mutual consent and
no compensation is payable upon leaving office. As they
are notappointed for a fixed term, there is no unexpired
contractual period.
Approach to setting fees
Foresight Solar’s policy is to favour smaller, incremental
fee adjustments over large, infrequent increases. When
considering changes, the Committee takes account of:
ș The macroeconomic environment and inflation
ș The increasingly complex regulatory landscape
ș Market benchmarks for FTSE 350 companies and other
investment trusts
Shareholders approved the previous remuneration policy
at the 2025 AGM for the financial year ended 31 December
2025. The Committee reviewed the policy during the year
and proposed minor updates to enhance transparency and
align with the AIC Code and other relevant frameworks.
Theupdated policy will be put to shareholders at the 2026
AGM to apply for subsequent years.
“ The Committee has responsibility
for reviewing and establishing
Directors’ remuneration, specifically
reflecting the responsibilities and
time commitment of their roles.”
Paul Masterton
Chair of the Remuneration Committee
Directors' Remuneration report
Remuneration
Financial Statements
Governance
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Annual Report and Financial Statements
for the year ended 31 December 2025
101
Directors' Remuneration report continued
Remuneration
Remuneration considerations
The Committee reviews Board fees at least annually and undertakes external comparisons
to ensure they remain appropriate. In 2025, the Committee considered commissioning an
independent consultant but concluded that the peer benchmarking undertaken, supported
byanalysis from the Investment Manager, was sufficient.
Benchmarking confirmed that overall Board fees remain at or below the mid‑point of the
renewable energy investment trust peer group. In light of the challenging macroeconomic
environment, the Committee recommended no changes to remuneration for 2025.
Throughout the year, the Board maintained a strong commitment to delivering the best
outcomes for shareholders. This led to extensive deliberation, with Directors meeting 28
times between the regular schedule and ad hoc engagements. The Committee expects this
heightened level of involvement to continue given ongoing sector-wide pressures and remains
open to granting one‑off fee payments to reflect the extra work.
Following its review and detailed discussions, the Committee has recommended a 3.5%
increase in fees for 2026.
Individual Directors’ fees
Details of Directors’ fees for the year, and those forecast for 2026, are provided below.
Noother remuneration was paid or is payable for the period.
Anticipated fees for the
year ending
31 December
2026 (Unaudited)
Fees for the
year ended
31 December
2025 (Audited)
Fees for the
year ended
31 December
2024 (Audited)
Tony Roper (Chair)
1
£86,000 £62,081 £5,966
Paul Masterton
2
£55,500 £53,508 £5,966
Ann Markey £68,000 £65,520 £65,520
Lynn Cleary £55,500 £53,508 £53,508
Alex Ohlsson
3
— £59,087 £82,992
Chris Ambler
4
— £24,696 £53,508
Monique O'Keefe
5
— — £47,692
Total £265,000 £318,400 £315,152
1. Tony Roper was appointed to the Board on 21 November 2024 and became Chair on 16 September 2025. Had he been Chair
forthe full year, he would have received £82,992.
2. Paul Masterton was appointed to the Board on 21 November 2024.
3. Alex Ohlsson stepped down from the Board on 16 September 2025.
4. Chris Ambler stepped down from the Board on 17 June 2025.
5. Monique O’Keefe stepped down from the Board on 21 November 2024.
Directors' interests
Directors’ shareholdings as at 31 December 2025 are set out below. As noted earlier, Directors
do not hold share options as part of their roles.
Shares held on
31 December
2025
Shares held on
31 December
2024
Tony Roper (Chair)
6
129,725 49,725
Paul Masterton — —
Ann Markey 10,000 10,000
Lynn Cleary 15,000 15,000
6. 95,000 shares held directly, and 34,725 shares held via a family investment company. WhilstMrRoper controls the decision‑
making of the latter shares, the economic benefit is solelyforhis children.
Approval of report
The Board will propose a resolution at the forthcoming AGM for shareholders to approve this
Remuneration Report, including the Directors’ fees for the year ending 31 December 2026.
Paul Masterton
Chair of the Remuneration Committee
23 March 2026
Financial Statements
Governance
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Annual Report and Financial Statements
for the year ended 31 December 2025
102
Overview
The Directors' report summarises key information about
Foresight Solar’s structure, share capital, authorities, dividend
arrangements and compliance with relevant regulatory
frameworks. It also outlines the Company’s approach to
financial risk management and confirms its adherence to
applicable governance and legal requirements.
The Company
Foresight Solar Fund Limited (FSFL) is a closed-end
investment company with an indefinite life. It was
incorporated in Jersey on 13 August 2013 under the
Companies (Jersey) Law 1991 (asamended) with registration
number 113721.
The Company is authorised as a collective investment fund
under the Collective Investment Funds (Jersey) Law 1988 and
is regulated as a Jersey listed fund under the JFSC’s Listed
Fund Guide.
The registered office is: 28 Esplanade, St. Helier, Jersey,
JE42QP.
Share capital and voting rights
Details of Foresight Solar’s capital structure and movements
in share capital during the year areprovided in note 17 to the
Financial Statements.
As at 23 March 2026, the Company had 609,958,720 ordinary
shares of nil par value in issue. The shares are listed on the
Main Market of the London Stock Exchange.
Investment objective
Foresight Solar’s objective is to provide investors with a
sustainable, progressive quarterly dividend and enhanced
capital value, whilst facilitating climate change mitigation and
the transition to a lower‑carbon economy.
Investment policy
The Company pursues its investment objective by investing
in a diversified portfolio of ground‑based solar power plants
and utility-scale battery energy storage systems (BESS)
predominantly located in the UK, contributing to the growth
of renewable energy generation capacity available and the
production of more clean power over the long term.
The Company is permitted to invest in BESS up to a limit
of 10% of the GAV of the Company and its subsidiaries,
calculated at the time of investment, supporting the transition
to low‑carbon electricity networks.
Directors' report
The Directors present their report and the audited Financial Statements
of the Company for the year ended 31 December 2025.
The Company will invest in operational ground-based solar
power plants and BESS but will also be able to invest in
pre-operational assets which are either in the development
stage or the construction stage of their lifecycle, enabling the
Company to contribute to the deployment of new renewable
energy generation capacity and flexible electricity storage
over time whilst supporting its financial objectives.
Investments in assets which are in the development stage
of their lifecycle, which have not yet secured all necessary
project rights for construction and operation but have a
delivery plan and have established reasonable viability to
secure such necessary project rights, will be limited to 5% of
the GAV of the Company and subsidiaries, calculated at the
time of investment.
Investments outside the UK and in assets which are, when
acquired, still under construction, will be limited to 25%
respectively of the GAV of the Company and subsidiaries,
calculated at the time of investment.
The Company will seek to acquire majority or minority
stakes in individual ground‑based solar assets. When
investing in a stake of less than 100% in a solar power plant
special purpose vehicle (SPV), the Company will secure its
shareholder rights through shareholders’ agreements and
other legal transaction documents.
Financial Statements
Governance
Strategic Report
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Annual Report and Financial Statements
for the year ended 31 December 2025
103
Directors' report continued
Diversification will also be achieved by the Company using a
number of different third‑party providers such as developers,
engineering, procurement and construction (EPC) contractors,
operations and maintenance (O&M) contractors, panel
manufacturers, landlords and distribution network operators.
The Articles provide that gearing, calculated as Group
borrowing (including any asset-level gearing) as a percentage
of the Company’s GAV, will not exceed 50% at the time of
drawdown. Itis the Board’s current intention that long‑term
gearing (including long-term, asset-level gearing), calculated
as Group borrowings (excluding intra‑group borrowings (i.e.
borrowings between members of the Group) and revolving
credit facilities) as a percentage of the Company’s GAV will
not exceed 40% at the time of drawdown.
Allotment of shares
Shareholders have authorised the Directors to issue new
shares up to 10% of the Company’s issued share capital.
The Board intends to seek renewal of this authority at the
forthcoming AGM.
Shareholders have also authorised the Directors to disapply
pre‑emption rights, also up to 10% of issued share capital,
as permitted by the Company’s Articles of Association, the
Listing Rules and the Financial Services and Markets Act
2000. A special resolution will be proposed at the AGM to
renew this authority.
No shares were allotted under these authorities during
theyear.
Investment policy continued
Power purchase agreements (PPAs) will be entered into
between each of the individual solar power plant SPVs in
the portfolio and creditworthy offtakers. Under the PPAs, the
SPVs will sell solar-generated electricity and, if applicable,
green benefits to the designated offtaker. The Company may
retain exposure to power prices through PPAs that do not
include mechanisms such as fixed prices or price floors.
Investment may be made in equity, debt or intermediate
instruments but not in instruments traded on any investment
exchange.
The Company is permitted to invest cash held for working
capital purposes and awaiting investment in cash deposits,
gilts and money market funds.
In order to spread risk and diversify its portfolio, at the
time of investment, no single asset shall exceed 30% of the
Company’s GAV post‑acquisition.
If the investment is an additional stake in an existing
investment, the combined value of both the existing stake
and the additional stake acquired should also not exceed
30%. The GAV of the Company will be calculated based
on the last published gross investment valuation of the
Company’s portfolio, including cash, plus acquisitions made
since the date of such valuation at their cost of acquisition.
The Company’s portfolio will provide diversified exposure
through the inclusion of not less than five individual solar
power plants and the Company will also seek to diversify
risk by ensuring that a significant proportion of its expected
income stream is derived from regulatory support (which will
consist of, for example, without limitation, ROCs and FiTs for
UK assets).
Purchase of own shares
The Company is authorised to make market purchases
of up to 14.99% of its issued ordinary shares (excluding
treasury shares), subject to specified pricing parameters and
compliance with the Articles:
(a) The Company may purchase up to 14.99% of the ordinary
shares that were in issue on 23May 2025, which is
83,488,221 shares
(b) The minimum price the Company may pay for an ordinary
share is £0.01
(c) The maximum price the Company may pay, excluding
expenses, is the higher of: (i) 14.99% above the average
middle‑market price for an ordinary share over the five
business days before the purchase is agreed; and (ii)
the higher of the last independent trade and the highest
current independent bid on the trading venue where the
purchase takes place
(d) This authority is in addition to any existing share purchase
authorities and will expire at the next AGM, or 18 months
after the date it was granted, whichever comes first, unless
renewed, varied or revoked by shareholders
(e) The Company may enter into contracts to buy back shares
before the authority expires, even if the purchases are
completed after the authority has ended
(f) The Directors will provide a statement of solvency, as
required under Articles 55 and 57 of the Companies
(Jersey) Law
Financial Statements
Governance
Strategic Report
Foresight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
104
Directors' report continued
Purchase of own shares continued
The Company will only buy back shares through the market,
for cash, and at prices below the prevailing net asset value
per share. Purchases will only be made when the Directors
believe they will increase the NAV per share and are in
shareholders’ best interests, for example when buybacks
help correct an imbalance between supply and demand for
the Company’s shares.
On 4 May 2023, the Company announced a £10 million
share buyback programme to address the discount between
the share price and asset values implied by third-party
transactions. The programme was extended twice to £40
million. On 8 August 2024, the Board increased the allocation
to £50 million and, again, on 16 July 2025, the total was
raised to up to £60 million.
As at the date of this report, 62,334,393 ordinary shares had
been repurchased. The authority expires at the next AGM.
The Board will continue to assess whether further buybacks
remain in shareholders’ best interests.
Treasury shares
Under Jersey law, companies may hold repurchased shares
in treasury rather than cancel them. Issued shares may be
held in treasury and may be later cancelled or sold for cash.
Holding treasury shares gives the Company flexibility to
reissue shares efficiently and support market liquidity. As
at the date of this report, 62,334,393 shares were held in
treasury.
Dividends
Under the Articles of Association, the Board may approve
interim dividends without shareholder approval. However,
in line with best practice, the Company seeks annual
shareholder approval for its policy to pay four interim
dividends per year. This authority was renewed at the AGM
held on 12 June 2025.
Scrip dividend option
At the 2019 AGM, shareholders authorised the Directors to
offer dividends in the form of new ordinary shares (a Scrip
Dividend Scheme). This authority was renewed for three years
at the 2022 AGM.
To date, approximately 6.1 million new ordinary shares have
been issued under the scheme, resulting in a net cash saving
of £5.9 million.
The Board has suspended the scrip dividend alternative
to protect shareholder value whilst the Company’s shares
trade at a discount to net asset value. Issuing new shares
now would be dilutive to NAV per share and inconsistent with
prudent capital management, particularly when the Directors
are focused on supporting a recovery in the stock’s rating.
The scheme remains under review for reinstatement when
appropriate.
Share dealing code, policy and manual
In accordance with the UK Market Abuse Regulations, the
Company has adopted a share dealing code, policy and
manual to ensure compliance by Directors and other Persons
Discharging Managerial Responsibilities.
Financial Statements
Governance
Strategic Report
Foresight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
105
Financial risk management
Information on the Company’s financial risk management
objectives and policies is provided in note 19 to the Financial
Statements.
Bribery Act 2010
Foresight Solar is committed to conducting business fairly,
honestly and transparently. The Investment Manager
maintains policies and procedures designed to prevent
bribery within its operations.
Criminal Finances Act 2017
The Company has adopted a zero-tolerance approach to the
facilitation of tax evasion, whether under UK or foreign law.
It is committed to acting with integrity in all business dealings
and maintains systems and controls to prevent tax evasion
facilitation across all jurisdictions in which it operates.
Requirements of the Listing Rules
Listing Rule 6.6.4 requires certain information to be disclosed
in a single identifiable section of the Annual Report or via
a cross‑reference table. The Directors confirm that no
disclosures are required in relation to Listing Rule 6.6.4 for
this reporting period.
Directors’ indemnity
The Company maintains a directors’ and officers’ liability
insurance policy, providing cover for certain liabilities
incurred in the course of their duties. This policy does
notcover fraudulent or dishonest acts.
The Company has also kept standard-form indemnity
agreements with each of its Directors, in line with applicable
laws and regulations. These agreements provide protection
for Directors against liabilities arising in connection with the
performance of their duties, including any actions, costs,
losses, damages, expenses or claims made against them in
their role. The indemnities include the usual exclusions and
limitations, such as when liabilities may arise from negligence,
fraud, wilful acts or defaults, breaches of duty or trust, or
relate to liabilities incurred in defending claims brought by the
Company, criminal proceedings, criminal fines or regulatory
penalties. They are designed to supplement statutory
protections and do not cover any liabilities that legislation
prohibits or that arise from criminal acts.
The indemnities help ensure that Directors can carry out their
responsibilities with appropriate protection, subject to the
Board’s ongoing oversight and review.
Articles of Association
The Company’s Articles of Association are available from
theCompany Secretary and at the AGM.
Website publication
The Board is responsible for ensuring that the Annual Report
and Financial Statements are published on the Company’s
website in accordance with relevant legislation. Directors
are also responsible for the maintenance and integrity of the
website and the information it contains. Jersey requirements
for the preparation and dissemination of financial statements
may differ from those in other jurisdictions.
Post balance sheet events
Further information on post balance sheet events is
providedin note 25 to the Financial Statements.
Annual General Meeting
The AGM is expected to be held on 3 June 2026 at
the Company’s registered office at 28 Esplanade, St.
Helier, Jersey, JE2 3QA. Details on how shareholders
may participate will be included in the Notice of Annual
GeneralMeeting, to be published in due course.
By order of the Board.
Tony Roper
Chair
For and on behalf of
Foresight Solar Fund Limited
23 March 2026
Directors' report continued
Financial Statements
Governance
Strategic Report
Foresight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
106
Statement of Directors' responsibilities
In respect of the Annual Report and Financial Statements
The Directors are responsible for preparing the Financial Statements
in accordance with applicable law and regulations.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information published
on the Company’s website. The Auditor’s responsibilities do
not extend to this information, and KPMG LLP accepts no
responsibility for any changes that may have occurred to the
Financial Statements or the audit report since 23March2026.
KPMG LLP has carried out no procedures ofany kind after
that date.
Legislation in Jersey governing the preparation and
distribution of financial statements may differ from that
in other jurisdictions. The Directors remain responsible
for establishing and overseeing the process for preparing
the Financial Statements and ensuring that the published
documents are complete and unaltered.
The Board has voluntarily chosen to prepare a Directors’
Remuneration Report in accordance with Schedule 8 of the
Large and Medium-sized Companies and Groups (Accounts
and Reports) Regulations 2008, as if those UK requirements
applied to Foresight Solar.
Responsibility statement of the Directors
In respect of the annual financial report, we confirm that to
the best of our knowledge:
ș The Financial Statements, prepared in accordance with the
applicable accounting standards, give a true and fair view
of the Company’s assets, liabilities, financial position and
profit or loss
ș The Annual Report includes a fair review of the
development and performance of the Company's business
and its position, together with a description of the
principal risks and uncertainties it faces
ș We consider the Annual Report and Financial Statements,
taken as a whole, to be fair, balanced and understandable,
and to provide shareholders with the information
necessary to assess Foresight Solar’s position and
performance, business model and strategy
Tony Roper
Chair
For and on behalf of
Foresight Solar Fund Limited
23 March 2026
Jersey Company Law requires Directors to prepare financial
statements that give a true and fair view of the Company’s
affairs and of its profit or loss for each financial year. Under
this law, and as permitted by the UK Disclosure Guidance
and Transparency Rules, the Financial Statements have been
prepared in accordance with the International Accounting
Standards Board’s standards and all applicable legislation.
In preparing the Financial Statements, the Directors must:
ș Select suitable accounting policies and apply them
consistently
ș Make judgements and estimates that are reasonable,
relevant and reliable
ș Confirm compliance with applicable accounting standards,
except for any material departures that are disclosed and
explained in the Financial Statements
ș Assess the Company’s ability to continue as a going
concern and disclose any related uncertainties where
appropriate
ș Prepare the statements on a going concern basis, unless
they intend to liquidate the Company, cease trading, or
have no realistic alternative but to do so
The Directors are responsible for keeping adequate
accounting records that show the Company’s financial
position with reasonable accuracy and that ensure
compliance with the Companies (Jersey) Law 1991.
Theymust also put in place internal controls that they
consider necessary to produce financial statements that are
free from material misstatement, whether caused by fraud or
error, and take reasonable steps to safeguard the Company’s
assets and prevent and detect irregularities.
Financial Statements
Governance
Strategic Report
Foresight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
107
Financial
Statements
What's in this section:
109Independent Auditor’s report
116 Statement of profit and loss and other
comprehensive income
117Statement of financial position
118Statement of changes in equity
119Statement of cash flows
120Notes to the Financial Statements
154AIFMD disclosures (unaudited)
155Advisors
156Glossary of terms
Paddock Wood, UK
Financial StatementsForesight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
108
Governance
Strategic Report
Independent Auditor's report
To the members of Foresight Solar Fund Limited
1. Our opinion is unmodified
We have audited the financial statements of Foresight Solar Fund Limited (“the Company”)
for the year ended 31 December 2025, which comprise the Statement of Profit and Loss and
Other Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity,
Statement of Cash Flows and the related notes, including the accounting policies in note 2.
In our opinion the financial statements:
ș give a true and fair view, in accordance with International Financial Reporting Standards
adopted pursuant to Regulation (EC) No. 1606/2002 as it applies in the European Union, of
the state of the Company’s affairs as at 31 December 2025, and of its loss and cash flows
for the year then ended; and
ș have been properly prepared in accordance with the Companies (Jersey) Law, 1991.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK))
and applicable law. Our responsibilities are described below. We have fulfilled our ethical
responsibilities under, and are independent of the Company in accordance with, UK ethical
requirements including the FRC Ethical Standard as applied to listed public interest entities.
Webelieve that the audit evidence we have obtained is a sufficient and appropriate basis for
our opinion.
2. Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgement, were of most
significance in the audit of the financial statements and include the most significant assessed
risks of material misstatement (whether or not due to fraud) identified by us, including those
which had the greatest effect on: the overall audit strategy; the allocation of resources in the
audit; and directing the efforts of the engagement team. We summarise below the key audit
matter (unchanged from 2024), in arriving at our audit opinion above, together with our key
audit procedures to address that matter and our findings from those procedures in order that
the Company’s members, as a body, may better understand the process by which we arrived
at our audit opinion. This matter was addressed, and our findings are based on procedures
undertaken, in the context of, and solely for the purpose of, our audit of the financial statements
as a whole, and in forming our opinion thereon, and consequently are incidental to that opinion,
and we do not provide a separate opinion on this matter.
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Governance
Financial Statements
Independent Auditor's report continued
To the members of Foresight Solar Fund Limited
Valuation of unquoted investments Subjective valuation: Our procedures included:
(£543.5 million; 2024: £632.3 million)
Refer to page 97 (Audit and Risk
Committee Report), page 125
(accounting policy) and page 130
(financial disclosures).
Risk level remains unchanged
fromprior year
As at 31 December 2025, 99% (December 2024: 99%) of the
Company’s total assets (by value) were held in investments
where no quoted market price is available.
The unquoted investment held at fair value through profit
or loss represents a 100% holding in Foresight Solar (UK
Holdco) Ltd. This entity in turn makes its investments
through intermediate holding companies and underlying
Special Purpose Vehicles.
As these investments are unquoted and illiquid, in order to
determine the fair value, the Company has made a number
of assumptions which are unobservable in the market.
These included:
Significant assumptions: The discount rate and power price
curve assumptions have a high degree of complexity and
subjectivity.
Non‑significant assumptions and data points: We do not
consider other assumptions and data points to be at a
significant risk of material misstatement due to lower
complexity and subjectivity.
However, these assumptions are important as they can
have a material impact on the overall valuation.
ș Useful economic life assumption
ș Inflation assumption
ș Production and operating costs data
ș Tax assumptions
The effect of these matters is that, as part of our risk
assessment, we determined that the valuation of unquoted
investments has a high degree of estimation uncertainty,
with a potential range of reasonable outcomes greater than
our materiality for the financial statements as a whole, and
possibly many times that amount. The financial statements
(note 16) disclose the sensitivity estimated by the Company.
We performed the procedures below rather than seeking to rely on any of the Company’s controls because
the nature of the balance is such that we would expect to obtain audit evidence primarily through the detailed
procedures described.
Our procedures included:
Involvement of our valuation specialists:
ș With the assistance of our valuation specialists, we critically evaluated and challenged significant assumptions
affecting the valuation of the underlying assets, specifically discount rates and power price curves (including the
capture discount curve) and non‑significant assumptions (useful economic life and inflation rates)
Our procedures for significant assumptions included:
Benchmarking assumptions:
ș We assessed whether the discount rates and power price curves are within a reasonable range based on
relevant market data
ș We agreed the subsidy and wholesale power price to agreements in place, such as Power Purchase Agreements
Our procedures in respect of the non-significant assumptions and data points included:
Test of detail:
ș We agreed production data to due diligence reports prepared by third‑party engineers. We evaluated the
competence, objectivity and independence of the third‑party engineers
ș We assessed the reasonableness of forecast operating costs with reference to historic actual operating costs
and, where possible, underlying agreements for leases, asset management, operations and maintenance
contracts
ș We evaluated the appropriateness of the useful economic life for individual assets, taking into consideration
factors such as the life cycle of the asset, expiry of planning permissions, probability of lease extensions and
available market information
ș We compared the inflation rates assumption to relevant external forecasts
ș With the assistance of our tax and transfer pricing specialists, we evaluated key assumptions and methodology
adopted for incorporating tax in the valuation model and agreed the calculation on a sample basis.
Historical comparison:
ș We compared actual to previously budgeted production and considered this in our challenge of future
production forecasts
Assessing transparency:
ș We considered the appropriateness, in accordance with relevant accounting standards, of the disclosures
in respect of unquoted investments and the effect of changing one or more inputs to reasonably possible
alternative valuation assumptions
Our findings:
ș We found the Company’s valuation of unquoted investments to be mildly optimistic (2024: mildly optimistic).
110
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Financial Statements
3. Our application of materiality and an overview of the scope of our audit
Materiality for the financial statements as a whole was set at £6.0 million (2024: £6.5million),
determined with reference to a benchmark of net assets (2024: net assets), of which it
represents 1.1% (2024: 1.0%). We continued to select the Company’s net assets as the
benchmark in the current year owing to the focus of the users of the financial statements
onthenet assets as a measure of performance of the underlying renewable energy
infrastructure assets.
In line with our audit methodology, our procedures on individual account balances and
disclosures were performed to a lower threshold, performance materiality, so as to reduce
toan acceptable level the risk that individually immaterial misstatements in individual account
balances add up to a material amount across the financial statements as a whole.
Performance materiality was set at 75% (2024: 75%) of materiality for the financial statements
as a whole, which equates to £4.5 million (2024: £4.9 million). We applied this percentage in our
determination of performance materiality because we did not identify any factors indicating an
elevated level of risk.
We agreed to report to the Audit and Risk Committee any corrected or uncorrected identified
misstatements exceeding £0.3 million (2024: £0.3 million), in addition to other identified
misstatements that warranted reporting on qualitative grounds.
Our audit of the Company was undertaken to the materiality and performance materiality levels
specified above and was performed by a single audit team.
Impact of controls on our audit
As disclosed within the Audit and Risk Committee Report on page 97, administrative
and accounting operations of the Company are provided by JTC (Jersey) Limited (the
‘Administrator’). We therefore identified that the financial reporting system operated by the
Company’s Administrator to be the main IT system relevant to our audit. We obtained and read
the Administrator’s type two service organisation controls report to assist us in evaluating the
design of the general IT controls of the main finance system.
Consistent with our approach noted within the key audit matter in section 2 of our report, we
did not plan to rely on any of the Company’s controls in relation to any areas of our audit.
This is because the nature of the majority of the Company’s balances (including cash and cash
equivalents, interest income and receivable and management fees) is such that we would expect
to obtain audit evidence primarily from external confirmations (for cash and cash equivalents)
and independent recalculations based on the contractual arrangements (for interest income
and receivable and management fees). This is considered more efficient and therefore the scope
of the audit work performed was fully substantive in all aspects of the audit for the year ending
31December 2025.
4. The impact of climate change on our audit
In planning our audit, we have considered the potential impacts of climate change on the
Company’s business and its financial statements.
Climate change impacts the Company principally through the valuation of investments and
through potential reputational risk associated with the Company’s strategy. The Company’s
exposure to climate change is primarily through its indirect investment in the underlying
renewable energy infrastructure assets, as the key valuation assumptions and estimates could
be impacted by climate risks, for example where a new legislation on solar farms is introduced
and have an impact on the forecast cash flows.
Given the nature of the current investment portfolio, the impact of climate change is inherently
built in the valuations of the solar farms of the Company. We have performed a risk assessment
of how the impact of climate change may affect the financial statements and our audit, in
particular over the valuation of unquoted investments and our related key audit matter in
section 2 above.
We have read the disclosure of climate related information in the front half of the Annual Report
and considered consistency with the Financial Statements and our audit knowledge.
Independent Auditor's report continued
To the members of Foresight Solar Fund Limited
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Financial Statements
In relation to the valuation of the assets and the liquidity of the investment portfolio, we
considered whether these risks could plausibly affect the liquidity and covenant compliance
of the Company and its subsidiaries in the going concern period by comparing severe but
plausible downside scenarios that could arise from these risks individually and collectively
against the level of available financial resources and covenants indicated by the Company’s
financial forecasts.
We considered whether the going concern disclosure in note 2.2 to the Financial Statements
gives a full and accurate description of the Directors’ assessment of going concern, including
the identified risks and related sensitivities.
Our conclusions based on this work:
ș we consider that the Directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate;
ș we have not identified, and concur with the Directors’ assessment that there is not, a
material uncertainty related to events or conditions that, individually or collectively, may
cast significant doubt on the Company’s ability to continue as a going concern for the going
concern period; and
ș we have nothing material to add or draw attention to in relation to the Directors’ statement
in note 2 to the financial statements on the use of the going concern basis of accounting with
no material uncertainties that may cast significant doubt over the Company’s use of that
basis for the going concern period, and we found the going concern disclosure in note 2 to
be acceptable.
However, as we cannot predict all future events or conditions and as subsequent events may
result in outcomes that are inconsistent with judgements that were reasonable at the time
they were made, the above conclusions are not a guarantee that the Company will continue
inoperation.
5. Going concern
The Directors have prepared the financial statements on the going concern basis as they do not
intend to liquidate the Company or to cease its operations, and as they have concluded that the
Company’s financial position means that this is realistic. They have also concluded that there
are no material uncertainties that could have cast significant doubt over its ability to continue
as a going concern for at least a year from the date of approval of the financial statements
(“thegoing concern period”).
We used our knowledge of the Company, its industry, and the general economic environment to
identify the inherent risks to its business model and analysed how those risks might affect the
Company’s financial resources or ability to continue operations over the going concern period.
The risks that we considered most likely to adversely affect the Company’s available financial
resources, metrics relevant to debt covenants and its ability to operate over this period were:
ș The discontinuation vote at the Annual General Meeting in June 2026, which is triggered by
the level of discount between the Company’s Net Asset Value and its share price; and
ș The impact of a significant reduction in the valuation of the assets in the portfolio, driven
predominately by decreases in revenue and production, which impacts the Company and
itssubsidiaries’ cash flows and ability to meet the covenants in place.
In relation to the discontinuation vote, we considered the likely outcome of the discontinuation
vote with reference to the following information:
ș The outcome of the recent survey of investors commissioned by the Company and
conducted by an independent third party;
ș The performance of the Company, with reference to the performance of the underlying
assets considering the current macroeconomic conditions and compared to comparable
asset funds in the same sector;
ș The voting history in the Company’s Annual General Meetings;
ș The profile of the Shareholders; and
ș Our knowledge of the industry and market the Company operates in.
Independent Auditor's report continued
To the members of Foresight Solar Fund Limited
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Financial Statements
As the Company is regulated, our assessment of risks involved gaining an understanding
of the control environment including the entity’s procedures for complying with regulatory
requirements.
The potential effect of these laws and regulations on the financial statements varies
considerably.
Firstly, the Company is subject to laws and regulations that directly affect the financial
statements including financial reporting legislation (including related Companies legislation) and
distributable profits legislation, and we assessed the extent of compliance with these laws and
regulations as part of our procedures on the related financial statement items.
Secondly, the Company is subject to many other laws and regulations where the consequences
of non‑compliance could have a material effect on amounts or disclosures in the financial
statements, for instance through the imposition of fines or litigation. We identified the following
areas as those most likely to have such an effect: anti‑bribery, data protection, anti‑money
laundering, market abuse regulations and certain aspects of Company legislation recognising
the financial and regulated nature of the Company’s activities and its legal form.
Auditing standards limit the required audit procedures to identify non-compliance with
theselaws and regulations to enquiry of the Directors and the Administrator and inspection
ofregulatory and legal correspondence, if any. Therefore, if a breach of operational
regulationsis not disclosed to us or evident from relevant correspondence, an audit will
notdetect that breach.
Context of the ability of the audit to detect fraud or breaches of law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not
have detected some material misstatements in the financial statements, even though we
have properly planned and performed our audit in accordance with auditing standards. For
example, the further removed non‑compliance with laws and regulations is from the events
and transactions reflected in the financial statements, the less likely the inherently limited
procedures required by auditing standards would identify it.
In addition, as with any audit, there remained a higher risk of non-detection of fraud, as fraud
may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal controls. Our audit procedures are designed to detect material misstatement. We are
not responsible for preventing non‑compliance or fraud and cannot be expected to detect non
compliance with all laws and regulations.
6. Fraud and breaches of laws and regulations – ability to detect
Identifying and responding to risks of material misstatement due to fraud
To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events
or conditions that could indicate an incentive or pressure to commit fraud or provide an
opportunity to commit fraud. Our risk assessment procedures included:
ș Enquiring of the Directors and Administrator as to the Company’s high-level policies and
procedures to prevent and detect fraud, as well as whether they have knowledge of any
actual, suspected or alleged fraud;
ș Assessing the segregation of duties in place between the Directors, the Administrator and the
Company’s Investment Manager; and
ș Reading Board minutes and Audit & Risk Committee minutes.
We communicated identified fraud risks throughout the audit team and remained alert to any
indications of fraud throughout the audit.
As required by auditing standards, we perform procedures to address the risk of management
override of controls, in particular to the risk that management may be in a position to make
inappropriate accounting entries. We evaluated the design of the controls over journal entries
and other adjustments and made inquiries of the Administrator as to whether they were
aware of any inappropriate or unusual activity relating to the processing of journal entries
andotheradjustments.
Based on these risk assessment procedures, we assessed the opportunities for management
override of controls in the context of this Company. We compared all material post‑closing
entries and, to incorporate an element of unpredictability, a haphazard selection of other
entries to supporting documentation. On this audit we do not believe there is a fraud risk
related to revenue recognition because revenue, which in this context is interest income, is non
judgemental and straightforward, with limited opportunity for manipulation. We did not identify
any additional fraud risks.
Identifying and responding to risks of material misstatement related to compliance
with laws and regulations
We identified areas of laws and regulations that could reasonably be expected to have a
material effect on the financial statements from our general commercial and sector experience
and through discussion with the Directors and the Administrator (as required by auditing
standards) and discussed with the Directors the policies and procedures regarding compliance
with laws and regulations.
Independent Auditor's report continued
To the members of Foresight Solar Fund Limited
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Governance
Financial Statements
ș the Directors’ explanation in the viability statement of how they have assessed the prospects
of the Company, over what period they have done so and why they considered that period
to be appropriate, and their statement as to whether they have a reasonable expectation
that the Company will be able to continue in operation and meet its liabilities as they fall due
over the period of their assessment, including any related disclosures drawing attention to
any necessary qualifications or assumptions.
Our work is limited to assessing these matters in the context of only the knowledge acquired
during our financial statements audit. As we cannot predict all future events or conditions and
as subsequent events may result in outcomes that are inconsistent with judgements that were
reasonable at the time they were made, the absence of anything to report on these statements
is not a guarantee as to the Company’s longer‑term viability.
Corporate governance disclosures
We are required to perform procedures to identify whether there is a material inconsistency
between the Directors’ corporate governance disclosures and the financial statements and our
audit knowledge.
Based on those procedures, we have concluded that each of the following is materially
consistent with the financial statements and our audit knowledge:
ș the Directors’ statement that they consider that the Annual Report and Financial Statements
taken as a whole is fair, balanced and understandable, and provides the information
necessary for Shareholders to assess the Company’s position and performance, business
model and strategy;
ș the section of the Annual Report describing the work of the Audit and Risk Committee,
including the significant issues that the Audit and Risk Committee considered in relation to
the financial statements, and how these issues were addressed; and
ș the section of the Annual Report that describes the review of the effectiveness of the
Company’s risk management and internal control systems.
We are required to review the part of the Corporate Governance Statement relating to the
Company’s compliance with the provisions of the UK Corporate Governance Code specified
bythe Listing Rules for our review.
We have nothing to report in this respect.
7. We have nothing to report on the other information in the Annual Report
The Directors are responsible for the other information presented in the Annual Report together
with the financial statements. Our opinion on the financial statements does not cover the other
information and, accordingly, we do not express an audit opinion or, except as explicitly stated
below, any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether, based
on our financial statements audit work, the information therein is materially misstated or
inconsistent with the financial statements or our audit knowledge. Based solely on that work
wehave not identified material misstatements in the other information.
Directors’ remuneration report
In addition to our audit of the financial statements, the Directors have engaged us to audit the
information in the Directors’ Remuneration Report that is described as having been audited,
which the Directors have decided to prepare as if the Company were required to comply
with the requirements of Schedule 8 to The Large and Medium-sized Companies and Groups
(Accounts and Reports) Regulations 2008 (SI 2008 No. 410) made under the UK Companies
Act2006.
In our opinion the part of the Directors’ Remuneration Report to be audited has been properly
prepared in accordance with the UK Companies Act 2006, as if those requirements applied to
the Company.
Disclosures of emerging and principal risks and longer-term viability
We are required to perform procedures to identify whether there is a material inconsistency
between the Directors’ disclosures in respect of emerging and principal risks and the viability
statement, and the financial statements and our audit knowledge.
Based on those procedures, we have nothing material to add or draw attention to in relation to:
ș the Directors’ confirmation within the viability statement on page 58 that they have carried
out a robust assessment of the emerging and principal risks facing the Company, including
those that would threaten its business model, future performance, solvency and liquidity;
ș the Principal and Emerging risks disclosures describing these risks and how emerging risks
are identified, and explaining how they are being managed and mitigated; and
Independent Auditor's report continued
To the members of Foresight Solar Fund Limited
114
Foresight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
Strategic Report
Governance
Financial Statements
The purpose of our audit work and to whom we owe our responsibilities
This report is made solely to the Company’s members, as a body, in accordance with Article
113A of the Companies (Jersey) Law 1991 and the terms of our engagement by the Company.
Our audit work has been undertaken so that we might state to the Company’s members those
matters we are required to state to them in an auditor’s report, and the further matters we
are required to state to them in accordance with the terms agreed with the Company, and
for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company’s members, as a body,
forour audit work, for this report, or for the opinions we have formed.
Rahim Butt
for and on behalf of KPMG LLP
Chartered Accountants and Recognised Auditor
15 Canada Square
Canary Wharf
London
E14 5GL
24 March 2026
8. We have nothing to report on the other matters on which we are required
toreport by exception
Under the Companies (Jersey) Law 1991 we are required to report to you if, in our opinion:
ș proper accounting records have not been kept by the company, or
ș proper returns adequate for our audit have not been received from branches not visited by
us; or
ș the financial statements are not in agreement with the accounting records and returns; or
ș we have not received all the information and explanations we require for our audit.
We have nothing to report in these respects.
9. Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on page 107, the Directors are responsible
for: the preparation of financial statements that give a true and fair view; such internal control
as they determine is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error; assessing the Company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern; and
using the going concern basis of accounting unless they either intend to liquidate the Company
or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about whether the financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue our
opinion in an auditor’s report. Reasonable assurance is a high level of assurance but does not
guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of the financial statements.
A fuller description of our responsibilities is provided on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities.
Independent Auditor's report continued
To the members of Foresight Solar Fund Limited
115
Foresight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
Strategic Report
Governance
Financial Statements
Notes
31 December
2025
£'000
31 December
2024
£'000
Revenue
Interest earned on cash in bank 26 60
Interest income 4 28,828 31,368
Loss on investments held at fair value through profit or loss 14 (54,423) (20,311)
Total revenue (25,569) 11,117
Expenditure
Administration fees 6 (257) (251)
Directors' fees 7 (318) (315)
Management fees 5 (5,020) (6,348)
Other expenses 8 (1,263) (1,197)
Total expenditure (6,858) (8,111)
(Loss)/profit before tax for the year (32,427) 3,006
Taxation 2.7 — —
(Loss)/profit for the year (32,427) 3,006
Other comprehensive income — —
(Loss)/profit and other comprehensive income for the year (32,427) 3,006
(Loss)/earnings per ordinary share (pence per share) 9 (5.83) 0.52
All items above arise from continuing operations. There have been no discontinued operations during the period.
The accompanying notes on pages 120 to 153 form an integral part of these Financial Statements.
Statement of profit and loss and other comprehensive income
For the year ended 31 December 2025
116
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for the year ended 31 December 2025
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Governance
Financial Statements
Notes
31 December
2025
£'000
31 December
2024
£'000
Assets
Non-current assets
Investments 14 543,504 632,329
Total non-current assets 543,504 632,329
Current assets
Interest receivable 10 1,242 197
Trade and other receivables 11 319 304
Cash and cash equivalents 12 1,646 2,018
Total current assets 3,207 2,519
Total assets 546,711 634,848
Equity
(Accumulated deficit)/retained earnings (84,010) 4,470
Ordinary share capital and treasury shares 17 629,892 629,892
Total equity 545,882 634,362
Notes
31 December
2025
£'000
31 December
2024
£'000
Liabilities
Current liabilities
Trade and other payables 13 829 486
Total current liabilities 829 486
Total liabilities 829 486
Total equity and liabilities 546,711 634,848
Net asset value per ordinary share 18 99.2 112.3
The Financial Statements on pages 116 to 119 were approved by the Board and signed on its
behalf on 23 March 2026 by:
Tony Roper
Chair
The accompanying notes on pages 120 to 153 form an integral part of these Financial
Statements.
Statement of financial position
As at 31 December 2025
117
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Strategic Report
Governance
Financial Statements
Notes
Issued ordinary
shares¹
£'000
Treasury
shares
2
£'000
Accumulated
deficit
£'000
Total
£'000
Balance as at 1 January 2025 588,184 41,708 4,470 634,362
Total comprehensive profit/loss for the year:
Loss for the year — — (32,427) (32,427)
Transactions with owners, recognised directly in equity:
Dividends paid in the year 21 — — (44,867) (44,867)
Purchase of treasury shares² 17 (11,186) 11,186 (11,186) (11,186)
Balance as at 31 December 2025 576,998 52,894 (84,010) 545,882
For the year ended 31 December 2024
Notes
Issued ordinary
shares
1
£'000
Treasury
shares
2
£'000
Retained
earnings
£'000
Total
£'000
Balance as at 1 January 2024 609,983 19,909 67,997 697,889
Total comprehensive profit for the year:
Profit for the year — — 3,006 3,006
Transactions with owners, recognised directly in equity:
Dividends paid in the year 21 — — (44,734) (44,734)
Purchase of treasury shares² 17 (21,799) 21,799 (21,799) (21,799)
Balance as at 31 December 2024 588,184 41,708 4,470 634,362
1. The stated capital of the Company comprises issued ordinary shares, share premium and treasury shares.
2. Represents the cash payments made to Jefferies International Limited by year end.
The accompanying notes on pages 120 to 153 form an integral part of these Financial Statements.
Statement of changes in equity
For the year ended 31 December 2025
118
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Annual Report and Financial Statements
for the year ended 31 December 2025
Strategic Report
Governance
Financial Statements
Notes
31 December
2025
£'000
31 December
2024
£'000
(Loss)/profit for the year after tax adjustments for: (32,427) 3,006
Unrealised loss on investments 14 54,423 20,311
Operating cash flows before changes in working capital 21,996 23,317
(Increase)/decrease in interest receivables 10 (1,044) 13,454
Increase in trade and other receivables 11 (15) (14)
Increase/(decrease) in trade and other payables 13 342 (711)
Net cash inflow from operating activities 21,279 36,046
Investing activities
Repayment of shareholder loan 34,402 30,464
Net cash inflow from investing activities 34,402 30,464
Financing activities
Purchase of treasury shares¹ (11,186) (21,799)
Dividends paid 21 (44,867) (44,734)
Net cash outflow from financing activities (56,053) (66,533)
Net decrease in cash and cash equivalents (372) (23)
Cash and cash equivalents at the beginning of the year 2,018 2,041
Cash and cash equivalents at the end of the year 12 1,646 2,018
1. This figure represents the cash payments made to Jefferies International Limited by year end.
The accompanying notes on pages 120 to 153 form an integral part of these Financial Statements
Statement of cash flows
For the year ended 31 December 2025
119
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Annual Report and Financial Statements
for the year ended 31 December 2025
Strategic Report
Governance
Financial Statements
1. Company information
Foresight Solar Fund Limited (the Company) is a closed‑ended public company with an indefinite
life and was incorporated in Jersey under the Companies Law (Jersey) 1991, as amended,
on13 August 2013, with registered number 113721. The address of the registered office is:
28Esplanade, St. Helier, Jersey, JE4 2QP.
The Company has one investment, Foresight Solar (UK Hold Co) Limited (UK Hold Co). The
principal activity of the Company through its direct and indirect subsidiaries, as per the
structure chart, is investing in operational and development-stage ground-based solar power
plants and battery storage systems in the UK, Australia and Spain.
UK Hold Co has three investments: FS RCF Debtco Limited (RCF Debtco), FS Holdco 4 Limited
(FS Holdco 4) and Foresight Battery Storage Holding Limited (FBSHL).
RCF Debtco has three investments: FS Top Holdco 1 Limited (FS Topco 1), FS Top Holdco 2
Limited (FS Topco 2) and FS Holdco 3 Limited (FS Holdco 3).
FS Topco 1 has one investment in FS Intermediate Holdco Limited (FIHC). FIHC in turn has one
investment in FS Holdco Limited (FS Holdco).
FS Topco 2 has one investment in Foresight Intermediate Solar Holdings Limited (FISH). In turn,
FISH has one investment in FS Holdco 2 Limited (FS Holdco 2) which has one investment in FS
Debtco Limited (FS Debtco).
FS Holdco 3 has one investment in Second Generation Portfolio 1 Holdings Limited (SGP
Holdings 1). SGP Holdings 1 in turn invests in Second Generation Portfolio 1 (SGP 1) which
invests directly into underlying solar investments.
FS Holdco, FS Debtco and FS Holdco 4 invest in further holding companies (the SPVs) which
then invest in the underlying solar and battery storage investments.
Structure chart
The following chart shows the Group structure as at 31 December 2025:
Notes to the Financial Statements
For the year ended 31 December 2025
Foresight Solar Fund Limited
UK Hold Co
RCF Debtco
FS Topco 1 FS Holdco 3 FBSHL 50% FS Topco 2
SPVs SPVs SPVs SPVsSPVs
FS Holdco SGP 1 FS Holdco 4FS Debtco
FS Holdco 2
FIHC SGP Holdings 1FISH
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Recent interactions with shareholders have not indicated that the special resolution in respect
to discontinuation will pass. During December 2025 and January 2026, the Investment Manager
commissioned an independent specialist consultancy to survey shareholders representing 28%
of ordinary shares outstanding at 31 December 2025. The objective was to understand views
on the Company, covering many topics, including the views on the upcoming vote.
The poll was conducted through meetings and direct conversations. The results showed that
a minority of individual respondents indicated they intend to vote for the discontinuation of
the Company. A majority of individual respondents would not openly share their intentions,
but suggested that, if Foresight Solar delivered on its stated goals, they saw clear reasons
for continuance. These investors indicated that they will refrain from making a decision until
speaking to the Board. Most shareholders interviewed did not consider discontinuation the best
option to maximise value.
The Directors have considered the improved result against discontinuation in June 2025 and
the Board’s and the Investment Manager’s efforts to address the discount to NAV the shares
trade at through a disciplined capital allocation strategy. Based on the most recent assessment
of the shareholders' sentiment, the Directors are comfortable with a successful result against
discontinuation in the vote to be held at the June 2026 AGM.
Background:
The going concern assessment has been prepared over a period of 18 months from the balance
sheet date of the audited Annual Financial Statements in March 2026 (the going concern
assessment period). The Company’s exposure to wholesale energy prices is reduced in the
medium term through a combination of fixed price forward sales arrangements covering 67% of
PPA revenues until 31 March 2026 and then financial hedging arrangements covering 48% of PPA
revenues until 30 June 2027. This provides some protection if merchant power prices continue
to decline. The Company’s power purchase agreements are all contracted across a pool of five
UK, five Australian and two Spanish energy suppliers. Insolvency of PPA offtakers presents a
key risk for the Company due to the high proportion of revenues that are contracted with these
energy suppliers, including concentration risk with one accounting for 59%. Accordingly, the
Investment Manager monitors the counterparty risk on the Company’s energy suppliers and will
consider new PPAs if the counterparty risk of existing energy suppliers is of concern. Similarly,
the credit risk of financial hedging counterparties is monitored and managed in accordance with
Company policies.
2. Summary of significant accounting policies
2.1 Basis of presentation
The Financial Statements for the year ended 31 December 2025 have been prepared in
accordance with International Financial Reporting Standards as adopted by the European Union
(IFRS) which comprise standards and interpretations issued by the International Accounting
Standards Board (IASB). The Financial Statements have been prepared on the historical cost
convention as modified for the measurement of certain financial instruments at fair value
through profit or loss and in accordance with the provisions of the Companies (Jersey) Law
1991. The investment in UK Hold Co is held at net asset value on the statement of financial
position in line with the International Private Equity and Venture Capital 2022 (IPEV) Valuation
Guidelines.
2.2 Going concern
Discontinuation vote:
As set out in the Company’s Articles of Association, as the Company’s share price traded at
more than a 10% discount to NAV during 2025, shareholders will have the opportunity to vote
on a special resolution at the June 2026 AGM of the Company on whether the Company should
cease to continue in its present form. The Company’s shares traded at a 26% discount to NAV,
on average, during 2025. Similar to peers in the renewable infrastructure sector, the Company
continues to trade at a discount as investors demand higher returns against a backdrop of
higher levels of inflation and higher interest rates. The Board and Investment Manager continue
to actively implement strategies to mitigate this and to enhance the appeal of the shares to
investors. The Board continues to actively engage with shareholders and is considering a range
of strategic options while continuing to deliver on the Company’s near‑term objectives.
FSFL’s June 2025 discontinuation vote resulted in 86% of votes cast being in favour of FSFL
continuing in its present form, which was an improvement from the prior year result of 76%.
The Directors are focused on balancing the objectives expressed by shareholders in order
to deliver value to shareholders in an efficient and effective manner by exploring all options
available. The Directors are keen to engage further with Shareholders up until the AGM and
beyond. Actions taken to date have responded promptly to the market environment and further
strategic action will be taken in efforts to reduce the trading discount to NAV, which has grown
since the prior year, across the sector as a whole.
Notes to the Financial Statements continued
For the year ended 31 December 2025
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2. Summary of significant accounting policies continued
2.2 Going concern continued
Background: continued
In July 2025, the UK government announced its decision to maintain a single national wholesale
electricity price, while implementing reforms to network charging and balancing incentives to
improve locational investment signals. This means the government will not proceed with zonal
pricing, a previously considered option. Reformed national pricing involves significant reforms
to network charging and balancing incentives to better guide investment in generation and
storage, encouraging them to locate where they are most needed on the network.
The implementation of the reformed national pricing plan is expected to be published in 2026,
including cost‑benefit analysis, after which, the government will work with Ofgem, the National
Energy System Operator (NESO) and the industry to develop and implement these changes. The
recent updates that the UK government is publishing provide investors with clarity, particularly
for the next Contracts for Difference allocations.
The Investment Manager acknowledges the upcoming Fixed Price Certificates (FPCs)
consultation, aiming to stabilise the pricing of ROC‑based subsidies. This consultation has not
launched yet but is expected later this year.
The Investment Manager expects any market changes will take years to implement and will
therefore fall outside of the going concern assessment period.
The Investment Manager has forecast ROC prices being inflated by CPI following a government
consultation on inflation indexation for ROC/FiT schemes, which means, from April 2026, the
subsidies will rise annually according to CPI rather RPI or CPIH. The December 2025 NAV of
FSFL includes CPI inflation on ROC prices in future.
Cash flow analysis:
Cash flow analysis was prepared for the going concern assessment period.
An evaluation of going concern was prepared by the Company’s Investment Manager, then
approved by the Audit and Risk Committee and subsequently by the Board.
Cash flow analysis was completed to consider the following individual downside scenarios,
each of which has been linked to quantifiable risks identified in the Risk and risk management
section of this audited Annual Report and Financial Statements:
All investments consistently generate a P90 level (90% probability of exceeding expected
production over a 10‑year period) of electricity output. The Directors deem this to be an
appropriate, market‑standard stress test, with a relevant example being historically low
irradiation in the UK throughout 2024 and the first two months of 2025. This is corroborated by
data from the Department for Energy Security and Net Zero, showing that 2024 had the lowest
number of sun hours since the Company’s IPO in 2013
(1) Power prices were reduced by 20% across the portfolio. This downside scenario represents
decreasing merchant power prices and historic oil and electricity price volatility
(2) The PPA provider that the Group is most exposed to fails to settle revenue under the PPA
contract. This downside scenario represents the risk of insolvencies of PPA counterparties
in response to the high number of energy company insolvencies during the last three years
because of the high power price market
(3) A combination of scenarios 1 and 2
Severe but plausible cash flow analysis was also completed to consider a scenario in which
the three highest yielding project companies in the portfolio simultaneously have operational
restrictions and reduced capacity and therefore pay reduced distributions (15% less than base
case) in the going concern assessment period.
If any of the scenarios described above were to materialise, the Company could still settle all
liabilities falling due and there would be no instances of non-compliance of debt covenants
during the going concern assessment period.
The Board would continue to review on a periodic basis whether the dividend paid per share
is appropriate considering the reduced cash flow. The cash flow forecasts show that operating
costs would be settled as they fall due, but the cash balance would reduce gradually during the
going concern assessment period.
Notes to the Financial Statements continued
For the year ended 31 December 2025
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Basis of preparation:
The Directors and the Investment Manager do not consider the prospect of the June 2026
discontinuation vote will impact the Company’s ability to continue as a going concern or give
rise to a material uncertainty.
The Directors are confident that the cash flows have been appropriately challenged and
therefore the Company will have sufficient funds to continue to meet its liabilities as they
fall due for the going concern assessment period and have therefore prepared the Financial
Statements on a going concern basis.
2.3 Changes in accounting policies and disclosures
New and revised IFRSs adopted by the Company
The accounting policies adopted are consistent with those of the previous financial
year. Management have assessed all new standards and amendments to standards and
interpretations that are effective for annual periods after 1 January 2025 and considered none
to be applicable to the Company.
The following standards have been issued but are not effective for this accounting period and
have not been adopted early:
ș Amendments to IFRS 9 and IFRS 7 Classification and Measurement of Financial Instruments
– The amendments clarify the timing for recognising and derecognising certain financial
assets and liabilities, introduce additional guidance for the solely payments of principal and
interest (SPPI) criterion, add new disclosure requirements for instruments with cash flow
changes linked to ESG targets, and update disclosures for equity instruments designated at
Fair Value through Other Comprehensive Income (FVOCI) – effective from 1 January 2026.
The Board considered the impact of this on the Company and concluded that this is not
material to the Company
ș Amendment to IFRS 9 and IFRS 7 Contracts Referencing Nature-dependent Electricity –
The amendments apply only to contracts referencing nature-dependent electricity in which
a company is exposed to variability in the underlying amount of electricity because the
source of electricity generation depends on uncontrollable natural conditions. A company
may apply the own‑use exemption to certain PPAs under the amendments and therefore
would not recognise these PPAs in its statement of financial position. Where this is the case,
the company is required to disclose clearly to reflect the effects of contracts referencing
nature‑dependent electricity on an entity’s Financial Statements – effective 1 January 2026.
The Board considered the impact of this on the Company and concluded that this is not
material to the Company
2. Summary of significant accounting policies continued
2.2 Going concern continued
Covenant compliance:
Three Group subsidiaries, FS Holdco, FS Debtco and RCF Debtco, are all required to complete
semi‑annual debt compliance reporting. The covenants that FS Holdco and FS Debtco are
required to report on are the look-back debt service cover ratio, the look-forward debt service
cover ratio and the loan life cover ratio. The debt service cover ratio (DSCR), calculated at
investment entity subsidiaries level, is a measure of how each portfolio can use its generated
cash to repay its debt obligations in any given six‑month calculation period. It is calculated
as the cash generated from operations and available to pay debt service divided by the debt
principal and interest in any given six‑month period.
RCF Debtco is required to report an interest cover ratio (ICR) and a Loan to Value (LtV) ratio.
These must be compliant semi‑annually to permit the movement of UK project company
distributions to UK Hold Co and FSFL. Without these project distributions, FSFL would unlikely
be able to pay quarterly dividends to investors at the current dividend per share.
A breach at RCF Debtco would restrict more cash moving up the structure than a breach at
either FS Holdco or FS Debtco. While the Investment Manager considers non‑compliance of the
RCF covenants as unlikely, it was considered prudent to investigate this via two reverse stress
tests, which also addressed financial gearing risk.
(1) The base case SONIA and Euribor interest rates were gradually increased until the increased
finance costs caused the ICR threshold to be breached. Variable interest rates would have
to increase approximately eight times by June 2027 to lead to a breach of the ICR, which is
deemed highly unlikely
(2) The valuation of the RCF Debtco qualifying portfolio was gradually decreased until the LtV
covenant was breached. This investigation has been deemed necessary considering falling
merchant energy prices, rising discount rates and associated falling project valuations. UK
project valuations would need to fall by 71% to lead to a breach of the LtV ratio, which
represents a severe decrease deemed highly unlikely
The Directors are pleased to confirm that there were no instances of non‑compliance of debt
covenants throughout the going concern assessment period in any of the scenarios.
Notes to the Financial Statements continued
For the year ended 31 December 2025
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2. Summary of significant accounting policies continued
2.3 Changes in accounting policies and disclosures continued
New and revised IFRSs adopted by the Company continued
ș IFRS 18 Presentation and Disclosure in Financial Statements – The new standard introduces
updates to the presentation and disclosure in financial statements. Management’s
assessment of the standard is that it is considered to be immaterial due to the nature
of the business and compliance with current IFRSs, minimal changes will be required to
ensure that the presentation is consistent with the standard. Key changes expected include
categorisation of income and expenses in the statement of profit or loss, mandatory
disclosures for management‑defined performance measures reported outside the financial
statements, and enhanced principles for aggregation and disaggregation in primary Financial
Statements and notes – effective from 1 January 2027. The Board considered the impact
of this on the Company and concluded that this will not result in a material change to the
Financial Statements of the Company. The Company will early adopt IFRS 18 in the 2026
accounting period such that comparative data for 1 January 2027 will be aligned and no
restatement of the comparative period will be necessary in the subsequent reporting period
ș IFRS 19 Subsidiaries without Public Accountability: Disclosures – The standard permits
qualifying companies to apply IFRS accounting standards with reduced disclosure
requirements. The Board considered the impact of this on the Company and concluded that
this is not applicable to the Company – effective 1 January 2027
There are no standards, amendments or interpretations in issue at the reporting date which
are effective and not yet adopted that are deemed to have a material impact on the Financial
Statements.
2.4 Consolidation
Subsidiaries
Subsidiaries are entities over which the Company has control. The Company controls an entity
when the Company is exposed to, or has the rights to, variable returns from its involvement
with the entity and has the ability to affect those returns through its power over the entity.
Associates
Associates are entities over which the Company has significant influence, being the power
to participate in the financial and operating policy decisions of the investee (but not control
orjointcontrol).
Investment entity exemption
Qualifying entities that meet the definition of an investment entity are not required to produce
a consolidated set of Financial Statements and instead account for subsidiaries, joint ventures
and associates at fair value through profit or loss.
Under the definition of an investment entity, the entity should satisfy all three of the followingtests:
ș Obtains funds from one or more investors for the purpose of providing those investors
withinvestment management services
ș Commits to its investors that its business purpose is to invest funds solely for returns
from capital appreciation, investment income or both (including having an exit strategy
forinvestments)
ș Measures and evaluates the performance of substantially all of its investments on a
fairvalue basis
In assessing whether the Company meets the definition of an investment entity set out in
IFRS10, the Directors note that:
ș The Company is an investment company that invests funds obtained from multiple investors
in a diversified portfolio of solar energy infrastructure assets and related infrastructure
assets and has appointed the Investment Manager to manage the Company’s investments
ș The Company’s purpose is to invest funds for investment income and potential capital
appreciation and will exit its investments at the end of their economic lives or when their
planning permissions or leasehold land interests expire (unless it has repowered their sites)
and may also exit investments earlier for reasons of portfolio balance or profit
ș The Board evaluates the performance of the Company’s investments on a fair value basis
as part of the quarterly management accounts review. The Company values its investments
on a fair value basis twice a year for inclusion in its Annual and Interim Financial Statements
with the movement in the valuations taken to the income statement and, therefore, is
measured within its earnings
Taking these factors into account, the Directors are of the opinion that the Company has all the
typical characteristics of an investment entity and meets the definition set out in IFRS 10.
The Directors believe the treatment outlined above provides the most relevant information to
investors.
As UK Hold Co is not consolidated, its subsidiaries – plus their underlying investments – are not
separately presented at fair value through profit or loss in the Company’s accounts.
Notes to the Financial Statements continued
For the year ended 31 December 2025
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2. Summary of significant accounting policies continued
2.4 Consolidation continued
Investment entity exemption continued
The Directors have evaluated whether the subsidiaries are investment entities and have
concluded that they meet the definition set out in IFRS 10. Should subsidiaries fail to meet the
definition of an investment entity, the Company would have to consolidate its subsidiaries.
2.5 Revenue
Revenue comprises interest income (loan interest) and income in the form of realised and/
or unrealised gains on investments held at fair value through profit or loss. Interest income is
recognised when it is probable that the economic benefits will flow to the Company and the
amount of revenue can be measured reliably. Loan interest income is recognised on an accruals
basis by reference to the principal outstanding and at the effective interest rate applicable.
Bank interest income on cash deposits is recognised on an accruals basis using the effective
interest rate method. Unrealised gains arising from changes in the fair value of the investments
held at fair value through profit or loss are recognised in the period in which they arise.
2.6 Expenses
Operating expenses are the Company's costs incurred in connection with the ongoing
management of the Company's investments and administrative costs. Operating expenses are
accounted for on an accruals basis.
The Company's operating expenses are charged through the statement of profit and loss and
other comprehensive income.
Acquisition costs of assets are capitalised on purchase of assets. Costs directly relating to
the issue of ordinary shares are charged to the Company's share capital and share premium
reserve.
2.7 Taxation
The Company is currently registered in Jersey. The Company is taxed at 0%, which is the
general rate of corporation tax in Jersey. No tax has been charged in the current year
(2024:£nil).
2.8 Treasury shares
The Company recognises the purchase of its own equity instruments in treasury shares, which
are deducted from retained earnings. No gain or loss is recognised in profit or loss on the
purchase, sale, issue or cancellation of the Company’s own equity instruments.
2.9 Functional and presentational currency
The Directors consider the Company's functional currency to be pounds sterling (GBP) as this
is the currency in which the majority of the Company's assets and liabilities and significant
transactions are denominated. The Directors have selected GBP as the Company's presentation
currency.
Indirect subsidiaries of the Company may have assets and liabilities relating to foreign
operations which will impact the investment value on the Company's balance sheet. The assets
and liabilities relating to these foreign operations, including fair value adjustments arising on
investments, are translated into GBP at the exchange rates at the reporting date. The income
and expenses relating to foreign operations are translated into GBP at the exchange rates at the
dates of the transactions.
2.10 Financial instruments
Recognition and initial measurement
Financial assets and financial liabilities are initially recognised when the Company becomes a
party to the contractual provisions of the instrument.
A financial asset or financial liability is initially measured at fair value plus, for an item not at
fairvalue through profit or loss, transaction costs that are directly attributable to its acquisition
or issue.
Classification and subsequent measurement
Investments held at fair value through profit or loss
The investments held at fair value through profit or loss consist of one investment in UK Hold
Co. The asset in this category is classified as non‑current.
Fair value is defined as the amount for which an asset could be exchanged between
knowledgeable willing parties in an arm's length transaction.
Notes to the Financial Statements continued
For the year ended 31 December 2025
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2. Summary of significant accounting policies continued
2.10 Financial instruments continued
Classification and subsequent measurement continued
Investments held at fair value through profit or loss continued
The fair value of UK Hold Co is made up of the fair value of its net assets, which are in turn
determined by the fair value of its underlying assets. The subsidiaries of UK Hold Co are
disclosed in note 1 Company information. FS Holdco and FS Debtco are fair valued using their
net asset value as reported at year end, with adjustments to their long‑term external debt
to reflect the fact that the carrying value at amortised cost is not considered to be the best
approximation of its fair value. FS Holdco 3, FS Holdco 4, FS Topco 2, FISH, FS Holdco 2, FS
Topco 1, FIHC, FBSHL and RCF Debtco are fair valued using their net asset value as reported
atyear end.
The fair values of the underlying investments held by the Company's subsidiaries, which impact
the value of the Company's subsidiaries, are determined by using valuation techniques. The
Directors oversee the fair value of the investments based on information received from the
Investment Manager, which calculates the value. In accordance with IFRS 13 the Investment
Manager's assessment of fair value of investments is determined in accordance with the
International Private Equity and Venture Capital 2022 (IPEV) Valuation Guidelines, using a
discounted cash flow valuation methodology.
The Board and the Investment Manager consider that the discounted cash flow valuation
methodology used in deriving a fair value of the underlying assets is in accordance with the fair
value requirements of IFRS 9. Investments not yet operational are measured at cost less any
impairment as this is considered the best approximation of fair value. Gains or losses arising
from changes in the fair value of the "investments held at fair value through profit or loss" are
presented in the statement of profit and loss and other comprehensive income within "gains/
(losses) on investments held at fair value through profit or loss" in the period in which they arise.
Other financial instruments at amortised cost
The financial instruments at amortised cost are non‑derivative financial assets and liabilities
with fixed or determinable payments that are not quoted in an active market. They comprise
trade and other receivables, interest receivable, cash and cash equivalents and trade and other
payables.
Trade and other receivables are rights to receive compensation for goods or services that
have been provided in the ordinary course of business to customers. Accounts receivable are
classified as current assets if receipt is due within one year or less. If not, they are presented as
non‑current assets.
Interest receivable is the right to receive payments at fixed or variable interest rates on loans
issued by the Company. Interest receivable is classified as current if the receipt is due within
one year or less. If not, it is presented as a non‑current asset.
Cash and cash equivalents comprise cash on hand.
Trade and other payables are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. Accounts payable are classified as current
liabilities if payment is due within one year or less. If not, they are presented as non‑current
liabilities.
Derecognition
The Company derecognises a financial asset when the contractual rights to the cash flows from
the financial asset expire. The Company also derecognises a financial asset when it transfers
the rights to receive the contractual cash flows in a transaction in which substantially all of the
risks and rewards of ownership of the financial asset are transferred.
Lastly, the Company also derecognises the financial asset when it neither transfers nor retains
substantially all of the risks and rewards of ownership and it does not retain control of the
financial asset.
The Company derecognises a financial liability when its contractual obligations are discharged
or cancelled or expire. The Company also derecognises a financial liability when its terms are
modified and the cash flows or the modified liability are subsequently different, in which case a
new financial liability based on the modified terms is recognised at fair value. Any gain or loss
on derecognition is recognised in profit or loss.
Impairment of financial assets
The Company applies the simplified approach to measuring expected credit losses, as
permitted by IFRS 9, which uses a 12‑month expected loss allowance for all trade receivables
and interest receivable.
Notes to the Financial Statements continued
For the year ended 31 December 2025
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2. Summary of significant accounting policies continued
2.11 Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue
of new ordinary shares are shown in equity as a deduction, net of tax, from the proceeds.
Ordinary shares have a nil par value.
2.12 Dividend distribution
Dividend distributions to the Company's shareholders are recognised through equity in the
Company's Financial Statements in the period in which the dividends are approved by the
Company's shareholders.
Under Jersey law, the Company can pay dividends in excess of its retained earnings provided
it satisfies the solvency test prescribed under the Companies Law (Jersey) 1991. The solvency
test considers whether the Company is able to pay its debts when they fall due, and whether
the value of the Company's assets is greater than its liabilities. The Company satisfied the
solvency test in respect of all dividends declared or paid in the year.
3. Critical accounting estimates and judgements
The preparation of Financial Statements in conformity with IFRS requires the use of certain
critical accounting estimates. It also requires management to exercise its judgement in the
process of applying the Company’s accounting policies.
The Board considers that the only areas where management make critical estimates that
may have a significant effect on the Financial Statements are in relation to the valuation of
investments held at fair value through profit and loss; the most significant judgement is related
to the determination that the Company meets the definition of an investment entity.
The estimates and associated assumptions are based on historical experience and various
other factors that are believed to be reasonable under the circumstances, the results of which
form the basis of making judgements about the carrying value of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these estimates and
underlying assumptions are reviewed on an ongoing basis.
Key judgements
The Board considers that the determination that the Company meets the definition of an
investment entity involves significant judgement. The Board has concluded that the Company
continues to meet the definition of an investment entity, as its strategic objective of investing
in portfolio investments and providing investment management services to investors for the
purpose of generating returns in the form of investment income and capital appreciation
remains unchanged.
Key source of estimation uncertainty: Investments at fair value through profit or loss
The Company recognises its investment in UK Hold Co at fair value, which requires the
determination of fair value of the underlying investments. The Board considers that determining
the fair value of the underlying investments not quoted in an active market involves critical
accounting estimates. The discount rate, power price curve, inflation and useful economical life
of assets are considered the most significant unobservable inputs through which an increase or
decrease would have a material impact on the fair value of the investments at fair value through
profit or loss.
The discount rates are subjective and therefore it is feasible that a reasonable alternative
assumption may be used, resulting in a different value. The discount rates applied to the cash
flow are reviewed by the Investment Manager and approved by the Board on a quarterly basis,
taking into consideration market transactions with similar nature.
Independent advisors are used to provide evidenced forward power price curves and therefore
it is feasible that a reasonable alternative assumption may be used, resulting in a different value.
The Investment Manager uses forward-looking power price forecasts to estimate the portfolio’s
future income for valuation. For UK solar assets, this is based on a blended average of three
independent consultants’ forecasts, adjusted to reflect management's experienced view on
capture price discounts for solar generation. The power price curves are reviewed by the
Investment Manager and approved by the Board on a quarterly basis.
Inflation forecasts, such as that of the Office for Budget Responsibility, are used alongside
in-house views of the Investment Manager to determine this assumption and therefore it is
feasible that a reasonable alternative assumption may be used, resulting in a different value.
The inflation assumptions are reviewed by the Investment Manager and approved by the Board
on a quarterly basis.
Notes to the Financial Statements continued
For the year ended 31 December 2025
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3. Critical accounting estimates and judgements continued
Key source of estimation uncertainty: Investments at fair value through
profitorlosscontinued
Useful economic lives (UELs) of assets are based on the Investment Manager’s estimates of
the period over which the assets will generate revenue, which is approved by independent
technical experts. They are periodically reviewed for continued appropriateness. The UELs
of the assets will be limited by the sooner of planning and 40 years for UK assets and will
not be limited by actual lease terms secured. The UK UEL assumption has changed in 2025
to better reflect the UEL of the underlying assets. The resulting impact on NAV was £18.2
million. In Spain and Australia, UELs of the assets are based on the underlying lease contract
of the individual assets. The Investment Manager fully expects to be able to renew any lease
contracts of the underlying investments. The expected weighted average life of the UK portfolio
as at 31December 2025 is 37 years from the date of commissioning. The UEL of the Australian
portfolio is 37 years. The UEL of the Spanish portfolio is 40 years.
These key assumptions used in determining the fair value of the underlying investment and the
associated sensitivities are disclosed in note 16.
4. Interest income
31 December
2025
£'000
31 December
2024
£'000
Interest on loan notes 23,661 25,430
Interest on shareholder loans 5,167 5,938
28,828 31,368
Loan notes were issued by the Company to UK Hold Co for the purchase of investments.
Interest accrues at 9% per annum in arrears on each Interest Payment Date (28/29 February
and 31 August each year).
Where interest is not paid on the payment date, it will compound and future interest shall
accrue at 11% per annum from the due date up to the date of actual payment, compounding on
each Interest Payment Date. The loan notes balance at period end on which interest is charged
is £250,000,000 (2024: £250,000,000), due to be repaid on 1 November 2038. These loans form
part of the fair value of the investments as per note 14. On 28 February 2025, all outstanding
interest up to date was paid, resulting in no compounding interest. On 31 August 2025, UK Hold
Co had unpaid interest which therefore compounded and changed the interest rate to 11%.
A shareholder loan is created when the total amount paid by the Company on behalf of UK
Hold Co to acquire the underlying investments is more than the total loan notes issued by
theCompany to UK Hold Co. Interest accrues at 2% per annum, and is repayable on demand.
Theshareholder loan balance at year end is £239,450,269 (31 December 2024: £273,852,906).
These loans form part of the fair value of the investments as per note 14.
5. Management fees
The Investment Manager of Foresight Solar is Foresight Group LLP.
From 1 January 2025 to 28 February 2025, the Investment Manager of the Company received
an annual fee of 1% of the net asset value (NAV) of the Company up to £500 million – NAV in
excess to this was charged at 0.9% per annum. This was payable quarterly in arrears and
calculated based on the published quarterly NAV.
During the year, the Board and Investment Manager re-negotiated the Investment Manager
fee. Effective from 1 March 2025, the new management fee is applied to an equal weighting of
the average of the closing daily market capitalisation during each quarter and the published
NAV for the quarter. In addition to the change in basis, it was agreed that the percentage rates
applied to each tier of weighted value will be reduced from 1% to 0.95% upto£500million.
Thefee for NAV in excess to this is reduced from 0.9% to 0.8%.
For the year ended 31 December 2025, the Investment Manager was entitled to a
managementfee of £5,020,361 (31 December 2024: £6,347,915) of which £nil was
outstandingas at 31 December 2025 (31 December 2024: £69,094).
6. Administration fees
Under an Administration Agreement, the Administrator of the Company, JTC (Jersey) Limited,
is entitled to receive minimum annual administration and accountancy fees of £205,000
(2024: £200,000) payable quarterly in arrears. For the year ended 31 December 2025, total
administration and accountancy fees, including disbursements, were £257,089 (2024: £251,363)
of which £60,750 was outstanding as at 31 December 2025 (2024: £50,000).
Notes to the Financial Statements continued
For the year ended 31 December 2025
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7. Staff costs and Directors' fees
No members of staff were employed during the year (2024: nil).
Total Directors’ fees were £318,400 (2024: £315,152).
8. Other expenses
31 December
2025
£'000
31 December
2024
£'000
Legal and professional fees 1,091 793
Other expenses 172 404
1,263 1,197
Included within legal and professional fees is £197,650 (2024: £192,250) relating to the accrual
of the 2025 audit fees.
Audit fees paid to KPMG LLP in relation to the audit of the Group are £402,069 for the year
ended 31 December 2025 (2024: £375,765). There were no fees paid to the Auditor for
non‑audit services during the year (2024: £nil).
9. Loss per ordinary share – basic and diluted
The basic and diluted loss per ordinary share is £5.83 per share (2024: basic profit of 0.52
pence per share). This is based on the loss for the period of £32,427,840 (2024: £3,005,954
profit) and on 556,380,504 (2024: 573,946,152) ordinary shares, being the weighted average
number of shares in issue during the year, excluding treasury shares.
10. Interest receivable
31 December
2025
£'000
31 December
2024
£'000
Interest receivable on loan notes 688 197
Interest receivable on shareholder loans 554 —
1,242 197
Information about the Company’s exposure to credit and market risk and impairment losses for
interest receivable is included in note 19.
Information about the interest receivable balance is included in note 4.
11. Trade and other receivables
31 December
2025
£'000
31 December
2024
£'000
Prepaid expenses 62 47
Other receivables 257 257
319 304
Information about the Company’s exposure to credit and market risk and impairment losses for
trade and other receivables is included in note 19.
12. Cash and cash equivalents
31 December
2025
£'000
31 December
2024
£'000
Cash at bank 1,646 2,018
1,646 2,018
Information about the Company's exposure to credit and market risk and impairment losses for
cash and cash equivalents is included in note 19.
Notes to the Financial Statements continued
For the year ended 31 December 2025
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13. Trade and other payables
31 December
2025
£'000
31 December
2024
£'000
Accrued expenses 582 211
Amounts due to subsidiaries¹ 187 187
Unsettled treasury shares 60 88
829 486
1. Amounts due to subsidiaries are unsecured, interest free and repayable on demand.
14. Investments held at fair value through profit or loss
The following table presents the Company's investments at fair value through profit or loss:
31 December 2025 31 December 2024
Equity
£'000
Loan
£'000
Total
investment
£'000
Equity
£'000
Loan
£'000
Total
investment
£'000
Opening balance 108,478 523,851 632,329 128,789 554,315 683,104
Additions — — — — — —
Repayments — (34,402) (34,402) — (30,464) (30,464)
Loss on investments
held at fair value
through profit or loss (54,423) — (54,423) (20,311) — (20,311)
Investments held at
fair value through
profit or loss 54,055 489,449 543,504 108,478 523,851 632,329
The Company measures its investment in UK Hold Co at fair value through profit or loss.
Thisinvestment consists of both debt and equity and is not quoted in an active market.
The fair value of the Company's interests in UK Hold Co is derived from the net assets of
UK Hold Co which holds the underlying investments at fair value. The debt portion of the
investment is measured at principal (as this approximates the fair value of the debt). The full
terms of the debt are included in note 4. The fair value of the equity portion is based on the net
assets of UK Hold Co and reflects the fair value of underlying solar assets plus working capital
less the borrowings in the structure. The underlying investments are valued using a discounted
cash flow methodology, if operational. Assets in construction are valued at cost or cost less
impairment.
The accrued interest on the debt at the year end of £3,228,000 (2024: £197,000) is shown
separately as a current asset on the balance sheet as it reflects earned interest that will be
recovered in the next 12 months.
In turn, UK Hold Co has three investments in RCF Debtco, FS Holdco 4 and FBSHL. RCF
Debtco has three investments in FS Topco 1, FS Topco 2 and FS Holdco 3. FS Topco 1 has one
investment in FIHC. FIHC has one investment in FS Holdco. FS Topco 2 has one investment in
FISH. FISH has one investment in FS Holdco 2. FS Holdco 2 has one investment in FS Debtco.
FS Holdco 3 has one investment in SGP Holdings 1 which in turn has one investment in Second
Generation Portfolio 1 (SGP 1). These investments also consist of both debt and equity and are
not quoted in an active market. FS Holdco and FS Debtco are fair valued using their net asset
value as reported at year end, with adjustments to their long‑term external debt to reflect the
fact that the carrying value at amortised cost is not considered to be the best approximation
of their fair value. FS Topco 1, FS Topco 2, FS Holdco 4, FIHC, FS Holdco 3 and FISH are fair
valued using their net assets.
FS Holdco, FS Debtco, SGP Holdings 1 and FS Holdco 3's investment portfolios consist of
unquoted investments in solar projects, the valuations of which are based on a discounted cash
flow methodology (as set out in note 16) for solar projects that are operational. FS Holdco 4
consists of operational Australian and Spanish assets, the valuations of which are also based
on a discounted cash flow methodology, and also a development pipeline of Spanish solar and
BESS projects, which are held at cost less impairment to reflect current fair value based on
market pricing.
FBSHL consists of an operational BESS asset, the valuations of which are based on a
discounted cash flow methodology, and also a development BESS asset, which is held at cost
less impairment to reflect current fair value based on market pricing.
Notes to the Financial Statements continued
For the year ended 31 December 2025
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14. Investments held at fair value through profit or loss continued
Fair value hierarchy
IFRS 13 Fair Value Measurement requires disclosures relating to fair value measurements using a three‑level fair value hierarchy. The level within which the fair value measurement is categorised
inits entirety is determined on the basis of the lowest level input that is significant to the fair value measurement.
Assessing the significance of a particular input requires judgement, considering factors specific to the asset or liability. The following table shows investments recognised at fair value, categorised
between those whose fair value is based on:
(a) Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities
(b) Level 2 – Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
(c) Level 3 – Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
All investments held at fair value through profit or loss are classified as level 3 within the fair value hierarchy.
As UK Hold Co’s net asset value is not considered observable market data, the investment in UK Hold Co has been classified as level 3. There were no movements between levels during the period,
categorised between those whose fair value is based on:
As at 31 December 2025:
Level 1
£'000
Level 2
£'000
Level 3
£'000
Total
£'000
Investments held at fair value through profit or loss — — 543,504 543,504
As at 31 December 2024:
Level 1
£'000
Level 2
£'000
Level 3
£'000
Total
£'000
Investments held at fair value through profit or loss — — 632,329 632,329
Sensitivity analysis
Due to the nature of the Group structure and the underlying valuation basis of UK Hold Co, RCF Debtco, FS Topco 1, FIHC, FS Holdco, FS Topco 2, FS Debtco, FS Holdco 3, FS Holdco 4 and the
underlying solar project investments, the valuation of the Company's investment at fair value through profit or loss is directly linked to the valuation of the underlying solar and battery storage
investments. Therefore, the unobservable inputs driving the valuation of the Company's investments in UK Hold Co are directly attributable to the valuation of the unquoted investments in FS Holdco,
FS Debtco, FS Holdco 3 and FS Holdco 4, which are discussed further in note 16.
Notes to the Financial Statements continued
For the year ended 31 December 2025
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15. Subsidiaries and associates
Investments in subsidiaries
Name
Direct or
indirect holding
Country
of incorporation Principal activity
Proportion
of shares
and voting
rights held
Foresight Solar (UK Hold Co) Limited (UK Hold Co) Direct UK Holding Company 100%
FS Holdco Limited (FS Holdco) Indirect UK Holding Company 100%
FS Top Holdco 2 Limited (FS Topco 2) Indirect UK Holding Company 100%
Foresight Intermediate Solar Holdings Limited (FISH) Indirect UK Holding Company 100%
FS Holdco 2 Limited (FS Holdco 2) Indirect UK Holding Company 100%
FS Debtco Limited (FS Debtco) Indirect UK Holding Company 100%
FS Holdco 3 Limited (FS Holdco 3) Indirect UK Holding Company 100%
FS Holdco 4 Limited (FS Holdco 4) Indirect UK Holding Company 100%
FS RCF Debtco Limited (RCF Debtco) Indirect UK Holding Company 100%
FS Top Holdco 1 Limited (FS Topco 1) Indirect UK Holding Company 100%
FS Intermediate Holdco Limited (FIHC) Indirect UK Holding Company 100%
FS Wymeswold Limited Indirect UK SPV Holding Company 100%
FS Castle Eaton Limited Indirect UK SPV Holding Company 100%
FS Pitworthy Limited Indirect UK SPV Holding Company 100%
Foresight Solar Germany Holding GmbH Indirect Germany SPV Holding Company 100%
FS Highfields Limited Indirect UK SPV Holding Company 100%
FS High Penn Limited Indirect UK SPV Holding Company 100%
FS Hunter's Race Limited Indirect UK SPV Holding Company 100%
FS Spriggs Limited Indirect UK SPV Holding Company 100%
FS Bournemouth Limited Indirect UK SPV Holding Company 100%
FS Landmead Limited Indirect UK SPV Holding Company 100%
Notes to the Financial Statements continued
For the year ended 31 December 2025
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Name
Direct or
indirect holding
Country
of incorporation Principal activity
Proportion
of shares
and voting
rights held
FS Kencot Limited Indirect UK SPV Holding Company 100%
FS Copley Limited Indirect UK SPV Holding Company 100%
FS Port Farms Solar Limited Indirect UK SPV Holding Company 100%
FS Membury Limited Indirect UK SPV Holding Company 100%
FS Southam Solar Limited Indirect UK SPV Holding Company 100%
FS Atherstone Solar Limited Indirect UK SPV Holding Company 100%
FS Paddock Wood Solar Farm Limited Indirect UK SPV Holding Company 100%
Southam Holdco Limited Indirect UK SPV Holding Company 100%
Atherstone Holdco Limited Indirect UK SPV Holding Company 100%
Paddock Wood Holdco Limited Indirect UK SPV Holding Company 100%
FS Shotwick Limited Indirect UK SPV Holding Company 100%
FS Sandridge Limited Indirect UK SPV Holding Company 100%
FS Wally Corner Limited Indirect UK SPV Holding Company 100%
FS Holdco 5 Limited Indirect UK SPV Holding Company 100%
FS Welbeck Limited Indirect UK SPV Holding Company 100%
FS Trehawke Limited Indirect UK SPV Holding Company 100%
FS Homeland Limited Indirect UK SPV Holding Company 100%
FS Marsh Farm Limited Indirect UK SPV Holding Company 100%
FS Steventon Limited Indirect UK SPV Holding Company 100%
FS Fields Farm Limited Indirect UK SPV Holding Company 100%
FS Gedling Limited Indirect UK SPV Holding Company 100%
Notes to the Financial Statements continued
For the year ended 31 December 2025
15. Subsidiaries and associates continued
Investments in subsidiaries continued
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Name
Direct or
indirect holding
Country
of incorporation Principal activity
Proportion
of shares
and voting
rights held
FS Sheepbridge Limited Indirect UK SPV Holding Company 100%
FS Cuckoo Limited Indirect UK SPV Holding Company 100%
FS Field House Limited Indirect UK SPV Holding Company 100%
FS Upper Huntingford Limited Indirect UK SPV Holding Company 100%
FS Abergelli Limited Indirect UK SPV Holding Company 100%
FS Crow Trees Limited Indirect UK SPV Holding Company 100%
FS Yarburgh Limited Indirect UK SPV Holding Company 100%
FS Nowhere Solar Limited Indirect UK SPV Holding Company 100%
FS Bilsthorpe Solar Limited Indirect UK SPV Holding Company 100%
FS Bulls Head Solar Limited Indirect UK SPV Holding Company 100%
FS Roskrow Solar Limited Indirect UK SPV Holding Company 100%
FS Abbeyfields Solar Limited Indirect UK SPV Holding Company 100%
FS Lindridge Solar Limited Indirect UK SPV Holding Company 100%
FS Misson Solar Limited Indirect UK SPV Holding Company 100%
FS Playters Solar Limited Indirect UK SPV Holding Company 100%
FS PS Manor Farm Solar Limited Indirect UK SPV Holding Company 100%
FS SV Ash Solar Park Limited Indirect UK SPV Holding Company 100%
FS Pen Y Cae Solar Limited Indirect UK SPV Holding Company 100%
Second Generation Portfolio Holdings 1 (SGP Holdings 1) Indirect UK SPV Holding Company 100%
Second Generation Portfolio 1 (SGP 1) Indirect UK SPV Holding Company 100%
Foresight Solar Spain Holding S.L (FSSH) Indirect Spain SPV Holding Company 100%
Notes to the Financial Statements continued
For the year ended 31 December 2025
15. Subsidiaries and associates continued
Investments in subsidiaries continued
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Name
Direct or
indirect holding
Country
of incorporation Principal activity
Proportion
of shares
and voting
rights held
Wymeswold Solar Farm Limited (Wymeswold) Indirect UK Investment 100%
Castle Eaton Solar Farm Limited (Castle Eaton) Indirect UK Investment 100%
Pitworthy Solar Limited (Pitworthy) Indirect UK Investment 100%
Highfields Solar Limited (Highfields) Indirect UK Investment 100%
High Penn Solar Limited (High Penn) Indirect UK Investment 100%
Hunter's Race Solar Limited (Hunter's Race) Indirect UK Investment 100%
Spriggs Solar Limited (Spriggs) Indirect UK Investment 100%
Bournemouth Solar Limited (Bournemouth) Indirect UK Investment 100%
Landmead Solar Farm Limited (Landmead) Indirect UK Investment 100%
Kencot Hill Solar Farm Limited (Kencot) Indirect UK Investment 100%
Copley Solar Limited (Copley) Indirect UK Investment 100%
Port Farms Solar Limited (Port Farms) Indirect UK Investment 100%
Membury Solar Limited (Membury) Indirect UK Investment 100%
Atherstone Solar Farm Limited (Atherstone) Indirect UK Investment 100%
Southam Solar Farm Limited (Southam) Indirect UK Investment 100%
Paddock Wood Solar Farm Limited (Paddock Wood) Indirect UK Investment 100%
Shotwick Solar Limited (Shotwick) Indirect UK Investment 100%
Sandridge Solar Power Limited (Sandridge) Indirect UK Investment 100%
Wally Corner Solar Limited (Wally Corner) Indirect UK Investment 100%
Second Generation Yardwall Limited (Yardwall) Indirect UK Investment 100%
Second Generation Verwood Limited (Verwood) Indirect UK Investment 100%
Notes to the Financial Statements continued
For the year ended 31 December 2025
15. Subsidiaries and associates continued
Investments in subsidiaries continued
135
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Governance
Financial Statements
Name
Direct or
indirect holding
Country
of incorporation Principal activity
Proportion
of shares
and voting
rights held
Second Generation Park Farm Limited (Park Farm) Indirect UK Investment 100%
Second Generation Coombeshead Limited (Coombeshead) Indirect UK Investment 100%
Second Generation Sawmills Limited (Sawmills) Indirect UK Investment 100%
Welbeck Solar Limited (Welbeck) Indirect UK Investment 100%
Trehawke Solar Limited (Trehawke) Indirect UK Investment 100%
Homeland Solar Limited (Homeland) Indirect UK Investment 100%
Marsh Farm Solar Limited (Marsh Farm) Indirect UK Investment 100%
Steventon Solar Limited (Steventon) Indirect UK Investment 100%
Fields Farm Solar Limited (Fields Farm) Indirect UK Investment 100%
Gedling Solar Limited (Gedling) Indirect UK Investment 100%
Sheepbridge Solar Limited (Sheepbridge) Indirect UK Investment 100%
Tengore Solar Limited (Tengore) Indirect UK Investment 100%
Cuckoo Solar Limited (Cuckoo) Indirect UK Investment 100%
Field House Solar Limited (Field House) Indirect UK Investment 100%
Upper Huntingford Solar Limited (Upper Huntingford) Indirect UK Investment 100%
Abergelli Solar Limited (Abergelli) Indirect UK Investment 100%
Crow Trees Solar Farm Limited (Crow Trees) Indirect UK Investment 100%
Yarburgh Solar Limited (Yarburgh) Indirect UK Investment 100%
Nowhere Solar Limited (Nowhere) Indirect UK Investment 100%
Bilsthorpe Solar Limited (Bilsthorpe) Indirect UK Investment 100%
Bulls Head Solar Limited (Bulls Head) Indirect UK Investment 100%
Notes to the Financial Statements continued
For the year ended 31 December 2025
15. Subsidiaries and associates continued
Investments in subsidiaries continued
136
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for the year ended 31 December 2025
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Governance
Financial Statements
Name
Direct or
indirect holding
Country
of incorporation Principal activity
Proportion
of shares
and voting
rights held
Roskrow Solar Limited (Roskrow Solar) Indirect UK Investment 100%
Lindridge Solar Limited (Lindridge) Indirect UK Investment 100%
Misson Solar Limited (Misson Solar) Indirect UK Investment 100%
Playters Solar Limited (Playters) Indirect UK Investment 100%
PS Manor Farm Solar Limited (PS Manor Farm) Indirect UK Investment 100%
SV Ash Solar Park Limited (SV Ash) Indirect UK Investment 100%
Pen Y Cae Solar Limited (Pen Y Cae) Indirect UK Investment 100%
Bailey Solar Limited Indirect UK Investment 100%
True Blue Solar Limited Indirect UK Investment 100%
Shotton Grid Company Limited Indirect UK Investment 100%
Abbeyfields Solar Limited (Abbeyfields) Indirect UK Investment 100%
Virgen del Carmen Solar S.L (Virgen del Carmen) Indirect Spain Investment 100%
Foresight Energy Storage Spain 1 S.L.0 Indirect Spain Investment 100%
Foresight Energy Storage Spain 2 S.L.0 Indirect Spain Investment 100%
Foresight Energy Storage Spain 3 S.L.0 Indirect Spain Investment 100%
Foresight Energy Storage Spain 4 S.L.0 Indirect Spain Investment 100%
Foresight Energy Storage Spain 5 S.L.0 Indirect Spain Investment 100%
Foresight Energy Storage Spain 6 S.L.0 Indirect Spain Investment 100%
San Isidro Solar 10 S.L Indirect Spain Investment 100%
Longreach New Holdco Pty Limited Indirect Australia SPV Holding Company 100%
Oakey 1 New Holdco Pty Limited Indirect Australia SPV Holding Company 100%
Notes to the Financial Statements continued
For the year ended 31 December 2025
15. Subsidiaries and associates continued
Investments in subsidiaries continued
137
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for the year ended 31 December 2025
Strategic Report
Governance
Financial Statements
Name
Direct or
indirect holding
Country
of incorporation Principal activity
Proportion
of shares
and voting
rights held
FS Oakey 2 Pty Limited Indirect Australia SPV Holding Company 100%
RE Oakey Pty Limited Indirect Australia Investment 100%
Oakey Networks Pty Limited Indirect Australia SPV Holding Company 100%
Longreach Asset Company Pty Limited Indirect Australia SPV Holding Company 100%
RE Oakey Pty Limited Indirect Australia SPV Holding Company 100%
Oakey 1 Hold Company Pty Limited Indirect Australia SPV Holding Company 100%
Longreach Hold Company Pty Limited Indirect Australia SPV Holding Company 100%
Oakey 1 Asset Company Pty Limited Indirect Australia SPV Holding Company 100%
Oakey 1 FinCo Pty Limited Indirect Australia SPV Holding Company 100%
Oakey 1 Op Hold Company Pty Limited Indirect Australia SPV Holding Company 100%
Oakey 1 Op Company Pty Ltd Indirect Australia Investment 100%
Longreach FinCo Pty Limited Indirect Australia SPV Holding Company 100%
Longreach Op Hold Company Pty Limited Indirect Australia SPV Holding Company 100%
Longreach Op Company Pty Ltd Indirect Australia Investment 100%
Notes to the Financial Statements continued
For the year ended 31 December 2025
15. Subsidiaries and associates continued
Investments in subsidiaries continued
138
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Governance
Financial Statements
Investments in associates
Name
Direct or
indirect holding
Country
of incorporation Principal activity
Proportion
of shares
and voting
rights held
Kiamco Hanwha Foresight Bannerton Pty Limited Indirect Australia SPV Holding Company 48.5%
Foresight Solar Australia Pty Limited Indirect Australia Investment 48.5%
Lunanhead Energy Storage Limited Indirect UK SPV Holding Company 50%
Clayfords Energy Storage Limited Indirect UK SPV Holding Company 50%
Sandridge Battery Storage Limited Indirect UK SPV Holding Company 50%
Global Solar Energy Veintisiete, S.L Indirect Spain Investment 50%
Solar de la Contraviesa 5 S.L.0 Indirect Spain Investment 50%
Solar de la Contraviesa 6 S.L.0 Indirect Spain Investment 50%
Solar de la Contraviesa 7 S.L.0 Indirect Spain Investment 50%
Foresight Battery Storage Holding Limited (FBSHL) Indirect UK Holding Company 50%
16. Fair value of the investments in unconsolidated entities
Valuation process
Valuations are the responsibility of the Board of Directors. The Investment Manager is responsible for submitting fair market valuations of Group assets to the Directors. The Directors review and
approve these valuations following appropriate challenge and examination. Valuations are carried out quarterly. The current portfolio consists of non‑market traded investments and valuations
are based on a discounted cash flow methodology. The Investment Manager's assessment of fair value of investments is determined in accordance with the revised International Private Equity
and Venture Capital 2022 (IPEV) Valuation Guidelines, using levered and unlevered discounted cash flow principles. The Investment Manager and Directors consider that the discounted cash flow
methodology used in deriving a fair value is in accordance with the fair value requirements of IFRS 13. The assets in construction were valued at cost or cost less impairment at 31 December 2025
and have therefore been omitted from the sensitivity analysis on the following pages.
Notes to the Financial Statements continued
For the year ended 31 December 2025
15. Subsidiaries and associates continued
139
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Financial Statements
16. Fair value of the investments in unconsolidated entities continued
Sensitivity analysis of significant changes in unobservable inputs within level
hierarchy of underlying investments
The majority of the Company's underlying investments (indirectly held through its
unconsolidated subsidiaries FS Holdco, FS Debtco, FS Holdco 3 and FS Holdco 4) are valued
with reference to the discounted value of future cash flows. The Directors consider the
valuation methodology used, including the key assumptions and discount rate applied, to be
appropriate. The Board reviews, at least annually, the valuation inputs and, where possible,
makes use of observable market data to ensure valuations reflect the fair value of the
investments. A broad range of assumptions are used in the valuation models. The Investment
Manager has adjusted the sensitivities calculation methodology from an asset‑level cash flows
only basis to a calculation based on asset‑level cash flow less holding company level debt cash
outflows. This has resulted mainly ina reduction of the discount rate sensitivity disclosed below.
The base valuation of £528.5 million represents the levered discounted value of future cash
flows of the underlying operational assets with assets under construction held at cost, less
thediscounted cash flows of the long‑term debt held at holding company level. The valuation
ofthe Australian assets is net of debt. The base valuation of £528.5 million is equal to the
NAVof £528.5 million adjusted by items deemed not subject to the sensitivities applied.
31 December
2025
£m
Base case for sensitivities 528.5
Items not subject to sensitivities:
Cash in underlying assets 27.1
Assets in construction valued at cost or net realisable value 6.1
Company and intermediate holding companies' cash 61.9
RCF outstanding (72.7)
Company and intermediate holding companies' net liabilities (0.4)
Compensation liability (4.6)
Net asset value at 31 December 2025 545.9
Notes to the Financial Statements continued
For the year ended 31 December 2025
140
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16. Fair value of the investments in unconsolidated entities continued
The Directors consider the following to be the most significant inputs to the discounted cash
flows (DCF) calculation.
Power price
Power price DCF models assume power prices that are consistent with the power purchase
agreements and financial hedges currently in place. At the PPA end date, the model reverts
to the power price forecast. The power price forecasts are updated quarterly and based on
power price forecasts from relevant independent sources, adjusted by the Investment Manager
for the expected capture price discounts for solar generation as considered appropriate.
The forecast assumes an average annual decrease in power prices in real terms of
approximately 1.0% (2024: 0.7%). During the year, c.51% (2024: 47%) of the investments'
operational revenues came from regulatory support mechanisms. The remaining c.49%
(2024:53%) of revenue is derived from electricity sales which are partially subject to power
price movements. On a net present value basis, future electricity sales which are subject to
price movements represent c.55% (2024: 52%) of total revenues.
‑20.0% ‑10.0% Base +10.0% +20.0%
Portfolio valuation (£m) 424.5 478.0 528.5 576.3 625.5
Change in portfolio valuation (£m) (104.0) (50.4) 0 47.8 97.0
NAV per share change (pence) (18.9) (9.2) 99.2 8.7 17.6
Production
Base case production is a function of multiple assumptions including irradiation levels,
availability of the sites and technical performance of the equipment. A sensitivity of +/‑10%
is considered reasonable given historical stable levels of irradiation, contractual availability
guarantees and understanding of future performance levels of the equipment.
‑10.0% Base +10.0%
Portfolio valuation (£m) 445.7 528.5 609.6
Change in portfolio valuation (£m) (82.7) 0 81.1
NAV per share change (pence) (15.0) 99.2 14.7
Inflation
A variation of 0.5% to 1.0% is considered reasonable given the long‑term inflation rate of 3.5%
for 2026, 3.00% from 2027 to 2030, after which it is 2.25% (2024: 3.00% for 2024, 3.00% from
2025 to 2030, after which it is 2.25%).
‑1.0% ‑0.5% Base +0.5% +1.0%
Portfolio valuation (£m) 487.4 507.0 528.5 550.8 574.9
Change in portfolio valuation (£m) (41.1) (21.4) 0 22.3 46.4
NAV per share change (pence) (7.5) (3.9) 99.2 4.1 8.4
Discount rate
The global weighted average discount rate used is 8.12% (2024: 7.88%). The Directors do not
expect to see a significant change in the discount rates applied within the solar infrastructure
sector. Therefore, a variance of +/‑0.5% is considered reasonable to be factored into the
analysis. In terms of the climate change risk, the discount rate is benchmarked against a similar
asset base to ensure the underlying climate risk exposure is factored into the analysis.
‑0.50% ‑0.25% Base +0.25% +0.50%
Portfolio valuation (£m) 549.2 538.6 528.5 518.6 509.1
Change in portfolio valuation (£m) 20.7 10.2 0 (9.8) (19.3)
NAV per share change (pence) 3.8 1.8 99.2 (1.8) (3.5)
Notes to the Financial Statements continued
For the year ended 31 December 2025
141
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Financial Statements
16. Fair value of the investments in unconsolidated entities continued
Operating costs (investment level)
The Directors also consider the following to be important inputs to the discounted cash flows
calculation.
Operating costs include operating and maintenance (O&M), insurance and lease costs. Other
costs are fixed and are, therefore, not considered to be sensitive to changes in unobservable
inputs. Base case costs are modelled on current commercial agreements. The Directors would
not expect these costs to fluctuate widely over the life of the assets and are comfortable that
the base case is appropriate. A variance of +/‑ 5.0% is considered reasonable, a variable of
10.0% is shown for information purposes.
‑10.0% ‑5.0% Base +5.0% +10.0%
Portfolio valuation (£m) 544.4 536.4 528.5 520.0 512.2
Change in portfolio valuation (£m) 15.9 8.0 0 (8.5) (16.3)
NAV per share change (pence) 2.9 1.4 99.2 (1.5) (3.0)
Exchange rate
The Company’s investments are directly exposed to fluctuations in foreign currency due to
its holdings in Australian dollar and euro denominated assets. Whilst the Group mitigates its
exposure to fluctuations in Australian dollars through the use of forward contracts, and in euros
through the natural hedge of Spanish distributions offsetting with the euro debt service, the
valuations of these assets will be directly impacted.
The DCF valuations of the Spanish assets may vary as a result of exchange rates; however, this
is offset by the exchange rate movements in the equivalent balance of the euro denominated
RCF loan. The EUR/GBP table below does not consider the offsetting exchange rate movements
on the RCF.
Whilst the Directors would not expect to see fluctuations quite this large, a variable of 20%
isconsidered appropriate.
EUR/GBP ‑20.0% ‑10.0% Base +10.0% +20.0%
Portfolio valuation (£m) 520.2 524.3 528.5 532.6 536.8
Change in portfolio valuation (£m) (8.3) (4.1) 0 4.1 8.3
NAV per share change (pence) (1.6) (0.8) 99.2 0.8 1.6
AUD/GBP ‑20.0% ‑10.0% Base +10.0% +20.0%
Portfolio valuation (£m) 524.8 526.6 528.5
530.3 532.2
Change in portfolio valuation (£m) (3.7) (1.9) 0
1.9 3.7
NAV per share change (pence) (0.7) (0.4) 99.2
0.4 0.7
Tax rate
From 1 April 2023, the UK corporation tax increased from 19% to 25%. The valuations of the
assets will be directly impacted by any changes to corporation tax rates. On that basis, a
variable of1.0% is considered reasonable given historic information.
‑1.0% Base +1.0%
Portfolio valuation (£m) 533.2 528.5 523.7
Change in portfolio valuation (£m) 4.7 0 (4.7)
NAV per share change (pence) 0.9 99.2 (0.9)
Notes to the Financial Statements continued
For the year ended 31 December 2025
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Financial Statements
16. Fair value of the investments in unconsolidated entities continued
Useful economic lives
The valuation of the Company’s investments is determined based on the discounted value of
future cash flows of those investments over their UELs. The UEL of the assets will be limited by
the sooner of planning and 40 years for UK assets and will not be limited by actual lease terms
secured. In Spain and Australia, UELs of the assets are based on the underlying lease contract
of the individual assets. Similarly, if the assets did not operate for the duration of the fixed
contractual period, this would reduce the value of those assets.
-1 year Base +1 year
Portfolio valuation (£m) 524.8 528.5 531.6
Change in portfolio valuation (£m) (3.7) 0 3.2
NAV per share change (pence) (0.7) 99.2 0.6
Interest rate
The interest rate received on UK bank deposits is subject to reassessment in respect of
fluctuations in the Bank of England’s base rate. The valuations of the assets will be directly
impacted by any changes to the bank deposit rate. Whilst the Directors would not expect tosee
fluctuations quite this large, a variable of 1% is considered appropriate.
‑1.0% ‑0.5% Base +0.5% +1.0%
Portfolio valuation (£m) 527.5 528.0 528.5 529.0 529.5
Change in portfolio valuation (£m) (1.0) (0.5) 0 0.5 1.0
NAV per share change (pence) (0.2) (0.1) 99.2 0.1 0.2
17. Stated capital and share premium
The Company issued shares of nil par value and therefore the stated capital relates only to
share premium. The stated capital of the Company consists of ordinary shares and treasury
shares. At any General Meeting of the Company each shareholder will have, on a show of
hands, one vote and on a poll one vote in respect of each ordinary share held. As at the year
end the total number of voting rights in the Company is 550,239,207 (2024: 564,856,642) which
excludes 59,719,513 (2024: 45,102,078)ordinary shares held in treasury.
Stated capital is the net proceeds received from the issue of ordinary shares (net of issue
costscapitalised). The holders of the ordinary shares are entitled to receive dividends from
time to time.
Authorised ordinary shares
31 December
2025
Shares
31 December
2024
Shares
Ordinary shares ̵ nil par value Unlimited Unlimited
Ordinary shares in circulation
31 December 2025 31 December 2024
Ordinary
shares
Treasury
shares
Ordinary
shares
Treasury
shares
Opening balance 564,856,642 45,102,078 589,239,345 20,719,375
Purchase of treasury shares (14,617,435) 14,617,435 (24,382,703) 24,382,703
Closing balance 550,239,207 59,719,513 564,856,642 45,102,078
Issued ordinary share capital and treasury shares
31 December 2025 31 December 2024
Ordinary
shares
£'000
Treasury
shares
£'000
Ordinary
shares
£'000
Treasury
shares
£'000
Opening balance 588,184 41,708 609,983 19,909
Less: Purchase of treasury shares (11,186) 11,186 (21,799) 21,799
Closing balance 576,998 52,894 588,184 41,708
Notes to the Financial Statements continued
For the year ended 31 December 2025
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Financial Statements
17. Stated capital and share premium continued
Issued ordinary share capital and treasury shares continued
On 4 May 2023, the Company announced a share buyback programme and allocated an initial
£10,000,000 from its available cash reserves to the programme. On 16 November 2023, the
Company announced that this allocation of available cash would be increased to a potential
£40 million. On 8 August 2024, the Company announced that this allocation of available
cash would further be increased to a potential £50 million. On 16 July 2025, the Company
announced that this allocation of available cash would further be increased to a potential
£60million. There is no certainty that the full buyback allocation will be utilised.
Share buybacks under the engagement will be made pursuant to the authority granted to the
Company at its General Meeting held on 3 June 2026, which limits purchases of ordinary shares
by the Company in the market to up to 14.99% of its issued capital.
18. NAV per ordinary share
The net asset value (NAV) per redeemable ordinary share for the Company is 99.2(2024:112.3)
pence per ordinary share. This is based on the net asset value atthe reporting date of
£545,881,914 (2024: £634,362,015) and on 550,239,207 (2024: 564,856,642) redeemable
ordinary shares, being the number of ordinary shares in issue at31December2025 excluding
ordinary shares held in treasury.
19. Financial instruments and risk profile
The Company holds cash and liquid resources as well as having receivables and payables that
arise directly from its operations. The underlying investments of the Company's investment
activities indirectly expose it to various types of risk associated with solar power. The main
risks arising from the Company's financial instruments are market risk, liquidity risk, credit risk
and interest rate risk.
The Directors regularly review and agree policies for managing each of these risks and these
are summarised below:
19.1 Market risk
(a) Foreign currency risk
Foreign currency risk, as defined in IFRS 7, arises as the values of recognised monetary assets
and monetary liabilities denominated in other currencies fluctuate due to movements in foreign
exchange rates. Transactions in foreign currencies are translated at the foreign exchange rate
ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign
currencies at the balance sheet date are translated to pounds sterling at the foreign exchange
rate ruling at that date. Foreign exchange differences arising on translation are recognised
inincome.
The Company has no direct exposure to foreign currency risk. However, through its underlying
investment in FS Holdco 4 and RCF Debtco, it has indirect exposure.
FS Holdco 4 is directly exposed to fluctuations in foreign currency due to its investments in
assets and cash denominated in EUR and AUD. The relevant holding companies mitigate the
exposure to fluctuations in foreign currency through the use of forward exchange contracts.
The carrying amount of FS Holdco 4’s foreign currency exposure at the reporting date is
asfollows:
31 December
2025
£'000
31 December
2024
£'000
AUD Investments 18,234 40,677
EUR Investments 46,806 44,333
AUD Cash 2,241 1
EUR Cash 1,192 2,099
The RCF euro denominated tranche of €50,320,596 was chosen to align with the valuation of
the operational Spanish portfolio of projects. The distributions of these operational projects act
as a hedge to offset the currency exposure of the EUR RCF debt service.
Notes to the Financial Statements continued
For the year ended 31 December 2025
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Financial Statements
19. Financial instruments and risk profile continued
19.1 Market risk continued
(a) Foreign currency risk continued
The carrying amount of RCF Debtco’s foreign currency exposure at the reporting date is as
follows:
31 December
2025
£'000
31 December
2024
£'000
EUR Loan 43,933 41,591
EUR Cash 26 57
The FX rate applied at 31 December 2025 was AUD/GBP 0.4958 (2024: 0.4942) and EUR/GBP
0.8731 (2024: 0.8265).
The sensitivities linked to the assets denominated in AUD and EUR are set out in note 16 as
these assets are held in the underlying investment.
(b) Price risk
The Company's investments are susceptible to market price risk arising from uncertainties
about future values of the instruments. The Investment Manager provides the Company with
investment recommendations. The Investment Manager's recommendations are reviewed and
approved by the Board before the investment decisions are implemented. To manage the
market price risk, the Investment Manager reviews the performance of the investments on a
regular basis and is in regular contact with the management of the non-current investments for
business and operational matters.
Price risk is the risk that the fair value or cash flows of a financial instrument will fluctuate
due to changes in market prices. At 31 December 2025, the Company's only investment
was valued at net assets excluding the outstanding loans issued by the Company. Were this
value to increase or decrease by 10%, the increase or decrease in net assets attributable to
shareholders for the year would be £54,350,432 (2024: £63,232,907). The impact of changes
inunobservable inputs to the underlying investment is considered in note 16.
(c) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market interest rates. The Company's exposure to the risk of
changes in market interest rates relates primarily to the Company's long-term borrowing to
its subsidiary. At the year end the Company had no long‑term borrowings with third parties
(2024:£nil).
Total portfolio
31 December
2025
£'000
Weighted
average
interest rate
31 December
2025
%
Weighted
average time
for which
rate is fixed
31 December
2025
Days
Loan notes 250,000 9.68 2,603
Shareholder loans¹ 239,450 2.00 3,835
Cash 1,646 0.05 —
491,096
Total portfolio
31 December
2024
£'000
Weighted
average
interest rate
31 December
2024
%
Weighted
average time
for which
rate is fixed
31 December
2024
Days
Loan notes 250,000 9.00 2,238
Shareholder loans¹ 273,853 2.00 3,470
Cash 2,018 0.05 —
525,871
1. The weighted average interest rate is calculated on a time‑apportioned basis for the period. The interest rate on the loan notes
increased from 9% to 11% effective 31 August 2025, following a step‑up provision triggered by the partial non‑payment of interest
due on 31 August 2025.
Notes to the Financial Statements continued
For the year ended 31 December 2025
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Financial Statements
19. Financial instruments and risk profile continued
19.1 Market risk continued
(c) Interest rate risk continued
The Company is also indirectly exposed to interest rate risk through its investment in UK Hold
Co. Details of the indirect interest rate risk exposure are as follows:
Total indirect
exposure
2025
£'000
Weighted
average
interest rate
2025
%
Weighted
average time
for which
rate is fixed
2025
Days
Investments RCF Debtco
1
642,105 7.09 1,461
Investments FS Holdco 4
1
93,401 5.64 3,512
Cash and cash equivalents 255 0.05 —
Total indirect exposure interest rate risk 735,761
Total indirect
exposure
2024
£'000
Weighted
average
interest rate
2024
%
Weighted
average time
for which
rate is fixed
2024
Days
Investments RCF Debtco
1
642,105 7.09 1,096
Investments FS Holdco 4
1
93,401 5.64 3,147
Cash and cash equivalents 4,446 0.05 —
Total indirect exposure interest rate risk 739,952
1. Although interest is charged on the loan portion of the investments, the risk is low as the loans are inter-group and therefore not
subject to significant fluctuations. These loans do not have a repayment date and are repayable on demand. However, the Directors
do not intend to demand repayment within at least 12 months after year end.
19.2 Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as
they fall due as a result of the maturity of assets and liabilities not matching. An unmatched
position potentially enhances profitability but can also increase the risk of losses. Liquidity
could be impaired by an inability to access secured and/or unsecured sources of financing
to meet financial commitments. The Board monitors the Company's liquidity requirements to
ensure there is sufficient cash to meet the Company's operating needs.
The following are the expected maturities of the financial assets and liabilities at the year end
based on contractual undiscounted payments:
31 December 2025
Carrying
amount
£'000
Contractual
total
£'000
Less than
6 months
£'000
6 to 12
months
£'000
Greater than
12 months
£'000
Financial assets
Investments 543,504 543,504 — — 543,504
Trade and other receivables 319 319 — 64 255
Interest receivable 1,242 1,242 — 1,242 —
Cash and cash equivalents 1,646 1,646 1,646 — —
Total financial assets 546,711 546,711 1,646 1,306 543,759
Financial liabilities
Trade and other payables 829 829 545 — 284
Total financial liabilities 829 829 545 — 284
Net position 545,882 545,882 1,101 1,306 543,475
Notes to the Financial Statements continued
For the year ended 31 December 2025
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Financial Statements
31 December 2024
Carrying
amount
£'000
Contractual
total
£'000
Less than
6 months
£'000
6 to 12
months
£'000
Greater than
12 months
£'000
Financial assets
Investments 632,329 632,329 — — 632,329
Trade and other receivables 304 304 17 65 222
Interest receivable 197 197 — 197 —
Cash and cash equivalents 2,018 2,018 2,018 — —
Total financial assets 634,848 634,848 2,035 262 632,551
Financial liabilities
Trade and other payables 486 486 269 — 217
Total financial liabilities 486 486 269 — 217
Net position 634,362 634,362 1,766 262 632,334
19.3 Credit risk
(a) Exposure to credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations,
resulting in financial loss for the Company. Foresight Solar places cash with authorised
deposit‑takers and is, therefore, potentially at risk from such institutions' failures.
In respect of credit risk arising from other financial assets and liabilities, which mainly comprise
of cash and cash equivalents, exposure to credit risk arises from default of the counterparty
with a maximum exposure equal to the carrying amounts of these instruments. In order to
mitigate such risks, cash is maintained with major international financial institutions. During
the year and at the reporting date, the Company maintained relationships with the following
financial institutions:
Moody's
credit rating
31 December
2025
£'000
Cash in bank:
Royal Bank of Scotland International Limited P2 1,646
Total cash and cash equivalents 1,646
Moody's
credit rating
31 December
2024
£'000
Cash in bank:
Royal Bank of Scotland International Limited P2 2,018
Total cash and cash equivalents 2,018
Notes to the Financial Statements continued
For the year ended 31 December 2025
19. Financial instruments and risk profile continued
19.2 Liquidity risk continued
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19. Financial instruments and risk profile continued
19.3 Credit risk continued
(a) Exposure to credit risk continued
The Company is also indirectly exposed to credit risk through its investment in UK Hold Co. The
Board of UK Hold Co has determined that the maximum exposure to credit risk in relation to
investments is £765,269,357 (2024: £735,506,149), being the portion of UK Hold Co investments
that are made up of loans as at 31 December 2025. Included within this are the related party
loans as disclosed within note 22 as well as debt facilities entered into by FS Holdco, FS Debtco
and RCF Debtco with Santander UK plc, NatWest Group plc, Allied Irish Banks plc, Lloyds Bank
plc, Macquarie Group Limited, Landesbank Hessen-Thuringen Girozentrale, Sumitomo Mitsui
Banking Corporation, London Branch and Barclays plc respectively. The balance of the external
debt facilities as at year end amounted to £296,190,530 (2024: £297,759,940).
The Group's ability to meet the debt covenants described in note 2.2 is directly impacted by
power prices. If the debt covenants were not met, the Company may not be able to repatriate
cash through the structure. On the debt calculation date before the date of this report, the
DSCR for FS Holdco was 3.44:1 and for FS Debtco it was 3.64:1. The ratios must higher than
1.20:1 and 1.10:1, respectively, to be compliant.
On the debt calculation date for RCF Debtco, the interest cover ratio was 23.52:1. This ratio
must remain higher than 3.00:1 to be compliant.
RCF Debtco has additional debt covenants in relation to its Environmental, Social and
Governance performance against three metrics. The current interest margin applied to the RCF
is 1.90%. If all three covenants are compliant, the margin will be decreased by 0.05%; however,
if no covenants are compliant, then the margin will be increased by 0.05%. These metrics are
listed below:
(i) An increase in total operational and developed capacity (disregarding any divestments) above
the operational and developed capacity for the previous financial year – not compliant
(ii) Total community benefit spend of at least equal to 0.025% of the net asset value of the FSFL
Group at year end – compliant
(iii) Desktop biodiversity analysis across 100% of FSFL's operational assets in all geographies for
assets still held at the end of the year – compliant
The Investment Manager is pleased to confirm that two of the three covenants were compliant
at year end, and as such, the existing interest margin of 1.90% will not be adjusted.
(b) Expected credit loss assessment
Investments held at fair value through profit or loss are not subject to IFRS 9 impairment
requirements.
The Company applies the simplified approach to measuring expected credit losses, as
permitted by IFRS 9, which uses a lifetime expected credit loss allowance for all trade
receivables. The expected credit loss on trade receivables and the balance at period end was
deemed not to be material and, therefore, no impairment adjustments were accounted for.
(c) Power hedging financial instruments
As part of its risk management strategy, the Group hedges its UK electricity market exposure
through a combination of physically‑settled and non‑physically‑settled hedging instruments.
Due to the relationship with external counterparties, there is an associated credit risk related
to settlements and mark-to-market positions of trades FS Topco 1, FS Topco 2 and FS Holdco
3 (the Holdcos) enter. The Group monitors and manages its counterparty credit exposure in
accordance with its hedging policy.
Whilst the Holdcos with no direct commodity exposure hold trades at fair value, these values
are eliminated on consolidation with internal trades.
19.4 Other risks
The value of ordinary shares may be affected by uncertainties such as political or diplomatic
developments, social and religious instability, changes in government policies, taxation or
interest rates, currency repatriation and other political and economic developments in law
or regulations and, in particular, the risk of expropriation, nationalisation, and confiscation of
assets and changes in legislation relating to the level of foreign ownership.
Governmental authorities are actively involved in the promulgation and enforcement of
regulations relating to taxation, land use and zoning, planning restrictions, environmental
protection, safety and other matters. The introduction and enforcement of such regulations
could have the effect of increasing the expense and lowering the income or rate of return from,
as well as adversely affecting the value of, the Company's assets.
Notes to the Financial Statements continued
For the year ended 31 December 2025
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19. Financial instruments and risk profile continued
19.4 Other risks continued
Specific risks to the value of ordinary shares, as per the Risk and risk management section
ofthis report:
Access to capital
Difficult market conditions, weak investor sentiment and elevated interest rates have restricted
access to new equity capital. Persistent discounts to NAV limit the Company’s ability to raise
funds and may constrain growth and long‑term financial flexibility. The Board is prioritising
balance sheet strengthening through debt reduction, capital recycling and share buybacks.
Regulatory change, including changes to subsidies
Returns remain exposed to political and regulatory decisions. Recent changes to inflation
indexation for ROC and FiT schemes (moving from RPI to CPI) and upcoming consultations on
fixed price certificates may negatively affect asset valuations and future revenue stability.
Near-term energy prices
Short-term power price volatility impacts revenue and may reduce cash generation available
for dividends. The Company hedges a significant proportion of expected production, targeting
at least 60% contracted revenue and aiming for 75% on a rolling two‑year basis.
Long-term energy prices
Long‑term power price forecasts significantly influence asset valuations and NAV. Reductions
in long‑term curves could materially weaken future returns. Power purchase agreements and
long‑dated power price hedges are used to manage uncertainty.
Dividend pressure
Foresight Solar is committed to delivering a sustainable, progressive dividend. Dividend
capacity is sensitive to cash generation, power prices, inflation indexation changes and
divestment timing. A shortfall in cash, driven by lower revenues or higher costs, could challenge
its ability to meet payments. Success in the Company's divestment programme may lead to
lower dividend cover in the near term. The Company has paid every quarterly dividend since
listing in 2013. Missing a payment would likely erode investor confidence, put downward
pressure on the share price, and weaken the Company's ability to execute its strategy.
Portfolio performance
Operational underperformance due to technical issues, grid constraints, irradiation variability
or ageing equipment can reduce cash flows. Mitigation includes monitoring and diversification of
O&M providers, asset management and lifecycle planning.
Liquidity of investments
Infrastructure assets are naturally illiquid, making disposals dependent on market conditions
and buyer demand. Difficulty selling assets may delay exits and limit capital redeployment,
affecting strategic progress. Shareholders want FSFL to exit Australia, increasing pressure for
timely realisations. Multiple sale processes are underway to improve the chances of successful
exits. Solar assets remain attractive to long‑term investors, though sentiment varies across
markets.
Fund performance
Underperformance versus peers can damage investor confidence and reduce demand for
FSFL shares. Competitive market conditions heighten scrutiny and increase consolidation and
takeover risk. Weak sentiment and broad sector discounts continue to weigh on share prices.
The Board and Manager actively monitor performance and have taken steps such as asset
sales and debt reduction. A discontinuation vote in June 2026 poses a further strategic risk if
shareholders demand change.
Counterparty risk
The Company’s key contractual counterparties may fail or underperform, limiting their ability
to meet their obligations. This is underscored by the portfolio's revenue concentration, with
approximately 59% of revenues attributable to a single PPA offtaker. Higher interest rates are
pressuring counterparties’ balance sheets, and heightening the need to monitor counterparties
for signs of financial stress. The Investment Manager regularly benchmarks service providers
and retenders key contracts. Financial hedging counterparties are required to have a minimum
credit rating set out in the Company's hedging policy. Agreements contain termination clauses
for insolvency or poor performance and are typically limited to terms of no more than five
years without a review. Additionally, counterparty diversification helps reduce reliance on any
single counterparty as risks remain elevated. Counterparty risk is likely to remain elevated if
interest rates stay higher for longer, with weaknesses potentially emerging over the next few
years.
Notes to the Financial Statements continued
For the year ended 31 December 2025
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Governance
Financial Statements
19. Financial instruments and risk profile continued
19.4 Other risks continued
Financial gearing
The Company’s use of debt facilities exposes it to risks if project cash flows weaken. Rising
interest rates increase refinancing risk, reduce valuations and raise the cost of variable‑rate
borrowing. Lower cash generation could lead to covenant breaches, defaults or reduced
dividend capacity. Interest rate hedging limits volatility, with at least 80% of debt hedged and
long‑term facilities fully hedged. The Australian portfolio faces refinancing challenges between
2026 and 2027 due to difficult market conditions.
Development and construction
Early‑stage projects face risks such as planning delays, construction issues and grid connection
setbacks. Such delays can reduce returns or create financial pressure where debt or PPA
obligations exist during construction. Protections include performance bonds, retention
mechanisms and milestone‑linked payments. In‑house development experts oversee project
delivery and ensure specifications and milestones are met. Demand for renewable projects
continues to support the pipeline, though higher competition has pushed up prices.
20. Capital management
The Company's objectives when managing capital are to safeguard the Group's ability to
continue as a going concern in order to provide returns for shareholders and benefits for other
stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Company may adjust the amount of
dividends paid to shareholders, return capital to shareholders, issue new shares (up to its
authorised number of shares) or sell assets to reduce debt. The Company is permitted to
purchase up to 14.99% of its own issued share capital.
21. Dividends
2025 2024
£'000
Pence/
ordinary
share £'000
Pence/
ordinary
share
Quarter 1 11,266 2.000 11,027 1.880
Quarter 2 11,166 2.000 10,942 1.895
Quarter 3 11,253 2.025 11,412 2.000
Quarter 4 11,182 2.025 11,353 2.000
44,867 44,734
On 21 November 2025, the Company announced the third interim dividend, in respect of the
period 1 July 2025 to 30 September 2025, of 2.025 pence per ordinary share. The shares
went ex‑dividend on 29 January 2026 and the dividend was paid on 20 February 2026 to
shareholders on the register as at the close of business on 30 January 2026.
No shares were issued in lieu of cash dividends during the year.
Notes to the Financial Statements continued
For the year ended 31 December 2025
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Strategic Report
Governance
Financial Statements
22. Related party disclosures
For the purposes of these Financial Statements, a related party is an entity or entities who are
able to exercise significant influence directly or indirectly on the Company's operations.
As noted in note 2, the Company does not consolidate its subsidiaries. However, the Company
and its subsidiaries (direct and indirect) are a Group and, therefore, are considered to be
related parties.
Transactions with UK Hold Co
For the year ended 31 December 2025:
Opening
balance as at
1 January
2025
£'000
Movements
during the
year
£'000
Closing
balance as at
31 December
2025
£'000
Interest-bearing loans and outstanding interest 523,853 (34,403) 489,450
Non-interest-bearing loans 187 — 187
For the year ended 31 December 2024:
Opening
balance as at
1 January
2024
£'000
Movements
during the
year
£'000
Closing
balance as at
31 December
2024
£'000
Interest-bearing loans and outstanding interest 567,966 (44,113) 523,853
Non-interest-bearing loans 187 — 187
Transactions between UK Hold Co and its underlying subsidiaries
There were no transactions between UK Hold Co, Topco 1, FIHC, FS Holdco, Topco 2, FISH,
FS Holdco 2, FS Debtco, FS Holdco 3, FS Holdco 4 and SGP Holdings 1 during the current or
prior year.
Transactions with RCF Debtco
For the year ended 31 December 2025:
Opening
balance as at
1 January
2025
£'000
Movements
during the
year
£'000
Closing
balance as at
31 December
2025
£'000
Interest-bearing loans and outstanding interest 640,517 42,255 598,262
Non-interest-bearing loans (261,001) 128,407 (389,408)
For the year ended 31 December 2024:
Opening
balance as at
1 January
2024
£'000
Movements
during
the year
£'000
Closing balance
as at
31 December
2024
£'000
Interest-bearing loans and outstanding interest 638,828 1,689 640,517
Non-interest-bearing loans (306,279) 45,278 (261,001)
Notes to the Financial Statements continued
For the year ended 31 December 2025
151
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Governance
Financial Statements
22. Related party disclosures continued
Transactions with FS Holdco 4
For the year ended 31 December 2025:
Opening
balance as at
1 January
2025
£'000
Movements
during
the year
£'000
Closing
balance as at
31 December
2025
£'000
Interest-bearing loans and outstanding interest 123,755 (30,354) 93,401
Non-interest-bearing loans 23,232 (5,184) 18,048
For the year ended 31 December 2024:
Opening
balance as at
1 January
2024
£'000
Movements
during
the year
£'000
Closing
balance as at
31 December
2024
£'000
Interest-bearing loans and outstanding interest 147,778 (24,023) 123,755
Non-interest-bearing loans (15,152) 38,384 23,232
Transactions with FBSHL
For the year ended 31 December 2025:
Opening
balance as at
1 January
2025
£'000
Movements
during
the year
£'000
Closing
balance as at
31 December
2025
£'000
Interest-bearing loans and outstanding interest 15,670 (1,629) 14,041
For the year ended 31 December 2024:
Opening
balance as at
1 January
2024
£'000
Movements
during
the year
£'000
Closing
balance as at
31 December
2024
£'000
Interest-bearing loans and outstanding interest 8,040 7,630 15,670
Transactions between FS Holdco, FS Debtco, FS Holdco 3, FS Holdco 4
andtheirSPVs
All of the SPVs are cash‑generating solar farms (except for the non‑operational Spanish
investments). On occasion, revenues are received and expenses are paid on their behalf by
FSHoldco, FS Holdco 2, FS Debtco, FS Holdco 3 and FS Holdco 4. All of these transactions
arerelated party transactions.
For the year ended 31 December 2025:
Amounts paid
on behalf SPV
2025
£'000
Amounts
received from
SPV 2025
£'000
FS Holdco and its SPVs 28 47,913
FS Debtco and its SPVs 206 37,271
For the year ended 31 December 2024:
Amounts paid
on behalf SPV
2024
£'000
Amounts
received SPV
2024
£'000
FS Holdco and its SPVs 11 48,428
FS Debtco and its SPVs 26 47,973
Notes to the Financial Statements continued
For the year ended 31 December 2025
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Financial Statements
22. Related party disclosures continued
Transactions with the Investment Manager
The Investment Manager of Foresight Solar is Foresight Group LLP.
During the year, the Investment Manager charged marketing service fees of £8,000 (2024:
£15,000) and power hedging service fees of £180,000 (2024: £nil) to the Company. The
Investment Manager, through its management services subsidiary, Foresight Asset Management
Limited, charged management services fees to the underlying projects of £3,080,000 during the
year (2024: £2,923,000). The Investment Manager also charged management services fees of
€289,000 through its Spanish subsidiary Foresight Group Iberia, S.L (2024: €167,000).
23. Commitments and contingent liabilities
There are no commitments or contingent liabilities (2024: £nil).
24. Controlling party
In the opinion of the Directors, there is no controlling party as no one party has the ability to
direct the financial and operating policies of the Company with a view to gaining economic
benefits from its direction.
25. Post balance sheet events
There were no post balance sheet events requiring disclosure.
Notes to the Financial Statements continued
For the year ended 31 December 2025
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Governance
Financial Statements
Overview of investment activities
The Company’s investment activities during the year are disclosed in full in the Investment
Manager’s report from page 11.
The performance of Foresight Solar’s portfolio during the year is also disclosed in full in the
Operational review from page 29.
Meanwhile, a list of FSFL’s portfolio investments is included from page 37.
Leverage and borrowing
Leverage is defined as any method by which the Company increases its exposure through debt,
borrowed capital or the use of derivatives.
The Company and its subsidiaries’ leverage position and third-party debt arrangements are
disclosed in full in the Financial review from page 69.
“Exposure” is defined in two ways – “gross method” and “commitment method” – and the
Company must not exceed maximum exposures under both methods.
The Directors are required to calculate and monitor Foresight Solar’s leverage, expressed as a
ratio between the exposure of the Company and its net asset value (Exposure/NAV), under both
the gross method and the commitment method.
“Gross method” exposure is calculated as the sum of all Company positions (both positive and
negative), that is, all eligible assets, liabilities and derivatives, including derivatives held for risk
reduction purposes.
“Commitment method” exposure is also calculated as the sum of all Company positions (both
positive and negative), but after netting off derivative and security positions as specified by the
Directive.
For the “gross method”, the following has been excluded:
ș The value of any cash and cash equivalents which are highly liquid investments held in the
Company’s local currency that are readily convertible to a known amount of cash, subject to
an insignificant risk of changes in value and which provide a return no greater than the rate
of the three-month high quality government bond
ș Cash borrowings that remain in cash or cash equivalents as defined above and where the
amounts of that payable are known
The total amount of leverage calculated as at 31 December 2025 is:
ș Gross method: 33%
ș Commitment method: 43%
Liquidity
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as
they fall due because of the maturity of assets and liabilities not matching. An unmatched
position potentially enhances profitability but can also increase the risk of losses. Liquidity
could be impaired by an inability to access secured and/or unsecured sources of financing to
meet financial commitments. The Board monitors Foresight Solar’s liquidity requirements to
ensure there is sufficient cash to meet operating needs.
The Company’s financial position, its cash flows, liquidity position and borrowing facilities are
referred to in the Chair’s statement (see page 6), Strategic Report (see page 1) and Notes to the
Financial Statements (see page 120). In addition, the Financial Statements (see page 116) include
the Company’s objectives, policies and processes for managing its capital, its financial risk
management objectives, and its exposures to credit risk and liquidity risk.
Foresight Solar has sufficient financial resources together with investments and income
generated. Consequently, the Directors believe it is able to manage its business risks.
Risk management policy note
Please refer to the Principal risks section from page 51.
Remuneration
As an AIFM, the Company is subject to a remuneration code which is consistent with the
requirements of the Financial Conduct Authority. The remuneration policy is designed to ensure
that any relevant conflicts of interest can be always managed appropriately and that the
remuneration of the Directors and of senior management are in line with the risk policies and
objectives of the funds managed by the AIFM.
The Company does not directly employ any staff members. These services are provided by
Foresight Group LLP employees.
In accordance with the AIFMD, information in relation to the remuneration of the Company’s
AIFM is required to be made available to investors. In accordance with the Directive, the AIFM’s
remuneration policy and the numerical remuneration disclosures in respect of the AIFM’s
relevant reporting period (year ended December 2025) are available from the AIFM on request.
AIFMD disclosures (unaudited)
154
Foresight Solar Fund Limited
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Strategic Report
Governance
Financial Statements
Administrator & Company Secretary
JTC (Jersey) Limited
JTC House
28 Esplanade
St. Helier
Jersey JE4 2QP
Corporate brokers
Jefferies International Limited
100 Bishopsgate
London EC2N 4JL
Singer Capital Markets
1 Bartholomew Lane
London EC2N 2AX
Independent Auditor
KPMG LLP
15 Canada Square
London E14 5GL
Investment Manager
Foresight Group LLP
The Shard
32 London Bridge Street
London SE1 9SG
Legal advisors to the Company
as to the acquisition of solar assets
Osborne Clarke
One London Wall
London EC2Y 5EB
Legal advisors to the Company
as to English Law
Dickson Minto W.S.
Broadgate Tower
20 Primrose Street
London EC2A 2EW
Advisors
Legal advisors to the Company
as to Jersey Law
Ogier
Ogier House
The Esplanade
St. Helier
Jersey JE4 9WG
Public relations
Sodali & Co
The Leadenhall Building
122 Leadenhall Street
London EC3V 4AB
Registrar
Computershare Investor Services (Jersey)
Queensway House
Hilgrove Street
St. Helier
Jersey JE1 1ES
155
Foresight Solar Fund Limited
Annual Report and Financial Statements
for the year ended 31 December 2025
Strategic Report
Governance
Financial Statements
FCA Financial Conduct Authority
FiT Feed‑in Tariff. The Feed‑in Tariff scheme is the financial mechanism
introduced on 1 April 2010 by which the UK government incentivises
the deployment of renewable and low-carbon electricity generation
ofup to 5 MW of installed capacity
FPC Fixed Price Certificate
GAV Gross Asset Value on investment basis including debt held at SPV level
GHG Greenhouse gas
Group borrowing Group borrowing refers to all third-party debt by the Company and
itssubsidiaries
GWh Gigawatt hour
IAS International Accounting Standard
IC Investment Committee
IFRS International Financial Reporting Standards as adopted by the EU
Investment Manager Foresight Group LLP
IPEV Valuation
Guidelines
International Private Equity and Venture Capital Valuation Guidelines
IPCC Intergovernmental Panel on Climate Change
IPO Initial Public Offering
ISSB International Sustainability Standards Board
KPI Key performance indicator
KPMG LLP KPMG is the Company's Auditor
LGC Large‑scale Generation Certificate
Listing Rules The set of FCA rules which must be followed by all companies listed
inthe UK
Main Market The main securities market of the London Stock Exchange
Glossary of terms
AGM Annual General Meeting
AIC The Association of Investment Companies
AIC Code The Association of Investment Companies Code of
CorporateGovernance
AIFs Alternative Investment Funds
AIFMs Alternative Investment Fund Managers
AIFMD The Alternative Investment Fund Managers Directive
APM Alternative Performance Measure
BBSY Bank Bill Swap Bid Rate
BESS Battery energy storage system
CEFC The Clean Energy Finance Corporation
CfD Contracts for Difference
Company Foresight Solar Fund Limited
Contracted revenues Revenue with a high degree of certainty, both from subsidies or from
electricity sales hedged or fixed under power price agreements
CPI Consumer Price Index
DCF Discounted cash flow
DESNZ Department for Energy Security and Net Zero
DNO Distribution network operator
DSCR Debt service cover ratio
EBITDA Earnings before interest, taxes, depreciation and amortisation
EPC Engineering, procurement and construction
Euribor The Euro Interbank Offered Rate is based on the average interest rates
at which a panel of European banks borrow funds from one another
EV Enterprise Value
156
Foresight Solar Fund Limited
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for the year ended 31 December 2025
Strategic Report
Governance
Financial Statements
Management services The Company's underlying investments have appointed Foresight Asset
Management Limited, a subsidiary of Foresight Group LLP, to act as
their management services provider
MIDIS Macquarie Infrastructure Debt Investment Solutions
MWh Megawatt hour
N2EX Power market in London
NAV Net asset value
NEM National Electricity Market
Net zero A target of completely negating the amount of greenhouse gases
produced by human activity, to be achieved by reducing emissions
and implementing methods of absorbing carbon dioxide from
theatmosphere
NSW New South Wales
Ofgem Office of Gas and Electricity Markets (UK government regulator)
O&M Operation and maintenance
PCAF Partnership for Carbon Accounting Financials
PNIEC Plan Nacional Integrado de Energía y Clima, Spain's local
implementation of the EU-wide National Energy and Climate Plan
PPA Power Purchase Agreement
PRI Principles for Responsible Investment
QLD Queensland
RCF Revolving credit facility
RCPs Representative Concentration Pathways
REGO Renewable Energy Guarantees of Origin
REMA Review of Electricity Market Arrangements
RO Scheme 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 Renewables Obligation Certificates
RPI Retail Prices Index
SDG United Nations Sustainable Development Goal
SDR Sustainability Disclosure Requirements
SONIA Sterling Overnight Index Average
SPVs The special purpose vehicles which hold the Company's investment
portfolio of underlying operating assets
SSPs Shared Socioeconomic Pathways
TCFD Task Force on Climate-related Financial Disclosures
UEL Useful economic life
UK The United Kingdom of Great Britain and Northern Ireland
VIC Victoria
Glossary of terms continued
157
Foresight Solar Fund Limited
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for the year ended 31 December 2025
Strategic Report
Governance
Financial Statements
Foresight Solar Fund Limited
JTC House
28 Esplanade
St. Helier, Jersey
JE4 2QP
ForesightSolar.com