Annual

Report and

Financial

Statements

FOR THE YEAR ENDED

COMPANY REGISTRATION NO: 56708

30 JUNE 2022

Table of Contents

General Information

Highlights

Corporate Summary

Chair’s Statement

Analysis of the Company’s Operational

Investment Portfolio

Strategic Report

Report of the Investment Adviser

Environmental, Social and Governance Report

Task Force for Climate-related Financial

Disclosures (TCFD)

Report of the Directors

Board of Directors

Directors’ Statement of Responsibilities

Responsibility Statement of the Directors

in Respect of the Annual Report

Corporate Governance Report

Report of the Audit Commitee

Independent Auditor’s Report

Statement of Financial Position

Statement of Comprehensive Income

Statement of Changes in Equity

Statement of Cash Flows

Notes to the Financial Statements

for the year ended 30 June 2022

101

Glossary of Deﬁned Terms

104

Alternative Performance Measures

ANNUAL REPORT AND FINANCIAL STATEMENTS

MERIEL LENFESTEY

General Information

JAMES ARMSTRONG

Managing Partner

NEIL WOOD

Partner

Registered Ofﬁce

PO Box 286,

Floor 2, Trafalgar Court,

Les Banques,

St Peter Port,

Guernsey, GY1 4LY

Investment Adviser

Blueﬁeld Partners LLP

6 New Street Square

London, EC4A 3BF

Board of Directors (all non-executive)

JOHN RENNOCKS

(Chair)

LAURENCE MCNAIRN

(retired 17 February 2022)

PAUL LE PAGE

(Chair of Audit

Committee)

JOHN SCOTT

(Senior Independent

Director)

Administrator, Company Secretary & Designated Manager

Ocorian Administration (Guernsey) Limited

Floor 2, Trafalgar Court, Les Banques,

St Peter Port, Guernsey, GY1 4LY

Independent Auditor

KPMG Channel Islands Limited

Glategny Court, Glategny Esplanade

St Peter Port, Guernsey, GY1 1WR

Registrar

Link Market Services (Guernsey) Limited

Mont Crevelt House

Bulwer Avenue, St Sampson

Guernsey, GY2 4LH

Receiving Agent & UK Transfer Agent

Link Asset Services Limited

The Registry

34 Beckenham Road

Beckenham, Kent, BR3 4TU

Sponsor, Broker & Financial Adviser

Numis Securities Limited

45 Gresham Street

London, EC2V 7BF

Legal Advisers to the Company (as to English law)

Norton Rose Fulbright LLP

3 More London Riverside

London, SE1 2AQ

Legal Advisers to the Company (as to Guernsey law)

Carey Olsen

PO Box 98, Carey House

Les Banques, St Peter Port

Guernsey, GY1 4BZ

Principal Bankers

NatWest International plc

35 High Street, St Peter Port

Guernsey, GY1 4BE

GIOVANNI TERRANOVA

Managing Partner

ELIZABETH BURNE

(appointed 7 October 2021)

ANNUAL REPORT AND FINANCIAL STATEMENTS

Net Asset Value (NAV)

£858.4m £471.4m

NAV per Share

140.39p 115.83p

Underlying

Earnings

(pre amortisation of debt)

£66.8m £48.6m

Underlying Earnings

per share

(pre amortisation of debt)

12.04p 11.34p

Underlying Earnings per

(post amortisation of debt)

9.54p 9.16p

Highlights

As at 30 June 2022 / 30 June 2021

1. Underlying earnings is an alternative performance measure employed by the Company to provide insight to

the Shareholders by linking the underlying ﬁnancial performance of the operational projects to the dividends

declar

ed and paid by the Company. Further detail is provided on page 30.

2. Total Shareholder Return is based on share price movement and dividends paid in the year. It is deﬁned in the

Alternative Performance Measure appendix.

3. Total Return is based on the NAV movement and dividends paid in the year. It is deﬁned in the Alternative

Performance Measure appendix.

Total Shareholder

Return

14.55% (3.79)%

Total Return

28.16% 5.83%

Total return to

Shareholders since IPO

92.45% 74.79%

Dividend Target per Share

8.16pps 8.00pps

Actual Dividend Declared

8.20pps 8.00pps

Forward Focus

Further investment into the Company’s solar and battery

development pipeline has increased it to a combined total

of C.900MW

In July 2021, the Company completed its maiden wind

investment, acquiring 109 small scale UK onshore wind

turbines with the potential for future re-powering with

larger turbines for an initial consideration of £63m.

Environmental, Social

and Governance (ESG)

ESG KPIs

•

Over 624,000,000 kWh of renewable energy generated

•

Over 120,000 tonnes of CO

e savings achieved

•

Equivalent of 215,000 homes powered with renewable energy

•

Over £154,000 paid to community beneﬁt schemes

ESG Highlights

•

Developed a robust ESG strategy, including an ESG vision, commitments & KPIs

•

Published the Company’s ﬁrst TCFD disclosure

•

Aligning with Article 8 of the Sustainable Finance Disclosure Regulation (SFDR)

57% of revenues are indexed linked over life of the subsidies

ANNUAL REPORT AND FINANCIAL STATEMENTS

Results Summary

For the year ended

30 June 2022

For the year ended

30 June 2021

Total operating income

£176,141,970 £25,921,639

Total comprehensive income before tax

£174,572,832 £24,517,576

Total underlying earnings (pre amortization of debt)

£66,750,110 £48,663,667

Earnings per share (per page 46)

34.91p 6.25p

Underlying EPS available for distribution

11.92p 11.09p

Total declared dividends per share for year

8.20p 8.00p

Earnings per share carried forward (See Page 46)

3.39p 2.67p

NAV per share

140.39p 115.83p

Share price at 30 June

131.00p 121.40p

Total return

28.16% 5.83%

Total Shareholder Return

14.55% (3.79)%

Total Shareholder Return since inception

92.45% 74.79%

Dividends per share paid since inception

61.45p 53.39p

1. Underlying earnings is an alternative performance measure employed by the Company to provide insight to

the Shareholders by linking the underlying ﬁnancial performance of the operational projects to the dividends

declared and paid by the Company. Further detail is provided on page 30.

2. Underlying EPS is calculated using underlying earnings available for distribution divided by the average number

of shares.

3. Total return is based on NAV per share movement and dividends paid in the year.

4. Total Shareholder Return is based on share price movement and dividends paid in the year.

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

ANNUAL REPORT AND FINANCIAL STATEMENTS

Investment objective

The investment objective of the Company is to provide

Shareholders with an attractive return, principally in the

form of regular income distributions, by being invested

primarily in solar energy assets located in the UK. The

Company also invests a minority of its capital into other

renewables assets including wind and energy storage.

Structure

The Company is a non-cellular company limited by shares

incorporated in Guernsey under the Law on 29 May 2013.

The Company’s registration number is 56708, and it

is regulated by the GFSC as a registered closed-ended

collective investment scheme and as a Green Fund after

successful application under the Guernsey Green Fund

Rules to the GFSC on 16 April 2019. The Company’s

Ordinary Shares were admitted to the Premium Segment

of the Ofﬁcial List and to trading on the Main Market of the

LSE following its IPO on 12 July 2013. The issued capital

during the year comprises the Company’s Ordinary Shares

denominated in Sterling.

The Company has the ability to use long term and short

term debt at the holding company level, as well as having

long term, non-recourse debt at the SPV level.

Corporate Summary

Investment Adviser

The Investment Adviser to the Company during the

period was Bluefield Partners LLP which is authorised

and regulated by the UK FCA under the number 507508.

In May 2015 Bluefield Services Limited (BSL), a company

with the same ownership as the Investment Adviser,

commenced providing asset management services to

the investment SPVs held by the UK limited company

parent, which changed from Bluefield SIF Investments

Limited (BSIFIL) to Bluefield Renewables 1 Limited

(BR1) in May 2022 to facilitate arrangement of the

new RCF. In August 2017 Bluefield Operations Limited

(BOL), a company with the same ownership as the

Investment Adviser, commenced providing operation

and maintenance services to the Company and provides

services to 64 sites (555MW) of the investment portfolio

held by BR1 as at year end.

In December 2020 Blueﬁeld Renewable Developments

Limited (BRD), a company with the same ownership as the

Investment Adviser, commenced providing the Company

with new build development opportunities in addition

to arrangements in place with the Company’s other

development partners.

ANNUAL REPORT AND FINANCIAL STATEMENTS

Introduction

As the Company ends its ninth year of operation, it gives the Board and I great

pleasure once again to be reflecting on a year of considerable success for the

Company.

As the world emerged from the Covid pandemic and the global economy

rebounded, the Company’s Investment Adviser succeeded in growing the

generating capacity of the Company’s portfolio by over 25% in the period to

June 2022. When combined with the increase seen in the previous ﬁnancial

year, your Company’s portfolio of operating renewable assets has grown by

over 60% since June 2020. In the light of recent increases in inflation and

(particularly) the price of electricity, our acquisition programme looks well

timed and provides shareholders with excellent value.

The Company’s ability to maximise the value of energy sales through its

strategy of typically ﬁxing prices 18 months ahead, and thanks to its high

levels of inflation- linked revenues, it continues to deliver a sector leading,

covered dividend. With its proprietary pipeline of business, the Company

intends to continue to grow its high quality asset base.

Chair’s Statement

ANNUAL REPORT AND FINANCIAL STATEMENTS

Acquisitions

Over the reporting period the Company completed 153.3MW of

ROC and FiT accredited acquisitions, consisting of solar (95MW)

and onshore wind (58.3MW) projects, increasing the Company’s

generating portfolio to 766MW as at 30 June 2022 (June 2021:

613MW); this resulted in a generating mix for the portfolio of 92.4%

solar and 7.6% onshore wind, the latter being our ﬁrst foray into this

sector. The Company’s mandate allows for diversiﬁcation up to 25% of

its GAV into non solar renewables.

In addition to successfully completing acquisitions of subsidised

assets, good progress has been made on the Company’s strategy of

investing in the future build out of the UK’s renewable mix through

receipt of planning consent on two ready to build PV plants totalling

80MW and investments into ready to build co-located solar and

storage (45MW and 25MW, respectively), as well as standalone

battery storage of over 100MW.

These ready to build assets provide the Company with the opportunity

to invest up to £34m over the next year and are in addition to the

investment of up to £34m to complete construction of Yelvertoft. More

details of acquisitions during the period are outlined on page

21 within

the Investment Adviser’s report.

Underlying Earnings and Dividend Income

The Underlying Earnings for the period, pre amortisation of long-

term ﬁnance, were £66.8m, or 12.04pps, and underlying earnings

for distribution, post debt repayments of £13.8m (2.50pps), were

£52.9m (9.54pps).

The strong operational performance of the Company’s portfolio over

the six months to 31 December 2021, combined with the beneﬁt of

brought forward revenue reserves of 2.39pps (adjusted 115,384,615

new shares issued during the period) means the Board has earned

comfortably in excess of its dividend target of 8.16pps for the year

to 30 June 2022. By declaring a fourth interim dividend of 2.09pps,

the total dividend for the year is 8.20pps and the Company thereby

remains the sector’s highest dividend distributor (on a pence per

share basis).

Further details of Underlying Earnings are set out in the Investment

Adviser’s Report on page

30.

Valuation and Discount Rate

Demand for renewable projects, at all stages of their lifecycle, remains

strong; as both power prices and inflation have surged, valuations of

assets have risen in tandem.

The Investment Adviser is now observing that pricing for solar

portfolios, on £m/MW basis, has moved to c.£1.40m/MW, with the

upper range on deals closer to £1.50m/MW. Transactions in previous

years have been in the £1.25m/MW - £1.40m/MW range.

Higher interest rates and the inclusion of onshore wind within the

portfolio have caused the Board to increase the discount rate for the

30 June valuation to 6.75% (June 2021: 6%).

By valuing the Company’s operational portfolio at an enterprise value

of £1,181m (c.£1.39m/MW for the solar assets (vs. £1.26m/MW in

June 2021), the Directors’ Valuation as at 30 June 2022 is in line

with recent market transactions and consistent with the Company’s

valuation methodology of ‘willing buyer/willing seller’.

Please see page

34 in the Investment Adviser’s report for further

details on the Directors’ Valuation.

Inflation

Over the past year inflation has surged, reflecting higher commodity

and energy prices following a recovery in demand from pandemic lows.

Since March 2022, Russia’s invasion of Ukraine and the continuing

conflict there have helped push inflation to levels not seen since the

1980s. The result is current UK inflation, on an RPI basis, close to 12%

(CPI 9.4%).

Prevailing opinion among economic forecasters remains that inflation

will abate during 2023, but it is possible that price pressures will

endure. Since our income grows with inflation, resulting from the

indexation provisions in our regulated revenues, increases in RPI

boost both our earnings and the valuation of our assets.

Reflecting the latest economic forecasts, as well as the transition from

RPI to CPIH post 2030, inflation assumptions supporting the valuation

are 10.9% in 2022 (an increase from 6.4% as per the December 21

Interim statements), 3.4% in 2023 and thereafter 3.0% until 2029,

before dropping to 2.25%.

The principal activities of the Company, as well as

main features of the period under review, are:

•

The Company completed the purchase of three

portfolios of subsidised onshore wind and solar

assets, with a combined enterprise value of

approximately £300m;

•

To complement this level of investment, the

Company raised c.£255m through equity issuance,

in August 2021 and June 2022;

•

Ensuring a focus on increasing future renewable

generation and supporting the UK’s transition

to Net Zero, 45MW of new build solar and over

125MW of ready to build storage assets were

purchased for a combined total of £11m;

•

Momentum on the Company’s development

pipeline continued apace, with planning consents

being secured on c.100MW of solar projects whilst

the wider total pipeline grew to c.900MW of solar

and c.429MW of battery storage;

•

The Net Asset Value per share rose to 140.39pps

(30 June 2021: 115.83pps), reflecting both the

dramatically higher electricity prices which have

been seen since Russia’s invasion of Ukraine and

the spike in inflation;

•

Total declared dividends for the year have been

increased to 8.20pps, ahead of our original target

of 8.12pps;

•

Post period end the Company signed contracts for

the construction of Yelvertoft, a CfD backed 50MW

solar plant; and

•

The Company was recently promoted to the FTSE

250 index.

At the time of writing, the Group’s total outstanding

debt has increased to c.£460 million and its leverage

level stands at c.35% of GAV, which is at the lower end

of our preferred range of 35%-45%.

CHAIR’S STATEMENT ANNUAL REPORT AND FINANCIAL STATEMENTS

Environmental, Social and Governance

(“ESG”)

It gives me great pleasure to present the Company’s

ﬁrst ESG strategy within this report and I take pride

in the unwavering commitment the Board and

Investment Adviser have in ensuring the Company

strives to implement best practice policies in this

hugely important area.

This year has seen the ﬁrst retirement from

the Board of Directors since the Company was

established in 2013, so I would like to extend a

warm welcome to Libby Burne who joined us as a

Non-Executive Director in October 2021 following a

distinguished career at PwC; and to thank Laurence

McNairn, who has retired from the Board, for his

wise counsel and dedication since the very early

days of the Company.

After nine years as Chair it is now my intention to

stand down at the forthcoming AGM, and the Board

has agreed that John Scott will move from his role

as Senior Independent Director to succeed me as

Chair of Company. I believe this is important for

continuity as we rotate other Board members who

have served since the IPO. John intends to serve

not more than three additional years, during which

time the newer members of the Board will be more

established, and we will look for a longer term

replacement as Chair. We are also at an advanced

stage in appointing a new non-executive director

who will succeed John as Senior Independent

Director at the AGM.

Power Prices

Increasing electricity demand, as the world

emerged from the Covid 19 pandemic, had seen

power prices rising steadily but Russia’s invasion

of Ukraine sent shockwaves through European

energy markets, with concerns around the supply of

Russian gas to Europe driving a 45.5%

increase in

gas prices and sending UK day-ahead power prices

surging from c.£78/MWh to highs of c.£593/MWh

in August 2022.

Navigating such turbulent times requires care,

and the Company’s PPA strategy of ﬁxing power

for between one and three years has allowed it to

ﬁx power contracts throughout the period of rising

prices. This not only insulates the portfolio from

market volatility, as successfully demonstrated

during the Covid pandemic, but also enables it to

create pricing certainty at increasing levels for up

to three years ahead. Evidence of this is seen in

the average ﬁxed price achieved for ﬁxed contracts

from January 2022 onwards. As at June 2022

the average weighted price for these contracts

were £190.1/MWh, £303/MWh for January 2023

and £230/MWh for June 2023. This provides the

expectation of over 2 x dividend cover (post and

ex-carried forward earnings) in the ﬁnancial years

ending June 2023 and June 2024.

Please see page

33 in the Investment Adviser’s

report for a graph illustrating the blended power

curves used by the Company in the Directors’

Valuation.

The Energy Crisis and Reform

The energy crisis has resulted in power prices reaching unsustainably

high levels, putting pressure on every section of the economy. The

government is engaging with renewable energy generators to see

how our industry can be part of the solution, recognising that the

renewable energy sector is well placed to play a major role in creating

a long term solution to this crisis. Solar and wind are today the lowest

cost generators in the market, their technologies are relatively quick

to deploy and they provide indigenous, clean and secure supplies

of energy. The Company welcomes the opportunity to discuss an

equitable reform of the electricity market that will result in consumers

seeing the beneﬁt of the lower generating costs of existing portfolios. In

the event that both government and generators ﬁnd a fair solution that

will not impair the future attractiveness of the market and which does

not constrain our ability to raise the new capital required to support

the investment needed to continue the process of decarbonising the

economy, there is an opportunity for a good outcome for all.

Conclusion

With high levels of index-linked revenues, a conservative debt and

power sales strategy and no currency risk, we have demonstrated

after close to a decade of operation that your Company remains a

safe haven for investors looking for robust sterling income, with sector

leading earnings and dividends.

I am delighted that the Company has been promoted to membership

of the FTSE 250 index, and it does so on the strongest of ﬁnancial

footings and with a wonderful opportunity to play an increasing role in

the transformation of the UK’s energy map.

John Rennocks

Chair

29 September 2022

1. Source: Natural gas - 2022 Data - 1990-2021 Historical - 2023 Forecast - Price - Quote - Chart

(tradingeconomics.com)

CHAIR’S STATEMENT ANNUAL REPORT AND FINANCIAL STATEMENTS

SOLAR PV <5MWp

SOLAR PV 5 - 10MWp

SOLAR PV 10 - 45MWp

SOLAR PV >45MWp

WIND TURBINE

SOLAR PV MICRO SITES

WIND FARM

Analysis of the

Company’s Operational

Investment Portfolio

The Company’s investment portfolio, analysed by geography, revenue type,

subsidy tariff and technology type, as at 30 June 2022 is as follows:

* Revenue is based on the Company’s operating portfolio of 766.2MWp

and does not include estimated ROC Recycle RevenueNote: Graph percentages are based on capacity

Oxfordshire

8.1%

GEOGRAPHICAL

ANALYSIS

Norfolk

13.9%

Kent

7.0%

Devon

5.5%

Dorset 4.9%

Derbyshire 2.2%

Sussex 1.5%

Cambridgeshire 3.4%

Leicestershire 1.4%

Hampshire

9.6%

Gloucestershire 1.9%

Wiltshire

15.3%

Somerset 4.8%

Other Counties

12.3%

Northern Ireland 1.7%

Cornwall

6.5%

TECHNOLOGY

Solar PV

92.4%

Wind

7.6%

SUBSIDY

SCHEME

2.0 ROC

3.7%

1.6 ROC

16.1%

1.4 ROC

36.9%

1.3 ROC

9.5%

FiT

8.0%

1.2 ROC

19.0%

4.0 ROC

0.8%

1 ROC 2.2%

0.9 ROC

3.8%

REVENUE

TYPE*

ROC Buyout

46.3%

FiT

9.3%

PPA

44.4%

ANNUAL REPORT AND FINANCIAL STATEMENTS

1. Company’s Objectives and Strategy

The Company seeks to provide Shareholders with an attractive, sustainable

return, principally in the form of quarterly income distributions, by investing

in a portfolio of large-scale UK based renewable energy infrastructure

assets. Subject to maintaining a prudent level of reserves, the Company aims

to achieve this through optimisation of asset performance, acquisitions and

the use of gearing. The Company’s original dividend target for the ﬁnancial

year ended 30 June 2022 was 8.12pps and this was subsequently raised to a

target of not less than 8.16pps. Having now declared four interim dividends

totalling 8.20pps, the Company is pleased to have exceeded this target.

The Operational and Financial Review section on page 14 provides further

information relating to performance during the year.

Strategic Report

ANNUAL REPORT AND FINANCIAL STATEMENTS

PROJECT DEVELOPMENT AGREEMENT

SPVs

(Portfolio

Investments held

in SPVs ultimately

owned by the

holding

company)

EQUITY OWNERSHIP

SERVICES

Portfolio

Sub Holding

Companies

Portfolio

Holding Company

Blueﬁeld Renewables

1 Limited

(UK)

Parent

Blueﬁeld Solar

Income Fund Limited

(Guernsey: LSE Listed,

July 2013)

Shareholders

ASSET MANAGEMENT AGREEMENT

INVESTMENT

ADVISORY

AGREEMENT

LTF AGREEMENT

RCF AGREEMENT

COMPANY MANAGEMENT

SERVICE

PROVIDERS

Company Advisers &

Service Providers

(Company Secretary, Legal,

Corporate Broking, Public

Relations)

Revolving

Credit Facility

RBSI / SANTANDER

O&M Contractor

BLUEFIELD OPERATIONS

LIMITED

Asset Manager

BLUEFIELD SERVICES

LIMITED

Development Partners

Investment Adviser

BLUEFIELD PARTNERS LLP

Independent Board

INDEPENDENT DIRECTORS

Governance and Oversight

Long Term

Finance Provider

AVIVA

O&M SERVICES

STRATEGIC REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

Management

Board and Committees

The independent Board is responsible to Shareholders for the overall

management of the Company. The Board has adopted a Schedule of Matters

Reserved for the Board which sets out the particular duties of the Board. Such

reserved powers include decisions relating to the determination of investment

policy, approval of new investments, oversight of the Investment Adviser,

approval of changes in strategy, risk assessment, Board composition, capital

structure, statutory obligations and public disclosure, ﬁnancial reporting and

entering into any material contracts by the Company.

Through the Committees and the use of external independent advisers, the

Board manages risk and governance of the Company. The Board is fully made up

of independent non-executive Directors, three of whom are Guernsey residents.

See the Corporate Governance Report for further details.

Investment Adviser

The Investment Adviser’s key responsibilities include identifying and

recommending suitable investments for the Company and negotiating the

terms on which such investments will be made.

Through a Technical Services Agreement with BR1 the Investment Adviser

is also responsible for all issues relating to the supervision and monitoring

of existing investments (included within the fee cap under the Investment

Advisory Agreement). The Company has appointed BSL, a company with the

same ownership as the Investment Adviser, to provide asset management

services for the Company’s portfolio. Blueﬁeld Operations Limited and Blueﬁeld

Renewable Developments Limited also have the same ownership as the

Investment Adviser and provide operational management for the majority of

the Company’s investments and a pipeline of development projects for the

Company respectively.

During the year the Investment Adviser has been paid a fee equivalent to 0.6%

of NAV at 30 June 2022 (0.8% at 30 June 2021) reflecting the increase in the

Company’s asset size. A summary of the fees paid to the Investment Adviser is

given in Note 16 of the ﬁnancial statements. The fees paid to BSL, BRD and BOL,

the Solar Asset Management and Operations and Maintenance businesses under

common ownership with the Investment Adviser are also detailed in Note 16.

Administrator

The Board has delegated administration and company secretarial services

to the Administrator. Further details on the responsibilities assigned to the

Investment Adviser and the Administrator can be found in the Corporate

Governance Report.

2. Company’s Operating Model

Structure

The Company holds and manages its investments through a UK limited company,

in which it is the sole shareholder. On 6 May 2022 the UK limited company

parent changed from BSIFIL to Blueﬁeld Renewables 1 Limited (BR1) to facilitate

arrangement of the new RCF.

Employees and Ofﬁcers of the Company

The Company does not have any employees

and therefore policies for employees are not

required. The Directors of the Company are listed

on page

62.

Investment Process

Through its record of investment in the UK

renewable energy market, the Investment Adviser

has developed a rigorous approach to investment

selection, appraisal and commitment.

Repeat transaction experience with specialist

advisers

The Investment Adviser has worked with a range

of specialist advisers from multiple disciplines in

each of the transactions it has executed in the UK

and European market and is able to source relevant

expertise to address project issues both during and

following a transaction.

Application of standardised terms developed

from direct experience

The Investment Adviser has developed

standardised terms which have been speciﬁcally

tested by reference to real transaction and project

operational experience. Whilst contract terms

are speciﬁcally negotiated and tailored for each

individual project, the Investment Adviser always

includes contractual protection regarding recovery

of revenue losses for underperformance and

obligations for correction of defects.

Rigorous internal approval process

All investment recommendations issued to the

Company, are made following the formalised review

process described below:

(1) Investment origination and review by Managing

Partners

Before incurring costs in relation to the

preparation of a transaction, a project is concept

reviewed by the Investment Adviser’s Managing

Partners, following which, a letter of interest or

memorandum of understanding is issued, and

project exclusivity is secured.

(2) Director Concept Approval

In the event that material costs are to be

incurred in pursuing a transaction, a concept

paper is issued by the Investment Adviser for

review by the Board. This concept review ﬁxes a

project evaluation budget as well as conﬁrming

the project proposal is in line with the Company’s

investment policy and strategy and aligned to

ESG principles.

(3) Due diligence

In addition to applying its direct commercial

experience in executing renewable energy

acquisitions and managing operational projects,

the Investment Adviser engages legal, technical

and, where required, insurance and accounting

advisers from its extensive network to undertake

independent due diligence.

(4) Blueﬁeld Partners LLP Investment Committee

Investment recommendations issued by the

Investment Adviser are made following the

submission of a detailed investment paper to

the Investment Committee. The Investment

Committee operates on the basis of unanimous

consent and has a record of making detailed

evaluation of project risks. The investment

paper submitted to the Investment Committee

discloses all interests which the Investment

Adviser and any of its afﬁliates may have in the

proposed transaction.

(5) Board approval

Following approval by the Investment

Adviser Investment Committee, investment

recommendations are issued by the Investment

Adviser for review by the boards of the Company

and BR1. The boards undertake detailed review

meetings with the Investment Adviser to assess

the recommended projects. If the boards of both

the Company and BR1 approve the relevant

transaction, the Investment Adviser is authorised

to execute it in accordance with the Investment

Adviser’s recommendation and any condition

stipulated in the boards’ approvals. The boards

are regularly updated on the pipeline of potential

new investments to help provide context for

capital allocation decisions.

(6) Closing memorandum

Prior to executing the transaction, the Investment

Adviser completes a closing memorandum

conﬁrming that the ﬁnal transaction is in

accordance with the terms presented in the

investment paper to the Investment Committee;

detailing any material variations and outlining

how any conditions to the approval of the

Investment Committee and/or Board approval

have been addressed. This closing memorandum

is countersigned by an appointed member of the

Investment Committee prior to completing the

transaction.

Managing conflicts of interest

The Investment Adviser is regulated by the FCA

and is bound by conduct of business rules relating

to management of conflicts of interest. The Board

has noted that the Investment Adviser has other

clients and has satisﬁed itself that the Investment

Adviser has procedures in place to address

potential conflicts of interest which, together with

any mitigation measures, are disclosed in the

investment recommendation for each investment.

STRATEGIC REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

3. Investment Policy

The Company invests in a diversiﬁed portfolio of renewable

energy assets, all located within the UK, with a focus on

utility scale assets and portfolios on greenﬁeld, industrial

and/or commercial sites. With a focus on solar, the Company

has the ability to invest up to 25% of the Company’s GAV

into complementary renewable technologies, principally

wind and storage. The Company’s responsible investment

approach is discussed in section 4 of the Strategic Report.

Individual assets or portfolios of assets are held within

SPVs into which the Company invests through equity and/

or debt instruments. The Company typically seeks legal

and operational control through direct or indirect stakes of

normally 100% in such SPVs, but may participate in joint

ventures or minority interests to gain exposure to assets

which the Company would not be able to acquire on a wholly-

owned basis.

The Company may, at holding company level, make use of

both short term debt ﬁnance and long term structural debt,

but such holding company level debt (when taken together

with the SPV ﬁnance noted above) will not exceed 50% of

the GAV. It may also make use of non-recourse ﬁnance at the

SPV level to provide leverage for speciﬁc renewable energy

infrastructure assets or new portfolios provided that at the

time of entering into (or acquiring) any new ﬁnancing, total

non-recourse ﬁnancing within the portfolio will not exceed

50% of GAV.

While it is not the Company’s policy to be a long term holder

of non-UK assets, the Company can invest up to 10% of GAV

into assets outside the UK to enable it to acquire portfolios

with a mix of UK and non-UK assets. Furthermore, up to 5%

of the GAV may be invested into pre-construction UK solar

development opportunities. The aggregate exposure to other

renewable energy assets, energy storage technologies, UK

solar development opportunities and non-UK assets will be

limited to 30% of the Company’s GAV.

No single asset (excluding any third-party funding or debt

ﬁnancing in such asset) will represent, on acquisition, more

than 25% of the NAV.

The Company derives its revenues from the sale of ROCs, FiTs

and CfDs (or any such regulatory regimes that may replace

them from time to time) alongside the sale of electricity

under power purchase agreements with counterparties such

as co-located industrial energy consumers and wholesale

energy purchasers.

The Company may invest up to 5% of GAV into further UK

solar development opportunities and purchase assets pre- or

post- construction in order to:

1. Maximise quality and scale of deal flow;

2. Optimise the efﬁciency of the acquisitions;

3. Minimise risk via appropriate contractual agreements; and

4. Acquire assets using prudent assumptions.

Listing Rule Investment Restrictions

The Company currently complies with the investment

restrictions set out below and will continue to do so for so

long as they remain requirements of the FCA:

•

neither the Company nor any of its subsidiaries will conduct

any trading activity which is signiﬁcant in the context of the

Group as a whole;

•

the Company must, at all times, invest and manage its

assets in a way which is consistent with its objective of

spreading investment risk and in accordance with the

published investment policy; and

•

not more than 10% of the GAV at the time of investment

is made will be invested in other closed-ended investment

funds which are listed on the Ofﬁcial List.

As required by the Listing Rules, any material change to the

investment policy of the Company will be made only with the

prior approval of the FCA and Shareholders.

4. Responsible Investment

In line with its purpose of ‘Renewable Energy, Delivered Responsibly’,

the Company is committed to delivering shareholder value whilst at

the same time promoting positive environmental and social impact.

As part of its responsible investment approach, the Company must

consider both the positive and adverse impacts of its investment

decisions on sustainability factors, seeking to mitigate the negative

where possible.

ESG consideration within the investment process has been

enhanced this year, with the creation of a standalone ESG due

diligence questionnaire. Developed in line with SASB standards,

the questionnaire includes an exclusionary list, high-level climate

screening and SFDR considerations, in addition to focused

environmental, social and governance questions. As part of a recent

potential acquisition, the Company outsourced ESG due diligence to

an external consultant.

Further information on the Company’s approach to Responsible

Investment and its ESG strategy is contained within the ESG Report

on page

38.

AERIAL VIEW AT TRETHOSA

STRATEGIC REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

Key Performance Indicators

As at 30 June

2022

As at 30 June

2021

Market Capitalisation (£’000s) 801,002 494,098

Total dividends per share

declared in relation to the year

8.20p 8.00p

NAV (£’000s) 858,391 471,426

NAV per share 140.39p 115.83p

Total Shareholder Return 14.55% (3.79)%

Market Capitalisation (1)

The Directors regard the Company’s market capitalisation as an

important secondary indicator of the trading liquidity in its shares. The

Company’s market capitalisation grew from £494m to £801m, due to

an increased share price as a result of two successful capital raises

and during the year.

Total Dividends Per Share Declared (1)

BSIF generates returns primarily in the form of distributions and the

Company has a progressive dividend target, so it is important that the

dividend increases each year. During the year the dividend grew by

2.5% from 8pps to 8.20pps.

NAV

The Company’s average NAV is a determinant of BSIF’s total expense

ratio as forms the denominator of the calculation. The ﬁnite life

of renewable asset leases will ultimately lead to the attrition the

Company’s NAV. The Directors recognise this as a signiﬁcant feature

5. Operational & Financial Review for the period

and have expanded the mandate of the Company in part to mitigate

this effect. The Company’s NAV grew during the year as a result of

capital raising activity and valuation uplifts.

NAV Per Share(1)

Whilst the Company’s principal goal is to produce income, the NAV

per share movement informs our shareholders and the Board whether

this income has been produced at the expense of capital growth. The

NAV per share grew during the year and produced a positive return

to capital, largely as result of valuation uplifts deriving from strong

demand for electricity and renewable generation assets.

Total Shareholder Return(1)

This is a measure of the combined return to Shareholders from

dividend income and share price movements and whilst this should be

positive in the long-term, short term fluctuations in shareholder and

market sentiment can cause this number to be positive or negative.

The positive return of 14.55% for 2022 compared to the negative

return of -3.79% in 2021 reflects an improvement in market sentiment

for the Company and the renewables sector.

Acquisitions

See the Investment Adviser’s Report in Section 2.

Portfolio Performance

See the Investment Adviser’s Report under Sections 2 and 4.

The Company’s PPA strategy is to enter into short term contracts with

contracting periods spread quarterly across the portfolio in order to

minimise the portfolio’s sensitivity to short term price volatility.

Summary Statement of Comprehensive Income

Year ended 30

June 2022

£ million

Year ended 30

June 2021

£ million

Total Income

(Note 4 of the ﬁnancial statements)

0.8 0.7

Change in fair value of assets

(Note 8 of the ﬁnancial statements)

175.4 25.2

Administrative expenses

(Note 5 of the ﬁnancial statements)

(1.6) (1.4)

Total comprehensive income 174.6 24.5

Earnings per share 34.91p 6.25p

Income for the period includes interest income and monitoring fees

paid by BSIFIL and BR1 to BSIF.

The total comprehensive income before tax of £174.6 million reflects

the performance of the Company when valuation movements and

operating costs are included. Further detail on valuation movements

of BR1’s portfolio is given in the Report of the Investment Adviser.

The Company’s ongoing charges ratio is 1.02% (2021: 1.14%),

calculated in accordance with the AIC recommended methodology,

which excludes non-recurring costs and uses the average NAV in its

calculation. See page

105 for a tabular calculation of the Company’s

ongoing charges ratio.

(1) please see Alternative Performance Measures on pages 104 to 105 for further details.

STRATEGIC REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

6. Directors’ Valuation* of Company’s portfolio

The Investment Adviser, or an independent external valuer, is

responsible for preparing the fair market valuation recommendations

for the Company’s investments for review and approval by the Board.

Valuations are carried out semi-annually, as at 31 December and

30 June, with an external review as and when the Board deems

appropriate.

This fair market value adopted for the portfolio was £939.9m (note 8 of

the ﬁnancial statements) and is conﬁrmed by an alternative approach

using a combination of discounted cash flows of income generated

from the portfolio of investments.

The Board reviews the recommendations of the Investment Adviser

to form an opinion of the fair value of the Company’s investments. A

detailed analysis of the Directors’ Valuation is presented in the Report

of the Investment Adviser.

7. Principal and Emerging Risks

Under the FCA’s Disclosure Guidance and Transparency Rules, the

Board is required to identify those material risks to which the Company

is exposed and take appropriate steps to mitigate those risks.

These inherent risks associated with investments in the renewable

energy sector could result in a material adverse effect on the

Company’s performance and value of Ordinary Shares.

The Company’s risk register covers ﬁve main areas of risk:

•

Portfolio Management;

•

Fund Operations;

•

Regulation and Compliance;

•

External;

•

Emerging.

Each of these areas, together with the principal risks associated

with that category, is summarised in the table below and includes

commentary on the mitigating factors. The list is a subset of a much

larger set of risks which the Board reviews on a regular basis. Emerging

risks are identiﬁed in the course of board discussions and meetings

and are recorded in a separate area of the risk register.

* Directors’ Valuation is an alternative performance measure to show the gross value of the SPV investments held by BR1, including their

holding companies. A reconciliation of the Directors’ Valuation to Financial assets at fair value through proﬁt and loss is shown in Note 8

of the ﬁnancial statements

PORTFOLIO MANAGEMENT

Risk Potential Impact Mitigation

1. Portfolio

Acquisition

Risk

Poor investment decisions

or missed investment

opportunities.

The Board reviews the Company’s investment pipeline with the Investment

Adviser, who have substantial experience in the sector, on a regular basis.

To fund acquisitions, the Company has access to debt ﬁnancing under

terms of its revolving credit facility, as well as the option to complete equity

issuances.

2. Portfolio

Operational

Risk

Underperformance of

wind, solar or storage

plant versus expectations

at acquisition.

BSL as asset manager prepares a quarterly operational summary for the

Board that evaluates the performance of each plant against budget and

highlights any issues to be addressed. The Board has agreed KPIs for

BSL with Blueﬁeld LLP and is in the process of agreeing KPIs for Blueﬁeld

Operations Ltd (BOL), to monitor contractor performance as more projects

are transitioned to BOL.

OPERATIONAL

Risk Potential Impact Mitigation

3. Valuation

error

Valuations of the SPV

investments maybe over

or understated.

Valuations presented by the Investment Adviser are underpinned by

comparisons with other market transactions and conﬁrmed by long term

DCF model. The valuations are reviewed and challenged by the Board at a

minimum on a semi-annual basis.

The Investment Adviser is currently working to simplify the Company’s

models to reduce the risk of errors and minimise data storage requirements.

To minimise the risk of forecast error and to mitigate the impact of power

price volatility on the Company’s portfolio valuation, blended power price

curves from three leading forecasters are used in the portfolio cash flow

model.

4. Depreciation

of NAV

The portfolio NAV will

depreciate through the

Company’s life subject to

other market fluctuations

and the addition of new

assets.

The Investment Adviser has been requested to model how the portfolio

NAV will move with time, producing long term scenario planning for

the Board’s review. The Board has authorised the Investment Adviser

to negotiate lease extensions on all active plants, as each successful

extension increases the life of the Company and reduces the depreciation

of the NAV. The Company has secured development permission for its ﬁrst

unsubsidised solar plant and has added new technologies such as battery

storage to its portfolio to mitigate the impact of the expiry of the FiT and

ROC regimes.

STRATEGIC REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

EXTERNAL

Risk Potential Impact Mitigation

5. Physical and

Transitional

Climate-related

Risks

Global climate change has the potential to disrupt the operation of the

company both directly via solar irradiation and wind speed and indirectly via

the risk of damage to portfolio assets, power transmission infrastructure or

the demand for the electricity that we produce.

A number of mitigation measures are already in place for physical and transitional climate-related risks, as

described in the TCFD disclosure on page

57. We will also undertake scenario analysis for material physical

and transitional climate-related risks and opportunities within the next 12 months, to better understand

the potential impacts on the Company. In 2022, the Company undertook a climate materiality assessment

to identify material physical and transitional risks. Please refer to the TCFD disclosure on page

57 for more

information.

6. Changing

Electricity Market

Conditions

Annual income generation of the Company is sensitive to future power market

pricing. A major structural shift in power demand or supply will impact the

Company’s ability to meet its dividend target.

Excessive movement in power prices could destabilise the energy markets.

The Investment Adviser regularly updates the portfolio cash flow model to reflect future power market

forecasts and where appropriate applies discounts to the forecasts. New projects are always assessed using

the most recent power market forecast data available. A rolling programme of PPA contract expiries has been

implemented to minimise risk. Protection against a sustained period of low energy prices can only be achieved by

maximising exposure to regulatory revenues through acquisition of more legacy FiT and ROC plants. Some recent

acquisitions have included ﬁxed power contracts for a longer period, reducing exposure to short term volatility.

Long term power prices are however beyond the control of the Company. A third party review of the power

strategy adopted by the Investment Adviser has also given a strong independent veriﬁcation of the strategy. The

Investment Adviser is periodically reviewing possibilities for the private sale of electricity to stabilise long term

revenues.

The Company commissioned and received a report on the beneﬁts of integrating storage technologies within its

portfolio and is currently developing its ﬁrst battery storage site. This will give the added beneﬁt of being able to

proﬁt from power price volatility.

7. Changes in tax

regime

There may be unfavourable tax related changes including restrictions on

renewables, or no relief on debt structuring.

Measures to protect UK consumers from power price increases have been

implemented and it is not yet clear whether these measures will be funded

through taxation.

An independent taxation review of the Company was carried out as part of the long-term debt ﬁnancing

procurement process. The Company makes regular debt repayments to reduce operating leverage and with

the intention of ensuring that debt is repaid before regulatory revenues expire. The Board continues to monitor

the situation and take advice from the Group’s Tax Advisers as necessary.

8. Changes to

Government Plans

Decisions affecting the wholesale supply of electricity through either i) a

flooded market or ii) other available forms of energy sources.

The UK government is currently consulting with industry on plans to reform

the UK Electricity Market which may involve controls on sales prices for

renewable generators.

The Investment Adviser provides regular updates in this regard within the quarterly Board papers.

The Investment Adviser has begun to increase its level of political engagement to help with the formation of a

new energy policy and to ensure that investment in renewables is maintained.

9. Cyber risk

Key stakeholders could exchange corrupt or virus infected emails with key

BSIF counterparties. Malicious ﬁrmware may cause damage to hardware

resulting in a loss of generation or damage to the grid.

BSL engaged a third-party consultant to implement a security case study at one of the Company’s plants. The

results of this are being used to assess and mitigate the risks facing the entire portfolio.

A group head of IT has been appointed by our Investment Adviser with speciﬁc responsibility for cyber security.

10. Adverse

publicity

Adverse publicity within the Renewable Energy sector could damage the

Company’s ability to raise additional ﬁnance and/or acquire new capacity.

Market responses have been considered and agreed at all levels. The Board and the Investment Adviser

ensure the Company’s activities are fairly and accurately presented including through Broker, Stock Exchange

announcements, press releases and web site maintenance. All incidences of adverse publicity monitored via

the Company’s PR Adviser.

SHEEP GRAZING AT CAPELANDS

STRATEGIC REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

EMERGING RISKS

Risk Potential Impact Mitigation

11. Inadequate ESG

Reporting

Inadequate ESG reporting could lead to

shareholder dissatisfaction and lack of

demand for the Company’s shares.

The Company has completed an ESG materiality review and has set the priorities

for its ESG programme.

12. Inflation

Excessive inflation is likely to increase

the Company’s cost of capital and cost of

operations.

Whilst the Company is a net beneﬁciary of inflation it is not clear whether the

government’s actions will reduce inflation and could lead to a weaker currency

and a higher cost of capital. The Company has maintained its interest rate hedge

in case inflation does not subside leading to more aggressive action by the Bank

of England.

13. Supply Chain

Risks

Projects in the Company’s development

pipeline are becoming more costly to

develop and may be subject to delays due

to supply chain risks.

Our supply chain has a high dependency

on Chinese components which could

impact availability of components and

could have potential reputational risk.

BSL the Company’s O&M contractor has made strategic purchases of long-lead

time critical components such as transformers.

We will map our supply chains, with priority given to Tier 1 and Tier 2 suppliers.

We will insist that our Tier 1 suppliers have some sort of grievance mechanisms

in place (Whistleblowing hotline, Grievance procedures, worker representation

etc) by June 2023. We are developing a sustainable procurement policy with

accompanying supplier sustainability checklist (to be used both in relation to the

repair and maintenance of operational assets and also the construction of new

infrastructure projects).

Longer term viability statement

Assessing the prospects of the Company

The corporate planning process is underpinned

by scenarios that encompass a wide spectrum of

potential outcomes. These scenarios are designed

to explore the resilience of the Company to the

potential impact of signiﬁcant risks set out below.

The scenarios are designed to be severe but

plausible and take full account of the likely

effectiveness of the actions to be taken to avoid or

reduce the impact of the underlying risks and which

would be open to management. In considering the

likely effectiveness of such actions, the conclusions

of the Board’s regular monitoring and review of risk

and internal control systems, as discussed on page

15, is taken into account.

The Board reviewed the impact of stress testing the

quantiﬁable risks to the Company’s cash flows in

the previous pages as detailed in risk factors 1-9

and concluded that the Company, assuming current

and envisaged leverage levels, would be able to

continue to produce distributable income in the

event of the following scenarios:

STRATEGIC REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

Strategic Report Risk Factor

Plant performance degradation of 1.0% per

annum versus 0.4% per annum

Plant availability reduced to 95%

P90 irradiation

Power price set to zero

The Board considers that this stress testing based

assessment of the Company’s prospects is reasonable in

the circumstances of the inherent uncertainty involved. In

accordance with the Articles, every ﬁve years the Board is

required to propose an ordinary resolution that the Company

should cease to continue as presently constituted. The ﬁrst

such discontinuation vote was held at the 2018 AGM and

resulted in a 99.46% vote in favour of continuation. The next

discontinuation vote is due to be held at the 2023 AGM and

the Directors have no reason to believe that shareholders

will vote for discontinuation. For the purposes of modelling

the Company’s viability, the discontinuation vote would have

limited impact as a restructuring or sale of the Company’s

portfolio would be likely to require more than the ﬁve year

viability modelling period to execute and the Company’s

portfolio would continue to be cash-flow generative

irrespective of the outcome of the vote.

The period over which we conﬁrm longer term viability

Within the context of the corporate planning framework

discussed above, the Board has assessed the prospects of

the Company over a ﬁve year period ending 30 June 2027.

The Directors have increased the viability period from three

to ﬁve years, reflecting the maturity of the Company and the

industry, and have determined that the ﬁve year period to

June 2027 is an appropriate period to provide this viability

statement as this period accords with the Group’s planning

purposes.

This period is used for our mid-term business plans and has

been selected because it presents the Board and therefore

readers of the annual report with a reasonable degree of

conﬁdence whilst still providing an appropriate longer term

outlook.

Conﬁrmation of longer term viability

The Board conﬁrms that its assessment of the principal and

emerging risks facing the Company was robust.

Based upon the robust assessment of the principal and

emerging risks facing the Company and its stress testing

based assessment of the Company’s prospects, the Board

conﬁrms that it has a reasonable expectation that the

Company will be able to continue in operation and meet its

liabilities as they fall due over the period to June 2027.

These inherent risks associated with investments in the

renewable energy sector could result in a material adverse

effect on the Company’s performance and value of Ordinary

Shares.

The Company’s risks are mitigated and managed by the Board

through continual review, policy setting and half yearly review

of the Company’s risk matrix by the Audit Committee to ensure

that procedures are in place with the intention of minimising

the impact of the above mentioned risks. The Board last

carried out a review of the risk matrix at the Audit Committee

meeting held on 26 September 2022. The Board relies on

periodic reports provided by the Investment Adviser and

Administrator regarding risks that the Company faces. When

required, experts will be employed to gather information,

including tax advisers, legal advisers and ESG advisers.

Directors’ Responsibilities Pursuant to Section 172 of

the Companies Act 2006

Section 172 of the Companies Act 2006 applies directly to

UK domiciled companies. Nonetheless the AIC Code requires

that the matters set out in section 172 are reported on by all

companies, irrespective of domicile, provided this does not

conflict with local company law.

Section 172 recognises that directors are responsible

for acting in a way that they consider, in good faith, is the

most likely to promote the success of the Company for the

beneﬁt of its Shareholders as a whole. In doing so, they are

also required to consider the broader implications of their

decisions and operations on other key stakeholders and their

impact on the wider community and the environment. Key

decisions are those that are either material to the Company

or are signiﬁcant to any of the Company’s key stakeholders.

The Company’s engagement with key stakeholders and the

key decisions that were made or approved by the Directors

during the year are described on the next page.

STRATEGIC REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

Stakeholder group Methods of engagement Beneﬁts of engagements

Shareholders

The major investors in the Company’s shares

are set out on page

65.

Continued access to capital is vital to the

Company’s longer term growth objectives,

and therefore, in line with its objectives, the

Company seeks to maintain shareholder

satisfaction through:

•

Positive risk-adjusted returns

•

Payment of Quarterly dividends

The Company engages with its Shareholders through the issue of regular portfolio

updates in the form of RNS announcements and quarterly factsheets.

The Company provides in-depth commentary on the investment portfolio, corporate

governance and corporate outlook in its semi-annual ﬁnancial statements.

In addition, the Company, through its brokers and Investment Adviser undertake

regular roadshows to meet with existing and prospective investors to solicit their

feedback, understand any areas of concern, and share forward looking investment

commentary.

The Board receives quarterly feedback from its brokers in respect of their investor

engagement and investor sentiment.

Shareholder engagement was rewarded by support

for the Company’s growth and diversiﬁcation strategy.

Service

providers

The Company does not have any direct

employees; however, it works closely with a

number of service providers (the Investment

Adviser, Administrators, secretaries, auditor,

brokers and other professional advisers).

The independence, quality and timeliness of

their service provision is critical to the success

of the Company.

The Company has identiﬁed its key service providers and on an annual basis

undertakes a review of performance based on a questionnaire through which it

also seeks feedback.

Furthermore, the Board and its sub-committees engage regularly with its service

providers on a formal and informal basis.

The Company will also regularly review all material contracts for service quality

and value.

The Feedback given by the service providers is used

to review the Company’s policies and procedures to

ensure open lines of communication, and operational

efﬁciency.

The Company is able to identify and resolve problems

with service provider relationships via this process.

Portfolio

Companies

The Company held an operational portfolio

of 127 solar PV plants (consisting of 85 large

scale sites, 39 micro sites and 3 roof top sites),

6 wind farms and 109 single stick turbines,

with a total capacity of 766.2MW. The portfolio

displays strong geographical diversity.

The Board reviews cash-flow projections for each investment that the company

makes and for the entire portfolio on a regular basis.

The Investment Adviser ensures that when the agreements are initially put in place,

the end dates of the investments are staggered in order to ensure a constant flow

of revenue. PPA counterparties are selected on a competitive basis but with a clear

focus on achieving diversiﬁcation of counterparty risk. A quarterly update on the

contracts is provided in the Investment Adviser’s Report within the Board Packs.

The Feedback given by the service providers is used

to review the Company’s policies and procedures to

ensure open lines of communication, and operational

efﬁciency regarding its Portfolio Companies.

Community &

Environment

The Company has worked with external consultants to develop robust ESG policies

and procedures.

This is an area of high importance to all our stake-

holders, therefore is a high priority in our decision

making and is described in detail in the ESG Report.

Paul Le Page

Director

29 September 2022

Elizabeth Burne

Director

29 September 2022

Introduction from the Investment Adviser

The period under review straddles the end of prolonged low inflation with

relatively stable power prices and the start of rapidly increasing inflation and

signiﬁcantly higher power prices. This shift is likely to see changes in public

policy. The UK government has commenced a consultation on the energy

markets (Review of Energy Market Arrangements under the acronym REMA)

which is looking to see whether changes can be effected to make the energy

system more efﬁcient. More urgently, the government is also opening up

fast track discussions with the renewable industry to see whether there is a

way for the merchant power element of the Renewable Obligation Scheme’s

revenues to be converted into a Contract for Difference. It could be a good

solution, as long as the outcome is fair to the Company’s shareholders and

to consumers, and we will be engaging with government on these potential

solutions.

A time of crisis can often propel positive change and I believe that this crisis

is the opportunity for the renewable energy industry to become even more

central and vital to the government’s core energy objectives. Solar and wind

are now the lowest cost energy sources in the market today. They are both

relatively quick to deploy and will add to the country’s energy security. They

also, particularly solar, have high levels of public support.

James Armstrong

Managing Partner, Blueﬁeld Partners LLP

Report of the

Investment

Adviser

ANNUAL REPORT AND FINANCIAL STATEMENTS

2. Portfolio: Acquisitions, Performance and Value Enhancement

a. Acquisitions in the period

STATUS TECHNOLOGY TRANSACTION DETAILS

TOTAL VALUE DATE

OPERATIONAL

Solar and

Wind

UK-based solar and onshore wind portfolio

93.2MW ROC and FiT backed operational

portfolio of solar (64.9MW) and wind

(28.3MW), located across England, Wales,

Northern Ireland and Scotland.

c. £187m – Equity

c. £112 million, net Debt

(third party) c.£75. million

May 2022

Solar and

Wind

UK-based solar and onshore wind portfolio

47.5MW ROC backed operational portfolio

— solar (30.1MW) and wind (17.4MW) —

located largely in the South West.

c£62.5m – Equity c£22.5

million, Debt (third party)

£40 million

January 2022

Wind

Small scale onshore wind portfolio

12.6MW FiT and NI ROC backed operational

portfolio of 109 small scale onshore wind

turbines – located across England (62),

Northern Ireland (29), Scotland (11) and

Wales (7). Includes the opportunity to

increase investment through the re-powering

of 17 turbines in Northern Ireland.

c£63 million – All equity

(potential re-powering

investment of additional

£35 million)

August 2021

DEVELOPMENT

Storage

100MW of consented storage projects

Development rights, grid connection and

associated land to build two 40MW battery

storage sites in Derbyshire and Worcestershire

and one 20MW storage project in Liverpool.

Commercial operations scheduled to start in

2023/24.

c.£6 million – All equity January 2022

and May 2022

Solar and

Storage

Mauxhall Farm

Development rights and associated land to

build a 45MW solar asset and co-located

25MW battery storage site in northeast Lin-

colnshire for c. £5mn.

Commercial operations scheduled to start in

2023.

c.£5 million – All equity August 2021

Total Value

c.£323.5 million Equity

c.£208.5m,

Debt (3rd party

c£115m

1. About Blueﬁeld Partners LLP

(‘Blueﬁeld’)

Blueﬁeld was established in 2009 and is an

investment adviser to companies and funds

investing in renewable energy infrastructure.

Our team has a proven record in the selection,

acquisition and supervision of large scale energy

and infrastructure assets in the UK and Europe. The

Blueﬁeld team has been involved in over £6 billion

renewable funds and/or transactions in both the

UK and Europe, including over £1 billion in the UK

since December 2011.

Blueﬁeld was appointed Investment Adviser to the

Company in June 2013. Based in its London ofﬁce,

Blueﬁeld’s partners are supported by a dedicated

and highly experienced team of investment,

legal and portfolio executives. As Investment

Adviser, Blueﬁeld takes responsibility for

selection, origination and execution of investment

opportunities for the Company, having executed

over 100 individual SPV acquisitions on behalf of

BSIF and other European vehicles.

REPORT OF THE INVESTMENT ADVISER ANNUAL REPORT AND FINANCIAL STATEMENTS

b. Portfolio Performance and Optimisation

As of 30 June 2022, the Company held an operational portfolio of 766.2MW,

comprising both solar PV (707.9MW, representing 92.4%) and onshore wind

(58.3MW, representing 7.6%) assets, located across the UK (June 21: 613MW,

+25.0% increase). For completeness, due to the timing of an acquisition in

late May 2022, 12 utility-scale plants and 3 micro sites plants (aggregated

capacity of 64.9MW) and 4 wind farms (aggregated capacity of 28.3MW), are

not included in the performance section of the report. These will be included in

full for the FY 22/23.

The combined solar and wind portfolio generated an aggregated total of

687.5GWh during the reporting year, with a Generation Yield of 1,027MWh/MW.

Chart D.1: Summary of Installed Capacity by Technology and Total Generation

by Technology

96.1%

3.9% Onshore Wind

INSTALLED

CAPACITY

90.8% PV

9.2% Wind

GENERATION BY

TECHNOLOGY

Following these acquisitions, the portfolio’s total

outstanding debt has increased to £460 million,

and the total installed capacity of its operational

portfolio has grown to 766MW (made up of solar

708MW and wind 58MW). The Company’s leverage

as at 30 June 2022 is c.35% of Gross Asset Value

(‘GAV’) (c.44% as at 30 June 2021).

Post period end – Construction Programme

In July 2022, the Investment Adviser successfully

secured CfDs on 62.4MW of ready to build PV

plants (Yelvertoft 49.9MW, Romsey 6.5MW and

Oulton 6.0MW). By securing a CfD contract, the

plants will beneﬁt from index linked revenues (to

CPI) over a 15 year duration at the AR4 solar PV

strike price of £45.99/MWh (in 2012 equivalent

prices), or £57.48/MWh in 2022. The contracts

commence from 31 March 2025, at which point the

strike price referenced above will include inflation

from 2023 and 2024.

The ﬁrst development to enter the mobilisation

phase is the Yelvertoft Solar PV project, which

signed an EPC contract with Bouygues in

September 2022 and is targeting initiation of

construction in Q4 2022 and operation in Q3 2023.

As the EPC agreements require contractors to

provide full procurement activity and to supply all

materials, the Investment Adviser completes a full

assessment of each contractor’s procurement and

supply chain management processes, to ensure

compliance with the Company’s ESG policies and

standards. For further information relating to the

Company’s wider ESG activity, please refer to the

ESG section on page

38.

(1) Solar PV

As of 30 June 2022, the capacity of the solar PV portfolio was 708MW

comprising 124 PV plants (83 large-scale plants, 39 micro sites and 2 roof top

arrays). Following acquisitions outlined in the table above, this is an increase

of 95MW from 30 Jun 2021. However, as outlined above, due to the timing

of the acquisition of 64MW in May 2022, these assets are excluded from the

performance summaries below.

The solar plants are located across the UK, predominantly in the South West

and South East of England:

Chart D.2: Solar PV Capacity (MW) by Location

22.66%

North England

0.77% Scotland

31.40% South East England

42.2% South West England

2.98% Wales

CAPACITY BY

LOCATION

As shown in the table below, irradiation levels during the period were 2.6%

higher than the Company’s forecast and 4.7% higher than FY 2021/22. As chart

D.3 illustrates on page

23, this reflects an offsetting of irradiation between the

ﬁrst six months of the period to December 2021 (-2.9% below expectations)

and the second six month period to June 2022 (+7.3% above expectations).

In the 12 months to 30 June 2022, the solar portfolio achieved a Net PR of

79.4% (FY 2020/21: 80.3%) against a forecast of 81.4% and generated

624.58GWh of power, marginally above expectations. The generation yield was

971MWh for each MW of installed capacity, 3.5% higher than recorded in the

previous year.

REPORT OF THE INVESTMENT ADVISER ANNUAL REPORT AND FINANCIAL STATEMENTS

Availability (the total time the plant was operating, as a percentage of the maximum possible) for

the year was in line with expectations at 98%.

Table D. 1: Summary of Solar Fleet Performance for 2021/22:

2021/22

Actual

2021/22

Forecast

Delta to

Forecast

(% change)

2020/21

Actual

Delta 21/22 to

20/21 Actual

(% change)

Portfolio Total

Installed Capacity

(MW)

642.9 N/A N/A 612.8 +4.9%

Weighted Average

Irradiation (Hrs)

1,222.7 1,191.9 +2.6% 1,168.0 +4.7%

Total Generation

(MWh)

624,651 621,740 +0.5% 575,358 +8.6%

Generation Yield

(MWh/MW)

971.6 967.1 +0.5% 938.9 +3.5%

Average Total Unit

Price (GBP/MWh)

£132.71 £128.47 +3.3% £125.70 +5.6%

Notes to Table D.1.

1. Excludes 12 solar plants acquired in late May 2022 (aggregated capacity of 64.9MW)

2. Periods of irradiation where irradiance exceeds the minimum level required for generation to occur

(50W/M

)

3. Excluding grid outages and signiﬁcant periods of constraint or curtailment that were outside the

Company’s control (for example, DNO-led outages and curtailments)

4. The Total Unit Price includes all income associated with the sale of power, subsidy payments, Liquidated

Damages and insurance claims amounts but excludes assumptions around ROC Recycle amounts

(which may contribute a further 5-7% of revenue)

Chart D.3: Irradiation & Generation (Actual & Forecast) by month, FY 2021/22

Total Revenue for the period was £82.89m, equivalent to £128.93k/MW, 4.53% higher than forecasts and

21% higher than the previous FY (2020/21: £118/MWh), due to the more favourable ﬁxed PPA agreements

which commenced during the period.

Operational Costs for the period were c.£18.4m, including the cost associated with the optimisation &

enhancement projects (see below).

REPORT OF THE INVESTMENT ADVISER ANNUAL REPORT AND FINANCIAL STATEMENTS

Optimisation & Enhancement Activity

A core focus of the Investment Adviser’s activities is protecting, optimising, and enhancing the

value of the Company’s operational portfolio. Examples of key activities for the solar portfolio

include:

• Asset Life Extension: Over 400MW (31 December 21: 371.4MW) of the PV portfolio now has

leases that allow for terms beyond 30 years, representing 62.8% of the solar PV portfolio as

at 30 June 2022, with 332.2MW beneﬁtting from planning term extensions up to 40 years

(100% of applications successful). The Investment Adviser continues to negotiate further

lease extensions.

• Transfer of O&M Services to Blueﬁeld Operations Limited (‘BOL’): BOL now provides O&M

contractor services to 64 of the Company’s assets, totalling 555MW of installed capacity,

representing 86.4% of the solar portfolio (FY 2020/21: 486MW). This transition has brought

enhanced service levels and operational savings of £454.3k/annum compared to the original

fees paid to external service providers. Further contracts will continue to transfer to BOL in

the 2022/23 FY.

• Capital Works Projects: We completed optimisation/enhancement projects across 10 plants,

with a total investment of c.£1.46m. Further projects include the replacement of existing

transformers, a phased repowering of string inverters, strengthening mounting structures and

improving site drainage. The Investment Adviser intends to undertake similar works over the

winter 22/23 period.

ASHLAWN

OFGEM Audits

As part of the industry-wide audits of RO-accredited generating assets,

the Investment Adviser and Asset Manager have been working closely

with the regulator on those assets (randomly) selected for audit. All

of the Company’s assets to have completed OFGEM audits have been

classiﬁed as ‘satisfactory’.

Table D.2. BSIF Solar PV Generation by Asset, FY 2021/22:

Solar PV Asset

Total

Investment

Commitment

(GBP)

Installed

Capacity

(MW)

Generation

to 30 June

2022

(Actual,/MWh)

Bradenstoke 89.0 70.0 64,397

West Raynham 55.9 50.0 50,122

Southwick 61.0 47.9 46,783

Elms 32.8 28.9 28,128

Hardingham 22.7 20.1 19,017

Pentylands 21.4 19.2 17,530

Molehill 23.1 18.0 19,288

Hoback 19.0 17.5 17,330

Littlebourne 22.0 17.0 17,164

Goosewillow 19.0 16.9 14,890

Hill Farm 17.3 15.2 14,971

Roves 14.0 12.7 11,106

Pashley 15.4 11.5 12,455

Hall Farm 13.4 11.4 11,553

Sheppey 12.0 10.6 11,369

Betingau 11.2 10.0 7,593

REPORT OF THE INVESTMENT ADVISER ANNUAL REPORT AND FINANCIAL STATEMENTS

Solar PV Asset

Total

Investment

Commitment

(GBP)

Installed

Capacity

(MW)

Generation

to 30 June

2022

(Actual,/MWh)

Capelands 8.6 8.4 8,318

North Beer 9.3 6.9 6,578

Ashlawn 7.6 6.6 6,289

Redlands 6.4 6.2 6,474

Bidwell 8.1 6.1 5,748

Nottington 11.8 6.0 7,126

Lower Marsh 8.6 5.9 5,627

Saxley 7.0 5.9 5,537

Cobbs Cross 9.1 5.7 5,518

Stow Longa 8.8 5.3 5,054

Foxcombe 7.5 5.3 4,441

Beaford 8.3 5.2 3,779

Eastcott 10.1 5.0 4,529

Hamptworth 8.8 5.0 5,107

Holly Farm 7.2 5.0 5,121

East Farm 7.2 5.0 4,861

Great Houndbeare

(Little Bear)

6.8 5.0 5,529

Durrants 6.4 5.0 5,124

Clapton 6.3 5.0 5,243

Romsey 5.8 5.0 5,382

Old Stone 5.7 5.0 5,100

Salhouse 5.6 5.0 4,964

Frogs Loke 5.6 5.0 4,999

Solar PV Asset

Total

Investment

Commitment

(GBP)

Installed

Capacity

(MW)

Generation

to 30 June

2022

(Actual,/MWh)

Place Barton 5.5 5.0 4,993

Court Farm 5.5 5.0 5,212

The Grange 5.4 5.0 5,149

Bunns Hill 5.3 5.0 4,910

Oulton 5.3 5.0 4,713

Rookery 5.2 5.0 5,254

Wormit 5.1 5.0 4,587

Kellingley 5.0 5.0 4,902

Kislingbury 5.0 5.0 4,503

Willows 4.6 5.0 4,578

Gretton 5.1 4.9 4,630

Trethosa 5.8 4.8 4,723

Folly Lane 5.3 4.8 4,922

Gypsum 4.4 4.5 4,314

Tollgate Farm 4.6 4.3 4,137

Burnaston 14.4 4.1 3,778

Galton Manor 5.5 3.8 3,979

Thornton Lane 3.7 3.6 3,204

Blackbush 6.6 3.4 2,942

Barvills 3.3 3.2 3,338

Hazel 4.3 2.8 2,707

Norton Hall 4.1 2.8 2,773

Lount 3.3 2.5 1,974

Langlands 3.1 2.1 2,110

Solar PV Asset

Total

Investment

Commitment

(GBP)

Installed

Capacity

(MW)

Generation

to 30 June

2022

(Actual,/MWh)

Stantway 2.7 1.8 1,714

Aberporth 2.0 1.4 1,333

Goshawk

(10 micro sites)

2.0 1.1 1,071

Butteriss

(20 micro sites)

2.3 0.8 653

Corby 2.3 0.5 383

Promothames

(9 micro sites)

1.3 0.4 316

SUB-TOTAL 763.8 613.0 593,946

Assets acquired during the Period

Solar PV Asset

Total

Investment

Commitment

(GBP)

Installed

Capacity

(MW)

Generation

to 30 June

2022

(Actual,/MWh)

Carloggas* 8.3 8,020

Crossroads* 5.0 5,289

Lower End* 5.0 5,241

Woolbridge* 5.0 5,495

Rookwood* 5.0 4,904

Creathorne* 1.8 1,682

SUB-TOTAL 30.1 30,631

* Although assets were acquired in January 2022, generation data is for the

full FY

REPORT OF THE INVESTMENT ADVISER ANNUAL REPORT AND FINANCIAL STATEMENTS

LOCATION

(2) Onshore Wind

During the reporting period the Investment Adviser managed a

wind portfolio of 117 onshore turbines, comprising of 109 small

scale turbines (55-250KW) with 8 turbines of 2.0-2.3MW, and an

aggregated capacity 30.0MW.

Chart D.4: BSIF Wind Portfolio, and Turbine Type/Installed Capacity

by Location/Installed Capacity.

15%

Endurance

3% Vestas

13% WTN 250

2% EWT 225

35% Enercon

32% Senvion

19% Nothern

Ireland

7% Scotland &

Far North Eng

38% North Eng

& Wales

36% SW Eng &

South Wales

TURBINE

TYPE

In late May 2022, the Company acquired an additional 18 large

onshore wind turbines, with a total installed capacity of 28.5MW.

These turbines have performed better than expected, but are

excluded from this report, as having less than 2 months of

operations in the reporting period.

Over the reporting year, the wind speed across the asset locations

averaged 6.1m/s (-4.2% to forecasts); UK averages during 2021

were at the lowest level recorded in the previous 10 years.

Total generation from onshore wind during the reporting period

was 62.9MWh, 17% below forecasts, largely due to low availability

of 2 turbines at Delabole Wind Farm, which experienced several

key component failures during the second half of the reporting

year. Liquidated Damages (‘LDs’) have been received from the

OEM for the 2021 calendar year, with losses during 2022 due

to calculated in January 2023. Availability for the remainder of

the fleet (Hampole and the small-scale turbines) was largely as

forecast at 95.9%.

Table D.3: Aggregated Wind Portfolio Performance, Annual 2021/22

Aggregate

Capacity

(MW)

Number of

Turbines

Actual Total

Power Price

(£/MWh)

Forecast

Total Power

Price (£/

MWh)

Delta to

Forecast

Power Price

(% change)

Actual

Generation

(MWh)

Forecast

Generation

(MWh)

Delta to

Forecast (%

change)

Small scale turbines 12.6 109 316.7 282.2 12% 27,339 29,522 -7%

Delabole 9.2 4 155.2 113.7 36% 15,615 25,227 -38%

Hampole 8.2 4 116.4 119.8 -3% 19,955 20,999 -5%

Aggregate Fleet 30.0 117 213.1 181.1 18% 62,909 75,748 -17%

The Investment Adviser was able to negotiate improved ﬁxed PPA terms on many assets; thus, despite low generation, the wind

portfolio’s total revenue was as forecast, at £13.4m.

During the reporting period the wind assets recorded lower than forecast wind speeds. This was largely due to the UK experiencing

the lowest average wind speeds in 10 years, during 2021.

REPORT OF THE INVESTMENT ADVISER ANNUAL REPORT AND FINANCIAL STATEMENTS

Chart D.5: Average Windspeed & Generation (Actual Vs Forecast) by month, 2021/22

Optimisation Activities

In the Northern Ireland fleet, 17 out of 29 small-scale turbines have been identiﬁed for

repowering with replacement EWT 250KW turbines. These assets can repower to a higher

capacity, whilst maintaining their respective RO accreditation statuses.

As at 30 June 2022, 4 turbines have been repowered and are operational, and a further 7

have received full planning approval for a new 25-year term. Prior to end December 2022 an

additional turbine will be decommissioned and repowered with the EWT model, and a further

3 are scheduled for early 2023. The remaining 6 turbines have seen planning applications

submitted to the relevant LPAs.

The Investment Adviser has continued to implement and manage a range of operational

enhancement measures across the small-scale turbines, both to improve performance and to

protect against failure.

Power Purchase Agreements

The Company maintained its strategy of ﬁxing power price contracts for periods between 12 and 36 months

with the majority of contracts continuing to be struck for a minimum of 18 months (the average required

duration under the LTF agreement with Aviva).

As shown in the charts below, 100% of BSIF assets hold subsidy accreditation, the vast majority with RO

accreditations, with RO and FiT subsidy revenue accounting for 59.2% of the total revenue (45.6% ROC,

13.6% FiT). Income from ﬁxed purchase power agreements constituted 37.5% the total revenue for the

year, with the remaining 3.3% of revenues coming from existing index-linked power agreements on newly

acquired assets.

Chart D.6: Subsidy accreditation by % of Portfolio Capacity (left) and Revenue Source by % of Portfolio

Capacity (right)

The Company has continued to implement the approach of ﬁxing power prices evenly throughout the year

for between 18-36 months, with the average current portfolio PPA term as at 30 June 2022 standing at

25.2 months.

The purpose of this strategy is to mitigate the Company’s exposure to seasonal fluctuations and short-

term events which have the potential to increase volatility in price, whilst allowing flexibility to capitalise

on periods of higher power prices, and simultaneously enabling the Company to avoid ﬁxing prices during

periods of signiﬁcant weakness.

92%

ROC

8% FiT

0% Unsubsidised

45.6% ROC

13.6% FiT

37.5% Fixed PPA

3.3% Wholesale PPA

SUBSIDY

ACCREDITATION

SUBSIDY

ACCREDITATION

REPORT OF THE INVESTMENT ADVISER ANNUAL REPORT AND FINANCIAL STATEMENTS

The Investment Adviser continues to believe this is the best strategy

for the Shareholders, who are looking for stable revenues and

forecastable, sustainable dividends. In March 2020, the Company

went into the pandemic with over 90% of its revenues ﬁxed and

had the best twelve months’ performance since IPO, at a time when

unhedged strategies were generating less than 50% of their expected

revenues. The current market is offering the opportunity to restrike

contracts at far higher prices out to 2025, something we are actively

doing (see chart below for the average of all ﬁxes and 270MW, ﬁxed

in 2022). A ﬁxed contract strategy will always lag a sudden upturn in

prices, but we have very high visibility of revenues over the next few

years where other strategies do not and it is a strategy that has almost

a decade of delivering the highest covered dividend (covered by in

year earnings and post debt amortisation).

Data Set Jan-23 Jul-23 Jan-24 Jul-24

BSIF Weighted Average

Contract Price £/MWh

126.07 124.89 129.47 116.12

BSIF Weighted Average

Contract Prices Fixed

from Jan’22 £/MWh

303.80 230.20 220.80 196.39

New PPA prices are agreed up to 3 months in advance of the

commencement of the ﬁxing period and PPA counterparties are

selected on a competitive basis, but with a clear focus on achieving

value and diversiﬁcation of counterparty risk.

The graph below shows that, as at 30 June 2022, the Company has a

price conﬁdence level of 96% to December 2022 and c.87% to June

2023 over the pricing of its power and subsidy revenue streams.

Note: There is c.95MW of capacity which beneﬁts from long term offtake agreements, with 9 years remaining. These agreements have built

in floor prices, which are automatically applied in the absence of direct short-term power price ﬁxes. Graph also includes all ﬁxed wind

assets but excludes 5.33MW of the small-scale wind portfolio which hold ‘floating’ PPAs, linked to the NI SEM.

Over the past 12 months, global energy demand grew rapidly

in the second half of 2021, propelled by rapid economic

recovery as Covid-19 lockdowns eased, leading to increasing

gas prices. The UK is particularly exposed to high gas prices

due to a reliance on residential gas supplies and a signiﬁcant

portion of UK electricity being generated in gas-ﬁred power

stations. Increased demand, coupled with historically low gas

storage levels, led to LNG and LPG prices rising signiﬁcantly,

pushing up wholesale electricity markets. This trend was

further compounded by Russia’s invasion of Ukraine, enforcing

uncertainty around the security of European gas supply and

price volatility on the gas markets, in turn leading to record

prices and high volatility in the UK power markets.

The price of coal also rose sharply towards the latter end

of the Period driven by high demand in Europe, a ban on

imported Russian coal and limited supply from Asia. As a

result, UK-ETS carbon prices held largely above the £70/

tonne of CO2 equivalent mark throughout the second half

of the Period, having closed below the £60/tonne of CO2

equivalent on most days between July 2021- mid-November

2021. The demand for carbon certiﬁcates is likely to remain

supported in the coming winter after several coal plants were

requested to stay online to safeguard GB system security and

reduce its reliance on gas imports.

Chart D.7: % of BSIF revenues ﬁxed as at 30 June 2022 (solar PV and onshore wind, combined)

REPORT OF THE INVESTMENT ADVISER ANNUAL REPORT AND FINANCIAL STATEMENTS

The impact of sharp commodity price increases was a three-fold year-on-year increase in the UK day-ahead

base load power price for the 12 months to 30 June 2022, of £171.25 per MWh from c. £55.25 per MWh,

for the 12 months to 30 June 2021.

Day-ahead base load power prices settled at £384.85/MWh on average in March 2022, which was almost

80% above market expectations, whilst UK seasonal forward power prices also rose sharply over the year,

with Winter 2022-23 base load reaching highs of £345/MWh in June 2022, almost ﬁve times the level seen

in July 2021.

As a further illustration of the points mentioned above, the below charts compare the wholesale electricity

prices versus gas and carbon from December 2019 to June 2022.

WIND TURBINE AT DELABOLE

Source data from Bloomberg. Carbon price EU ETS from Bloomberg, effective GB price based on IA calculations

The upward movement of the wholesale power market is reflected in the BSIF average seasonal weighted

power price. The average seasonal weighted power price for the 12-month period ending 30 June 2022 has

increased by 18.47% from the previous 12-month period ending 30 June 2021, from £47.86 per MWh to

£56.70 per MWh.

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

SOLAR PV AT PLACE BARTON

REPORT OF THE INVESTMENT ADVISER ANNUAL REPORT AND FINANCIAL STATEMENTS

3. Analysis of underlying earnings

The total generation and revenue earned in 2021/22 by the Company’s

portfolio, split by subsidy regime, is outlined below:

Subsidy

Regime

Generation

(MWh)

PPA

Revenue (£m)

Regulated

Revenue (£m)

FiT 55,303 3.6 9.8

4.0 ROC 12,782 1.7 3.2

2.0 ROC 26,868 1.7 3.0

1.6 ROC 112,726 6.0 10.2

1.4 ROC 266,350 14.7 20.8

1.3 ROC 65,181 4.3 4.8

1.2 ROC 133,993 8.0 9.7

1.0 ROC 17,288 1.4 0.9

0.9 ROC 41,282 5.5 2.1

Total 731,773 46.9 64.5

The Company includes ROC recycle assumptions within its long term

forecasts and applies a market based approach on recognition within

any current ﬁnancial period, including prudent estimates within its

accounts where there is clear evidence that participants are attaching

value to ROC recycle for the current accounting period.

In October 2021, Ofgem announced that value for ROC recycle for the

period April 2020 to March 2021 (CP19) was £3.87/ROC (equivalent

to 7.7% of CP19 ROC buyout prices). This was in line with the ROC

Recycle estimate the Company had recognised in its 30 June 2021

Financial Statements; a further ‘late payment’ amount of £0.55/ROC

was announced in December 2021, equating to a further £455k. This

amount has been included within the ‘Other revenue’ line within the

table below.

The key drivers behind the changes in Underlying Earnings between

FY 2021/22 and FY 2020/21 are the combined effects of higher

generation and PPA pricing in solar (8.6% and 9.2% respectively),

lower generation in wind assets (-17%) and an increase in earnings

from the acquisitions completed during the year.

The table below demonstrates that the portfolio generated underlying earnings, pre debt amortisation, of £66.8m (12.04pps)

and underlying earnings for distribution, post debt repayments of £13.8m (2.50pps), of £53.0m (9.54pps).

As a result, after declaring four interim dividends totalling 8.20pps, the Company has carry forward earnings available for

future dividends of 3.39pps.

Underlying Portfolio Earnings

Full year to

30 June 22

(£m)

Full year to

30 June 21

(£m)

Full year to

30 June 20

(£m)

Full year to

30 June 19

(£m)

Portfolio Revenue 111.4 73.1 65.9 63.6

Liquidated damages and Other Revenue* 1.6 2.0 3.8 0.8

Net Earnings from Acquisitions in the period 0.0 5.1 0.0 0.0

Portfolio Income 113.0 80.2 69.7 64.4

Portfolio Costs -27.8 -17.6 -14.1 -13.1

Project Finance Interest Costs -4.7 -1.8 -0.6 -0.6

Total Portfolio Income Earned 80.5 60.8 55.0 50.7

Group Operating Costs#** -8.3 -7.5 -5.8 -5.4

Group Debt Costs -5.4 -4.7 -4.6 -4.6

Underlying Earnings 66.8 48.6 44.6 40.7

Group Debt Repayments -13.8 -9.3 -9.2 -8.8

Underlying Earnings available for distribution 53.0 39.3 35.3 31.9

Full year to

30 June 22

(£m)

Full year to

30 June 21

(£m)

Full year to

30 June 20

(£m)

Full year to

30 June 19

(£m)

Bought forward reserves 13.4 8.4 2.3 1.1

Total funds available for distribution -1 66.4 47.7 37.6 33.0

Target distribution*** 45.2 34.3 29.3 28.4

Actual Distribution -2 45.5 34.3 29.3 30.7

Underlying Earnings carried forward (1-2)

20.9

13.4 8.4 2.3

REPORT OF THE INVESTMENT ADVISER ANNUAL REPORT AND FINANCIAL STATEMENTS

Full year to

30 June 22

(£m)

Full year to

30 June 21

(£m)

Full year to

30 June 20

(£m)

Full year to

30 June 19

(£m)

Excess Distribution Paid 0 0 0 2.3

* Other Revenue includes ROC mutualisation, ROC recycle late payment CP19, insurance proceeds, O&M settlement agree-

ments and rebates received.

# Includes the Company, BSIFIL and BR1 (included within BSIFIL is a group tax charge of £1.4m vs £2.3m June 2021).

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

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

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

Full year to

30 June 22

(£m)

Full year to

30 June 21

(£m)

Full year to

30 June 20

(£m)

Full year to

30 June 19

(£m)

Target Distribution 45.2 34.3 29.3 28.4

Total funds available for distribution

(including reserves)

66.4 47.7 37.6 33.0

Average Number of shares in year* 554,042,715 429,266,617 370,499,622 369,883,530

Target Dividend (pps) 8.16 8.00 7.90 7.68

Total funds available for distribution (pps) 12.22 11.19 10.13 8.91

Total Dividend Declared & Paid (pps) ** 8.20 8.00 7.90 8.31

Reserves carried forward (pps) *** 3.39 2.67 2.23 0.60

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

** An additional dividend of 0.63pps was paid for the year ended 30 June 2019.

*** Reserves carried forward are based on the shares in issue at the point of Annual Accounts publication (being c.611m

shares, 2021: c.496m).

4. NAV and Valuation of the Portfolio

The Investment Adviser is responsible for advising the Board in determining the

Directors’ Valuation and, when required, carrying out the fair market valuation

of the Company’s investments.

Valuations are carried out on a six-monthly basis at 31 December and 30 June

each year, with the Company committed to conducting independent reviews as

and when the Board believes it beneﬁts Shareholders.

As the portfolio comprises only non-market traded investments, the Investment

Adviser has adopted valuation guidelines based upon the IPEV Valuation

Guidelines published by the BVCA (the British Venture Capital Association). The

application of these guidelines is considered consistent with the requirements

of compliance with IFRS 9 and IFRS 13.

Following consultation with the Investment Adviser, the Directors’ Valuation

adopted for the portfolio as at 30 June 2022 was £939.9m (30 June 2021,

£694.5m).

The table below shows a breakdown of the Directors’ valuations over the last

three ﬁnancial years:

Valuation Component (£m) June 2022 June 2021 June 2020

Enterprise Portfolio DCF

value (EV)

1,180.6 770.1 602.7

Consented Solar and Battery

Storage Development rights

13.8 1.8 0.0

Deduction of Project Co debt -390.3 -119.8 -10.8

Project Net Current Assets 135.8 42.4 32.4

Directors’ Valuation 939.9 694.5 624.3

Portfolio Size (MW) 766.2 613.0 478.8

REPORT OF THE INVESTMENT ADVISER ANNUAL REPORT AND FINANCIAL STATEMENTS

Discounting Methodology

The Board continues to adopt the approach under the ‘willing buyer/

willing seller’ methodology, that the valuation of the Company’s

portfolio be appropriately benchmarked on £/MW basis against

comparable portfolio transactions.

The Directors’ Valuation is based on the discounting of post-tax,

projected cash flows of each investment, based on the Company’s

current capital structure, with the result then benchmarked against

comparable market multiples. The discount rate applied on the post-

tax levered project cash flows is the weighted average discount rate.

Key factors behind the valuation

During the reporting period there have been a number of key factors that

have been considered in the Investment Adviser’s recommendation to

the Directors’ Valuation:

(i) Competition for operational assets continues to remain high. This

has resulted in average pricing for subsidised projects moving

towards the higher band of the pricing range witnessed by the

Investment Adviser of c.£1.25m/MW and c.£1.45m/MW for

comparable portfolios to the Company’s. The step up in average

pricing is also related to signiﬁcant increases in near-term power

price forecasts, see details on page

33, and the rate of inflation

(see below);

(ii) Inflation has risen sharply since the Company’s Interim ﬁnancial

statements in December 2021, with RPI rising to over 11% on

a year on year basis as at 30 June 2022. To align the Directors

Valuation with the latest public data and Bloomberg’s basket of

independent forecasters, a revision to the assumption for 2022

from 6.4% (in December 2021) to 10.9% has been made. With high

levels of uncertainty over the potential level of inflation in 2023 and

beyond, the Directors have elected to remain at 3.4% in 2023 and

3.0% until 2029. Thereafter, an assumption of 2.25% from 2030

has been applied to reflect the transition from RPI to CPIH;

(iii) In tandem with rising inflation, interest rates have also seen

signiﬁcant increases over the period as the Bank of England raised

base rates from the historic lows of 0.1% (in place until as recently

as November 2021) to 1.25% as at 30 June 2022. Post year end,

as at 22 September 2022, the Bank of England raised base rate

to 2.25% with further increases expected. With long term debt

yields increasing by a comparable amount, the Directors have

determined it is appropriate that a proportional adjustment is

made to the Company’s equity discount rate. As such, the Levered

equity discount rate has been increased to 6.75% (6.00% in

December 2021 and June 2021). The discount rate for asset lives

in excess of 30 years has also been increased to 8.00% (7.50% in

December 2021 and June 2021);

(iv) Acquisitions made in the period, being a 109 wind turbine portfolio

with 12.5MW capacity and two mixed solar and wind portfolios

of 47.5MW and 93MW, have been valued on a discounted cash

flow basis as at 30 June 2022 with inherited 3rd party ﬁnancings

(£113.5m in total) associated with these acquisitions included

alongside the impact of £255m of equity raised during the period.

By reflecting the core factors above within the Directors’ Valuation

for 30 June 2022, the EV of the portfolio is £1,180.6m (June 2021:

£770.1m) with the effective price for the solar component of £1.38m/

MW (June 2021: £1.26m/MW). These metrics sit squarely within the

pricing range of precedent market transactions and the ‘willing buyer-

willing seller’ methodology upon which the Directors’ Valuation is

based.

Valuation Assumptions – Further detail

Debt

The debt assumptions within the Directors’ Valuation reflect all third-

party loans within the Company’s capital structure as at the valuation

date. Interest rates and repayment proﬁles are matched to the terms

of each loan. In the case of any short-term ﬁnancing, conservative

assumptions are applied with respect to interest rates and repayment

proﬁles post maturity.

As at 30 June 2022, the Group’s short term debt consisted of £70m

drawn under its RCF, along with a £110m term loan from NatWest,

maturing in September 2023 with the conversion assumption within

the Directors’ Valuation aligned to the percentage of the loan that has

been hedged (being 75% with 18-year interest rate swaps at a rate of

0.31% until 2038).

The interest rate applied to the converted balance of the RCF is 4%

and on the NatWest term loan it is 3% (with a cumulative balance of

£131.5m).

AERIAL VIEW AT ABERPORTH

REPORT OF THE INVESTMENT ADVISER ANNUAL REPORT AND FINANCIAL STATEMENTS

Power Price

The blended forecast of three leading consultants used within the latest

Directors’ Valuation, as shown in the graph below, is based on forecasts

released in the quarter to June 2022. For illustration purposes, the

graph below also includes the blended curves used in the Company’s

December 2021 Interim accounts and June 2021 Annual accounts.

The curves used in the 30 June 2022 Directors’ Valuation reflect the

following key updates:

1. Short-term European fuels – gas and coal – prices have risen

signiﬁcantly following the invasion of the Ukraine, driving material

increases in near-term wholesale power prices;

2. Increased renewable deployment in the UK (notably in the early 2030s

following the launch of the REPowerEU package in May 2022 which

highlights the EU’s plans to accelerate the clean energy transition and

rapidly reduce the region’s dependence on Russian gas imports)

3. Annual GB electricity demand, driven principally by electriﬁcation

of heat and transport, is expected to rise from 305TWh in 2022 to

497TWh by 2050;

NAV movement

Change in blended power price forecasts

BSIF blended Jun-22

BSIF blended Dec-21

REPORT OF THE INVESTMENT ADVISER ANNUAL REPORT AND FINANCIAL STATEMENTS

Directors’ Valuation movement

(£million)

As % of

valuation

30 June 2021 Valuation 694.5

New investments acquired 299.3

Restructure adjustment -

LT debt at project level

(106.6)

Rebased Valuation 887.2

Cash receipts from portfolio (63.7) (7.2)%

Date change, degradation,

O&M updates

(33.0) (3.7)%

Power curve updates (incl. PPAs) 99.9 11.3%

Inflation updates 60.3 6.8%

Discount rate change (38.4) (4.3)%

Balance of portfolio return 27.6 3.1%

30 June 2022 Valuation 939.9 6.0%

Each movement from the 30 June 2022 valuation is considered in turn below:

New investments acquired (12.6MW wind

portfolio, 47.5MW solar and wind portfolio,

93.2MWsolar and wind portfolio)

These movements reflect the base investment

cost of £63.6m of the 12.6MW, 109 single stick

wind portfolio the Company acquired in August

2021, 47.5MW ROC backed operational portfolio

of solar and wind, located largely in the South

West, acquired in January 2022, and 93.2MW

ROC and FiT backed operational portfolio of solar

and wind, located across England, Wales, Northern

Ireland and Scotland, acquired in May 2022. New

acquisitions were bought into the valuation model

on a discounted cash flow basis together with the

associated ﬁnancing.

Cash receipts from the Portfolio

This movement reflects the cash payments

made from the underlying project companies up

to BSIFIL, BR1 and the Company to enable the

companies to settle operating costs and distribution

commitments as they fall due within the period.

Power curve updates (incl. PPAs)

The Company’s three independent power price

forecasters released updated forecasts in April

2022 and June 2022, and these have been

applied to the Directors’ Valuation. The impact

of consistently applying an even blend of three

independent forecasters as well as the latest

power price ﬁxes, against power price expectations

applied in the 30 June 2022 valuation, results in a

valuation increase of £99.9m from June 2021.

The discounted cash flow for each project applies

the contractually ﬁxed power price applicable to

each generation asset until the end of the ﬁxed

period, and thereafter an even blend of three

independent forecasters’ prices.

Inflation

The Company’s inflation assumptions within the

June 2022 valuation have been adjusted to reflect

higher short-term inflation expectations with levels

now projected at 10.9% in 2022, 3.4% in 2023,

3.0% to 2029 and 2.25% from 2030 onwards

(June 2021: 2020 and 2025 of 3.00%, and from

2025 onwards of 2.75%);

Balance of Portfolio Return

The balance of portfolio return is the Company’s

change in capital structure following the equity

issuance of c.£255m from equity raises in August

2021 and June 2022, as well as minor operational

and ﬁnancial assumption changes.

Other assumptions

Consistent with previous Directors’ Valuations, the

valuation assumes a terminal value of zero for all

projects within the portfolio c.25 years after their

commencement of operation, or up to 40 years for

those with asset life extensions.

There have been no material changes to

assumptions regarding the future performance or

cost optimisation of the portfolio when compared

to the Directors’ Valuation of 30 June 2022.

On the basis of these key assumptions, the Board

believes there remains further potential for NAV

enhancement from the potential extensions of

asset life for further projects in the portfolio, as well

as cost optimisation on long term O&M fees.

The assumptions set out in this section will remain

subject to continuous review by the Investment

Adviser and the Board.

REPORT OF THE INVESTMENT ADVISER ANNUAL REPORT AND FINANCIAL STATEMENTS

Reconciliation of Directors’ Valuation to Balance sheet

BALANCE AT YEAR END

Category

30 June 2022

(£m)

30 June 2021

(£m)

30 June 2020

(£m)

Directors’ Valuation 939.9 694.5 624.3

Portfolio Holding Company Working

Capital

(13.6) 26.4 20.9

Portfolio Holding Company Debt (70.0) (250.6) (212.8)

Financial Assets at Fair Value per

Balance sheet

856.3 470.3 432.4

Gross Asset Value 1,316.7 840.7 653.3

Gearing (% GAV*) 35% 44% 33%

* GAV is the Financial Assets, as at 30 June 2022, at Fair Value of £856.3m plus RCF of £70m and 3rd

party portfolio debt of £390.7m (giving total debt of £460.7m).

Directors’ Valuation sensitivities

Valuation sensitivities are set out in tabular form in Note 8 of the ﬁnancial statements. The following

diagram reviews the sensitivity of the EV of the portfolio to the key underlying assumptions within

the discounted cash flow valuation.

5. Financing

Revolving Credit Facility

On 11 May 2022, the Company agreed a new and enlarged £100 million revolving credit facility

(“RCF”), provided equally by RBSI and Santander UK which, as well as being extended to May

2024 (with an option to extend to May 2025), also contained a new accordion tranche of up to a

further £100.0 million which matured on 8 August 2022. The accordion facilitated the acquisition

of the 93.2MW operational portfolio acquired in May 2022 and was repaid in full following the

£150 million equity raise in June 2022. The margin, over SONIA, on the facility has also been

lowered from 2.0% to 1.9%.

As at 30 June 2022 the Company’s subsidiary had drawn £70m from its RCF.

External Debt

Excluding the Company’s RCF, total outstanding loans to 3rd party lenders stands at £390.6m with

each loan secured against a portfolio of assets and fully amortising within the life of the respective

asset’s subsidies.

The table below outlines core details of all debt facilities within the Company, excluding the RCF,

which is detailed above.

Lender

Outstanding Amount

(June 2022) Maturity Secured against

Aviva -

18yr amortising loan

£93.9m ﬁxed,

£64.1m index linked

Sep 2034 401.2MW

solar portfolio

Natwest -

3 year Term Loan

£110m Sep 2023

(75% hedged at

0.31% until 2038)

141.7MW solar

portfolio

Gravis -

15yr amortising loan

£38.3m Jun 2035 47.5MW solar and

wind portfolio

BayernLB,

Clydesdale, KfW

15yr amortising loans

£57.0m (BayernLB),

£10.6m (KfW),

£8.1m (Clydesdale)

Dec 2033 to

Jun 2034

93.2MW

solar and wind

portfolio

BayernLB –

Project ﬁnance loan

£8.7m Sep 2029 5MW

solar asset

Total £390.7m

REPORT OF THE INVESTMENT ADVISER ANNUAL REPORT AND FINANCIAL STATEMENTS

GAV Leverage

The Group’s total outstanding debt, as at 30 June 2022, is c.£460 million and its leverage stands at c.35%

of GAV (44% as at 30 June 21) at the lower end of the 35% - 45% range the Directors have previously

outlined as desirable for the Company.

6. Market Developments

UK solar photovoltaic capacity and deployment

According to BEIS, the UK’s total installed solar photovoltaic capacity as at June 2022 (the latest statistics

available) was 13.99GWp, across just over 1.2 million installations. This compares to 13.66GWp in June

2021. Expansion over the period, of 330MW, has been driven exclusively by the deployment of c. 90,000 small

unaccredited installations with capacities below 50kWp. The chart below illustrates how the deployment of

new generating capacity has diminished signiﬁcantly since the closure of the RO scheme in 2017.

*Source; BEIS, Solar photovoltaics deployment June 2022

Capacity accredited nationally under the RO Scheme is 7.3GWp, according to the latest

data from BEIS released in March 2022, representing c. 52% of the total solar capacity in

the UK, but it constitutes only 2% of the number of installations.

Capacity accredited under the FiT scheme was c. 5.1GWp. This equates to about 36%

of total solar capacity and c. 75% of all installations. Subsidy-free capacity stands at

1.5GWp and 23% of installations, although many of these are micro installations.

Secondary market transactions and subsidy-free activity

Transactional activity in the UK secondary solar PV market continued its momentum

during July 2021-June 2022 with investor appetite for subsidised assets remaining

very high. According to the most recent ﬁgures from Bloomberg New Energy Finance

(BNEF) and Blueﬁeld internal data, 272MW of subsidised projects changed hands during

January-June 2022. For reference, some 732MW of solar PV project deals were reported

in 2021.

Activity in the UK subsidy-free market has also continued at pace. Signiﬁcant

development activity is being carried out within the UK, which is being driven by factors

such as ambitious decarbonisation targets, increasing preferences by customers for

clean energy, demand for ESG investments and the inclusion of solar PV in the recent

CfD auction round.

Estimates from Solar Power Media indicate that there are over 41GWp of large-scale

solar projects in the development/ready-to-build phase (June 2021: 17GWp) and c.

7.2GWp awaiting or under construction as at the end of May 2022.

Over the past 18 months there have been a small number of larger-scale unsubsidised

projects constructed in the UK. Throughout the 2021 ﬁnancial year, however, there have

been indications that solar deployment rates have stagnated somewhat due to increased

construction costs and supply chain challenges. The elevated pricing is being driven by a

signiﬁcant increase in solar module prices, together with increases in commodity prices

and disruption in global supply chains.

With 708MW of operational solar capacity, the Company maintains a strong position

within the UK solar market, owning about 7.4% of the country’s utility-scale solar PV

capacity.

As an established and experienced market participant, this pre-dominantly regulated

revenue base provides a strong foundation for continued growth of the Company through

both primary and secondary acquisitions in solar, storage and wind.

Capacity growth (GW)

Cumlative capacity (GW)

Capacity growth Cumulative capacity

REPORT OF THE INVESTMENT ADVISER ANNUAL REPORT AND FINANCIAL STATEMENTS

REPORT OF THE INVESTMENT ADVISER

7. Regulatory Environment

The regulatory environment is under the spotlight for the ﬁrst time in

a number of years as the government looks to manage soaring energy

costs and increase energy security. A consultation has been launched

to look at whether there needs to be reform of the energy markets. More

immediately, the government is looking to see whether the renewable

industry and the government can agree a mutually favourable change

to the merchant part of the Renewable Obligation Scheme.

Update on Contracts for Differences (CfD)

The CfD scheme, which currently provides a tariff for 100% of an

asset’s generation over a 15 year period, is now the UK Government’s

main mechanism for supporting low-carbon electricity generation

and operates via an auction process. The latest CfD allocation round

(AR4) opened in December 2021 and closed in July 2022. It was the

ﬁrst auction round since AR1 (2015) that allowed solar PV projects to

participate.

A total of ninety-three new renewable energy projects won contracts

in AR4 across GB, which is more than the number of projects awarded

in the previous three auctions combined. A total of 10.8GW renewable

projects received CfDs in AR4 (up by 87% from the previous auction

in 2019) with the majority going to offshore wind at 7GW and 2.2GW

to solar PV projects. These numbers reflect the success the scheme

is having with respect to accelerating the deployment of renewable

energy in the UK

In February 2022, the UK government conﬁrmed that it will hold annual

CfD auctions from 2023, having previously been scheduled once every

two years. The next CfD auction (AR5) is planned for March 2023.

A CfD consultation outcome published in May 2022 announced changes

to Supply Chain Plan requirements and a strengthened non-delivery

disincentive. The 2020-21 government call for evidence on ‘Enabling

a high renewable, net zero electricity system’ also highlighted several

areas in which CfDs could be reformed.

The UK Energy Security Strategy

In April 2022, the UK government published its British Energy Security

Supply paper following widespread calls to lower the UK’s reliance

on Russian gas and reduce the impact of signiﬁcant wholesale

power price rises on UK retail energy consumers. The latest targets

largely added to the goals set in the Government Energy White Paper,

published in late 2020, with a particular focus on greater nuclear and

offshore wind capacity targets.

The Government now plans to reach 50GW offshore wind capacity

by 2030 — an increase from the 40GW target in its net zero strategy

released in October 2021 — of which floating offshore wind should

make up 5GW, up from 1GW previously. No target was set for onshore

wind growth targets with former Prime Minister Boris Johnson having

been reluctant to ease planning rules to enable more onshore wind

developments. A nuclear target of 24GW by 2050 was set, with

small modular reactors expected to form a key part of the nuclear

project pipeline. The Government estimated a ﬁve-fold increase in

solar deployment levels by 2035, as well as its intention to consult

on amending planning rules for ground-mounted solar to strengthen

policy in favour of development on non-protected land.

Future of the UK ETS

A joint consultation of the UK, Scottish, Welsh and North Irish

governments on developing the UK Emissions Trading Scheme (UK

ETS) was launched in March 2022 and closed in mid-June. The

governments sought feedback on a net zero consistent UK ETS cap

following advice from the Climate Change Committee’s (CCC), with

any changes to the policy to align the cap with a net zero trajectory

to be implemented by no later than January 2024. The wide-ranging

consultation also sought comments on other topics such as the role

of Free Allocation policy as a carbon leakage mitigation tool and the

incorporation of greenhouse gas removal into the UK ETS, all of which

ultimately aim to improve the ambition and operational effectiveness

of the scheme.

Balancing Services Use of System (BSUoS) Charges

The UK energy regulator Ofgem approved a measure to move

balancing charges away from generators and onto ﬁnal demand users

from 1 April 2023, following several years of consultation processes

on the proposal. Successful applicants in the AR4 will have their CfD

strike prices adjusted downwards to reflect this regulatory change.

BSUoS charges are how the ESO recovers costs associated with

balancing the electricity transmission system, including the costs of

constraints, frequency response services, provision of reserve, the

costs of actions taken in the Balancing Mechanism and the ESO’s

internal costs. BSUoS charges are currently recovered from demand

customers and generators based on the amount of energy import from

or exported into the network in each half-hour period.

Review of Electricity Market Arrangements

The UK Government published its Review of Electricity Market

Arrangements (REMA) consultation in mid-July which potentially

opens the GB power market to one of the biggest overhauls for a

generation. REMA aims to deliver fundamental reform to non-retail

electricity market arrangements to facilitate the decarbonisation

of the electricity system by 2035, while ensuring security of supply.

Topics covered include the revision of the wholesale market structure

(potentially decoupling power from gas prices), balancing mechanism,

network charging, operability services and related policies such as CfD

and capacity market schemes. The consultation closes on 10 October

2022 and a delivery roadmap is expected to be released in 2024.

Blueﬁeld Partners LLP

29 September 2022

REPORT OF THE INVESTMENT ADVISER ANNUAL REPORT AND FINANCIAL STATEMENTS

Environmental,

Social and

Governance

Report

1. Introduction

An introduction from the Chair

I am pleased to present the Company’s ﬁrst environmental, social and

governance (ESG) strategy within this report, encompassing the Company’s

purpose of ‘Renewable Energy, Delivered Responsibly’. The Company has

refreshed its materiality assessment, engaged stakeholders to identify priority

ESG topics, established its key pillars and articulated its ESG ambition. To

enable our shareholders to feel conﬁdent that ESG issues are being well

managed, and opportunities grasped, ESG performance will be reported

annually against a set of commitments and KPIs.

Climate action is at the forefront of the sustainability agenda. The journey

to Net Zero continues to be a challenging one, with the global pandemic,

conflict between Ukraine and Russia and the cost-of-living crisis evidencing

the dynamic relationship between social and environmental factors. Our

societies cannot be separated from the natural environment they inhabit, and

global emission reduction goals cannot be achieved in isolation from social

challenges.

ANNUAL REPORT AND FINANCIAL STATEMENTS

Over 624,000,000 kWh of

renewable energy generated

(2021: over 545,000,000 kWh)

Over 120,000 tonnes

of CO

e savings achieved

(2021: over 127,000 tonnes of CO

Equivalent of 215,000 houses

powered with renewable energy

(2021: over 187,000)

Over £154,000 paid

to Community benefit schemes

(2021: over £151,000)

Note: CO

e savings have reduced from 2021 due to the decreasing contribution of fossil fuels

to the UK grid mix, resulting in reduced displacement of fossil fuel generated energy and

therefore reduced CO

e savings. This is discussed in more detail on page

69.

Developed a robust

ESG strategy, including

an ESG vision, commit-

ments and KPIs

Published the

Company’s first TCFD

Disclosure

Aligning with Article

8 of the Sustainable

Finance Disclosure

Regulation (SFDR)

Published the

Company’s first

ESG Policy and a

Biodiversity Policy

An introduction

from the Investment Adviser

As the Company’s Investment Adviser, Blueﬁeld

Partners LLP has worked closely with the Board

over the last 12 months to develop its ﬁrst ESG

strategy, which will enable the Company to manage

its ESG risks and opportunities, deliver meaningful

impact and meet its regulatory requirements.

The strategy will be delivered through the activities

of the Blueﬁeld companies which service the

portfolio. Their structure, with four separate

but complementary businesses, facilitates the

integration of ESG into different parts of the

investment and operational cycle. Input from

Blueﬁeld employees, including investment and

development teams through to ﬁeld service

engineers who maintain the portfolio on a daily

basis, was instrumental to the development of

the Company’s ESG strategy and their passion

and dedication towards sustainability will drive its

success.

Though it has been a year of considerable

achievement for the Blueﬁeld companies, we are

aware of the social context in which we operate,

in particular the cost-of-living crisis in the UK and

the contribution of rising energy prices towards

this. It has always been our belief that renewable

energy assets offer shareholders attractive returns,

but they are also the most cost-effective energy

solution globally and have a low carbon impact once

operational. Large-scale deployment of renewable

infrastructure throughout the UK will both support

net zero ambitions and help secure domestic energy

supply, stabilising energy pricing. Echoing the

Chair’s message above, social and environmental

factors cannot be considered in isolation, and we

must make simultaneous progress towards energy

stability, affordability, and sustainability.

James Armstrong,

Managing Partner of Blueﬁeld Partners LLP

The renewables industry plays an important role in

climate change mitigation through decarbonisation

of the energy markets. As the demand for

renewables continues to rise, the industry must

address social risks, such as those presented

within its supply chain. Indeed, we have witnessed

the renewables sector come together over such

matters in recent years, recognising that the

greatest impact will be achieved through industry

collaboration.

The Company was founded on the belief that

investment in renewable technology created the

opportunity for attractive and sustainable returns

whilst delivering clean, renewable energy. As a

pioneer in the market, BSIF has always had a clearly

articulated environmental focus. The Company

recognises the opportunities and value that ESG

considerations present, and the positive impact

which can be delivered by its portfolio in addition to

ﬁnancial returns.

Over the coming year, the Company will work

towards its ESG vision, embedding policies and

processes to ensure best practice ESG governance.

A key focus will be alignment with the EU

Sustainable Finance Disclosure Regulation (SFDR)

and EU taxonomy, in preparation for the Company’s

ﬁrst full disclosure next year. The Company will

also enhance its understanding of potential climate

related impacts, helping it to better adapt, mitigate

and manage climate related risks and leverage

opportunities.

This year has been a signiﬁcant one in the

Company’s ESG journey. The Board looks forward

to continuing this momentum, progressing towards

the Company’s ESG vision, and delivering positive

impact across the communities and environments

it operates within.

John Rennocks,

Chair

2. 2022 ESG Highlights

Covering the 12-month period ending 30 June 2022:

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

3. ESG Context

ESG Landscape

Urgent action is needed to tackle the climate crisis and extensive

ﬁnancial investment will be needed to decarbonise global economies

and mobilise the green transition. The Company presents an

investment solution which delivers attractive returns to shareholders

whilst mitigating the effects of climate change through the production

of clean energy. Through its UK focused portfolio, the Company is also

contributing to domestic energy security.

Whilst ESG considerations increasingly dominate the executive

agenda, historically these have not received equal attention, with

more focus placed on environmental issues. Recently, it has been

recognised that social and environmental factors cannot be viewed

separately. This has been exacerbated by the global pandemic, and the

war between Russia and Ukraine. Sustainable development requires

simultaneous environmental and social progress. In combination with

good governance, consideration of these factors is integral to the long-

term success of any investment fund.

ESG regulation

Rising demand for environmentally sustainable investments has

caused a global surge in mandatory ESG reporting, driving funds to

transparently disclose how they consider sustainability aspects. A

suite of regulation is emerging, with the SFDR in Europe and the

highly anticipated Sustainable Disclosure Regulation (SDR) in the UK.

These regulations have a shared purpose to drive more consistent

sustainability reporting and prevent greenwashing.

SFDR

SFDR Level 1 disclosure requirements came into effect in March 2021.

The Board reviewed the Company’s ESG strategy and characteristics

with the Investment Adviser and elected to adopt an Article 8

classiﬁcation. Given the nature of the Company’s investments, Article

9 classiﬁcation has been considered. However, there is currently

insufﬁcient detail on the level of regulatory scrutiny Article 9 funds

will be subject to compared to Article 8. The Company has decided to

remain classiﬁed as an Article 8 product for the interim and is preparing

to make its ﬁrst full disclosure under the SFDR Level 2 requirements,

coming into effect in January 2023. As the requirements and

expectations of the SFDR become clearer, the Company will review

whether Article 8 classiﬁcation remains appropriate.

For the purposes of Article 8, the environmental characteristics

promoted by the Company are to reduce reliance on fossil fuels and

facilitate the UK transition to renewable and sustainable methods of

energy generation. Please see the ‘Climate Change Mitigation’ section

of this report to see how the Company has met its environmental

characteristics over the reporting period.

EU Taxonomy

The EU Taxonomy, complementary to the SFDR, speciﬁes an additional

set of disclosure requirements which establish whether an economic

activity is environmentally sustainable

. To align with the EU Taxonomy,

the Company’s investments must satisfy the following criteria:

Contribute to one

of six environmental

objectives

‘Do no

signiﬁcant harm’

(DNSH) to any of the

six environmental

objectives

Comply with minimum

social safeguards

Comply with the

taxonomies technical

screening criteria

The Company considers that its investments substantially contribute

to the environmental objective of Climate Change Mitigation. During

the reporting period, the Company aimed to achieve this objective

through its production of clean, renewable energy, and by investing

in new renewable energy infrastructure and energy storage facilities.

Please see the ‘Climate Change Mitigation’ section of this report

to see how the Company’s investments have contributed to this

environmental objective during the reporting period.

The Company acknowledges that its investments in renewable energy

infrastructure have the potential to harm the other environmental

objectives of the Taxonomy Regulation. The Company takes the

following actions to help mitigate such risks:

•

Protection and restoration of biodiversity and ecosystems: On-

site measures are in place to preserve the natural environment

and prevent adverse impacts on biodiversity-sensitive areas. This

includes ensuring each asset remains compliant with its Landscape

& Ecological Management Plan (LEMP). During the reporting period,

a Biodiversity Policy has also been created for the portfolio. Please

refer to the ‘Pioneering Positive Local Impact’ section of this report

for further detail.

•

Transition to a circular economy: The Company remains committed

to a best practice approach in respect of asset decommissioning

and recycling, acknowledging that recycling practices at the point of

decommissioning remain difﬁcult to deﬁne, given the long lifespan

of renewable infrastructure. Further information on the Company’s

approach to decommissioning can be found within the ‘Generating

Energy Responsibly’ section of this report.

Human and labour rights are key priorities for the Company,

particularly in relation to materials sourcing and supply chain

management. During the reporting period, the Investment Adviser

carried out appropriate due diligence and compliance checks on key

contractors and other counterparties to help mitigate risks, including

in relation to human and labour rights, anti-money laundering, anti-

bribery, and anti-corruption. The Company has also committed to

ensuring that its assets are covered by a Human Rights Policy, aligned

with the principles of the United Nations Global Compact

(UNGC) and

OECD Guidelines

. Please refer to the ‘Generating Energy Responsibly’

section of this report for further detail.

2. https://ec.europa.eu/info/business-economy-euro/banking-and-ﬁnance/

sustainable-ﬁnance/eu-taxonomy-sustainable-activities_en

3. https://www.unglobalcompact.org/

4. https://www.oecd.org/

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

4. The Company’s ESG Strategy

Introduction

As a pioneer in the renewable market, the Company has always considered ESG

issues. The Company is proud to have developed its approach and embraced a

critically self-reflective practice to discover, deﬁne and articulate an ESG strategy

that reflects stakeholder expectations, and which will deliver a positive impact

across its portfolio of investments.

Company Purpose & ESG Vision

The Company’s ESG vision acts as a guide for the strategy and aligns with the

Company’s wider purpose and ambition to deliver value through its investments.

Given that the Company only invests in renewable energy

infrastructure and supporting technologies such as energy storage, its

high-level assessments indicate that all of its investments contribute

to the environmental objective of climate change mitigation.

Therefore, 100% of the portfolio may be taxonomy-aligned, including

approximately 12.5% in enabling activities (based on operational and

controlled pipeline capacity). However, the Company acknowledges

that further work is needed to ensure compliance with the other

requirements of the Taxonomy Regulation, and this will be addressed

as part of the ESG activities being undertaken over the coming year,

which are detailed throughout this report.

The “do no signiﬁcant harm” principle applies only to those investments

underlying the ﬁnancial product that take into account the EU criteria

for environmentally sustainable economic activities. The investments

underlying the remaining portion of this ﬁnancial product do not take

into account the EU criteria for environmentally sustainable economic

activities.

How regulation has shaped the Company’s ESG strategy

Climate considerations, the SFDR’s Principal Adverse Impact

(PAI) indicators and requirements of the EU Taxonomy were

considered during ESG strategy development, ensuring

alignment between the Company’s ESG framework, commit-

ments and KPIs, and regulatory requirements.

Other Regulation

In its 2021 Annual Report, the Company committed to aligning with

the recommendations of the Task Force on Climate-related Financial

Disclosures (TCFD) and is pleased to present its ﬁrst voluntary

disclosure on page

57. Emerging regulation, including the Taskforce

on Nature-related Financial Disclosures (TNFD) and the UK climate

transition plan standard

, are being monitored by the Investment

Adviser.

5.https://www.gov.uk/government/publications/fact-sheet-net-zero-

aligned-ﬁnancial-centre/fact-sheet-net-zero-aligned-ﬁnancial-centre

TURBINES AT DELABOLE

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

RENEWABLE ENERGY,

DELIVERED RESPONSIBLY

OUR ESG VISION:

BSIF is helping to mitigate climate change through decarbon-

isation of the energy sector, whilst delivering long-term dividends

to our shareholders. We match our best-in-class shareholder

returns with a best-in-class approach to environmental, social

and governance aspects. We recognise that being a renewables

fund does not mean that we can remove ourselves from wider

environmental, social, and governance topics, and are conscious

of the potentially harmful impacts that come with being part

of the renewables industry. We have committed to further

developing our robust due diligence processes and requirements

of our suppliers and contractors and we believe that the assets

within our fund have a part to play at the local level as much as

at the national level. We aim to enhance biodiversity at our sites

and integrate this in our efforts in the communities in which we

operate, recognising the interconnection between ecological and

climate impact.

OUR PURPOSE:

RENEWABLE ENERGY, DELIVERED RESPONSIBLY

Driving shareholder value whilst promoting positive environ-

mental and social impact through our work as a pioneering

and responsible renewables fund. As well as supporting the

UK’s Net Zero carbon ambition, we aim to enhance biodiversity

across our sites, to support the UK in mitigating both the climate

and ecological crisis.

17 ICONS: COLOUR VERSION

ICONS

17 ICONS: COLOUR VERSION

ICONS

17 ICONS: COLOUR VERSION

ICONS

When an icon is on a square, that square must be proportional 1 x 1.

background.

o not alter the colours of the SDG icons.

ICONS

In January 2018, the United Nations launched a revised design of Icon 10, as seen on this page

17 ICONS: COLOUR VERSION

ICONS

When an icon is on a square, that square must be proportional 1 x 1.

background.

o not alter the colours of the SDG icons.

ICONS

In January 2018, the United Nations launched a revised design of Icon 10, as seen on this page

17 ICONS: COLOUR VERSION

ICONS

When an icon is on a square, that square must be proportional 1 x 1.

background.

o not alter the colours of the SDG icons.

ICONS

In January 2018, the United Nations launched a revised design of Icon 10, as seen on this page

17 ICONS: COLOUR VERSION

ICONS

17 ICONS: COLOUR VERSION

ICONS

17 ICONS: COLOUR VERSION

ICONS

CARBON EMISSIONS

ADVOCATING RENEWABLE

ENERGY

MANAGING CLIMATE-RELATED

RISKS & OPPORTUNITIES

BIODIVERSITY

DELIVERY PARTNERSHIPS

COMMUNITY IMPACT &

INITIATIVES

HUMAN & LABOUR RIGHTS

GOOD GOVERNANCE &

BUSINESS ETHICS

RESPONSIBLE & SUSTAINABLE

PROCUREMENT

UNDERPINNED BY ESG BEST PRACTICE DUE DILIGENCE, PROCESSES & PROCEDURES THAT DRIVE STAKEHOLDER VALUE & OPPORTUNITIES

CLIMATE CHANGE

MITIGATION

Supporting the UK in achieving

its Net Zero Carbon ambition

whilst aligning to the TCFD

recommendations.

PIONEERING POSITIVE

LOCAL IMPACT

Enhancing biodiversity and

encouraging community

engagement at the local level

throughout the asset lifecycle.

GENERATING ENERGY

RESPONSIBLY

Driving ethical practices within

our operations and throughout our

supply chain

Figure 1 – the Company’s ESG strategy, including key pillars and priority ESG topics

Disclaimer: The content of this publication has not been approved by the United Nations and does not reflect the views of the United Nations or its ofﬁcials or Member States

ESG STRATEGY:

The Company’s ambitions will be achieved through delivery

of its ESG strategy, which is centred around three key pillars.

ESG topics are arranged under the three pillars and reflect:

• Priority focus areas, as identiﬁed by stakeholders

• Regulatory requirements, e.g., EU SFDR, EU Taxonomy and

TCFD

• ESG reporting frameworks, e.g., SASB

These underpin what will become the Company’s biggest value

and impact drivers.

ANNUAL REPORT AND FINANCIAL STATEMENTS

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT

Sustainable Development Goals

The United Nations Sustainable Development Goals

(UN SDGs)

were a key consideration during strategy

development. Following the alignment protocol, the

most relevant SDGs have been mapped against each

of the Company’s ESG pillars (Figure 1). In total,

eight goals have been identiﬁed where the Company

believes it can have the greatest positive impact

The Company’s largest impact will be in relation to

Goal 7, ‘Affordable and Clean Energy’ and Goal 13,

‘Climate Action’. Through its portfolio of renewable

energy assets, the Company is producing hundreds

of thousands of MWh of renewable energy each year

and supporting decarbonisation of the UK economy.

Table 1 – key ESG commitments for the 22/23 ﬁnancial year

PILLAR KEY COMMITMENTS

Climate Change

Mitigation

• We will report our renewable energy generation annually

• We will implement renewable energy import tariffs across our

portfolio

• We will invest up to £50,000 in industry collaborations annually to

support the energy transition

• We will undertake scenario analysis for material physical and

transitional climate-related risks and opportunities within the next

twelve months

Pioneering Positive

Local Impact

• We will evaluate Biodiversity Net Gain (BNG) across the

operational portfolio and achieve at least 20% BNG on new solar

developments

• We will conduct independent biodiversity assessments across at

least 10% of our sites annually (relating to assets over 1MW in

capacity)

• We will continue to promote positive action within the communities

we operate within

Generating Energy

Responsibly

• We will ensure 100% of our assets are covered by a Human Rights

policy by June 2023

• We will ensure 100% of our assets are covered by policies covering

UNGC principles and OECD Guidelines by June 2023

• We will adopt a Supplier Code of Conduct and require its adoption

by Tier 1 suppliers by the end of June 2023

Commitments & KPIs

Commitments and KPIs have been developed to

enable the Company to monitor and evidence its

ESG performance. These were adopted by the

Board in August 2022 and will be reviewed by the

Board annually, to ensure they remain aligned to

the evolving ESG landscape. Data will be collected

over the coming year to enable the Company to ﬁrst

report against its KPIs in 2023.

Key commitments are highlighted in Table 1 and a

full breakdown of the Company’s commitments and

KPIs is presented within Appendix 1 on page

55.

O: COLOUR VERSION

SDG LOGO

FOR NON-UN ENTITIES

HORIZONTAL LOGO

LOGO

The COLOUR VERSION of the Sustainable Development Goals logo

a white or light grey background. See colour

LIGHT GREY

PMS: Cool Gray 1C

R 241 G 241 B 241

C 4 M 3 Y 3 K 0

7. https://sdgs.un.org/goals

6. Disclaimer: The content of this publication has not been approved by the United Nations and does not reflect the

vie

ws of the United Nations or its ofﬁcials or Member States

When an icon is on a square, that square must be proportional 1 x 1.

background.

o not alter the colours of the SDG icons.

In January 2018, the United Nations launched a revised design of Ico

n 10, as seen on this page

When an icon is on a square, that square must be proportional 1 x 1.

background.

o not alter the colours of the SDG icons.

In January 2018, the United Nations launched a revised design of Ico

n 10, as seen on this page

When an icon is on a square, that square must be proportional 1 x 1.

background.

o not alter the colours of the SDG icons.

In January 2018, the United Nations launched a revised design of Ico

n 10, as seen on this page

are, that square must be proportional 1 x 1.

o not alter the colours of the SDG icons.

In January 2018, the United Nations launched a revised design of Ico

n 10, as seen on this page

When an icon is on a square, that square must be proportional 1 x 1.

background.

o not alter the colours of the SDG icons.

In January 2018, the United Nations launched a revised design of Ico

n 10, as seen on this page

When an icon is on a square, that square must be proportional 1 x 1.

background.

o not alter the colours of the SDG icons.

In January 2018, the United Nations launched a revised design of Ico

n 10, as seen on this page

When an icon is on a square, that square must be proportional 1 x 1.

background.

o not alter the colours of the SDG icons.

In January 2018, the United Nations launched a revised design of Ico

n 10, as seen on this page

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

5. How ESG is Embedded

ESG Oversight

ESG is considered by the Board as part of Board meetings and

investment decisions, with Meriel Lenfestey named as the Director

having overall responsibility and oversight of ESG risks and

opportunities, including in relation to climate. Figure 2 presents the

Company’s ESG and climate governance structure.

Figure 2 – the Company’s ESG and Climate Governance Structure

INVESTMENT

Responsible for incorporating

ESG and climate risks and

opportunities into due diligence

COMMERCIAL

Responsible for the

management of the portfolio

(wind, solar, battery)

ASSET MANAGEMENT

Responsible for operational

management and compliance of

the portfolio (wind, solar, battery)

O&M

Responsible for operational

maintenance of solar assets

DEVELOPMENT

Responsible for ﬁnding and

developing sites for solar and

battery pipeline

THE BSIF BOARD

The Board’s role is to ensure the long-term sustainable success of BSIF by setting the strategy through which value can be created or preserved for the beneﬁt of shareholders, whilst also

generating positive impact for the fund’s wider stakeholders. A dedicated Head of ESG and Climate has been assigned at Board level to further drive this forward. The Board delegates certain

ESG and climate related oversight matters to its principal Committees and representatives.

The Group ESG Manager is responsible for internalising and externalising ESG and climate progress across the key business areas including:

Driving shareholder value whilst promoting environmental and social impact through our work as a pioneering and responsible renewables fund

INFORMING

REPORTING

BSIF AUDIT & RISK COMMITTEE

Responsible for ﬁnancial reporting, investment

valuation, auditing, governance and risk management.

Meets at least three times a year, at appropriate times

in the reporting and audit cycle and otherwise as

required by the Chair

INVESTMENT ADVISER

Blueﬁeld Partners LLP is responsible for managing

the portfolio, fundraising, and investment strategy

and implementation.ESG is considered as part

of these activities. Reports to the BSIF Board

quarterly and anything material ad-hoc.

GROUP ESG MANAGER

Responsible for driving ESG and climate matters

across key stakeholders and business areas. Routinely

communicates ESG and climate matters through Board

reports on a quarterly basis and has ad-hoc meetings with

the Head of ESG and Climate at the BSIF Board level.

The Board monitors ESG and climate activity through regular

communication with the Investment Adviser, including as part of

investment committee papers, Board meetings, ad hoc calls, and

written updates. Key activities, such as development of the Company’s

ESG strategy, must be approved by the Board. Where additional ESG

expertise is required, the Company engages external consultants,

including ESG specialists, biodiversity consultants and law ﬁrms.

The Company’s ESG policy, which communicates its ESG ambition

and strategy, is available on its website:

blueﬁeldsif.com/investors/

publications/.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

Day-to-day management of ESG and climate is the responsibility of the

Investment Adviser. The Group ESG Manager works closely with the

Investment and Commercial teams to drive ESG and climate activities

across the portfolio. ESG is included as a standing agenda item as part

of the Investment Adviser’s quarterly Board meetings and the Group

ESG Manager regularly reports progress to the Managing Partner and

Group General Counsel.

The Group ESG Manager is also responsible for communicating,

embedding, and monitoring ESG initiatives across the other Blueﬁeld

companies which service the portfolio. Key individuals from each

team, including Commercial Analysts, Investment Managers, Asset

Managers and O&M Portfolio Managers, regularly interact with the

Group ESG Manager to integrate ESG considerations into each stage

of the asset lifecycle. The performance of the Group ESG Manager

is assessed via progress against agreed ESG objectives, which are

reviewed and updated annually.

Responsible Investment

On behalf of the Company, the Investment Adviser undertakes detailed

due diligence on each investment opportunity. ESG consideration

within the investment process has been enhanced recently, with the

creation of a standalone ESG due diligence questionnaire. Developed

in line with SASB standards, the questionnaire includes an exclusionary

list, high-level climate screening and SFDR considerations, in addition

to focused environmental, social and governance questions. As part of

a recent potential acquisition, the Company piloted outsourcing ESG

due diligence to an external consultant, trialling the questionnaire and

reﬁning it for future use.

The following diagram details how sustainability risks are integrated

into the Company’s investment process:

The focus over the coming months will be to integrate the Company’s

ESG strategy into portfolio related activities. Collaboration between

the Blueﬁeld companies, including between development, investment,

asset management and O&M teams, will aid this process. Robust

data will be needed to evidence ESG performance, and the Company

is working with the Investment Adviser to implement systems to

facilitate the collection, analysis, and monitoring of ESG data across

the portfolio.

ESG CONSIDERATION WITHIN THE INVESTMENT PROCESS

NEGATIVE SCREENING

Checks made against the Company’s investment policy and exclusionary list (which forms part of its ESG

due diligence questionnaire).

INVESTMENT SCREENING

The Company primarily invests in solar energy infrastructure, alongside a minority exposure to other

renewable energy assets, including energy storage;

DUE DILIGENCE

In 2022, a comprehensive due diligence questionnaire was created to identify material ESG risks and

opportunities and identify data gaps associated with the asset which the Company may need to ﬁll in

order to comply with its ESG reporting requirements. In addition to an exclusionary list, the questionnaire

includes questions relating to material ESG risks and opportunities, developed in line with SASB standards.

Requirements of the EU SFDR, including in relation to Principal Adverse Indicators (PAIs) and climate

risk screening, and the EU Taxonomy’s Do No Signiﬁcant Harm (DNSH) criteria, are also captured. Where

required, the Company may outsource ESG due diligence to a competent third party;

VETTING AND MONITORING

Legal checks are undertaken on key counterparties to ensure that they are reputable, particularly as regards

anti-money laundering, anti-bribery and anti-corruption, and sanctions breaches. Diligence is undertaken

on O&M contractors associated with target assets, including in relation to labour practices and Health &

Safety. Integration of ESG into vetting and monitoring of third-party service providers is ongoing, including

use of an ESG due diligence process in association with engineering, procurement and construction (“EPC”)

site contractors;

INVESTMENT APPROVAL

Approval of acquisition of renewable energy assets by the Board, with a dedicated ESG section within the

submitted investment committee papers;

MANAGEMENT AND REPORTING

Active management of sustainability issues over the operational lifetime of the assets, including

implementation of the Company’s ESG strategy and reporting against ESG commitments and KPI’s;

END OF INVESTMENT LIFE

Best practice will be followed in the recycling of assets in line with industry standards at the time of

decommissioning, recognising their long lifespan.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

Stakeholder Engagement

Stakeholder engagement was key in deﬁning the Company’s ESG focus.

To identify priority ESG topics, interviews were conducted with a range

of internal and external stakeholders, capturing different perspectives

and interests, and building upon the ﬁndings of the materiality

assessment undertaken in 2021. The interviews were conducted

by Anthesis Group (“Anthesis”), a global sustainability consultancy

engaged to support the Company with development of its ESG strategy.

Stakeholders were asked to identify topics that they felt were most

likely to influence the Company’s future performance as a sustainable

business, and what areas should be focused on as a priority.

Though different ESG challenges and opportunities presented for

different stakeholder groups, three topics were routinely identiﬁed:

•

Renewable Energy Production

•

Ecological Impacts

•

Material Sourcing and Lifecycle Assessment

Other topics such as supplier and contractor relations, community

impact and greenhouse gas (GHG) emissions were also identiﬁed

as important areas for the Company to address. With no employees,

health, safety, and wellbeing were linked to the Company in relation to

its duty of care to those who service its portfolio, and therefore areas

for which the Company should retain oversight.

The Company will look to implement formal processes to facilitate

engagement with its stakeholders on ESG topics. The Company will

continue to engage with local communities, as detailed within the

‘Pioneering Positive Local Impact’ section of this report.

Materiality Assessment

In addition to stakeholder interviews, a landscape review of the Company was undertaken. This helped evaluate the

ESG context that the Company sits within and included a review of regulatory drivers and industry reporting standards.

Information gathered from the interviews and landscape review was used to update the Company’s materiality assessment.

The materiality assessment is presented in a matrix (Figure 3), that compares internal and external stakeholder priorities,

with the highest priorities appearing in the top right corner.

Figure 3 – the Company’s updated materiality assessment, highlighting priority ESG topics

Identiﬁed material topics form the basis from which the Company’s ESG strategy was built and are represented within

each of its three key pillars. By focusing on these prioritised topics, the Company aims to anticipate and meet the needs

of its stakeholders as much as possible.

Principles for Responsible Investment

The Principles for Responsible Investment (PRI) are a set of

voluntary investment principles which promote the integration

of ESG considerations into investment practice. The Investment

Adviser has been signatory to the PRI since 2019.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

6. CLIMATE CHANGE MITIGATION

In recognition of its positive

environmental impact, the

Company has been awarded

the following accreditations:

Key Commitments:

• We will report our renewable energy

generation annually

• We will implement renewable energy

import tariffs across our portfolio

• We will invest up to £50,000 in industry

collaborations annually, to support the

energy transition

• We will undertake scenario analysis for

material physical and transitional climate-

related risks and opportunities within the

next twelve months

SDG Contribution:

8. https://bit.ly/3vBw6rH

9. https://www.ipcc.ch/report/ar6/wg3/down-

loads/report/IPCC_AR6_WGIII_SPM.pdf

10. https://www.gov.uk/government/news/uk-en-

shrines-new-target-in-law-to-slash-emissions-

by-78-by-2035

17 ICONS: COLOUR VERSION

ICONS

When an icon is on a square, that square must be proportional 1 x 1.

background.

o not alter the colours of the SDG icons.

ICONS

In January 2018, the United Nations launched a revised design of Icon 10, as seen on this page

7 ICONS: COLOUR VERSION

ICONS

When an icon is on a square, that square must be proportional 1 x 1.

background.

o not alter the colours of the SDG icons.

ICONS

In January 2018, the United Nations launched a revised design of Icon 10, as seen on this page

Introduction

Critical and ambitious action is needed to address

climate change. To remain in line with the Paris

Agreement, global emissions need to reduce by

at least 45% by 2030

. Despite this, fossil fuels

still account for 64% of global greenhouse gas

emissions

The UK has set one of the world’s most ambitious

climate change targets, aiming to reduce emissions

by 78% by 2035

. Renewable energy infrastructure

will be critical for decarbonisation and to reduce

reliance upon volatile and polluting fossil fuel

markets

In addition to supporting the UK’s transition to net

zero, the Company is contributing to sustainable

development by helping secure domestic energy

supply. Through its ESG strategy, the Company

will evidence a responsible and ethical approach

to investment, driving shareholder value whilst

also promoting positive environmental and social

impact.

11.https://www.gov.uk/government/publications/british-energy-security-strategy/british-energy-security-strategy

12. Based on Ofgem’s Typical Domestic Consumption Values

13. Based on generation data aligned with the appropriate Government CO

e conversion factor

Advocating Renewable Energy

The Company substantially contributes to climate

change mitigation through its generation of

renewable energy. During the period 1 July 2021 –

30 June 2022, the Company produced:

•

over 624,000,000 kWh of renewable energy

•

powered the equivalent of over 215,000 UK

homes

with renewable electricity for a year

•

achieved over 120,000 tonnes of CO

e savings

Since IPO in 2013, the Company has saved over one

million tonnes of CO

e from being released into the

atmosphere. Though CO

e savings are a commonly

used metric in the renewables industry, the reducing

contribution of fossil fuels to the UK grid mix means

that relative CO

e savings will decrease over time,

even if renewable energy generation increases.

This is because the CO

e savings metric is derived

from the displacement of fossil fuel generated

electricity, therefore as fewer fossil fuels supply the

grid, there will be less carbon to be displaced. For

this reason, the Company reports against additional

environmental metrics to evidence the portfolio’s

positive environmental impact.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

The Company will achieve its greatest impact in the ﬁght

against the climate crisis by working side by side with other

industry players. The Company recognises the potential

harmful impacts that come with being part of the renewables

industry, and as the sector continues to grow, it will need

to address emerging social and environmental risks. Where

immediate solutions do not present, the industry will need

to work collaboratively to manage these risks and ensure

an ethical approach to investment is upheld. Such has been

recently demonstrated in regard to concerns of forced labour

in the polysilicon supply chain.

Over the coming year, the Company will invest up to £50,000

in industry initiatives, including universities and research

institutions, to support the energy transition. Renewable

asset end-of-life considerations, an increasingly important

topic for the industry to address, will be considered as part of

this. The Company’s approach to end-of-life considerations

is discussed in more detail in the ‘Generating Energy

Responsibly’ section of this report.

The Role of Batteries

In 2020, the Company widened its investment

mandate from focusing solely on solar PV to include

minority exposure to additional renewable energy

assets and energy storage technology (up to 25%

of the Company’s Gross Asset Value).

Battery storage systems are integral to the net

zero transition through their role in stabilising the

electricity grid. Renewable energy is generated in

peaks and troughs, and therefore to ensure a stable

supply, batteries are needed to store energy as it is

generated and deploy it to the grid during times of

peak demand.

The Company is aware of the socio-environmental

challenges associated with battery supply chains

and will look to mitigate these as batteries are

adopted into its portfolio.

Carbon Emissions

Though the Company generates renewable energy, it also takes

accountability for its own carbon contribution and is committed

to reporting against its carbon emissions annually. To date, the

Company has primarily invested in secondary assets, meaning

they were operational when acquired. Once operational,

a renewable asset will generate more energy than it will

consume, making its carbon impact net positive. However, as

the Company plans to construct new solar and battery assets

from 2022, it is taking steps to better understand the carbon

intensity of its operations.

The Company has calculated its ﬁrst GHG inventory for the

period 1 July 2021 – 30 June 2022, in line with the GHG

Protocol. Emission factor sources included DEFRA 2021,

DEFRA EEIO 2022, and IEA 2021. Table 2 highlights emission

results per category

Table 2 – the Company’s GHG emission inventory for the period

1 July 2021 – 30 June 2022

Emissions

Location-Based

(tCO

e) %

Emissions

Market-Based

(tCO

e) %

Scope 1 58 2 58 2

Scope 2 1,081 30 1,249 34

Scope 3 2,453 68 2,353 64

Total 3,592 100 3,660 100

The Company deﬁnes its organisational boundaries using

the Operational Control approach as per the World Resource

Institute (WRI) and World Business Council for Sustainable

Development (WBCSD) GHG Protocol. Under this approach,

the Company will account for 100% of the GHG emissions

from operations over which it has operational control. Scope

1 emissions are those arising directly from the Company’s

operations; Scope 2 are those which arise indirectly in relation

to the purchase of electricity; and Scope 3 relates to indirect

emissions associated with the Company’s wider supply chain.

Scope 3 emission categories included: Purchased Goods and

Services; Fuel-and-Energy-Related Activities; and Waste.

As this was the Company’s ﬁrst GHG inventory, certain areas

of data collection proved challenging and therefore some data

were estimated. The Company will improve the accuracy of its

inventory over time as it embeds the required data collection

processes into its regular GHG reporting routine.

As expected, the Company’s Scope 3 emissions represent

the bulk of its carbon footprint. It is expected that Scope 3

emissions will increase over coming years as the Company

begins its construction programme. The Investment Adviser

is working collaboratively with Engineering, Procurement &

Construction (EPC) contractors to understand how energy use

can be reduced during the construction process.

As a measure to reduce its direct emissions, the Company

will transfer its assets onto renewable energy import tariffs,

where these are not already in place. As standard, renewable

energy import tariffs will be elected for all new assets being

developed. The Company will continue to review what

additional measures could be taken to reduce its operational

footprint over time.

The Investment Adviser and other Blueﬁeld companies

calculate their carbon footprint annually and offset this through

investment in Plan Vivo veriﬁed carbon offset projects. Blueﬁeld

Operations Limited is also continuing to investigate how electric

vehicles can be incorporated effectively into its fleet.

14. The carbon footprint relating to the 21-22 ﬁnancial year has not been externally veriﬁed

ANNUAL REPORT AND FINANCIAL STATEMENTS

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT

Lifecycle Carbon Analysis of a Solar Asset

Once operational, renewable energy assets generate minimal carbon emissions. However, the

manufacturing, transportation and construction of renewable assets does have an associated

carbon footprint. As part of its responsible investment approach, the Company is committed to

better understanding the lifecycle carbon impact of the assets within its portfolio.

In 2022, the Investment Adviser, in partnership with Lightrock Power, commissioned a Lifecycle Assessment (LCA) for a

new build 50MW solar asset based in the UK. The LCA was undertaken by an independent environmental adviser, who built

a model to examine the assets cradle-to-grave impact across a range of environmental factors, including carbon emissions.

The model required an extensive range of data, and despite working collaboratively with several suppliers, there were

certain areas of data collection which proved challenging. In these instances, estimated or industry standard data was used.

The weights and materials of each solar farm component, their shipping, plus the activities associated with installing and

maintaining the site, were all included within the model. For end-of-life considerations, industry predictions were used

regarding the likely fates of different materials.

Depending on the future energy mix modelled, the carbon payback period of the solar farm ranged between one to three

years, with the asset increasingly carbon negative for the rest of its 25 to 40-year lifespan. Approximately 75% of the total

emissions from the asset were estimated to arise from the production phase, which relates to material extraction and

manufacturing of on-site equipment.

The results of the LCA indicate that there can be a signiﬁcant carbon beneﬁt from the installation and operation of solar

assets. Moving forward, these results will be used to support the Company in accurately calculating its carbon footprint,

particularly regarding new build assets. As part of the construction process, the Investment Adviser will work with EPC

contractors to collect exact data (for example, in relation to the quantity and composition of construction materials) to

enable the accuracy of the model to be improved over time.

Case

Study

Climate-related Risks and Opportunities

The Task Force on Climate-related Financial

Disclosures (TCFD) is the ﬁrst international initiative

to examine climate change in a ﬁnancial context.

Recognising the potential impact of climate risks and

opportunities on investments, the FCA introduced

mandatory TCFD reporting for asset managers and

asset owners, supporting the UK’s ambition to create

a net zero aligned ﬁnancial centre

. Although the

Company does not currently fall within the scope of

the FCA’s mandatory reporting requirement, it has

chosen to undertake TCFD reporting on a voluntary

basis. The Company’s ﬁrst TCFD disclosure can be

found on page

57.

15. https://www.gov.uk/government/news/chancellor-uk-

will-be-the-worlds-ﬁrst-net-zero-ﬁnancial-centre

CONSTRUCTION AT KISLINGBURY

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

7. PIONEERING POSITIVE LOCAL IMPACT

Introduction

The Company believes that the assets within its portfolio can drive

positive local impact, as well as having a role at the national level.

Recognising that ecological improvements such as enhanced

biodiversity can bring about community gain, for example through

visual accessibility to nature, education and conservation, the

Company wishes to maximise its impact by strengthening its approach

to these areas simultaneously.

The Company is also mindful of the potential adverse impacts that

its operations may have at a local level. This includes the activities

of delivery partners, such as suppliers and contractors, who service

the portfolio on the Company’s behalf. Supply chain engagement will

therefore be key to ensuring the Company’s ESG expectations are

communicated and met across portfolio related activities.

Biodiversity

Climate change and ecological impact are intrinsically linked, and both

require urgent action. The Company aims to create positive impact

in both of these areas simultaneously, focusing upon Biodiversity

Net Gain (BNG) across the portfolio as an additional way to mitigate

climate change beyond its contribution to the net zero transition.

Given the alarming rate of biodiversity decline in the UK

, and the

thousands of acres of land under management, the Company has the

opportunity to go beyond its mandatory requirements to deliver a

notable ecological impact.

The Company has developed a biodiversity policy which reflects its

aspiration to become an industry leader in biodiversity management.

The policy is available on the Company’s website:

blueﬁeldsif.com/

investors/publications/.

The policy was developed with support from Wychwood Biodiversity,

a leading ecological consultant working closely with the UK solar

industry to enhance ecological monitoring standards. Delivery of the

policy will help the Company beneﬁt from nature related opportunities

which may arise in the future and also evidence to shareholders how

nature related risks are being considered as part of ensuring long

term sustainability.

Does solar support farmers?

Yes – in addition to providing an extra source of stable

income, solar farms can support grazing and enable farmers

to continue their operations on other parts of their land. In

line with planning requirements, solar developments target

poor quality or non-agricultural land in the ﬁrst instance. More

information can be found as part of Solar Energy UK’s Fact-

checker Campaign.

Key Commitments:

• We will evaluate Biodiversity Net Gain

(BNG) across the operational portfolio and

achieve at least 20% BNG on new solar

developments

• We will conduct independent biodiversity

assessments across at least 10% of our

sites annually (relating to assets over

1MW in capacity)

• We will continue to promote positive

action in the communities we operate

within

SDG Contribution:

17 ICONS: COLOUR VERSION

ICONS

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ICONS

l 1 x 1.

ICONS

17 ICONS: COLOUR VERSION

ICONS

When an icon is on a square, that square must be proportional 1 x 1.

background.

o not alter the colours of the SDG icons.

ICONS

In January 2018, the United Nations launched a revised design of Icon 10, as seen on this page

To achieve the Company’s biodiversity aspirations, a 12-month

implementation plan has been created and will be delivered by the

Blueﬁeld companies which service the portfolio. Due to the close

working nature of the Blueﬁeld companies, the Company has an

enhanced ability to implement, manage and monitor biodiversity

initiatives across its portfolio, integrating them into the planning

process and fostering them throughout the operational lifecycle. Focus

will be given to quantifying BNG across the existing portfolio, as well as

ensuring at least 20% BNG is achieved for all new solar developments,

going beyond the 10% requirement of the Environment Act.

16. https://earth.org/uk-biodiversity-loss/

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

Biodiversity Assessments

To quantify biodiversity across

the portfolio, the Company has

committed to assessing bio-

diversity across at least 10% of

its portfolio annually (relating to

assets over 1MW in capacity).

Following industry best practice, during summer 2022

Wychwood Biodiversity conducted biodiversity assessments

across a range of sites showcasing different geographical

and ecological characteristics:

• Sites independently assessed: 10

• Number of red listed bird species identiﬁed: 13, including

lapwing, swift, greenﬁnch and spotted flycatcher

• Number of amber listed bird species identiﬁed: 17,

including marsh harrier, meadow pipit, and oystercatcher

• Pollinator surveys undertaken: 10 surveys, consisting of

over 100 transects in total. Pollinators identiﬁed were

mainly common species of butterfly and bumblebee

• Mammal species identiﬁed: 6, including a polecat

“Wychwood is delighted to be working with

Bluefield to assess biodiversity across their assets

under management. Results from these initial

assessments indicate that the solar farms are

supporting a wide range of biodiversity, including

rare birds and mammals”.

Guy Parker, Wychwood Biodiversity

This data, and that from future assessments, will be used

to build up a picture of biodiversity across the Company’s

portfolio and will facilitate quantitative target setting over

time.

Case

Study

In line with the EU Taxonomy’s requirement to do no

signiﬁcant harm to biodiversity, the Company carefully

manages its ecological impacts across the operational cycle

of its assets. Blueﬁeld Operations Limited is responsible for

ensuring each asset remains compliant with its Landscape

and Ecological Management Plan (LEMP). The LEMP is

often created during the planning phase of a new project,

to help ensure the asset has no net negative impact on the

surrounding environment. The LEMP speciﬁes enhancement

measures which must be implemented to support (and

potentially increase) the biodiversity present, including

wildflower seeding, bat and bird box installation, mammal

gates and hibernacula.

Once operational, land management activities are scheduled

to minimise impact on surrounding fauna and flora. Grass

cuts avoid ground bird nesting season and sections of a site

may be left uncut to provide refuge and boost biodiversity.

Many of the sites also support sheep grazing, helping manage

grassland whilst supporting farming activities.

Community Impact and Initiatives

A key focus for the Company is how it can maximise its

positive impact towards the communities surrounding its

portfolio. Community perception of renewable technology

is important as it feeds into local decision making, policy

development and ultimately planning requirements.

Engagement undertaken as part of the planning process

helps develop positive relationships with local stakeholders

and obtain community support.

Though a certain level of public consultation must be

undertaken as standard, Blueﬁeld Development, currently

developing a solar and battery pipeline for the Company,

prides itself on going beyond minimum requirements to

actively engage community representatives, such as Parish

Councils, as early in the planning process as possible.

Information obtained during early consultation helps reﬁne

project plans and can feed into the creation of community

beneﬁt funds.

Minimising community impact during the construction

process is a priority for the Company. Though the Company

has yet to start its new construction programme, as part of the

tender process, EPC contractors are asked how they engage

with the local community. Adherence of subcontractors

to construction and trafﬁc management plans, which

help minimise disturbance to the local community, will be

monitored by EPC contractors and reported as required to

the Investment Adviser.

Once assets are operational, community engagement is

maintained through long-term relationships with landowners

and the administration of community beneﬁt funds. To better

understand the positive impact of its community beneﬁt

payments, the Company has engaged an independent grant

specialist to oversee community beneﬁt fund management

across the portfolio. As well as offering administrative

support to Parishes, the engagement will provide greater

insight into how funds are being used, enabling the Company

to enhance its reporting in this area.

The Company has paid over

£154,000 to Community Benefit

Funds during the financial year

ending 30 June 2022.

Over the coming year, the Company will identify and

support partnerships and initiatives which beneﬁt the

local communities surrounding its assets. The Investment

Adviser will also explore how to better quantify community

engagement and value, which is currently challenging. One

area could relate to local job creation – for example, during

the last ﬁnancial year Blueﬁeld Operations Limited created

an additional ten Field Service Engineer (FSE) positions to

support growth of the Company’s portfolio.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

Case

Study

The Blueﬁeld Foundation

The Blueﬁeld companies are

launching a Charitable Incorporated

Organisation (CIO) to maximise their

positive social and environmental

impact. Blueﬁeld employees will be offered

paid volunteering days to work with charities supported

by the Foundation, enabling them to ‘give back’ whilst

also experiencing the personal beneﬁts that volunteering

offers.

Note: the charity will be a legally separate organisation, taking

its own decisions independently from the Blueﬁeld companies.

Delivery Partnerships

On-site activities, including construction and maintenance,

grass cutting, panel cleaning and ecological management,

all require the services of external parties. To communicate

its ESG expectations and to support delivery of its ESG

strategy, the Company will adopt a suite of policies at SPV

level, including a Sustainable Procurement Policy, a Waste

Management Policy, and a Supplier Code of Conduct.

Commitments within these policies will be enacted through

the activities of the Company’s delivery partners, including

suppliers and contractors, helping drive ethical practices

across the Company’s operations and supply chain.

Health & Safety is of the highest importance to both the

Company and the Blueﬁeld companies which service its

portfolio. Every asset owning SPV holds Health & Safety

Community Engagement

Blueﬁeld Development engage with local communities

through:

• Parish Council Meetings

• In-person Consultations

• Brochures

• Dedicated phonelines

• Websites

policies, standards, and process requirements, with which

all contractors must comply. Main contractors (including

Blueﬁeld companies) undergo annual Health & Safety

audits by the SPVs, to ensure ongoing compliance. Each

SPV conducts a routine review of its Health & Safety

records and policies, to ensure compliance with the latest

Health & Safety guidance and industry best-practise.

During the reporting year, Blueﬁeld Operations Limited

had one major Health & Safety incident, which resulted

in no injuries to personnel. Blueﬁeld Operations Limited

investigate every incident report raised and any learnings

or signiﬁcant trends are followed up and communicated to

the wider team.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

Key Commitments:

• We will ensure 100% of our assets are

covered by a Human Rights policy by June

2023

• We will ensure 100% of our assets are

covered by policies covering UNGC

principles and OECD Guidelines by June

2023

• We will adopt a Supplier Code of Conduct

and require its adoption by Tier 1

suppliers by the end of June 2023

SDG Contribution:

17.https://assets.publishing.service.gov.

uk/government/uploads/system/uploads/

attachment_data/ﬁle/69403/pb13530-waste-

hierarchy-guidance.pdf

8. GENERATING ENERGY RESPONSIBLY

Introduction

To ensure that ESG issues are well managed, the Company is

currently embedding policies, processes, and procedures to drive best

practice and reduce its exposure to industry risks, both social and

environmental. As part of its responsible investment approach, the

Company will consider both the positive and adverse impacts of its

investment decisions on sustainability factors, seeking to mitigate the

negative where possible.

By integrating ESG considerations into its underlying corporate

governance, the Company hopes to not only produce a sustainable

product but achieve sustainability throughout its operations.

Human & Labour Rights

The renewables industry has a responsibility to ensure social safeguards

are upheld during the transition to a low carbon economy. Human and

labour rights are a key consideration for the Company, particularly in

relation to materials sourcing and supply chain management.

The Company has zero tolerance for any form of human rights abuse,

reflected in the Company’s Modern Slavery Statement:

blueﬁeldsif.

com/modern-slavery-statement/

. To mitigate these risks as far as

possible, and help ensure it is beneﬁtting from ethical supply chains,

the Company is committed to building robust management and due

diligence practices, aligned with global frameworks. Over the coming

months, the Company will ensure its assets are covered by a Human

Rights Policy, which will be aligned with the principles of the United

Nations Global Compact (UNGC) and OECD Guidelines. The Company

will also begin mapping its supply chains to identify upstream social and

environmental risk and improvement opportunities.

Whilst the Company is taking steps to strengthen its own approach to

human rights due diligence, it is also supporting industry initiatives in

this area. In 2021, concerns arose relating to the use of forced labour

in the supply chain of polysilicon, which is the base material used to

manufacture solar cells. This prompted an industry response, led

by Solar Energy UK and Solar Power Europe, to develop systems and

processes to improve transparency and sustainability within the PV

supply chain. Representatives of the Investment Adviser are part of

the Solar Energy UK Supply Chain Taskforce, which is driving progress

of this initiative, and ﬁnancial support has also been committed – the

Investment Adviser is one of only a few UK solar power organisations

to do so. The UK solar industry’s supply chain statement, to which

the Investment Adviser is a signatory, can be viewed here:

https://

solarenergyuk.org/uk-industry-supply-chain-statement/

Responsible and Sustainable Procurement

To meet future energy demand through renewable sources, extensive

deployment of renewable infrastructure will be needed. As a result,

demand for the raw materials needed to manufacture these products

will increase substantially. Consideration of risks relating to materials

sourcing will be an important element of the Company’s responsible

investment approach, including in relation to human rights.

In addition to a Sustainable Procurement Policy, during the next

ﬁnancial year the Company will adopt a Supplier Code of Conduct,

which will set out the Company’s expectations in regard to responsible

and ethical supplier practices, including materials sourcing. The

Company will require adoption of the Supplier Code of Conduct by its

Tier 1 suppliers in the ﬁrst instance.

Through its Code of Conduct, the Company will encourage its

contractors to take a responsible approach to waste management, in

line with Waste Hierarchy principles

. A Waste Management Policy

will also be adopted by each SPV. To better understand the waste

generated by its portfolio, and to reduce this over time, the Company

will implement mechanisms to calculate its hazardous waste ratio.

As with operational considerations, the Company also seeks to take

a responsible approach to asset end of life. End of life considerations

refers to the processes undertaken once assets are withdrawn from

operation, including how the materials are repaired, recycled, reused,

or disposed of. These processes are difﬁcult to deﬁne given the long

lifespan of renewable technology, which is often 25+ years, and the

uncertainty around what recycling practices will look like in several

decades time, or how technology may develop to facilitate this.

ICONS: COLOUR VERSION

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background.

o not alter the colours of the SDG icons.

ICONS

ICONS: COLOUR VERSION

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background.

o not alter the colours of the SDG icons.

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l 1 x 1.

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ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

Despite end-of-life considerations being largely unknown,

as part of the lease and planning conditions for each project,

budget is set aside to support with the dismantling and

recycling of equipment once it is no longer operational.

Equipment on-site is maintained to ensure it lasts as long

as possible, with Blueﬁeld Operations Limited implementing

a detailed Planned Preventative Maintenance (PPM)

programme to reduce equipment failures. Wherever possible,

equipment is repaired as opposed to being replaced.

Over the coming year the Company will invest in industry

collaborations to support the energy transition, which may

include initiatives relating to end-of-life considerations. The

Investment Adviser will also track end-of-life developments

through engagement with key suppliers and industry trade

bodies.

Good Governance and Business Ethics

The reputation and success of the Company could not have

been achieved without its foundation of sound corporate

governance, into which ESG is being increasingly considered.

It is the framework from which the Company undertakes

decision making, reporting, management, risk analysis and

compliance.

The Company’s approach to responsible investment, which

has been recently enhanced, facilitates the identiﬁcation of

ESG risks and opportunities, which are considered as part

of investment decisions. Integration of ESG into policies,

procedures, and processes is ongoing, and the Company will

develop a range of related policies over the coming year to

support its responsible approach. These will increase the

Company’s requirements for its suppliers and contractors

and enhance due diligence processes.

As an FCA regulated entity, the Company’s Investment

Adviser evidences the highest standards of professional

conduct. Key policies, including in relation to anti-bribery, anti-

corruption and anti-money laundering, conflicts of interest

and compliance are in place, and third-party compliance

advisers are used to ensure regulatory obligations are met

through quarterly reviews and reports on business activities.

9. Looking Forward

To the Company, ESG provides a framework through which the Company can

deliver environmental and social gain whilst also taking accountability for its own

adverse impacts. It provides opportunities to drive shareholder value, recognising

the Company’s role in mitigating the climate crisis, but also further opportunities

relating to biodiversity, community beneﬁt and industry collaboration.

Through the Company’s new ESG strategy, it has made a number of

commitments, from becoming a leader in biodiversity management to the

development of Human Rights and Sustainable Procurement policies. Working

with its Investment Adviser and the Blueﬁeld companies which service its

portfolio, the Company will deliver its ESG strategy and satisfy regulatory

reporting requirements, implementing processes and procedures to collect and

report quantitative ESG data, which will form the basis from which the Company

will measure its ESG performance moving forward.

The Company is proud of the progress it has made towards ESG this year. To

achieve its ESG ambition and truly deliver renewable energy responsibly,

the Company will continue to embed ESG into its corporate governance,

approaching ESG with transparency and integrity on a journey of constant

evaluation and improvement.

Industry Engagement

Several Blueﬁeld employees are members

of trade body working groups, including

Solar Energy UK’s Natural Capital and

Supply Chain task groups and Renewable

UK’s ESG Steering Group. Participation

in working groups allows Blueﬁeld to

contribute to the improvement of industry standards and remain

at the forefront of industry developments. Luke Roberts, Senior

Commercial Director of the Investment Adviser, joined the board

of Solar Energy UK in 2020, and has chaired the Utility Scale

Commercial Working Group since early 2021.

Representatives of the Investment Adviser also regularly participate

in industry webinars and events, including discussion on ESG topics.

For the other Blueﬁeld companies which service the portfolio,

governance is evidenced through a suite of policies, including

in relation to anti-bribery, anti-corruption, GDPR, conflicts of

interest and whistleblowing.

The Company has always taken a comprehensive and

transparent approach to ﬁnancial reporting. Through its

ESG strategy, commitments and KPIs, the Company will

take a similarly transparent approach to its ESG disclosures,

with more quantitative reporting over time. By continually

improving its ESG performance, the Company will deliver

positive environmental and social impact whilst continuing

to decarbonise energy markets.

The Company recognises the value of diversity and has

previously committed to making progress in this area. In

October 2021 the Board was pleased to announce the

appointment of Ms. Libby Burne as an independent non-

executive Director, bringing the current representation

of women on the Board to 40%, being two of ﬁve current

Directors. The Company will continue to diversify its Board

as part of its commitment to fostering an inclusive culture.

Diversity, Equity, Inclusion and Belonging (DEIB) is a key focus

of the Investment Adviser and other Blueﬁeld companies.

DEIB is embedded through an equal opportunities policy in

the UK and a new DEIB committee, which will contribute to the

creation of a DEIB strategy from 2023. Inclusive Leadership

training has also been provided to managers. Discussions

with universities are in progress to identify opportunities to

engage on diversity and inclusion issues, such as through

mentoring and seminars, supporting students wanting

to enter less diverse industry sectors. Blueﬁeld has also

pledged to create two paid internship placements in 2023

through the 10,000 Black Interns initiative

, a programme

that is designed to change the horizons of young black people

in the UK, with the aim of creating a more diverse workforce.

Case

Study

18. https://www.10000blackinterns.com

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

APPENDIX

A full breakdown of the Company’s ESG commitments and KPIs for the ﬁnancial year 1 July 2022 – 30 June 2023.

PILLAR COMMITMENT SUPPORTING KPI/S

CLIMATE CHANGE MITIGATION

We will report our renewable energy generation annually. • Renewable energy generated (kWh)

• CO2e savings achieved (tCO

• Equivalent houses powered (#)

We will invest up to £50,000 in industry collaborations annually to support the

energy transition.

• Revenue targeting industry collaboration (£)

We will report against our carbon emissions annually. • Measurement of Scope 1 GHG Emissions (tCO

• Measurement of Scope 2 GHG Emissions (tCO

• Measurement of Scope 3 GHG Emissions (tCO

• Total GHG Emissions (tCO

• GHG intensity of the Fund (tCO

e / EUR Rev)

We will implement renewable energy import tariffs across our portfolio. • Relative percentage of renewable and non-renewable energy consumed by BSIF (%)

• Share of non-renewable energy consumption and non-renewable energy production of investee companies

from non-renewable energy sources compared to renewable energy sources (%)

• AUM with renewable energy import tariffs (%)

We will undertake scenario analysis for material physical and transitional climate-

related risks and opportunities within the next twelve months

• Scenario analysis undertaken (Y/N)

We will incorporate ESG-related matters into BSIF’s risk register. • ESG-related matters in risk register (#)

We will undertake a climate change risk and vulnerability assessment (CRVA) in

line with the TCFD recommendations

• Climate change risk and vulnerability assessment undertaken (Y/N)

DELIVERED BLADES AT ERRIGAL ROAD

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

PILLAR COMMITMENT SUPPORTING KPI/S

PIONEERING POSITIVE LOCAL IMPACT

We will evaluate BNG across the operational portfolio and achieve at least 20%

BNG on new solar developments.

• New developments that have had BNG assessment (%)

• New solar developments with at least 20% BNG achieved (%)

• Existing sites with evidenced BNG (%)

We will conduct independent biodiversity assessments across at least 10% of our

sites annually (relating to assets over 1MW in capacity).

• AUM independently assessed (relating to assets over 1MW in capacity) (%)

• AUM without a biodiversity protection policy covering operational sites owned, leased, managed in, or

adjacent to, a protected area or an area of high biodiversity value outside protected areas (%)

• Notable species identiﬁed (e.g., red and amber listed species) (#)

We will minimise potential risks posed to threatened species by our assets and will

apply industry best practice to new sites under development.

• AUM which are deemed to have operations that affect threatened species (%)

• AUM that are located in or near to biodiversity-sensitive areas (%)

• AUM that negatively affect biodiversity-sensitive areas (%)

We will continue to promote positive action within the communities we operate

within.

• Revenue given to partnerships beneﬁting the local community (£)

• Revenue paid to community beneﬁt schemes (£)

We will insist that our Tier 1 suppliers that directly service the portfolio report H&S

performance on a quarterly basis.

• Lost time incident rate (per 100,000 employees)

• Number of reportable accidents (RIDDOR) (#)

• Number of near misses (#)

• Employees who have received H&S training (where possible) (%)

GENERATING ENERGY RESPONSIBLY

We will map our supply chains, with priority given to Tier 1 and 2 suppliers. • Tier 1 supply chains mapped (%) if available

We will ensure 100% of our assets are covered by a Human Rights Policy by June

2023.

• AUM with Human Rights Policy (%)

• AUM with a due diligence process to identify, prevent, mitigate, and address adverse human rights impacts (%)

We will ensure 100% of our assets are covered by policies covering UNGC princi-

ples and OECD Guidelines by June 2023.

• Share of investments in assets without policies to monitor compliance with the UNGC principles or OECD

Guidelines for Multinational Enterprises or grievance /complaints handling mechanisms to address violations

of the UNGC principles or OECD Guidelines for Multinational Enterprises (%)

We will implement mechanisms to measure our hazardous waste ratio by 2023 • Tonnes of hazardous waste and radioactive waste generated by assets per million EUR invested, expressed as

a weighted average

We will clearly communicate our ESG governance structure. • Clear governance structures in ESG report (Y/N)

We will further diversify our Board. • Average ratio of female to male board members expressed as a percentage of all board members (%)

• Number of senior board positions held by a woman (#)

• Number of board members from a non-white ethnic minority background (#)

We will ensure 100% of our assets are covered by a Sustainable Procurement

Policy by June 2023

• AUM with Sustainable Procurement Policy (%)

We will adopt a Supplier Code of Conduct and require its adoption by Tier 1 suppli-

ers by the end of June 2023.

• Tier 1 suppliers signed Supplier Code of Conduct (%)

We will encourage our contractors to use the waste hierarchy principles. • AUM with a Waste Management Policy (%)

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

ANNUAL REPORT AND FINANCIAL STATEMENTSANNUAL REPORT AND FINANCIAL STATEMENTS

Task Force for

Climate-related

Financial Disclosures

(TCFD)

1. Introduction

Climate change is one of the largest environmental challenges facing the planet,

with urgent action needed to reduce global Greenhouse Gas (GHG) emissions. The

Company supports the UK’s Net Zero carbon ambition by helping to mitigate climate

change through decarbonisation of the energy sector, whilst delivering long-term,

attractive dividends to its shareholders.

As a renewable energy fund, climate-related opportunities are the basis on which

the Company was founded. However, climate change poses both opportunities and

risks, and the Company will need to ensure it is considering both of these in order

to increase the resilience of its strategy over time. Climate-related considerations

form a key element of the Company’s ESG strategy, helping ensure that climate is

considered across the investment lifecycle, including pre-investment due diligence,

asset management and reporting.

The following pages present the Company’s ﬁrst voluntary TCFD disclosure. This will

develop over time as climate-related considerations are further embedded into the

activities of the fund.

DAWN AT BIDWELL

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2. Governance

a. Describe the Board’s oversight of

climate-related risks and opportunities

Given the nature of the Company, climate opportunities are

fundamental to every investment decision. The Board, who

meet formally at least once a quarter, have ultimate oversight

of climate-related risks and opportunities.

These are considered by the Board as part of every investment

decision and, to date, on an ad hoc basis as part of Board

meetings. Recently, ‘Climate-related risks and opportunities’

has been added as a standalone Board agenda item. Though

the Board has overall responsibility for managing all forms

of risk, Meriel Lenfestey, non-executive Director, has been

named as having oversight and responsibility of material

climate-related risks and opportunities. The Company’s ESG

and climate governance structure is presented on page

44.

To help ensure that climate issues are suitably considered

as part of strategic decision making, and to strengthen

understanding of climate-related risks and opportunities, in

September 2022 the Board undertook climate risk training,

which will be repeated on an annual basis.

b. Describe management’s role in assessing and

managing climate-related risks and opportunities

The Board monitor climate-related matters through regular

communication with the Investment Adviser, including as

part of Board meetings, investment committee papers, ad

hoc calls, and written updates. The Blueﬁeld Group ESG

Manager engages with the Board directly on material topics,

to discuss risks and opportunities and obtain approval on

climate-related activities. The Company’s Audit & Risk

Committee, comprised of all Board members, meets at least

three times a year to monitor the Company’s risk matrix and

assess material risks, including in relation to climate.

Day-to-day management of ESG and climate matters is

the responsibility of the Investment Adviser and other

Blueﬁeld companies which service the portfolio. Working

with the Investment team, the Group ESG Manager

oversees the integration of climate considerations into the

risk management and strategic thinking of both existing

assets and new acquisitions. Implementation of ESG

initiatives across the Blueﬁeld companies is overseen by

the Partners of the Investment Adviser and CEO of Blueﬁeld

Services Limited, Blueﬁeld Operations Limited and Blueﬁeld

Development.

To strengthen the identiﬁcation and assessment of climate-

related risks and opportunities, the Investment Adviser

has recently enhanced consideration of climate change

within the investment due diligence process. As a result,

assessment and management of climate-related factors

are now embedded into business-as-usual activities.

Climate change considerations will be integrated into wider

portfolio activities through the Company’s ESG strategy,

which includes a Climate Change Mitigation pillar, ESG

objectives and key performance indicators (KPIs). As part

of this, the Blueﬁeld companies which service the portfolio

will play an important role in providing the Company with

climate speciﬁc data.

3. Strategy

a. Describe the climate-related risks and opportunities the

organisation has identiﬁed over the short, medium, and

long term

The Company is well positioned to beneﬁt from climate-related

opportunities over the short, medium, and long term. In 2022, the

Company undertook a climate materiality assessment to identify

areas of potential greatest impact and vulnerability. This included

consideration of the activities of the Blueﬁeld companies which

service the portfolio, to ensure the Company’s upstream risks and

opportunities were captured. Identiﬁed risks are described within the

‘Risk Management’ section of this disclosure.

Given its investment strategy, it was identiﬁed that the Company is

already leveraging climate-related opportunities from the transitional

perspective of market shifts, policy shifts and the transition to low

carbon technologies (with the speed of the transition impacting upon

the scale of opportunities available). Whilst these opportunities exist

in the short-term, they will also play a critical role in the Company’s

business model over the medium and long term.

The materiality assessment also identiﬁed potential climate-related

risks, primarily related to the physical impacts of climate change

and how these may impact the Company’s assets, operations, and

productivity of service providers over the short, medium, and long

term. The 2022 heatwave highlighted the risk of extreme heat,

including the potential negative impacts of rising temperatures

upon the efﬁciency of solar PV and the productivity of on-site service

providers. This is expected to impact the Company in the long-term,

however, efforts are being made to reduce the impact of this risk

across the medium to long-term time horizons.

The increased frequency and intensity of storm events, such as Storm

Eunice earlier in 2022, has been identiﬁed as a potential short-term

risk, which could result in damaged assets or equipment being offline

for prolonged periods. The impact that extreme weather events,

such as precipitation and flooding, could have upon the Company’s

service providers was also identiﬁed as a potential material risk in the

medium to long-term.

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b. Describe the impact of climate-

related risks and opportunities on the

organisations businesses, strategy, and

ﬁnancial planning

The Company’s investment objective is to provide

shareholders with an attractive return through

investment in renewable energy assets. The

Company recognises the importance of managing

climate-related risks and opportunities as part

of preserving shareholder value, and it is for this

reason that the Company has embedded climate

considerations so prominently within its ESG

strategy, including a ‘Climate Change Mitigation’

pillar.

As a renewable energy fund which is supporting

the transition to a net zero economy, the Company

has desirable investment attributes, which are

only further enhanced by its robust ESG strategy

and focused lens upon climate change adaptation

and mitigation. The Company is well positioned

to beneﬁt from climate-related opportunities and

in 2020 widened its investment mandate to allow

minority investment into a more diversiﬁed range of

renewable technologies. Since 2019, the Company

has also invested a small proportion of its gross

asset value into development stage opportunities.

The build out of these projects will enable the

Company to contribute to renewable infrastructure

deployment targets whilst increasing its market

share.

However, the Company is conscious of the risks

posed by climate change. The Company’s portfolio

will likely be exposed to more frequent and

intensive weather events, resulting in an increased

risk of damage to on-site infrastructure and off-

site transmission and distribution systems. Long-

term changes to weather patterns will likely result

in material increases and decreases in asset yield

and performance. The Company’s service providers

will also be exposed to additional Health and

Safety risks, transportation disruption, and wider

operational disturbance.

To better understand the potential impact of climate

change on its portfolio, the Company has committed

to undertaking scenario analysis for material

physical and transitional risks and opportunities.

The analysis is likely to be undertaken later in 2022

and will include a climate risk and vulnerability

assessment to determine the greatest impacts of

climate risks and opportunities on the Company’s

strategy and ﬁnancial planning.

c. Describe the resilience of the

organisation’s strategy, taking into

consideration different future climate

scenarios, including a 2°C or lower scenario

As described above, the Company has not yet

undertaken scenario analysis, but is planning to

do so shortly. This will include the analysis of a

material physical risk across three-time horizons

(e.g., short, medium, and long-term) and will be

modelled against three temperature scenarios. For

the physical scenario model, this will be aligned

to CMIP6 global and regional climate model

data. Scenario pathways will also be developed

for transitional risk, enabling the Company to

understand the potential positive and negative

impacts of transition risks on the portfolio, as well

as the opportunities for the Company to further

embed climate resilience into the overarching

strategy.

4. Risk Management

a. Describe the organisation’s processes for identifying and assessing

climate-related risk.

Climate-related risks and opportunities are identiﬁed, assessed, and discussed by the

Audit and Risk Committee and included as part of the Company’s risk matrix. The Board

currently uses a 1-3 rating to assess the potential likelihood and potential impact of any

particular risk occurring. The risks are assessed in a pre- and post- mitigated setting, to

map risks into a compositive score ranging from 1-9. Principal and emerging risks are

disclosed annually as part of a risk matrix within the Company’s Financial Accounts.

Historically, ‘Unfavourable Weather and Climate Conditions’ has been considered a

principal risk and has sat within mainstream risk management processes. Following

the climate-related materiality assessment undertaken in 2022, the Company has

enhanced its consideration of climate change within its risk matrix, which is presented

on page

15.

Mitigating Heat Stress

As part of Planned Preventative Maintenance

(PPM) activities, Blueﬁeld Operations Limited, have

implemented on-site solutions to help assets maintain

generation despite high temperatures. Signiﬁcant

heat stress can cause damage to key pieces of on-

site equipment, such as transformers, which are often programmed to

shut down once a critical temperature is reached. Though this protects the

equipment from damage, it can result in lost generation during key generation

periods, i.e., on hot, summer days.

During Spring 2022, Blueﬁeld Operations Limited retroﬁtted the trans-

formers at Goosewillow Solar Park with waterproof connections and suitable

bunds, allowing the removal of surrounding buildings (which were housing

the equipment) and consequently assisting cooling by natural convection.

As a result, during the hottest days on record in the UK during July 2022, the

transformers and associated equipment worked safely throughout, with no

loss of generation or risk of damage.

Case

Study

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Climate risks and opportunities are also identiﬁed by the

Investment Adviser and Blueﬁeld companies which service

the portfolio. These are communicated to the Board as part

of quarterly Board meetings, investment committee papers

and ad-hoc communications. The Investment Adviser

actively monitors electricity markets and government policy/

regulatory developments. This is especially the case in

relation to national planning policy frameworks and local

authority development plans, to identify transitional risks

and opportunities for the Company. Independent market

advisers are also engaged to help track potential regulatory

changes in electricity markets and related areas, so that the

Company is prepared for any risks to its business model.

Working with Blueﬁeld’s technical advisers, the Investment

Adviser closely follows developments in renewable energy

technology, to ensure the Company is well positioned to

beneﬁt from any advances made in the future. In 2022, the

Investment Adviser commissioned a Lifecycle Assessment

(LCA) relating to a new build solar farm, identifying which

areas of the asset lifecycle have the greatest environmental

impact, including in relation to carbon emissions. The results

of the assessment can be used by the Company to further

enhance its climate resilience.

Climate-related risks, particularly physical risks, are also

considered as part of asset management service provisions,

including monitoring and reporting. As an example, the

impact of weather events, including elevated generation

from high irradiation or downtime caused by storm damage,

is captured within portfolio reporting. For new developments,

consideration is given to wind speed and different flooding

scenarios, helping inform site design and increase resilience

to adverse weather. When acquiring operational assets,

due diligence is undertaken in relation to any flood risk

assessments which have been previously carried out or

damage that has previously occurred due to adverse weather.

This year, high-level climate screening was incorporated

into a new ESG due diligence questionnaire as part of the

investment process, to help ensure material climate-related

risks are identiﬁed and that sufﬁcient management systems

and processes are in place to manage these risks.

b. Describe the organisation’s processes for managing climate-related risks

The Investment Adviser, working with the Blueﬁeld companies, is responsible for managing climate-related risks on behalf of the Company.

Identiﬁed climate-related risks are presented in the table below:

PHYSICAL RISKS

POTENTIAL RISK RISK DESCRIPTOR CURRENT MITIGATION MEASURES

Flooding

Flooding is likely to affect the portfolio

and may require signiﬁcant preventative

investment. If service providers are

unable to service equipment as a result,

there is possibility of compound risks.

Mitigation measures to reduce water ingress can be considered

during the design stage of new developments and flood risk

assessments are reviewed as part of the project development and

investment processes. Foundation slabs have previously been

elevated at speciﬁc sites to help alleviate flood risk . Flood events

are captured in incident reports.

Extreme Heat

Solar panel yield can reduce above 24°C

and in extreme cases, intense heat can

cause ﬁres. Equipment such as inverters,

transformers, and PV panels are most

likely to be affected. However, there is

potential for the lifespan of all electrical

equipment to be reduced, including in

relation to batteries.

Transformers protect themselves by shutting down if they reach

a temperature outside of their operational range. Blueﬁeld

Operations Limited have implemented on-site solutions to help

some assets maintain generation during high temperatures, as

described on page

46.

Storms

Storms are more unpredictable compared

to other physical risks, making them more

difﬁcult to adapt to. Turbines can stop

generating at high wind speeds and there

is potential for damage to both wind and

solar assets.

Turbine control systems are designed to switch off at around 25

metres per second, to avoid signiﬁcant damage or detachment.

As part of the site design process for new solar assets, static and

dynamic load calculations are performed to help ensure that

panels and their mounting structures can withstand predicted

maximum wind speeds. Routine framework checks are performed

on mounting structures.

Snow / Blizzards

Snow can cover solar panels and therefore

impact upon generation. Removal of snow

requires operational resources. Snow is

not expected to be as material as other

physical risks.

Snow mitigation measures can be costly. However, PV panels

have a coating that, together with the angle that the panels are

installed at, help the panels ‘self-clean’. Additionally, the dark

colours of PV panels (typically blue or black) facilitate the capture

of thermal energy, therefore speeding up the melting process.

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TRANSITIONAL RISKS

POTENTIAL RISK RISK DESCRIPTOR CURRENT MITIGATION MEASURES

Electricity Market

Conditions

The renewables market is anticipated to grow and therefore

market conditions are seen as an opportunity rather than

a risk. However, the success of the Company is sensitive

to future power market pricing, and a major shift in power

demand or supply will impact the Company’s ability to meet

its dividend target. The UK Government is also consulting on

proposals to reform electricity markets which may result in

split pricing for renewable and baseload generation and the

possibility of a regional pricing framework for generation and

other adverse consequences for the Company.

The Investment Adviser regularly updates the portfolio cash-flow model to reflect future power market forecasts

and where appropriate applies discounts to the forecasts. The Investment Adviser ﬁxes PPA’s quarterly and a rolling

programme of PPA contract expiries has been implemented to minimise risk. Protection against a sustained period

of low energy prices can only be achieved by maximising exposure to regulatory revenues through acquisition of

more legacy FIT and ROC plants. Some recent acquisitions have included ﬁxed power contracts for a longer period,

reducing exposure to short term volatility. Storage technology, which can proﬁt from power price volatility, is also

being acquired into the portfolio. The Company has begun a programme to improve its links with Westminster

to ensure that all members of Parliament are aware of the need to maintain sufﬁcient incentives for renewable

investment.

For a full overview of how market condition risks are being mitigated, please refer to the Company’s risk matrix on

page

15.

Technology

Solar assets have a lifespan of up to 40 years, during which

the technology could become outdated. There is a shorter-

term risk associated with the technology chosen at the point

of planning and whether this is still optimal at the point of

construction (which can be 4/5 years later). Also includes

consideration in relation to spare or replacement parts.

The Investment Adviser periodically evaluates and reviews the cost of replacement parts for the assets within the

portfolio. Availability of old parts may present an issue and, long-term, PV panels may need to be re-designed for

warmer temperatures and wind turbines designed to withstand a wider range of windspeeds. Heat losses are also

built into generation models.

In regard to short-term risks, once a project has achieved planning, the technical speciﬁcation of the site is

reviewed and can be amended to ensure appropriate equipment is installed.

Policy

Whilst climate-related policy changes may present some

challenges in relation to the planning process for new

assets, overall, policy shifts present prominent opportunities

for the Company to leverage.

Blueﬁeld Development, who are developing a solar and battery pipeline for the Company, engages local authorities

at all stages of the development process to ensure climate change is speciﬁcally addressed in the determination of

planning applications.

Reputation

The renewables sector has a positive reputation due to its

role in climate change mitigation and the energy transition.

A potential source of reputational damage could come from

health & safety incidents or supply chain issues.

The Company’s continued transparency regarding the climate actions it is taking will improve reputational risks.

As part of the development process, Blueﬁeld Development engages with local stakeholders to communicate the

beneﬁts of renewable energy projects and obtain local support. As part of its ESG strategy, the Company will look

to address the potential negative impacts associated with being part of the renewables industry, such as those

relating to supply chain.

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Climate-related risks and opportunities associated

with the acquisition of new assets is managed by

the Investment Adviser’s Investment team. If a

material climate risk is identiﬁed, the appropriate

adaption and mitigation measures would be

discussed amongst the Investment Adviser

and with the Investment Committee, the latter

ultimately approving whether the acquisition goes

ahead or not.

The Company invests in a range of renewable

technology types, which are geographically diverse

across the UK, helping to provide resilience against

unpredictable weather patterns. In particular,

the use of solar photovoltaic technology means

generation is not dependent only on direct

irradiation but also on predictable daylight hours,

limiting short-term volatility when compared to

other forms of weather dependent electricity

generation.

The assets have suitable insurance in place,

including both public liability and business

interruption, to help mitigate the impact of

operational disruption, which can occur through

weather related events. As part of its ESG strategy,

the Company has committed to implementing

renewable energy import tariffs across its portfolio

(if not already in place) over the coming year.

c. Describe how processes for identifying,

assessing, and managing climate-related

risks are integrated into the organisations

overall risk management

Climate change risks, both transitional and physical,

are considered by the Board, the Investment

Adviser and Blueﬁeld companies and are included

within the Company’s risk matrix. Ultimately,

the Board of the Company has oversight for what

controls and mitigation measures are deemed

sufﬁcient to manage climate-related risks, with

delegation given to the Investment Adviser when

further action is deemed necessary.

The Blueﬁeld companies are well-equipped to

identify, assess, and manage climate-related risks

from an operational perspective. For example,

generation irregularities are identiﬁed in real

time by monitoring teams who, following an

initial investigation into the cause of the issue,

can classify the risk and communicate it to asset

management and O&M teams, helping ensure a

quick resolution. Following climate events such as

extreme storms, Blueﬁeld Operations Limited are

able to adapt work schedules and respond quickly

to affected sites, securing them from a Health &

Safety perspective and identifying follow up works

to restore generation.

Climate-related events that impact a site (e.g., heat

stress), are recorded by O&M teams and provided

as an incident report to the asset manager. This

helps the Company to perform trend analysis

on asset performance to track the behaviour of

installed equipment, produce forecasts and analyse

how performance can be optimised. This insight

into the impact of climate-related incidents on

generation will support the Company in evaluating

the potential impact of climate risk on its portfolio

and as a result, help inform decisions to future-

proof its assets.

Case

Study

Pond installation

To assist drainage on site, and therefore prevent flooding

during periods of intense rain, Blueﬁeld Operations

Limited carry out regular ditch clearing and watercourse

maintenance.

Working with the Investment Adviser, a new programme of works is currently

being considered to construct ponds on sites which are prone to flooding. Use of

ponds to control surface run-off is multi-functional, not only helping remediate

flooding but also providing freshwater habitat for local fauna and flora. Pond

feasibility assessments have been undertaken on several sites and follow up

action will be considered over coming months.

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5. Metrics and Targets

a. Disclose the metrics used by the organisation

to assess climate-related risks and opportunities

in line with its strategy and risk management

processes.

Climate-related opportunities are tracked through the

following metrics, described in more detail within the

Company’s ESG report:

•

Renewable energy generated (kWh)

•

e savings achieved (tCO

•

Equivalent number of houses powered with renewable

energy (#)

Power price volatility is monitored through wholesale energy

prices and the % of revenues with ﬁxed power prices. Various

climate-related metrics are collected through incident

reports and monitoring data, which include: climate-related

events; temperature thresholds of equipment/components;

heat losses; and windspeed thresholds. Given that the

Company will start to construct new battery and solar assets

shortly, metrics are being identiﬁed to enable the carbon

intensity of these operations to be measured.

It is anticipated that the results of the scenario analysis

will help inform and expand the Company’s list of climate

metrics. The Company will continue to review metrics which

will enhance the assessment of climate-related risks and

opportunities in line with its strategy and risk management

processes, helping monitor climate-related trends impacting

the Company and its service providers.

b. Disclose Scope 1, Scope 2, and if appropriate,

Scope 3 greenhouse gas emissions, and the

related risks.

As found on page 48, the Company has calculated its GHG

emission inventory for the period 1st July 2021 – 30th

June 2022. Emissions have been calculated in accordance

with the GHG Protocol Corporate Accounting and Reporting

Standard, therefore covering the Company’s direct and

indirect emissions across its value chain. Figure 2 highlights

emission results per category

18. The carbon footprint relating to the 21-22 ﬁnancial year has

not been externally veriﬁed

Figure 2

– the Company’s GHG emission inventory for the period 1 July

2021 – 30 June 2022

Emissions

Location-Based

(tCO

e) %

Emissions

Market-Based

(tCO

e) %

Scope 1 58 2 58 2

Scope 2 1,081 30 1,249 34

Scope 3 2,453 68 2,353 64

Total 3,592 100 3,660 100

As expected, the Company’s Scope 3 emissions represent the

vast majority of its carbon footprint. It is envisaged that Scope 3

emissions will increase over coming years as the Company begins

its new construction programme. The Investment Adviser is working

collaboratively with Engineering, Procurement & Construction (EPC)

contractors to understand how energy usage can be reduced during

the construction process.

As a measure to reduce its direct emissions, the Company will transfer

its assets onto renewable energy import tariffs, where these are not

already in place. As standard, renewable energy import tariffs will

be elected for all new assets being developed. The Company will

continue to review what additional measures could be taken to reduce

its operational footprint over time.

c. Describe the targets used by the organisation to

manage climate-related risks and opportunities and

performance against targets.

The Company’s performance, which is intrinsically linked to climate-

related opportunities, is monitored through its ﬁnancial objectives,

which are described within the Strategic section of this report.

However, the Company also wishes to manage its climate-related

risks and consider sustainability alongside ﬁnancial performance.

As part of the Company’s ESG strategy, the following targets are in

place:

•

The Company will implement renewable energy import tariffs across

its portfolio (including for construction assets once they become

operational).

•

The Company will invest up to £50,000 in industry collaborations

annually to support the energy transition.

•

The Company will undertake scenario analysis for material physical

and transitional climate-related risks and opportunities within the

next 12 months.

•

The above will help the Company further embed climate

considerations into strategic decision making and ﬁnancial planning.

Work will continue to identify suitable targets and metrics to support

the Company in managing its climate-related risks and opportunities.

LITTLE BEAR

Report of the Directors

Business Review

A review of the Company’s business and its likely

future development is provided in the Chair’s

Statement on pages

6 to 8, Strategic Report on

pages

10 to 19 and in the Report of the Investment

Adviser on pages

20 to 37.

Listing Requirements

The Company has complied with the applicable

Listing Rules throughout the year.

Results and Dividends

The results for the year are set out in the ﬁnancial

statements on pages

84 to 100.

The dividends for the year are set out in the

ﬁnancial statements in Note 14 on page

97.

Share Capital

The Company has one class of Ordinary Shares.

The issued nominal value of the Ordinary Shares

represents 100% of the total issued nominal value

of all share capital. Under the Company’s Articles,

on a show of hands, each shareholder present in

person or by proxy has the right to one vote at

general meetings. On a poll, each shareholder is

entitled to one vote for every share held.

The Directors hereby submit the annual report

and ﬁnancial statements of the Company for the

year ended 30 June 2022.

General Information

The Company is a non-cellular company limited

by shares incorporated in Guernsey under the

Law on 29 May 2013. The Company’s registration

number is 56708, and it has been registered and

is regulated by the GFSC as a registered closed-

ended collective investment scheme and as a

Green Fund after successful application under the

Guernsey Green Fund Rules to the GFSC on 16

April 2020. The Company’s Ordinary Shares were

admitted to the Premium Segment of the Ofﬁcial

List and to trading on the Main Market of the

London Stock Exchange following its IPO which

completed on 12 July 2013.

Principal Activities

The principal activity of the Company is to invest

in a portfolio of large scale UK based solar, wind

and renewable energy infrastructure assets.

The Company has a progressive dividend target.

The dividend target for the ﬁnancial year ended 30

June 2022 was 8.16pps.

ANNUAL REPORT AND FINANCIAL STATEMENTS

Shareholders are entitled to all dividends paid by the Company

and, on a winding up, providing the Company has satisﬁed all of its

liabilities, the Shareholders are entitled to all of the surplus assets of

the Company. The Ordinary Shares have no right to ﬁxed income.

Shareholdings of the Directors

The Directors of the Company and their beneﬁcial interests in the

shares of the Company as at 30 June 2022 are detailed below:

Director

Ordinary

Shares of

£1 each

held 30

June 2022

% holding

at 30 June

2022

Ordinary

Shares of

£1 each

held 30

June 2021

% holding

at 30 June

2021

John Rennocks* 290,388 0.05 316,011 0.08

John Scott* 543,312 0.09 512,436 0.13

Paul Le Page 35,000 0.01 35,000 0.01

Laurence McNairn N/A N/A 441,764 0.11

Meriel Lenfestey 7,693 0.00 - -

Elizabeth Burne 15,000 0.00 N/A N/A

* Including shares held by PCAs

Directors’ Authority to Buy Back Shares

The Board believes that the most effective means of minimising any

discount to NAV which may arise on the Company’s share price is to

deliver strong, consistent performance from the Company’s investment

portfolio in both absolute and relative terms. However, the Board

recognises that wider market conditions and other considerations

will affect the rating of the Ordinary Shares in the short term and the

Board may seek to limit the level and volatility of any discount to NAV

at which the Ordinary Shares may trade. The means by which this

might be done could include the Company repurchasing its Ordinary

Shares. Therefore, subject to the requirements of the Listing Rules,

the Law, the Articles and other applicable legislation, the Company

may purchase Ordinary Shares in the market in order to address any

imbalance between the supply of and demand for Ordinary Shares or

to enhance the NAV of Ordinary Shares.

In deciding whether to make any such purchases the Board will have

regard to what it believes to be in the best interests of Shareholders

and to the applicable Guernsey legal requirements which require

the Board to be satisﬁed on reasonable grounds that the Company

will, immediately after any such repurchase, satisfy a solvency test

prescribed by the Law and any other requirements in its Articles. The

making and timing of any buybacks will be at the absolute discretion

of the Board and not at the option of the Shareholders. Any such

repurchases would only be made through the market for cash at a

discount to NAV.

On incorporation, the Company passed a written resolution granting

the Board general authority to purchase in the market up to 14.99%

of the Ordinary Shares in issue immediately following Admission. A

resolution to renew such authority was passed by Shareholders at the

AGM held on 3 December 2021. Therefore, authority was granted to

the Board to purchase in the market up to 14.99% of the Ordinary

Shares in issue immediately following the AGM held on 3 December

2021 at a price not exceeding the higher of (i) 5% above the average

mid-market values of Ordinary Shares for the ﬁve Business Days

before the purchase is made or (ii) the higher of the last independent

trade or the highest current independent bid for Ordinary Shares. The

Board intends to seek renewal of this authority from the Shareholders

at the next AGM scheduled to be held on 29 November 2022.

Pursuant to this authority, and subject to the Law and the discretion of

the Board, the Company may purchase Ordinary Shares in the market

on an ongoing basis with a view to addressing any imbalance between

the supply of and demand for Ordinary Shares.

Ordinary Shares purchased by the Company may be cancelled or

held as treasury shares. The Company may borrow and/or realise

investments in order to ﬁnance such Ordinary Share purchases.

The Company did not purchase any Ordinary Shares for treasury or

cancellation during the period.

Directors’ and Ofﬁcers’ Liability Insurance

The Company maintains insurance in respect of directors’ and ofﬁcers’

liability in relation to their acts on behalf of the Company. Insurance is

in place, having been renewed on 12 July 2022.

Substantial Shareholdings

As at 30 June 2022, the Company had been notiﬁed, in accordance with

chapter 5 of the Disclosure and Transparency Rules, of the following

substantial voting rights over 3% as Shareholders of the Company.

Shareholder Shareholding % Holding

BlackRock 89,238,358 14.59

Newton Investment Management 42,220,250 6.90

Gravis Capital Management 38,053,279 6.22

abrdn Capital 31,003,900 5.07

Hargreaves Lansdown,

stockbrokers (EO)

30,285,508 4.95

Legal & General Investment

Management

25,628,211 4.19

Total Shares in Issue 256,429,506

The Directors conﬁrm that there are no securities in issue that carry

special rights with regards to the control of the Company. The Company

also provides the same information as at 6 September 2022, being the

most current information available.

Shareholder Shareholding % Holding

BlackRock 89,379,090 14.62

Newton Investment Management 42,322,112 6.92

Gravis Capital Management 38,053,279 6.22

Hargreaves Lansdown,

stockbrokers (EO)

30,957,636 5.06

abrdn Capital 30,718,189 5.02

Legal & General Investment

Management

24,951,206 4.08

Brooks Macdonald 20,016,831 3.27

Interactive Investor (EO) 19,122,974 3.13

Total Shares in Issue 295,521,317

REPORT OF THE DIRECTORS ANNUAL REPORT AND FINANCIAL STATEMENTS

Independent Auditor

KPMG has been the Company’s external Auditor since the

Company’s incorporation. A resolution will be proposed at the

forthcoming AGM to reappoint them as Auditor and authorise

the Directors to determine the Auditor’s remuneration for the

ensuing year.

The Audit Committee will periodically review the appointment

of KPMG and the Board recommends their reappointment at

the forthcoming AGM. Further information on the work of the

Auditor is set out in the Report of the Audit Committee on

pages

75 to 78.

Articles of Incorporation

The Company’s Articles may be amended only by special

resolution of the Shareholders.

Going Concern

At 30 June 2022, the Company had invested in 127 solar

plants, six wind farms and 109 single stick wind turbines,

committing £962.2 million to SPV investments. The

Company, through its direct subsidiary, BR1, has access to

an RCF which, together with the net income generated by the

acquired projects, is expected to allow the Company to meet

its liquidity needs for the payment of operational expenses,

dividends and acquisition of new renewable energy

infrastructure assets. The Company, through BR1, expects

to comply with the covenants of its long term loans and RCF.

The Board, in its consideration of going concern, has

reviewed comprehensive cash flow forecasts prepared by

the Investment Adviser, taking into account capital raises

to 30 June 2022, as well as the performance of the solar

and wind plants currently in operation. The conflict in

Ukraine continues to have a signiﬁcant impact on the macro-

economic environment in which the Company operates. The

Board and Investment Adviser have been closely monitoring

this and it has been considered as part of the going concern

assessment.

The Board has also considered the likelihood of the Company

being asked to discontinue operations in its mandatory ﬁve

year discontinuation vote that is due at the 2023 AGM and

regards this as very unlikely, given the strong performance of

the Company and the support which it has received from its

major shareholders. In assessing the going concern status of

the Company, the Board has also considered the re-ﬁnancing

of the Natwest term loan, maturing in August 2023, and the

interest rate swaps for 75% of the balance (being £82.5m) in

place until 2037, and has concluded that there is no reason

to believe that these will not be reﬁnanced or repaid as they

fall due.

In the light of these enquiries, at the time of approving these

accounts the Board has a reasonable expectation that the

Company has adequate resources to continue in operational

existence for the 12 months from the date of signing the

ﬁnancial statements and does not consider there to be any

material threat to the viability of the Company. The Board

has therefore concluded that it is appropriate to adopt the

going concern basis of accounting in preparing the ﬁnancial

statements.

Internal controls review

Taking into account the information on Principal and Emerging

Risks provided on pages

15 to 17 of the strategic report and

the ongoing work of the Audit Committee in monitoring the

risk management and internal control systems on behalf of

the Board, the Directors

•

are satisﬁed that they have carried out a robust assessment

of the principal and emerging risks facing the Company,

including those that would threaten its business model,

future performance, solvency or liquidity; and

•

have reviewed the effectiveness of the risk management

and internal control systems and no signiﬁcant failings or

weaknesses were identiﬁed.

Fair, Balanced and Understandable

The Board has considered whether the Annual Report taken as a

whole is fair, balanced and understandable, taking into account the

commentary and tone and whether it includes the requisite information

needed for Shareholders to assess the Company’s business model,

performance and strategy. In addition, the Board also questioned

the Investment Adviser on information included and excluded from

the Annual Report, and considered whether the narrative at the front

of the report is consistent with the ﬁnancial statements. As a result

of this work, each of the Board members considers that the Annual

Report is fair, balanced and understandable and includes the requisite

information needed for Shareholders to assess the Company’s

business model, performance and strategy.

Financial Risks Management Policies and Procedures

Financial Risks Management Policies and Procedures are disclosed

in Note 15.

Principal and Emerging Risks

Principal and Emerging Risks are discussed in the Strategic Report on

pages

15 to 17.

Annual General Meeting

The AGM of the Company will be held on 29 November 2022 at Floor

2, Trafalgar Court, Les Banques, St Peter Port, Guernsey. Details of the

resolutions to be proposed at the AGM, together with explanations,

will appear in the Notice of Meeting to be distributed to Shareholders

together with this Annual Report.

Members of the Board will be in attendance at the AGM and will be

available to answer shareholder questions.

By order of the Board

Paul Le Page

Director

29 September 2022

Elizabeth Burne

Director

29 September 2022

REPORT OF THE DIRECTORS ANNUAL REPORT AND FINANCIAL STATEMENTS

John Scott

(Senior Independent Director)

John Scott was appointed as a non-executive

director of the Company on 12 June 2013 and is

a former investment banker who spent 20 years

with Lazard and is currently a director of several

investment trusts. Mr Scott has been Chair of Impax

Environmental Markets plc since May 2014 and

Chair of Alpha Insurance Analysts since April 2013.

In 2019, he was appointed Chair of JP Morgan

Global Core Real Assets. In June 2017, he retired

as Chair of Scottish Mortgage Investment Trust

PLC. He has an MA in Economics from Cambridge

University and an MBA from INSEAD. He is also a

Fellow of the Chartered Insurance Institute.

Paul Le Page

(Chair of the Audit Committee)

Paul Le Page was appointed as a non-executive

director of the Company on 12 June 2013 and is

a former executive Director and Senior Portfolio

Manager of FRM Investment Management Limited,

a subsidiary of Man Group, and holds non-executive

directorships of a number of investment funds. Mr.

Le Page is Audit Committee Chair of RTW Venture

Fund Limited and was previously Audit Committee

Chair of UK Mortgages Limited, Thames River

Multi Hedge PCC Limited and Cazenove Absolute

Equity Limited. Mr. Le Page has 18 years’ Audit

Committee experience within the closed end

investment fund sector and has a broad-based

knowledge of the global investment industry, fund

governance, reporting and product structures. Mr

Le Page graduated from University College London

in Electrical and Electronic Engineering and

qualiﬁed as a Chartered Electrical Engineer whilst

leading the development of robotic immunoassay

equipment. He obtained an MBA from Heriot Watt

University in 1999 which he used to switch from

industrial R&D to investment research.

Board of Directors

John Rennocks

(Chair)

John Rennocks was appointed as non-executive Chair on 12 June 2013 and is Chair of

Utilico Emerging Markets, an investor in infrastructure and related assets in emerging

markets. He has broad experience in emerging energy sources, support services and

manufacturing. Mr Rennocks previously served as a non-executive director of Greenko

Group plc, a developer and operator of hydro and wind power plants in India, non-executive

deputy chair of Inmarsat plc, a non-executive director of Foreign & Colonial Investment

Trust plc, Chair of Diploma plc, as well as several other public and private companies, and

as Executive Director-Finance for Smith & Nephew plc, Powergen plc and British Steel

plc/Corus Group plc. Mr Rennocks is a Fellow of the Institute of Chartered Accountants of

England and Wales.

Meriel Lenfestey

Meriel Lenfestey was appointed as a non-executive

director of the Company in April 2019. Ms Lenfestey

founded Flow Interactive in 1997, a London based

Customer Experience Consultancy assisting

clients across many sectors embracing digital

transformation. Since exiting the business in 2016

she has held a portfolio of non-executive director

and advisory roles across Energy, Telecoms,

Transport, Infrastructure, Technology, E-gaming

and local charities. She is a non-executive director

at International Public Partnerships (FTSE 250),

Boku (FTSE AIM), and Ikigai Ventures (FTSE All

share). She also holds non-executive director

roles at several private companies including

Gemserv, Jersey Telecom and Aurigny as well as

Art for Guernsey a local charity. She has an MA in

Computer Related Design from the Royal College

of Art, a Financial Times Non-Executive Director

Diploma and is a Fellow of the RSA.

Elizabeth Burne

Elizabeth Burne was appointed as a non-executive

director of the Company in October 2021, is a

Fellow of the Association of Chartered Certiﬁed

Accountants with a First Class Honours degree

in Applied Accounting and over twenty years’

experience within the ﬁnancial services sector

across the Channel Islands and Australia. Prior to

becoming a non-executive director Ms Burne was an

audit director at PwC, working in alternative asset

management and insurance, assisting clients with

strategic, ﬁnancial, risk and corporate governance

matters. Ms Burne holds a portfolio of non-executive

directorships including HarbourVest Global Private

Equity Limited (a constituent of the FTSE 250 Index),

as well as a number of private companies in the

venture capital, real estate and insurance sectors.

JOHN RENNOCKS

ELIZABETH BURNEMERIEL LENFESTEY

PAUL LE PAGE

JOHN SCOTT

ANNUAL REPORT AND FINANCIAL STATEMENTS

Directors’ Statement of

Responsibilities

The Directors are responsible for preparing the annual

report and ﬁnancial statements in accordance with

applicable law and regulations.

The Law requires the Directors to prepare ﬁnancial

statements for each ﬁnancial year. Under the Law, the

Directors have elected to prepare the ﬁnancial statements

in accordance with IFRS as adopted by the EU and

applicable law. The ﬁnancial statements are required by

Law to give a true and fair view of the state of affairs of

the Company and of its proﬁt or loss for that period. In

preparing these ﬁnancial statements, the Directors are

required to:

•

select suitable accounting policies and then apply them

consistently;

•

make judgments and estimates that are reasonable, and

prudent;

•

state whether applicable accounting standards have

been followed, subject to any material departures

disclosed and explained in the ﬁnancial statements;

•

assess the Company’s ability to continue as a going

concern, disclosing, as applicable, matters related to

going concern; and

•

use the going concern basis of accounting unless they

either intend to liquidate the Company or to cease

operations, or have no realistic alternative but to do so.

The Directors are responsible for keeping proper accounting

records that disclose with reasonable accuracy at any time,

the ﬁnancial position of the Company and enable them

to ensure that the ﬁnancial statements comply with the

Law. They are responsible for such internal control as they

determine is necessary to enable the preparation of ﬁnancial

statements that are free from material misstatement,

whether due to fraud or error, and have general responsibility

for taking such steps as are reasonably open to them to

safeguard the assets of the Company and to prevent and

detect fraud and other irregularities.

So far as each Director is aware, there is no relevant audit

information of which the Company’s Auditor is unaware,

and each Director has taken all the steps that they ought

to have taken as a Director in order to make themself

aware of any relevant audit information and to establish

that the Company’s Auditor is aware of that information.

This conﬁrmation is given and should be interpreted in

accordance with the provisions of section 249 of the Law.

The Directors are responsible for the maintenance and

integrity of the corporate and ﬁnancial information included

on the Company’s website, and for the preparation and

dissemination of Financial Statements. Legislation in

Guernsey governing the preparation and dissemination of

ﬁnancial statements may differ from legislation in other

jurisdictions.

By order of the Board

Paul Le Page

Director

29 September 2022

Elizabeth Burne

Director

29 September 2022

ANNUAL REPORT AND FINANCIAL STATEMENTS

Each of the Directors, whose names are set out on

page

67 in the Board of Directors section of the

annual report, conﬁrms that to the best of their

knowledge that:

• the ﬁnancial statements, prepared in accordance

with IFRS, as adopted by the EU give a true

and fair view of the assets, liabilities, ﬁnancial

position and proﬁt or loss of the Company;

• the Management Report (comprising Chair’s

Statement, Strategic Report, Report of the

Directors and Report of the Investment Adviser)

includes a fair review of the development and

performance of the business and the position of

the Company together with a description of the

principal and emerging risks on pages

15 to 17;

and

Having taken advice from the Audit Committee,

the Directors consider the annual report and

ﬁnancial statements, taken as a whole, is fair,

balanced and understandable and that it provides

the information necessary for Shareholders to

assess the Company’s position, performance,

business model and strategy.

By order of the Board

Responsibility

Statement of the

Directors in Respect of

the Annual Report

Paul Le Page

Director

29 September 2022

Elizabeth Burne

Director

29 September 2022

ANNUAL REPORT AND FINANCIAL STATEMENTS

Corporate

Governance

Report

The Board recognises the importance of sound corporate governance,

particularly the requirements of the AIC Code. The Company is currently

complying with the latest AIC code effective 1 January 2019.

The Company has been a member of the AIC since 15 July 2013. The Board

has considered the principles and provisions of the AIC Code. The AIC Code

provides a ‘comply or explain’ code of corporate governance and addresses

all the principles set out in the UK Code as well as setting out additional

principles and recommendations on issues that are of speciﬁc relevance

to investment companies such as the Company. The Board considers that

reporting against the principles and recommendations of the AIC Code

provides better information to Shareholders.

The GFSC issued a Guernsey Code which came into effect on 1 January

2012. The introduction to the Guernsey Code states that “Companies which

report against the UK Code or the AIC Code of Corporate Governance are also

deemed to meet this Code”. Therefore, AIC members which are Guernsey-

domiciled and which report against the AIC Code are not required to report

separately against the Guernsey Code.

The AIC Code is available on the AIC’s website (www.theaic.co.uk). The UK

Code is available from the FRC’s website (www.frc.org.uk). The Guernsey

code is available from the GFSC’s website (www.gfsc.gg).

Throughout the year ended 30 June 2022, the Company has complied with

the provisions of the AIC Code and the provisions of the UK Code, except to

the extent highlighted below.

ANNUAL REPORT AND FINANCIAL STATEMENTS

Provision A.2.1 of the UK Code requires a chief executive

to be appointed; as an investment company, however,

the Company has no employees and therefore has no

requirement for a chief executive. As all the Directors,

including the Chair, are non-executive and independent of

the Investment Adviser, the Company has not established

a remuneration committee which is not in accordance with

provisions B.2.1 and D.2.1 of the UK Code, and Principle 7

of the AIC Code respectively. The Board is satisﬁed that as a

whole, any relevant issues can be properly considered by the

Board. The absence of an internal audit function is discussed

in the Report of the Audit Committee on page

77.

The Board monitors developments in corporate governance

to ensure the Board remains aligned with best practice,

especially with respect to the increased focus on diversity.

The Board acknowledges the importance of diversity,

including gender (as stated in Principle 7 of the AIC Code),

for the effective functioning of the Board and commits to

supporting diversity in the boardroom. It is the Board’s

ongoing aspiration to have well-diversiﬁed representation

and it continues to value directors with diverse skill

sets, capabilities and experience gained from different

geographical and professional backgrounds that enhance

the Board by bringing a wide range of perspectives to the

Company. The Board is satisﬁed with the current composition

and functioning of its members and notes that we have 40%

female representation, exceeding the Hampton-Alexander

Review target.

The Board

The Directors’ biographies are provided on page 67 which

set out the range of investment, ﬁnancial and business skills

and experience represented.

John Rennocks, John Scott and Paul Le Page were appointed

on 12 June 2013, Meriel Lenfestey was appointed on 1 April

2019 and Elizabeth Burne was appointed on 7 October 2021.

Laurence McNairn was appointed 1 July 2013 and retired on

17 February 2022. The Board appointed John Scott as Senior

Independent Director effective from 10 December 2013 to

fulﬁl any function that is deemed inappropriate for the Chair

to perform.

The Directors shall retire and submit themselves for re-

election at each AGM of the Company; the next AGM is due to

take place on 29 November 2022.

Any Director who is elected or re-elected at that meeting

is treated as continuing in ofﬁce throughout. If they are not

elected or re-elected, they shall retain ofﬁce until the end

of the meeting or (if earlier) when a resolution is passed to

appoint someone in their place or when a resolution to elect

or re-elect the Director is put to the meeting and lost.

The Board is of the opinion that members should be re-

elected because they believe that they have the right skills

and experience to continue to serve the Company. As

recommended in Principle 7 of the AIC Code, the Board has

considered the need for a policy regarding tenure of service.

As at 30 June 2022, each of the directors had been on the

Board for approximately nine years, with the exceptions

of Ms Lenfestey and Ms Burne who were appointed to the

Board in 2019 and 2021 respectively. The Board is cognisant

of the AIC guidance around Board member tenure and has

taken positive action to address this by implementing a

carefully thought through succession plan that manages the

transition of corporate knowledge, recognises the beneﬁts of

bringing new perspectives and diversity, all whilst ensuring

independence.

The Board meets at least four times a year in Guernsey, with

unscheduled meetings held where required to consider

investment related or other issues. In addition, there is

regular contact between the Board, the Investment Adviser

and the Administrator. Furthermore, the Board requires

to be supplied in a timely manner with information by the

Investment Adviser, the Company Secretary and other

advisers in a form and of a quality appropriate to enable it to

discharge its duties.

The Company has adopted a share dealing code which

applies to the Board and any persons discharging managerial

responsibilities. This is to ensure compliance by the Board,

and relevant personnel of the Investment Adviser, with the

requirements of the UK Market Abuse Regulations.

Directors’ Remuneration

The Chair was entitled to an annual remuneration of £62,500 (2021:

£62,500). The other Directors were entitled to an annual remuneration

of £39,000 (2021: £39,000). Paul Le Page received an additional

annual fee of £8,000 (2021: £8,000) for acting as Chair of the Audit

Committee. The Board reviewed the Directors’ remuneration and

following this review from 1 January 2022 the Chair is entitled to an

annual remuneration of £65,625. The other Directors are entitled

to an annual remuneration of £41,000 and Paul Le Page receives

an extra £8,350 as Chair of the Audit Committee. Post year end the

Board established a Management Engagement Committee and ESG

Committee, the Chair of each is entitled to an extra £3,000.

The remuneration earned by each Director in the past two ﬁnancial

years was as follows:

Director

2022

2021

John Rennocks 64,063 62,500

John Scott 40,000 39,000

Paul Le Page 48,175 47,000

Laurence McNairn

(retired 17 February 2022)

24,892 39,000

Meriel Lenfestey 40,000 39,000

Elizabeth Burne

(appointed 7 October 2021)

29,689 N/A

The total Directors’ fees expense for the year amounted to £240,818

(2021: £226,500). As disclosed in Note 16, John Rennocks and John

Scott are directors of BSIFIL, and have received remuneration in

respect of BSIFIL.

All of the Directors are non-executive and each is considered

independent for the purposes of Chapter 15 of the Listing Rules.

In accordance with Article 22 of AIFMD, the Company shall disclose

the total amount of remuneration for the ﬁnancial year, split into ﬁxed

and variable remuneration, paid by the AIFM to its staff, and number of

beneﬁciaries, and, where relevant, carried interest paid by the AIF. As

the Company is categorised as an internally managed Non-EU AIFM for

the purposes of AIFMD, Directors’ remuneration reflects this amount.

CORPORATE GOVERNANCE REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

Duties and Responsibilities

The Board has overall responsibility for optimising the

Company’s success by directing and supervising the affairs

of the business and meeting the appropriate interests of

shareholders and relevant stakeholders, while enhancing

the value of the Company and also ensuring the protection

of investors. A summary of the Board’s responsibilities is as

follows:

•

statutory obligations and public disclosure;

•

strategic matters and ﬁnancial reporting;

•

investment strategy and management;

•

risk assessment and management including reporting,

compliance, governance, monitoring and control; and

•

other matters having a material effect on the Company.

The Directors have access to the advice and services

of the Administrator, who is responsible to the Board

for ensuring that Board procedures are followed and

that it complies with the Law and applicable rules

and regulations of the GFSC and the LSE. Where

necessary, in carrying out their duties, the Directors may

seek independent professional advice and services at the

expense of the Company.

The Company maintains appropriate directors’ and ofﬁcers’

liability insurance in respect of legal action against its

Directors on an ongoing basis.

The Board’s responsibilities for the annual report are set out

in the Directors’ Responsibilities Statement on page

69. The

Board is also responsible for issuing appropriate half-yearly

ﬁnancial reports and other price-sensitive public reports.

The attendance record of the Directors for the year to 30

June 2022 is set out below:

Director

Scheduled

Board Meetings

(max 4)

Ad-hoc

Board Meetings

(max 11)

Audit Committee

Meetings

(max 6)

John Rennocks 4 10 5

John Scott 4 10 6

Paul Le Page 4 10 6

Laurence McNairn

(retired 17

February 2022)

3 6 5

Meriel Lenfestey 4 8 6

Elizabeth Burne

(appointed 7

October 2021)

3 7 4

1 Prior to retirement Mr McNairn had attended all scheduled and ad-hoc

Board Meetings.

2 Since appointment Ms Burne has attended all scheduled and ad-hoc

Board Meetings.

11 ad-hoc Board Meetings were held during the period to formally

review and authorise each investment made by the Company, to

discuss the placing of Ordinary Shares and to consider interim

dividends, amongst other items.

The Board believes that, as a whole, it comprises an appropriate

balance of skills, experience, age, knowledge and length of service.

The Board also believes that diversity of experience and approach,

including gender diversity, amongst Board members is of great

importance and it is the Company’s policy to give careful consideration

to issues of Board balance when making new appointments. Any new

Director appointed to the Board will be provided with a bespoke

induction programme tailored to the individual needs of the Director.

Performance Evaluation

The Board established an Audit Committee in 2013. It is chaired

by Paul Le Page and at the date of this report comprised all of the

Directors set out on page

67. The report of the role and activities of

this committee and its relationship with the Auditor is contained in

the Report of the Audit Committee on pages

75 to 78. The Committee

operates within clearly deﬁned terms of reference which are available

on the Company’s website (www.blueﬁeldsif.com).

Committees of the Board

Audit Committee

The Board established an Audit Committee in 2013. It is chaired

by Paul Le Page and at the date of this report comprised all of the

Directors set out on page

67. The report of the role and activities of

this committee and its relationship with the Auditor is contained in

the Report of the Audit Committee on pages

75 to 78. The Committee

operates within clearly deﬁned terms of reference which are available

on the Company’s website (www.blueﬁeldsif.com).

Nomination Committee

Post year end the Board established a Nomination Committee. It is

chaired by John Rennocks and at the date of this report comprised

all of the Directors set out on page

67. The principal functions of the

Committee are to assist the Board in ﬁlling vacancies on the Board and

its committees and to review and make recommendations regarding

Board structure, size and composition. The Committee has yet to meet

since establishment, but shall meet at least once a year.

Management Engagement Committee

Post year end the Board established a Management Engagement

Committee. It is chaired by Elizabeth Burne and at the date of this

report comprised all of the Directors set out on page

67. The principal

function of the Committee is to annually review and, if thought ﬁt,

approve the terms of the Investment Advisory Agreement between

the Company and the Investment Adviser. Additionally, the Committee

shall review annually the performance and terms of engagement of any

other key service providers to the Company as considered appropriate.

The Committee has yet to meet since establishment, but shall meet at

least once a year.

ESG Committee

Post year end the Board established an ESG Committee. It is chaired

by Meriel Lenfestey and at the date of this report comprised all of the

Directors set out on page

67. The principal function of the Committee

is to provide a forum for mutual discussion, support and challenge

the Investment Adviser with respect to ESG including, with respect

to the policies adopted by the Company, in respect to investment

and divestment and by the Investment Adviser with respect to asset

management activities and their reporting on ESG matters to the

Committee and Board. The Committee will also assist on such other

matters related to ESG as may be referred to it by the Board. The

Committee has yet to meet since establishment, but shall meet at

least once a year.

CORPORATE GOVERNANCE REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

Internal Control and Financial Reporting

The Board acknowledges that it is responsible for establishing and

maintaining the Company’s system of internal control and reviewing

its effectiveness. Internal control systems are designed to manage

rather than eliminate the failure to achieve business objectives and

can only provide reasonable but not absolute assurance against

material misstatements or loss. The Audit Committee reviews all

controls including operations, compliance and risk management.

The key procedures which have been established to provide internal

control are:

•

the Board has delegated the day–to-day operations of the Company

to the Administrator and Investment Adviser; however, it remains

accountable for all of the functions it delegates;

•

the Board clearly deﬁnes the duties and responsibilities of the

Company’s agents and advisers and appointments are made by the

Board after due and careful consideration. The Board monitors the

ongoing performance of such agents and advisers;

•

the Board monitors the actions of the Investment Adviser at

regular Board meetings and is also given frequent updates on

developments arising from the operations and strategic direction of

the underlying investee companies; and

•

the Administrator provides administration and company secretarial

services to the Company.

The Administrator maintains a system of internal control on which it

reports to the Board.

The Board has reviewed the need for an internal audit function and

has decided that the systems and procedures employed by the

Administrator and Investment Adviser, including their own internal

controls and procedures, provide sufﬁcient assurance that a sound

system of risk management and internal control, which safeguards

shareholders’ investment and the Company’s assets, is maintained.

An internal audit function speciﬁc to the Company is therefore

considered unnecessary.

The systems of control referred to above are designed to ensure

effectiveness and efﬁcient operation, internal control and compliance

with laws and regulations. In establishing the systems of internal

control, regard is paid to the materiality of relevant risks, the likelihood

of costs being incurred and costs of control. It follows therefore that

the systems of internal control can only provide reasonable but not

absolute assurance against the risk of material misstatement or loss.

The Company has delegated the provision of all services to external

service providers whose work is overseen by the Board at its quarterly

meetings. Each year a detailed review of performance pursuant to their

terms of engagement has been completed by the Audit Committee

and will in future be undertaken by the Management Engagement

Committee and recommendations made to the Board.

Investment Advisory Agreement

In accordance with Listing Rule 15.6.2(2)R, the Directors formally

appraise the performance and resources of the Investment Adviser.

The Investment Adviser is led by its managing partners, James

Armstrong and Giovanni Terranova, who founded the Blueﬁeld

business in 2009 following their prior work together in European

solar energy. Neil Wood, who joined in 2013 was appointed partner

in 2020 and runs the Investment Adviser alongside the two founders.

The Investment Adviser’s team has a combined record, prior to and

including Blueﬁeld Partners LLP, of investing more than £1 billion in

solar PV projects. The Management team have been involved in over

£1.5 billion of solar PV transactions in the UK and Europe since 2008.

The Investment Adviser’s non-executive team includes Mike Rand,

Blueﬁeld Partners founder and former Managing Partner, William

Doughty, the founding CEO of Semperian; Dr. Anthony Williams, the

former chair of the Risk Committee for the Fixed Income, Currencies

& Commodities Division, and Partner at Goldman Sachs & Co; and Jon

Moulton, former managing partner and founder of Alchemy Partners.

In view of the substantial resources of the Investment Adviser and the

Company’s strong investment and operational performance for the

period, in the opinion of the Directors the continuing appointment of the

Investment Adviser is in the interests of the shareholders as a whole.

Dealings with Shareholders

The Board welcomes Shareholders’ views and places great importance

on communication with its shareholders. The Company’s AGM will

provide a forum for shareholders to meet and discuss issues with the

Directors of the Company. Members of the Board will also be available

to meet with shareholders at other times, if required. In addition,

the Company maintains a website which contains comprehensive

information, including regulatory announcements, share price

information, ﬁnancial reports, investment objectives and strategy and

information on the Board.

Principal and Emerging Risks

Each Director is aware of the risks inherent in the Company’s

business and understands the importance of identifying, evaluating

and monitoring these risks. The Board has adopted procedures and

controls that enable it to manage these risks within acceptable limits

and to meet all of its legal and regulatory obligations.

The Board considers the process for identifying, evaluating and

managing any signiﬁcant risks faced by the Company on an ongoing

basis and these risks are reported and discussed at Board meetings. It

ensures that effective controls are in place to mitigate these risks and

that a satisfactory compliance regime exists to ensure all applicable

local and international laws and regulations are upheld.

The Company’s Principal and Emerging Risks are discussed in detail

on pages

15 to 17 of the Strategic Report. The Company’s ﬁnancial

instrument risks are discussed in Note 15 to the ﬁnancial statements.

Changes in Regulation

The Board monitors and responds to changes in regulation as they

affect the Company and its policies

CORPORATE GOVERNANCE REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

AIFMD

AIFMD was introduced on 22 July 2014 in order to harmonise the

regulation of AIFMs and imposes obligations on managers who

manage or distribute AIFs in the EU or who market shares in such

funds to EU investors. After seeking professional regulatory and legal

advice, the Company was established in Guernsey as a self-managed

Non-EU AIF. Additionally, the Company has taken advice on and

implemented sufﬁcient and appropriate policies and procedures that

enable the Board to fulﬁl its role in relation to portfolio management

and the management of risk. The Company is therefore categorised

as an internally managed Non-EU AIFM for the purposes of AIFMD

and as such neither it nor the Investment Adviser is required to seek

authorisation under AIFMD.

The marketing of shares in AIFs that are established outside the EU

(such as the Company) to investors in an EU member state is prohibited

unless certain conditions are met. Certain of these conditions are

outside the Company’s control as they are dependent on the regulators

of the relevant third country (in this case Guernsey) and the relevant

EU member state entering into regulatory co-operation agreements

with one another.

Currently, the NPPR provides a mechanism to market Non-EU AIFs

that are not allowed to be marketed under AIFMD domestic marketing

regimes. The Board is utilising NPPR in order to market the Company,

speciﬁcally in the UK pursuant to Regulations 57, 58 and 59 of the

UK Alternative Investment Fund Managers Regulations 2013. The

Board is working with the Company’s advisers to ensure the necessary

conditions are met, and all required notices and disclosures are made

under NPPR. Eligible AIFMs will be able to continue to use NPPR for

the time being.

Any regulatory changes arising from implementation of AIFMD (or

otherwise) that limit the Company’s ability to market future issues of its

shares may materially adversely affect the Company’s ability to carry

out its investment policy successfully and to achieve its investment

objectives, which in turn may adversely affect the Company’s business,

ﬁnancial condition, results of operations, NAV and/or the market price

of the Ordinary Shares.

The Board, in conjunction with the Company’s advisers, will continue

to monitor the development of AIFMD and its impact on the Company.

FATCA and CRS

The Company is registered under FATCA and continues to comply with

FATCA and the Common Reporting Standard’s requirements to the

extent relevant to the Company.

PRIIPs

The Company is in compliance with the requirements under PRIIPs to

publish a KID. The KID is available on the Company’s website.

NMPI

On 1 January 2014 FCA rules relating to the restrictions on the retail

distribution of unregulated collective investment schemes and close

substitutes came into effect.

The Board has been advised that the Company would qualify as an

investment trust if it was resident in the UK, and therefore the Board

believes that the retail distribution of its shares should be unaffected

by the changes. It is the Board’s intention that the Company will make

all reasonable efforts to conduct its affairs in such a manner that its

shares can be recommended by independent ﬁnancial advisers to

UK retail investors in accordance with the FCA’s rules relating to non-

mainstream investment products.

Guernsey Green Fund Status

The Guernsey Green Fund aims to provide a platform for investments

into various green initiatives and gives investors a trusted and

transparent product that contributes to the internationally agreed

objectives of mitigating environmental damage and climate change.

The Company successfully obtained Guernsey Green Fund Status on

16 April 2019.

Following an application to the GFSC, the Company was deemed to

have met the following investment criteria outlined in the Guernsey

Green Fund Rules, 2018 (‘The Rules’):

•

The Property of a Guernsey Green Fund shall be invested with the

aim of spreading risk and with the ultimate objective of mitigating

environmental damage resulting in a net positive outcome for the

environment;

•

A Guernsey Green Fund shall comprise 75% assets by value that

meet the Guernsey Green Fund Rules criteria. The remaining 25%

must not lessen or reduce the Guernsey Green Fund’s overall

objective of mitigating environmental damage nor comprise an

investment of a type speciﬁed within schedule 3 of the Guernsey

Green Fund Rules, 2018;

•

A Guernsey Green Fund shall only comprise assets permitted to be

held under its principal documents or prospectus and of a nature

described in its prospectus; and

•

A Guernsey Green Fund shall not be invested in contravention

of limits or restrictions imposed under its principal documents or

prospectus.

The Company fulﬁls the above investment criteria by investing in a

diversiﬁed portfolio of renewable energy assets, each located within

the UK, with a focus on utility scale assets and portfolios on greenﬁeld

sites. The Group targets long life renewable energy infrastructure,

expected to generate energy output over asset lives of at least 25

years. The Company incorporates Environmental Social & Governance

policies into its investment processes and is actively monitoring

and working to improve its environmental and social impact. The

production of renewable energy equates to a signiﬁcant amount of CO

emissions saved, representing a sustainable and ethical investment.

By order of the Board

Paul Le Page

Director

29 September 2022

Elizabeth Burne

Director

29 September 2022

CORPORATE GOVERNANCE REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

Report of the

Audit Committee

The Audit Committee, chaired by Paul Le Page and comprising all of the

Directors set out on page

67, operates within clearly deﬁned terms of

reference (which are available from the Company’s website, www.blueﬁeldsif.

com) and includes all matters indicated by Rule 7.1 of the UK FCA’s DTRs

and the AIC Code. It is also the formal forum through which the Auditor will

report to the Board of Directors.

The Audit Committee meets no less than three times a year, and at such

other times as the Audit Committee shall require, and meets the Auditor at

least twice a year. Any member of the Audit Committee may request that a

meeting be convened by the company secretary. The Auditor may request

that a meeting be convened if they deem it necessary. Any Director who is

not a member of the Audit Committee, the Administrator and representatives

of the Investment Adviser shall be invited to attend the meetings as the

Directors deem appropriate.

The Board has taken note of the requirement that at least one member of

the Committee should have recent and relevant ﬁnancial experience and is

satisﬁed that the Committee is properly constituted in that respect, with two

of its members who are qualiﬁed accountants and three members with an

investment background.

INTERIM REPORT AND UNAUDITED FINANCIAL STATEMENTS

Responsibilities

The main duties of the Audit Committee are:

•

monitoring the integrity of the ﬁnancial statements of the

Company and any formal announcements relating to the

Company’s ﬁnancial performance and reviewing signiﬁcant

ﬁnancial reporting judgements contained in them;

•

reporting to the Board on the appropriateness of the

Board’s accounting policies and practices including critical

judgement areas;

•

reviewing the valuation of the Company’s investments

prepared by the Investment Adviser, and making a

recommendation to the Board on the valuation of the

Company’s investments;

•

meeting regularly with the Auditor to review their

proposed audit plan and the subsequent audit report

and assess the effectiveness of the audit process and the

levels of fees paid in respect of both audit and non-audit

work;

•

making recommendations to the Board in relation to the

appointment, reappointment or removal of the Auditor

and approving their remuneration and the terms of their

engagement;

Financial Reporting

The primary role of the Audit Committee in relation to the ﬁnancial

reporting is to review with the Administrator, Investment Adviser and

the Auditor the appropriateness of the interim and annual ﬁnancial

statements, concentrating on, amongst other matters:

•

the quality and acceptability of accounting policies and practices;

•

the clarity of the disclosures and compliance with ﬁnancial

reporting standards and relevant ﬁnancial and governance reporting

requirements;

•

material areas in which signiﬁcant judgements have been applied or

there has been discussion with the Auditor;

•

whether 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

performance, business model and strategy; and

•

any correspondence from regulators in relation to the Company’s

ﬁnancial reporting.

To aid its review, the Audit Committee considers reports from the

Administrator and Investment Adviser and also reports from the

Auditor on the outcomes of their half year review and annual audit.

Like the Auditor, the Audit Committee seeks to display the necessary

professional scepticism their role requires.

•

monitoring and reviewing annually the Auditor’s indepen-

dence, objectivity, expertise, resources, qualiﬁcation and

non-audit work;

•

considering annually whether there is a need for the

Company to have its own internal audit function;

•

keeping under review the effectiveness of the accounting

and internal control systems of the Company;

•

reviewing and considering the UK Code, the AIC Code, the

FRC Guidance on Audit Committees and the Company’s

institutional investors’ commitment to the UK Stewardship

code; and

•

reviewing the risks facing the Company and monitoring the

risk matrix.

The Audit Committee is required to report formally to the

Board on its ﬁndings after each meeting on all matters within

its duties and responsibilities.

The Auditor is invited to attend the Audit Committee

meetings as the Board deems appropriate and at which

they have the opportunity to meet with the Committee

without representatives of the Investment Adviser or the

Administrator being present at least once per year.

AERIAL VIEW AT HOBACK

REPORT OF THE AUDIT COMMITEE ANNUAL REPORT AND FINANCIAL STATEMENTS

Meetings

The Committee has met formally on 6 occasions

in the year covered by this report. The matters

discussed and challenged at those meetings were:

•

consideration and agreement of the terms of

reference of the Audit Committee for approval by

the Board;

•

review of the Company’s risk matrix;

•

review of the accounting policies and format of the

ﬁnancial statements;

•

review and approval of the audit plan of the

Auditor and timetable for the interim and annual

ﬁnancial statements;

•

review of the valuation policy and methodology of

the Company’s investments applied in the interim

and annual ﬁnancial statements;

•

detailed review of the interim and annual report

and ﬁnancial statements;

•

assessment of the effectiveness of the external

audit process as described below;

•

a review of the process used to determine the

viability of the Company; and

•

a review of the performance of the Company’s

Investment Adviser and key service providers.

The Audit Committee chair or other members of

the Audit Committee appointed for the purpose,

shall attend each AGM of the Company, prepared to

respond to any shareholder questions on the Audit

Committee’s activities.

Primary Area of Judgement

The Audit Committee determined that the key

risk of misstatement of the Company’s ﬁnancial

statements is the fair value of the investments

held by the Company in the context of the high

degree of judgement involved in the assumptions

and estimates underlying the discounted cash flow

calculations.

As outlined in Note 8 of the ﬁnancial statements,

the fair value of the BR1’s investments (Directors’

Valuation) as at 30 June 2022 was £939,947,842

(2021: £694,542,588). Market quotations are not

available for these investments so their valuation

is undertaken using a discounted cash flow

methodology. The Directors have also considered

transactions in similar assets and used these to

infer the discount rate. Signiﬁcant inputs such as the

discount rate, rate of inflation, power price forecast

and the amount of electricity the renewable energy

infrastructure assets are expected to produce are

subjective and include certain assumptions. As

a result, this requires a series of judgements to

be made as explained in Note 8 in the ﬁnancial

statements.

The valuation of the BR1’s portfolio of renewable

energy infrastructure assets (Directors’ Valuation)

as at 30 June 2022 has been determined by

the Board based on information provided by the

Investment Adviser.

The Audit Committee also reviewed and suggested

factors that could impact BR1’s portfolio valuation

and its related sensitivities to the carrying value

of the investments as required in accordance with

IPEV Valuation Guidelines.

Risk Management

The Company’s risk assessment process and

the way in which signiﬁcant business risks are

managed is a key area of focus for the Committee.

The work of the Audit Committee is driven primarily

by the Company’s assessment of its Principal and

Emerging Risks as set out on pages

15 to 17 of

the Strategic Report, and it receives reports from

the Investment Adviser and Administrator on the

Company’s risk evaluation process and reviews

changes to signiﬁcant risks identiﬁed.

Internal Audit

The Audit Committee considers at least once a

year whether there is a need for an internal audit

function. Currently it does not consider there to

be a need for an internal audit function, given that

there are no employees in the Company and all

outsourced functions are with parties who have

their own internal controls and procedures.

External Audit

KPMG has been the Company’s external Auditor

since the Company’s inception.

The Auditor is required to rotate the audit partner

every ﬁve years. The current Audit Director is in

his ﬁrst year of tenure. There are no contractual

obligations restricting the choice of external auditor

and the Company will consider putting the audit

services contract out to tender at least every ten

years. In line with the FRC’s recommendations

on audit tendering, this will be considered further

when the audit partner rotates every ﬁve years.

Under the Companies Law, the reappointment

of the external Auditor is subject to shareholder

approval at the AGM.

REPORT OF THE AUDIT COMMITEE ANNUAL REPORT AND FINANCIAL STATEMENTS

The objectivity of the Auditor is reviewed by

the Audit Committee which also reviews the

terms under which the external Auditor may be

appointed to perform non-audit services. The Audit

Committee reviews the scope and results of the

audit, its cost effectiveness and the independence

and objectivity of the Auditor, with particular

regard to any non-audit work that the Auditor

may undertake. In order to safeguard Auditor

independence and objectivity, the Audit Committee

ensures that any other advisory and/or consulting

services provided by the external Auditor do not

conflict with its statutory audit responsibilities.

Advisory and/or consulting services will generally

only cover reviews of interim ﬁnancial statements

and capital raising work. Any non-audit services

conducted by the Auditor outside of these areas

will require the consent of the Audit Committee

before being initiated.

The external Auditor may not undertake any

work for the Company in respect of the following

matters: preparation of the ﬁnancial statements;

provision of investment advice; taking management

decisions; advocacy work in adversarial situations;

provision of tax and tax compliance services;

promotion of, dealing in, or underwriting the

Company’s shares; provision of payroll services;

design or implementation of internal control or risk

management or ﬁnancial information technology

systems, provision of valuation services, provision

of services related to internal audit; and provision

of certain human resources functions.

The Committee reviews the scope and results of the

audit, its cost effectiveness and the independence

and objectivity of the Auditor, with particular

regard to the level of non-audit fees. During the

year, KPMG was also engaged to provide a review

of the Company’s interim information and to

provide reporting accountant services in relation

to the Company’s share placings. Total fees paid

for the Company and its subsidiaries amounted to

£611,400 (2021: £105,250), fees for the Company

itself amounted to £230,608 for the year ended

30 June 2022 (30 June 2021: £105,250) of which

£97,975 related to audit and audit related services

to the Company (30 June 2021: £74,200) and

£132,633 in respect of non-audit services (30 June

2021: £31,050).

Notwithstanding such services, which have arisen

in connection with review of the interim ﬁnancial

statements and reporting accountant services,

the Audit Committee considers KPMG to be

independent of the Company and that the provision

of such non-audit services is not a threat to the

objectivity and independence of the conduct of the

audit as appropriate safeguards are in place.

To fulﬁl its responsibility regarding the independence

of the Auditor, the Audit Committee has considered:

•

discussions with or reports from the Auditor

describing its arrangements to identify, report

and manage any conflicts of interest; and

•

the extent of non-audit services provided by

the Auditor and arrangements for ensuring the

independence and objectivity and robustness

and perceptiveness of the Auditor and their

handling of key accounting and audit judgements.

To assess the effectiveness of the Auditor, the

Committee has reviewed and challenged:

•

the Auditor’s fulﬁlment of the agreed audit plan

and variations from it;

•

discussions or reports highlighting the major

issues that arose during the course of the audit;

•

feedback from other service providers evaluating

the performance of the audit team;

•

arrangements for ensuring independence and

objectivity; and

•

robustness of the Auditor in handling key

accounting and audit judgements.

The Audit Committee is satisﬁed with KPMG’s

effectiveness and independence as Auditor, having

considered the degree of diligence and professional

scepticism demonstrated by them. Having carried

out the review described above and having satisﬁed

itself that the Auditor remains independent and

effective, the Audit Committee has recommended

to the Board that KPMG be reappointed as Auditor

for the year ending 30 June 2023.

To further enhance the audit efﬁciency of the

Company and its subsidiaries the Audit Committee

has recommended to the Board that KPMG should

undertake the audit of the Company’s subsidiary

SPVs and a phased two-year programme is

currently in process to implement this.

The Company is subject to mandatory audit director

rotation and Mr Barry Ryan was appointed as the

signing audit director for the current ﬁnancial year

following the rotation of Mr Rachid Frihmat. The

Audit Committee met with Mr Ryan to assess his

background and independence at the start of the

Company’s ﬁnancial year.

During the course of the year as part of the board

refreshment programme the Audit Committee

initiated a review of the Company’s articles

of association and its regulatory and taxation

substance requirements.

The Chair of the Audit Committee will be available

at the AGM to answer any questions about the work

of the Committee.

On behalf of the Audit Committee

Paul Le Page

Chairman of the Audit Committee

29 September 2022

REPORT OF THE AUDIT COMMITEE ANNUAL REPORT AND FINANCIAL STATEMENTS

Independent

Auditor’s Report

Independent Auditor’s Report to the Members of Blueﬁeld Solar Income

Fund Limited

Our opinion is unmodiﬁed

We have audited the ﬁnancial statements

of Blueﬁeld Solar Income Fund Limited (the

“Company”), which comprise the statement

of ﬁnancial position as at 30 June 2022, the

statements of comprehensive income, changes

in equity and cash flows for the year then ended,

and notes, comprising signiﬁcant accounting

policies and other explanatory information.

In our opinion, the accompanying ﬁnancial state-

ments:

• give a true and fair view of the ﬁnancial position

of the Company as at 30 June 2022, and of the

Company’s ﬁnancial performance and cash

flows for the year then ended;

• are prepared in accordance with International

Financial Reporting Standards as adopted by

the EU; and

• comply with the Companies (Guernsey) Law,

2008.

Basis for opinion

We conducted our audit in accordance with

International Standards on Auditing (UK) (“ISAs

(UK)”) and applicable law. Our responsibilities

are described below. We have fulﬁlled our ethical

responsibilities under, and are independent of

the Company in accordance with, UK ethical

requirements including the FRC Ethical Standard

as required by the Crown Dependencies’ Audit

Rules and Guidance. We believe that the audit

evidence we have obtained is a sufﬁcient and

appropriate basis for our opinion.

Key audit matters: our assessment of the

risks of material misstatement

Key audit matters are those matters that, in our

professional judgment, were of most signiﬁcance

in the audit of the ﬁnancial statements and

include the most signiﬁcant assessed risks of

material misstatement (whether or not due to

fraud) identiﬁed by us, including those which had

the greatest effect on: the overall audit strategy;

the allocation of resources in the audit; and

directing the efforts of the engagement team.

These matters were addressed in the context of

our audit of the ﬁnancial statements as a whole,

and in forming our opinion thereon, and we do not

provide a separate opinion on these matters. In

arriving at our audit opinion above, the key audit

matter was as follows (unchanged from 2021):

ANNUAL REPORT AND FINANCIAL STATEMENTS

Valuation of ﬁnancial assets held at fair value through proﬁt or loss £856,380,000; (2021: £470,282,000)

Refer to the Report of the Audit Committee on pages

75 to 78, note 2 (j) accounting policy and note 8 disclosures.

THE RISK OUR RESPONSE

Basis:

The Company’s investment in its immediate subsidiary is carried at fair value through proﬁt or loss

and represents a signiﬁcant proportion of the Company’s net assets (2022: 99.8%; 2021: 99.8%).

The fair value of the immediate subsidiary, which reflects its net asset value, predominantly

comprises of the fair value (£939,948,000) of underlying special purpose vehicle renewable

project investments (“SPVs”) and the immediate subsidiary level debt (see note 8).

The fair value of the SPVs has been determined using the income approach, discounting the future

cash flows of underlying renewable projects (the “Valuations”), for which there is no liquid market.

The Valuations incorporate certain assumptions including discount rate, electricity price forecasts,

useful economic life and other macro-economic assumptions.

In determining the discount rate used in the Valuations, the relevant long term government bond

yields, cost of debt, speciﬁc asset risk and evidence of recent market transactions are considered.

The Valuations are adjusted for other speciﬁc assets and liabilities of the SPVs.

Risk:

The Valuations represent both a risk of fraud and error associated with estimating the timing and

amounts of long term forecast cash flows alongside the selection and application of appropriate

assumptions. Changes to long term forecast cash flows and/or the selection and application of

different assumptions may result in a materially different valuation of ﬁnancial assets held at fair

value through proﬁt or loss.

Our audit procedures included, but were not limited to:

Control evaluation:

We assessed the design and implementation of the control over the Valuation of ﬁnancial assets held at

fair value through proﬁt or loss.

Valuation model integrity and model inputs:

• We tested the valuation model for mathematical accuracy including, but not limited to, material

formulae errors;

• We veriﬁed key inputs into the valuation model, such as power price forecasts, contracted revenue and

operating costs to supporting documentation;

• We agreed a value driven sample of balances within the residual net asset amounts at subsidiary

level to supporting documentation, such as independent bank conﬁrmations and other source

documentation; and

• In order to assess the reliability of management’s forecasts, for a risk based selection, we assessed the

historical accuracy of the cash flow forecasts against actual results.

Benchmarking the valuation assumptions:

With support from our KPMG valuation specialist, we challenged the appropriateness of the Company’s

valuation methodology and key assumptions including discount rate, power price forecasts, inflation,

and other macro-economic assumptions applied, by:

• assessing the appropriateness of the valuation methodology applied by the Investment Adviser;

• benchmarking against independent market data and relevant peer group companies; and

• using our KPMG valuation specialist’s experience in valuing similar investments.

Assessing transparency:

We considered the appropriateness of the Company’s investment valuation policies and the

adequacy of the Company’s disclosures in relation to the use of estimates and judgements in

arriving at fair value (see note 3).

We assessed whether the disclosures around the sensitivities to changes in key assumptions

reflect the risks inherent in the valuation of the underlying investment portfolio (see note 8).

INDEPENDENT AUDITOR’S REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

Our application of materiality and an overview of the

scope of our audit

Materiality for the ﬁnancial statements as a whole was set at

£17,167,000 determined with reference to a benchmark of net assets

of £858,391,000 of which it represents approximately 2% (2021: 2%).

In line with our audit methodology, our procedures on individual

account balances and disclosures were performed to a lower threshold,

performance materiality, so as to reduce to an acceptable level the

risk that individually immaterial misstatements in individual account

balances add up to a material amount across the ﬁnancial statements

as a whole. Performance materiality for the Company was set at 75%

(2021: 75%) of materiality for the ﬁnancial statements as a whole,

which equates to £12,875,000. We applied this percentage in our

determination of performance materiality because we did not identify

any factors indicating an elevated level of risk.

We reported to the Audit Committee any corrected or uncorrected

identiﬁed misstatements exceeding £858,000, in addition to other

identiﬁed misstatements that warranted reporting on qualitative

grounds.

Our audit of the Company was undertaken to the materiality level

speciﬁed above, which has informed our identiﬁcation of signiﬁcant

risks of material misstatement and the associated audit procedures

performed in those areas as detailed above.

Going concern

The directors have prepared the ﬁnancial statements on the going

concern basis as they do not intend to liquidate the Company or to

cease its operations, and as they have concluded that the Company’s

ﬁnancial position means that this is realistic. They have also concluded

that there are no material uncertainties that could have cast signiﬁcant

doubt over its ability to continue as a going concern for at least a year

from the date of approval of the ﬁnancial statements (the “going

concern period”).

In our evaluation of the directors’ conclusions, we considered the

inherent risks to the Company’s business model and analysed how

those risks might affect the Company’s ﬁnancial resources or ability to

continue operations over the going concern period. The risks that we

considered most likely to affect the Company’s ﬁnancial resources or

ability to continue operations over this period were:

•

Availability of capital to meet operating costs and other ﬁnancial

commitments; and

•

Ability of the Company’s subsidiaries to reﬁnance or repay debt and

to comply with debt covenants.

We considered whether these risks could plausibly affect the liquidity

in the going concern period by comparing severe, but plausible

downside scenarios that could arise from these risks individually and

collectively against the level of available ﬁnancial resources indicated

by the Company’s ﬁnancial forecasts.

We considered whether the going concern disclosure in note 2(b) to

the ﬁnancial statements gives a full and accurate description of the

directors’ assessment of going concern.

Our conclusions based on this work:

•

we consider that the directors’ use of the going concern basis

of accounting in the preparation of the ﬁnancial statements is

appropriate;

•

we have not identiﬁed, and concur with the directors’ assessment

that there is not, a material uncertainty related to events or

conditions that, individually or collectively, may cast signiﬁcant

doubt on the Company’s ability to continue as a going concern for

the going concern period; and

•

we have nothing material to add or draw attention to in relation to

the directors’ statement in the notes to the ﬁnancial statements on

the use of the going concern basis of accounting with no material

uncertainties that may cast signiﬁcant doubt over the Company’s

use of that basis for the going concern period, and that statement

is materially consistent with the ﬁnancial statements and our audit

knowledge.

However, as we cannot predict all future events or conditions and as

subsequent events may result in outcomes that are inconsistent with

judgements that were reasonable at the time they were made, the

above conclusions are not a guarantee that the Company will continue

in operation.

Fraud and breaches of laws and regulations – ability to detect

Identifying and responding to risks of material misstatement

due to fraud

To identify risks of material misstatement due to fraud (“fraud risks”)

we assessed events or conditions that could indicate an incentive or

pressure to commit fraud or provide an opportunity to commit fraud.

Our risk assessment procedures included:

•

enquiring of management as to the Company’s policies and procedures

to prevent and detect fraud as well as enquiring whether management

have knowledge of any actual, suspected or alleged fraud;

•

reading minutes of meetings of those charged with governance; and

•

using analytical procedures to identify any unusual or unexpected

relationships.

As required by auditing standards, and taking into account possible

incentives or pressures to misstate performance and our overall

knowledge of the control environment, we perform procedures to

address the risk of management override of controls, in particular

the risk that management may be in a position to make inappropriate

accounting entries, and the risk of bias in accounting estimates

such as valuation of unquoted investments. On this audit we do not

believe there is a fraud risk related to revenue recognition because

the Company’s revenue streams are simple in nature with respect

to accounting policy choice, and are easily veriﬁable to external data

sources or agreements with little or no requirement for estimation

from management. We did not identify any additional fraud risks.

We performed procedures including:

•

identifying journal entries and other adjustments to test based

on risk criteria and comparing any identiﬁed entries to supporting

documentation;

•

incorporating an element of unpredictability in our audit procedures;

and

•

assessing signiﬁcant accounting estimates for bias

Further detail in respect of valuation of unquoted investments is set

out in the key audit matter section of in this report.

INDEPENDENT AUDITOR’S REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

Identifying and responding to risks of material

misstatement due to non-compliance with laws

and regulations

We identiﬁed areas of laws and regulations that

could reasonably be expected to have a material

effect on the ﬁnancial statements from our

sector experience and through discussion with

management (as required by auditing standards),

and from inspection of the Company’s regulatory

and legal correspondence, if any, and discussed

with management the policies and procedures

regarding compliance with laws and regulations. As

the Company is regulated, our assessment of risks

involved gaining an understanding of the control

environment including the entity’s procedures for

complying with regulatory requirements.

The Company is subject to laws and regulations

that directly affect the ﬁnancial statements

including ﬁnancial reporting legislation and

taxation legislation and we assessed the extent

of compliance with these laws and regulations

as part of our procedures on the related ﬁnancial

statement items.

The Company is subject to other laws and regul-

ations where the consequences of non-compliance

could have a material effect on amounts or

disclosures in the ﬁnancial statements, for instance

through the imposition of ﬁnes or litigation or

impacts on the Company’s ability to operate. We

identiﬁed ﬁnancial services regulation as being the

area most likely to have such an effect, recognising

the regulated nature of the Company’s activities and

its legal form. Auditing standards limit the required

audit procedures to identify non-compliance

with these laws and regulations to enquiry of

management and inspection of regulatory and

legal correspondence, if any. Therefore if a breach

of operational regulations is not disclosed to us or

evident from relevant correspondence, an audit will

not detect that breach.

Context of the ability of the audit to detect fraud

or breaches of law or regulation

Owing to the inherent limitations of an audit,

there is an unavoidable risk that we may not have

detected some material misstatements in the

ﬁnancial statements, even though we have properly

planned and performed our audit in accordance

with auditing standards. For example, the further

removed non-compliance with laws and regulations

is from the events and transactions reflected in the

ﬁnancial statements, the less likely the inherently

limited procedures required by auditing standards

would identify it.

In addition, as with any audit, there remains a

higher risk of non-detection of fraud, as this may

involve collusion, forgery, intentional omissions,

misrepresentations, or the override of internal

controls. Our audit procedures are designed

to detect material misstatement. We are not

responsible for preventing non-compliance or fraud

and cannot be expected to detect non-compliance

with all laws and regulations.

Other information

The directors are responsible for the other

information. The other information comprises

the information included in the annual report but

does not include the ﬁnancial statements and

our auditor’s report thereon. Our opinion on the

ﬁnancial statements does not cover the other

information and we do not express an audit opinion

or any form of assurance conclusion thereon.

In connection with our audit of the ﬁnancial

statements, our responsibility is to read the other

information and, in doing so, consider whether the

other information is materially inconsistent with the

ﬁnancial statements or our knowledge obtained

in the audit, or otherwise appears to be materially

misstated. If, based on the work we have performed,

we conclude that there is a material misstatement

of this other information, we are required to report

that fact. We have nothing to report in this regard.

Disclosures of emerging and principal

risks and longer term viability

We are required to perform procedures to identify

whether there is a material inconsistency between

the directors’ disclosures in respect of emerging

and principal risks and the viability statement, and

the ﬁnancial statements and our audit knowledge.

we have nothing material to add or draw attention

to in relation to:

•

the directors’ conﬁrmation within the viability

statement (page 17 and 18) that they have

carried out a robust assessment of the emerging

and principal risks facing the Company, including

those that would threaten its business model,

future performance, solvency or liquidity;

•

the emerging and principal risks disclosures

describing these risks and explaining how they

are being managed or mitigated;

•

the directors’ explanation in the viability

statement (page 17 and 18) as to how they

have assessed the prospects of the Company,

over what period they have done so and why

they consider that period to be appropriate,

and their statement as to whether they have a

reasonable expectation that the Company will

be able to continue in operation and meet its

liabilities as they fall due over the period of their

assessment, including any related disclosures

drawing attention to any necessary qualiﬁcations

or assumptions.

We are also required to review the viability

statement, set out on pages

17 and 18 under the

Listing Rules. Based on the above procedures, we

have concluded that the above disclosures are

materially consistent with the ﬁnancial statements

and our audit knowledge.

INDEPENDENT AUDITOR’S REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

Corporate governance disclosures

We are required to perform procedures to identify

whether there is a material inconsistency between

the directors’ corporate governance disclosures

and the ﬁnancial statements and our audit

knowledge.

Based on those procedures, we have concluded

that each of the following is materially consistent

with the ﬁnancial statements and our audit

knowledge:

•

the directors’ statement that they consider

that the annual report and financial statements

taken as a whole is fair, balanced and

understandable, and provides the information

necessary for shareholders to assess the

Company’s position and performance, business

model and strategy;

•

the section of the annual report describing the

work of the Audit Committee, including the

signiﬁcant issues that the audit committee

considered in relation to the ﬁnancial statements,

and how these issues were addressed; and

•

the section of the annual report that describes

the review of the effectiveness of the Company’s

risk management and internal control systems.

We are required to review the part of Corporate

Governance Statement relating to the Company’s

compliance with the provisions of the UK Corporate

Governance Code speciﬁed by the Listing Rules

for our review. We have nothing to report in this

respect.

We have nothing to report on other matters

on which we are required to report by

exception

We have nothing to report in respect of the following

matters where the Companies (Guernsey) Law,

2008 requires us to report to you if, in our opinion:

•

the Company has not kept proper accounting

records; or

•

the ﬁnancial statements are not in agreement

with the accounting records; or

•

we have not received all the information and

explanations, which to the best of our knowledge

and belief are necessary for the purpose of our audit.

Respective responsibilities

Directors’ responsibilities

As explained more fully in their statement set out

on page

69, the directors are responsible for: the

preparation of the ﬁnancial statements including

being satisﬁed that they give a true and fair view;

such internal control as they determine is necessary

to enable the preparation of ﬁnancial statements

that are free from material misstatement, whether

due to fraud or error; assessing the Company’s

ability to continue as a going concern, disclosing, as

applicable, matters related to going concern; and

using the going concern basis of accounting unless

they either intend to liquidate the Company or to

cease operations, or have no realistic alternative

but to do so.

Auditor’s responsibilities

Our objectives are to obtain reasonable assurance

about whether the ﬁnancial statements as a whole

are free from material misstatement, whether due

to fraud or error, and to issue our opinion in an

auditor’s report. Reasonable assurance is a high

level of assurance, but does not guarantee that an

audit conducted in accordance with ISAs (UK) will

always detect a material misstatement when it

exists. Misstatements can arise from fraud or error

and are considered material if, individually or in

aggregate, they could reasonably be expected to

influence the economic decisions of users taken on

the basis of the ﬁnancial statements.

A fuller description of our responsibilities is

provided on the FRC’s website at

www.frc.org.uk/

auditorsresponsibilities.

The purpose of this report and restrictions on

its use by persons other than the Company’s

members as a body

This report is made solely to the Company’s

members, as a body, in accordance with section 262

of the Companies (Guernsey) Law, 2008. Our audit

work has been undertaken so that we might state

to the Company’s members those matters we are

required to state to them in an auditor’s report and

for no other purpose. To the fullest extent permitted

by law, we do not accept or assume responsibility to

anyone other than the Company and the Company’s

members, as a body, for our audit work, for this

report, or for the opinions we have formed.

Barry Ryan

For and on behalf of KPMG Channel Islands Limited

Chartered Accountants and Recognised Auditors,

Guernsey

29 September 2022

INDEPENDENT AUDITOR’S REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

Statement

of Financial

Position

As at 30 June 2022

Assets Note

30 June 2022

£’000

30 June 2021

£’000

NON-CURRENT ASSETS

Financial assets held at fair value through proﬁt or loss 8 856,380 470,282

Total non-current assets 856,380 470,282

CURRENT ASSETS

Trade and other receivables 9 882 773

Cash and cash equivalents 10 1,619 775

Total current assets 2,501 1,548

TOTAL ASSETS 858,881 471,830

Liabilities

CURRENT LIABILITIES

Other payables and accrued expenses

490 405

Total current liabilities 490 405

TOTAL LIABILITIES 490 405

NET ASSETS

858,391 471,425

Equity

Share capital 663,809 413,215

Retained earnings 194,582 58,210

TOTAL EQUITY 13 858,391 471,425

Number of Ordinary Shares in issue at period/year end 13 611,452,217 406,999,622

Net Asset Value per Ordinary Share (pence) 7 140.39 115.83

These ﬁnancial statements were approved and authorised

for issue by the Board of Directors on 29 September 2022

and signed on their behalf by:

Paul Le Page

Director

29 September 2022

Elizabeth Burne

Director

29 September 2022

The accompanying notes form an integral part of these

ﬁnancial statements.

ANNUAL REPORT AND FINANCIAL STATEMENTS

Statement of

Comprehensive

Income

For the year ended 30 June 2022

Income Note

Year ended

30 June 2022

£’000

Year ended

30 June 2021

£’000

Income from investments 4 834 740

834 740

Net gains on ﬁnancial assets held at fair value

through proﬁt or loss

8 175,308 25,181

Operating income 176,142 25,921

Expenses

Administrative expenses 5 1,569 1,404

Operating expenses 1,569 1,404

Operating proﬁt

174,573 24,517

Proﬁt and total comprehensive income for the year 174,573 24,517

Earnings per share:

Basic and diluted (pence)

12 34.91 6.25

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

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

ANNUAL REPORT AND FINANCIAL STATEMENTS

Statement of

Changes in

Equity

For the year ended 30 June 2022

For the year ended 30 June 2021

Note

Number of

Ordinary Shares

Share capital

£’000

Retained earnings

£’000

Total equity

£’000

Shareholders’ equity at

1 July 2021

406,999,622 413,215 58,210 471,425

SHARES ISSUED DURING THE PERIOD:

Ordinary Shares issued via placing 13 204,452,595 255,100 - 255,100

Share issue costs - (4,506) - (4,506)

Dividends paid 13,14 - - (38,201) (38,201)

Total comprehensive income for the period - - 174,573 174,573

Shareholders’ equity at

30 June 2022

611,452,217 663,809 194,582 858,391

Note

Number of

Ordinary Shares

Share capital

£’000

Retained earnings

£’000

Total equity

£’000

Shareholders’ equity at

1 July 2020

370,499,622 368,712 64,793 433,505

SHARES ISSUED DURING THE PERIOD:

Ordinary Shares issued via placing 13 36,500,000 45,260 - 45,260

Share issue costs - (757) - (757)

Dividends paid 13,14 - - (31,100) (31,100)

Total comprehensive income for the period - - 24,517 24,517

Shareholders’ equity at

30 June 2021

406,999,622 413,215 58,210 471,425

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

ANNUAL REPORT AND FINANCIAL STATEMENTS

Statement of

Cash Flows

For the year ended 30 June 2022

Note

Year ended

30 June 2022

£’000

Year ended

30 June 2021

£’000

Cash flows from operating activities

Total comprehensive income for the year 174,573 24,517

Adjustments:

Increase in trade and other receivables (109) (5)

Increase/(decrease) in other payables and accrued expenses 85 (31)

Net gains on ﬁnancial assets held at fair value through proﬁt or loss 8 (175,308) (25,181)

Net cash used in operating activities* (759) (700)

Cash flows from investing activities

Purchase of ﬁnancial assets held at fair value through proﬁt or loss 8 (250,282) (44,625)

Receipts from investments held at fair value through proﬁt or loss 8 39,492 31,950

Net cash used in investing activities (210,790) (12,675)

Cash flow from ﬁnancing activities

Proceeds from issue of Ordinary Shares 251,410 45,260

Issue costs paid (816) (757)

Dividends paid 14 (38,201) (31,100)

Net cash generated from ﬁnancing activities 212,393 13,403

Net increase in cash and cash equivalents 844 28

Cash and cash equivalents at the start of the year 775 747

Cash and cash equivalents at the end of the year 10 1,619 775

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

* Net cash used in operating activities includes £833,887

(2021: £739,966) of investment income.

** Receipts from investments held at fair value through proﬁt or

loss includes £14.1 million (2021: £5.4 million) of interest.

ANNUAL REPORT AND FINANCIAL STATEMENTS

Notes

to the Financial Statements for the

year ended 30 June 2022

1.General information

The Company is a non-cellular company limited by shares and was

incorporated in Guernsey under the Law on 29 May 2013 with registered

number 56708 as a closed-ended investment company. It is regulated by the

GFSC.

The ﬁnancial statements for the year ended 30 June 2022 comprise the

ﬁnancial statements of the Company only (see Note 2 (c)).

The investment objective of the Company is to provide Shareholders with an

attractive return, principally in the form of quarterly income distributions,

by being invested primarily in solar energy assets located in the UK. It also

has the ability to invest a minority of its capital into wind, hydro and energy

storage assets.

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

2. Accounting policies

a) Basis of preparation

The ﬁnancial statements included in this annual report have been presented

on a true and fair basis and prepared in accordance with IFRS as adopted by

the EU and the DTRs of the UK FCA.

These ﬁnancial statements have been prepared under the historical cost

convention with the exception of ﬁnancial assets measured at fair value

through proﬁt or loss, and in compliance with the provisions of the Law.

ANNUAL REPORT AND FINANCIAL STATEMENTS

In light of the December 2014 amendments to

IFRS 10 (the Consolidation Exception

Amendments), which clarified the scope of the

exceptions to mandatory non-consolidation

amendments, the Board considered the

investment entity status of BR1 and concluded

that it is, like the Company, an investment

entity. As such the Company is not permitted to

consolidate BR1 in the preparation of its financial

statements and all subsidiaries are recognised at

fair value through profit or loss.

d) Functional and presentation currency

These ﬁnancial statements are presented in

Sterling, which is the functional currency of the

Company as well as the presentation currency.

All amounts are stated to the nearest thousand

unless otherwise stated. The Company’s funding,

investments and transactions are all denominated

in Sterling.

e) Income

Monitoring fee income is recognised on an accruals

basis.

Interest income on cash and cash equivalents is

recognised on an accruals basis using the effective

interest rate method.

f) Expenses

Operating expenses are the Company’s costs

incurred in connection with the ongoing

administrative costs and management of the

Company’s investments. Operating expenses are

accounted for on an accruals basis.

g) Finance costs

Finance costs are recognised in the Statement

of Comprehensive Income in the period to which

they relate on an accruals basis using the effective

interest rate method. Arrangement fees for ﬁnance

facilities are amortised over the expected life of

the facility.

Standards, interpretations and amendments

to published standards adopted in the period

The Company has not adopted any new standards,

amendments or interpretations to existing standards

in the accounting period.

New and Revised Standards

The Company has not adopted any new standards,

amendments or interpretations to existing standards

because none applicable to the Company have

been published in the accounting period.

The Company has not adopted early any standards,

amendments or interpretations to existing standards

that have been published and will be mandatory for

the Company’s accounting periods beginning after 1

July 2022 or later periods.

At the date of authorisation of these ﬁnancial

statements, certain new standards, and amendments

to existing standards have been published by the

IASB that are not yet effective and have not been

adopted early by the Company.

The Board expects that all relevant pronouncements

will be adopted in the Company’s accounting

policies for the ﬁrst period beginning after the

effective date of the pronouncement. New

standards, interpretations and amendments are

not expected to have a material impact on the

Company’s ﬁnancial statements.

b) Going concern

At 30 June 2022, the Company had invested in

127 solar plants, six wind farms and 109 single

stick wind turbines, committing £962.2 million

to SPV investments. The Company, through its

direct subsidiary, BR1, has access to an RCF

which, together with the net income generated

by the acquired projects, is expected to allow the

Company to meet its liquidity needs for the payment

of operational expenses, dividends and acquisition

of new renewable energy infrastructure assets. The

Company, through BR1, expects to comply with the

covenants of its long term loans and RCF.

The Board, in its consideration of going concern,

has reviewed comprehensive cash flow forecasts

prepared by the Investment Adviser, taking into

account capital raises to 30 June 2022, as well

as the performance of the solar and wind plants

currently in operation. The conflict in Ukraine

continues to have a signiﬁcant impact on the

macro-economic environment in which the

Company operates. The Board and Investment

Adviser have been closely monitoring this and it

has been considered as part of the going concern

assessment.

The Board has also considered the likelihood of the

Company being asked to discontinue operations

in its mandatory ﬁve year discontinuation vote

that is due at the 2023 AGM and regards this as

very unlikely, given the strong performance of the

Company and the support which it has received

from its major shareholders. In assessing the going

concern status of the Company, the Board has also

considered the re-ﬁnancing of the Natwest term

loan, maturing in August 2023, and the interest rate

swaps for 75% of the balance (being £82.5m) in

place until 2037, and has concluded that there is no

reason to believe that these will not be reﬁnanced

or repaid as they fall due.

In the light of these enquiries, at the time of

approving these accounts the Board has a

reasonable expectation that the Company has

adequate resources to continue in operational

existence for the 12 months from the date of

signing the ﬁnancial statements and does not

consider there to be any material threat to the

viability of the Company. The Board has therefore

concluded that it is appropriate to adopt the going

concern basis of accounting in preparing the

ﬁnancial statements.

c) Accounting for subsidiaries

The Company makes its investments in the

SPVs through its wholly owned subsidiary, BR1

(previously BSIFIL).

h) Dividends

Dividends declared and approved are charged

against equity. A corresponding liability is

recognised for any unpaid dividends prior to year

end. Dividends approved but not declared will be

disclosed in the notes to the ﬁnancial statements.

i) Segmental reporting

IFRS 8 ‘Operating Segments’ requires a

‘management approach’, under which segment

information is presented on the same basis as that

used for internal reporting purposes.

The Board has considered the requirements of

IFRS 8 ‘Operating Segments’, and is of the view

that the Company is engaged in a single segment of

business, being investment in UK renewable energy

infrastructure assets via its holding company and

SPVs, and therefore the Company has only a single

operating segment.

The Board, as a whole, has been determined as

constituting the chief operating decision maker of

the Company. The key measure of performance used

by the Board to assess the Company’s performance

and to allocate resources is the total return on the

Company’s NAV, as calculated under IFRS, and

therefore no reconciliation is required between the

measure of proﬁt or loss used by the Board and that

contained in these ﬁnancial statements.

The Board has overall management and control of

the Company and will always act in accordance with

the investment policy and investment restrictions

set out in the Company’s latest Prospectus, which

cannot be radically changed without the approval

of Shareholders. The Board has delegated the

day-to-day implementation of the investment

strategy to its Investment Adviser but retains

responsibility to ensure that adequate resources of

the Company are directed in accordance with their

decisions. Although the Board obtains advice from

the Investment Adviser, it remains responsible for

making ﬁnal decisions in line with the Company’s

policies and the Board’s legal responsibilities.

NOTES TO THE FINANCIAL STATEMENTS ANNUAL REPORT AND FINANCIAL STATEMENTS

j) Financial instruments

Classiﬁcation and measurement of ﬁnancial assets and

ﬁnancial liabilities

Financial assets and ﬁnancial liabilities are recognised in the

Company’s Statement of Financial Position when the Company

becomes a party to the contractual provisions of the instrument.

i) Financial assets held at fair value through proﬁt or loss

Classiﬁcation

The Company’s investment in BR1 is accounted for as a ﬁnancial asset

rather than consolidated as the Company qualiﬁes as an investment

entity under IFRS 10, therefore the Company’s investment is held at

fair value through proﬁt or loss in accordance with the requirements

of IFRS 9.

Recognition and de-recognition

Purchases and sales of investments are recognised on the trade

date – the date on which the Company commits to purchase or sell

the investment. A ﬁnancial asset is de-recognised either when the

Company has transferred all the risks and rewards of ownership;

or it has neither transferred nor retained substantially all the risks

and rewards and when it no longer has control over the assets or a

portion of the asset; or the contractual right to receive cash flow has

expired.

Measurement

Subsequent to initial recognition, investment in BR1 is measured at

each subsequent reporting date at fair value. The Company holds all

of the shares in the subsidiary, BR1, which is a holding vehicle used

to hold the Company’s SPV investments. The Directors believe it is

appropriate to value this entity based on the fair value of its portfolio

of SPV investment assets held plus its other assets and liabilities.

The SPV investment assets held by the subsidiary are valued semi-

annually as described in Note 8 on a discounted cash flow basis which

is benchmarked against market transactions.

Gains or losses, through proﬁt or loss, are made up of BR1’s proﬁt

or loss, which comprises mainly cash receipts from its SPVs, the fair

value movement of BR1’s SPV portfolio and cash received in respect

of Eurobond instrument interest. Furthermore, cash receipts made to

the Company by BR1 are accounted for as a repayment of loans and

not reflected in the Company’s income, apart from monitoring fees

(see Note 4).

3. Critical accounting judgements, estimates

and assumptions in applying the Company’s

accounting policies

The preparation of these ﬁnancial statements under IFRS requires

management to make judgements, estimates and assumptions that

affect the application of policies and reported amounts of assets

and liabilities, income and expenses. The estimates and associated

assumptions are based on historical experience and other factors that

are believed to be reasonable under the circumstances, the results of

which form the basis of making judgements about carrying values of

assets and liabilities that are not readily apparent from other sources.

Actual results may differ from these estimates.

The area involving a high degree of judgement and/or complexity

and/or area where assumptions and estimates are signiﬁcant to

the ﬁnancial statements has been identiﬁed as the valuation of the

Company’s investment in BR1 which is estimated predominantly on

the valuation of the portfolio of investments held by BR1 (see Note 8).

The estimates and underlying assumptions are reviewed on an

ongoing basis. Revisions to accounting estimates are recognised in the

period in which the estimate is revised if the revision affects only that

period or in the period of the revision and future period if the revision

affects both current and future periods.

As disclosed in Note 8, the Board believes it is appropriate for the

Company’s portfolio to be benchmarked on a £m/MW basis against

comparable portfolio transactions and on this basis a weighted

average discount rate of 6.75% (6.00% as at 30 June 2021) has been

utilised.

Use of a blended power forecast is unchanged, but the inflation

assumption has been increased to 10.9% in 2022 and 3.4% in 2023

to reflect market forecasts, after this a medium-term rate at 3%

(June 2021: 3%) has been extended to June 2029 before reverting

to a reduced long term assumption of 2.25% (June 2021: 2.75%)

thereafter.

The Directors’ Valuation as at 30 June 2022 is based on a weighted

average life of the portfolio of 25 years (vs. 30.2 years in June 2021),

reflecting both new acquisitions and asset life extensions.

ii) Cash and cash equivalents and trade and other receivables

Cash and cash equivalents comprise cash on hand and short term

deposits with an original maturity of three months or less that are readily

convertible to a known amount of cash and are subject to an insigniﬁcant

risk of changes in value. Other receivables are non-derivative ﬁnancial

assets with ﬁxed or determinable payments that are not quoted in an

active market. These ﬁnancial assets are included in current assets,

except for maturities greater than twelve months after the reporting date,

which are classiﬁed as non-current assets. They are initially recognised

at fair value plus transaction costs that are directly attributable to the

acquisition, and subsequently carried at amortised cost using the effective

interest rate method, less provision for impairment.

iii) Financial liabilities

The classiﬁcation of ﬁnancial liabilities at initial recognition depends

on the purpose for which the ﬁnancial liability was issued and its

characteristics.

All ﬁnancial liabilities are initially recognised at fair value net of

transaction costs incurred. All purchases of ﬁnancial liabilities are

recorded on the trade date, being the date on which the Company

becomes party to the contractual requirements of the ﬁnancial liability.

The Company’s ﬁnancial liabilities consist of only ﬁnancial liabilities

measured at amortised cost.

Financial liabilities measured at amortised cost

These include trade payables and other short term monetary liabilities,

which are initially recognised at fair value and subsequently carried at

amortised cost using the effective interest rate method.

Derecognition of ﬁnancial liabilities

A ﬁnancial liability (in whole or in part) is derecognised when the

Company has extinguished its contractual obligations, it expires, or is

cancelled. Any gain or loss on derecognition is taken to proﬁt and loss.

k) Equity instruments

An equity instrument is any contract that evidences a residual interest

in the assets of an entity after deducting all of its liabilities. Equity

instruments issued by the Company are recognised as the proceeds

received, net of direct issue costs. Direct issue costs include those

incurred in connection with the placing and admission which include

fees payable under the Placing Agreement, legal costs and any other

applicable expenses.

NOTES TO THE FINANCIAL STATEMENTS ANNUAL REPORT AND FINANCIAL STATEMENTS

4.Income from investments

Year ended

30 June 2022

£’000

Year ended

30 June 2021

£’000

Monitoring fee in relation to

loans supplied (Note 16)

834 740

The Company provides monitoring and loan administration services to

BR1 and BSIFIL for which an annual fee is charged, payable in arrears.

5. Administrative expenses

Year ended

30 June 2022

£’000

Year ended

30 June 2021

£’000

Investment advisory base fee *

(see Note 16)

491 363

Legal and professional fees 166 186

Administration fees 395 319

Directors’ remuneration 241 227

Audit fees 98 74

Non-audit fees 40 30

Broker fees 52 50

Regulatory Fees 50 48

Registrar fees 35 51

Insurance 11 11

Listing fees 37 21

Other expenses (47) 24

1,569 1,404

* The Investment advisory base fee is paid by both the Company (10%) and

BR1 (90%). The amount shown above reflects the amount paid by the

Company only. Note 16 shows the full fee paid to the Investment Adviser.

Investment Advisory Agreement

The Company, BR1 and the Investment Adviser have entered

into an Investment Advisory Agreement, pursuant to which

the Investment Adviser has been given overall responsibility

for the non-discretionary management of the Company’s

(and any of BR1’s SPVs) assets (including uninvested cash)

in accordance with the Company’s investment policies,

restrictions and guidelines. Under the terms of the Investment

Advisory Agreement, the Investment Adviser is entitled to a

base fee. The base fee is payable quarterly in arrears in cash,

at a rate equivalent to 0.80% per annum of the NAV up to and

including £750,000,000, 0.75% per annum of the NAV above

£750,000,000 and up to and including £1,000,000,000 and

0.65% per annum of the NAV above £1,000,000,000. The

base fee will be calculated on the NAV reported in the most

recent quarterly NAV calculation as at the date of payment.

On 11 June 2014, BSIFIL entered into a Technical Services

Agreement with the Investment Adviser, with a retrospective

effective date of 25 June 2013, in order to delegate the

provision of the consultancy services to the Investment

Adviser in its capacity as technical adviser to the SPVs.

On the same date, 11 June 2014, the Group entered into

a base fee offset arrangement agreement, whereby the

aggregate technical services fee and base fee payable (under

the Investment Advisory Agreement) shall not exceed the

base fee that would otherwise have been payable to the

Investment Adviser in accordance with the Investment

Advisory Agreement had no fees been payable under the

Technical Services Agreement.

The fees incurred for the period and the amount outstanding

at the period end have been disclosed in Note 16.

Administration Agreement

The Administrator has been appointed to provide day-to-

day administration and company secretarial services to the

Company, as set out in the Administration Agreement dated

24 June 2013.

Under the terms of the Administration Agreement, the

Administrator is entitled to an annual fee, at a rate equivalent

to 10 basis points of NAV up to and including £100,000,000,

7.5 basis points of NAV above £100,000,000 and up to

and including £200,000,000 and 5 basis points of the

NAV above £200,000,000, subject to a minimum fee of

£100,000 per annum. The fees are for the administration,

accounting, corporate secretarial services, corporate

governance, regulatory compliance and stock exchange

continuing obligations provided to the Company. In addition,

the Administrator will receive an annual fee of £7,500 and

£3,000 for the provision of a compliance ofﬁcer and money

laundering reporting ofﬁcer, respectively.

The Administrator is entitled to an investment related

transaction fee charged on a time spent basis, which is capped

at a total of £5,000 per investment related transaction. All

reasonable costs and expenses incurred by the Administrator

in accordance with this agreement are reimbursed to the

Administrator quarterly in arrears.

The Administrator also receives a fee of £5,000 per annum

in relation to the administration of the Company’s Guernsey

Green Fund Status.

For the year ended 30 June 2022, the Company incurred fees

to the administrator of £395,329 (2021: £319,331) of which

£204,162 (2021: £89,438) was outstanding at year-end.

6. Taxation

The Company has obtained exempt status under the Income

Tax (Exempt Bodies) (Guernsey) Ordinance 1989 for which it

paid an annual fee of £1,200 (2021: £1,200) (included within

regulatory fees).

The income from the Company’s investments is not subject

to any further tax in Guernsey although the subsidiary and

underlying SPVs, as UK based entities, are subject to the

current prevailing UK corporation tax rate. The standard rate

of UK corporation tax is 19% (2021: 19%).

7. Net Asset Value per Ordinary Share

The calculation of NAV per Ordinary Share is based on NAV

of £858,390,982 (2021: £471,424,833) and the number

of shares in issue at 30 June 2022 of 611,452,217 (2021:

406,999,622) Ordinary Shares.

NOTES TO THE FINANCIAL STATEMENTS ANNUAL REPORT AND FINANCIAL STATEMENTS

8. Financial assets held at fair value through proﬁt or loss

The Company’s accounting policy on the measurement of these ﬁnancial assets is discussed in Note

2(j)(i) and below.

30 June 2022

Total

£’000

30 June 2021

Total

£’000

Opening balance (Level 3) 470,282 432,426

AAdditions – funds passed to BR1/BSIFIL 250,282 44,625

Change in fair value of ﬁnancial assets held at fair

value through proﬁt or loss

135,816 (6,769)

Closing balance (Level 3) 856,380 470,282

Analysis of net gains on ﬁnancial assets held at fair value through proﬁt or loss (per statement

of comprehensive income)

Year ended

30 June 2022

£’000

Year ended

30 June 2021

£’000

Unrealised change in fair value of ﬁnancial assets

held at fair value through proﬁt or loss

135,816 (6,769)

Cash receipts from non-consolidated subsidiary* 39,492 31,950

Net gains on ﬁnancial assets held at fair value

through proﬁt or loss

175,308 470,282

*Comprising of repayment of Loans and Eurobond interest

Investments at fair value through proﬁt or loss comprise the fair value of the SPV investment portfolio

held by BR1, the Company’s single direct subsidiary, which changed from BSIFIL to BR1 in May 2022

to facilitate arrangement of the new RCF. This is valued semi-annually by the Directors, and the fair

value of BR1’s cash, working capital and debt balances. A reconciliation of the SPV investment portfolio

value to ﬁnancial assets at fair value through proﬁt or loss shown on the Statement of Financial Position

is also shown on page

84.

30 June 2022

Total

£’000

30 June 2021

Total

£’000

SPV investment portfolio, Directors’ Valuation 939,948 694,543

Immediate Holding Company

Cash 13,102 22,542

Working capital (26,670) 3,754

Debt (70,000) (250,557)

(83,568) (224,261)

Financial assets at fair value

through proﬁt or loss

856,380 470,282

Fair value measurements

IFRS 13 ‘Fair Value Measurement’ requires disclosure of fair value measurement by level. The level

of fair value hierarchy within the ﬁnancial assets or ﬁnancial liabilities is determined on the basis of

the lowest level input that is signiﬁcant to the fair value measurement. Financial assets and ﬁnancial

liabilities are classiﬁed in their entirety into only one of the three levels.

•

Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities;

•

Level 2 – inputs other than quoted prices included within Level 1 that are observable for the assets

or liabilities, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

•

Level 3 – inputs for assets or liabilities that are not based on observable market data (unobservable

inputs).

The determination of what constitutes ‘observable’ requires signiﬁcant judgement by the Company. The

Company considers observable data to be market data that is readily available, regularly distributed or

updated, reliable and veriﬁable, not proprietary, and provided by independent sources that are actively

involved in the relevant market.

The only ﬁnancial instrument carried at fair value is the investment held by the Company, BR1, which

is fair valued at each reporting date. The Company’s investment has been classiﬁed within Level 3 as

BR1’s investments are not traded and contain unobservable inputs.

NOTES TO THE FINANCIAL STATEMENTS ANNUAL REPORT AND FINANCIAL STATEMENTS

Transfers during the period

There have been no transfers between levels during the year

ended 30 June 2022. Any transfers between the levels will

be accounted for on the last day of each ﬁnancial period. Due

to the nature of the investments, these are always expected

to be classiﬁed as Level 3.

Directors’ Valuation methodology and process

The same valuation methodology and process for

operational assets is followed in these ﬁnancial statements

as was applied in the preparation of the Company’s ﬁnancial

statements for the year ended 30 June 2021. Assets under

construction and not yet operational are valued at cost

(deemed to approximate fair value) and exclude acquisition

costs which are expensed in the period in which they are

incurred, whilst investments that are operational are valued

under the ‘willing buyer-willing seller’ methodology, on a

DCF basis over the life of the asset (typically more than 25

years) and, prudently benchmarked on a £/MW basis against

comparable transactions for large scale portfolios.

Each investment is subject to full UK corporate taxation at

the prevailing rate with the tax shield being limited to the

applicable capital allowances from the Company’s SPV

investments.

The Investment Adviser recommends the fair value on a

semi-annual basis, subject to the Board’s approval. The key

inputs, as listed below, are derived from various internal and

external sources. The key inputs to a DCF based approach

are: the equity discount rate, the cost of debt (influenced by

interest rate, gearing level and length of debt), power price

forecasts, long term inflation rates, asset life, irradiation

forecasts, average wind speeds, operational costs and

taxation. Given discount rates are a product of not only

the factors listed previously but also regulatory support,

perceived sector risk and competitive tensions, it is not

unusual for discount rates to change over time. Evidence of

this is shown by way of the revisions to the original discount

rates applied between the ﬁrst renewable acquisitions and

those witnessed in the past twelve months.

Given discount rates are subjective, there is sensitivity within these to

the interpretation of factors outlined above.

Judgement is used by the Board in increasing the weighted average

discount rate to 6.75% as at 30 June 2022 (2021: 6.00%) with three

key factors that have impacted the adoption of this rate outlined below:

a. Transaction values have risen to c.£1.25-1.45/MW for large scale

portfolios and which the Board have used to determine that an

effective price of £1.38m/MW is an appropriate basis for the

valuation of the BSIF portfolio as at 30 June 2022;

b. Inclusion of the latest long term power forecasts from the Company’s

three providers;

c. Inclusion of an uplift with respect to asset extensions of 15 years on

a subset (530MW) of the portfolio.

In order to smooth the sensitivity of the valuation to forecast timing or

opinion taken by a single forecast, the Board continues to adopt the

application of a blended power curve from leading forecasters.

The fair value of operational SPVs are calculated on a discounted

cash flow basis in accordance with the IPEV Valuation Guidelines. The

Investment Adviser produces fair value calculations on a semi-annual

basis as at 30 June and 31 December each year.

Sensitivity analysis

The table below analyses the sensitivity of the fair value of the Directors’

Valuation to an individual input, while all other variables remain constant.

The Directors consider the changes in inputs to be within a reasonable

range based on their understanding of market transactions. This is

not intended to imply that the likelihood of change or that possible

changes in value would be restricted to this range.

30 JUNE 2022

30 JUNE 2021

Input

Change in input

Change in fair value of

Directors’ Valuation £m

Change in NAV

per share (pence)

Change in fair value of

Directors’ Valuation £m

Change in NAV

per share (pence)

Discount rate

+ 0.5% (21.8) (3.57) (16.0) (3.93)

- 0.5% 23.1 3.77 17.1 4.20

Power prices

+10% 62.2 10.17 41.4 10.17

-10% (63.8) (10.43) (43.5) (10.69)

Inflation rate *

+ 0.5% 25.0 4.09 14.2 3.49

- 0.5% (26.1) (4.28) (13.9) (3.42)

Energy yield

10 year P90 (100.2) (16.39) (66.6) (16.36)

10 year P10 100.5 16.43 65.9 16.19

Operational costs

+10% (10.5) (1.72) (8.3) (2.04)

-10% 10.5 1.72 8.3 2.04

* PY change in input was +0.25%/-0.25%

NOTES TO THE FINANCIAL STATEMENTS ANNUAL REPORT AND FINANCIAL STATEMENTS

Subsidiaries and Associates

The Company holds investments through subsidiary companies which

have not been consolidated as a result of the adoption of IFRS 10:

Investment entities exemption to consolidation. Below is the legal

entity name and ownership percentage for the SPVs which are all

incorporated in the UK except for Blueﬁeld Durrants GmBH which is

incorporated in Germany.

Name

Ownership

percentage

Blueﬁeld Renewables 1 Limited 100

Blueﬁeld Renewables 2 Limited 100

Blueﬁeld SIF Investments Limited 100

Bunns Hill Solar Limited 100

HF Solar Limited 100

Hoback Solar Limited 100

Littlebourne Solar Farm Limited 100

Molehill PV Farm Limited 100

Pashley Solar Farm Limited 100

ISP (UK) 1 Limited 100

Solar Power Surge Limited 100

West Raynham Solar Limited 100

Sheppey Solar Limited 100

Capelands Solar Farm Limited 100

North Beer Solar Limited 100

WEL Solar Park 2 Limited 100

Hardingham Solar Limited 100

Redlands Solar Farm Limited 100

WEL Solar Park 1 Limited 100

Saxley Solar Limited 100

Frogs Lake Solar Limited 100

Old Stone Farm Solar Park Limited 100

Bradenstoke Solar Park Limited 100

GPP Langstone LLP 100

Ashlawn Solar Limited 100

Betingau Solar Limited 100

Name

Ownership

percentage

Grange Solar Limited 100

Hall Farm Solar Limited 100

Oulton Solar Limited 100

Romsey Solar Limited 100

Salhouse Solar Limited 100

Tollgate Solar Limited 100

Trethosa Solar Limited 100

Welbourne LLP 100

Barvills Solar Limited 100

Clapton Farm Solar Park Limited 100

Court Farm Solar Limited 100

East Farm Solar Park Limited 100

Old Stone Farm Solar Park Limited 100

Bradenstoke Solar Park Limited 100

GPP Langstone LLP 100

Galton Manor Solar Park Limited 100

Gypsum Solar Farm Limited 100

Holly Farm Solar Park Limited 100

Kellingley Solar Farm Limited 100

Little Bear Solar Limited 100

Place Barton Farm Solar Park Limited 100

Willows Farm Solar Limited 100

Southwick Solar Limited 100

Butteriss Down Solar Farm Limited 100

Goshawk Solar Limited 100

Kite Solar Limited 100

Peregrine Solar Limited 100

Promothames 1 LTD 100

Rookery Solar Limited 100

Mikado Solar Projects (2) Limited 100

Mikado Solar Projects (1) Limited 100

Eagle Solar Limited 100

Name

Ownership

percentage

Kislingbury Solar Limited 100

Thornton Lane Solar Farm Limited 100

Gretton Solar Farm Limited 100

Wormit Solar Farm Limited 100

Langlands Solar Limited 100

Blueﬁeld Merlin LTD 100

Harrier Solar Limited 100

Rhydy Pandy Solar Limited 100

New Energy Business Solar Ltd 100

Corby Solar Limited 100

Falcon Solar Farm Limited 100

Folly Lane Solar Limited 100

New Road Solar Limited 100

Blossom 1 Solar Limited 100

Blossom 2 Solar Limited 100

New Road 2 Solar Limited 100

GPP Eastcott LLP 100

GPP Blackbush LLP 100

GPP Big Field LLP 100

Good Energy Creathorne Farm Solar Park

(003) Limited

100

Good Energy Lower End Farm Solar Park (026) 100

Good Energy Woolbridge Solar Park (010) Limited 100

Good Energy Rook Wood Solar Park (057) Limited 100

Good Energy Carloggas Solar Park (009) Limited 100

Good Energy Cross Road Plantation Solar Park

(028) Limited

100

Good Energy Delabole Windfarm Limited 100

Good Energy Hampole Windfarm Limited 100

Good Energy Generating Assets No.1 Limited 100

Good Energy Holding Company No.1 Limited 100

Aisling Renewables LTD 100

NOTES TO THE FINANCIAL STATEMENTS ANNUAL REPORT AND FINANCIAL STATEMENTS

Name

Ownership

percentage

Arena Wind Beragh Limited 100

Arena Wind Camlough Limited 100

Arena Wind Cullybackey Limited 100

Arena Wind Dungorman Limited 100

Arena Wind Holdings Limited 100

Arena Wind Killeenan Limited 100

Arena Wind Mowhan Limited 100

Arena Wind Mullanmore Limited 100

Arena Wind (NI) Limited 100

Ash Renewables No 3 Limited 100

Ash Renewables No 4 Limited 100

Ash Renewables No 5 Limited 100

Ash Renewables No 6 Limited 100

Carmoney Energy Limited 100

Errigal Energy Limited 100

Galley Energy Limited 100

Oak Renewables 2 Limited 100

Oak Renewables Limited 100

S&E Wind Energy Limited 100

Arena Capital Partners Limited 100

Boston RE Ltd 100

DC21 Earth SPV Limited 100

E5 Energy Limited 100

E6 Energy Limited 100

E7 Energy Limited 100

Hallmark Powergen 3 Limited 100

Warren Wind Limited 100

Wind Energy Three Limited 100

Wind Energy Holdings Limited 100

Wind Energy Scotland (Fourteen Arce Fields) Limited 100

Wind Energy Scotland (Birkwood Mains) Limited 100

Name

Ownership

percentage

Wind Energy Scotland (Holmhead) Limited 100

Arena Capital MP Limited 100

Moscliff Power 5 Limited 100

Mosscliff Power 10 Limited 100

Mosscliff Power 2 Limited 100

Mosscliff Power 3 Limited 100

Mosscliff Power 4 Limited 100

Mosscliff Power 6 Limited 100

Mosscliff Power 7 Limited 100

Mosscliff Power Limited 100

E2 Energy PLC 100

Wind Energy One Limited 100

Wind Energy Two Limited 100

New Road Wind Limited 100

Yelvertoft Solar Farm Limited 100

Peradon Solar Farm Limited 60

Lower Tean Leys Solar Farm Limited 60

Lower Mays Solar Farm Limited 60

Leeming Solar Farm Limited 60

Whinﬁeld High Grange Solar Farm 60

Wallace Wood Solar Farm Limited 60

Sweet Briar Solar Farm Limited 60

BF31 WHF Solar Limited 100

BF27 BF Solar Limited 100

BF13A TF Solar Limited 100

HW Solar Farm Limited 100

AR108 Bolt Solar Farm Limited 100

BF33C LHF Solar Limited 100

AR006 GF Solar Limited 100

Mauxhall Farm Energy Park Limited 100

BF16D BHF Solar Limited 100

Name

Ownership

percentage

BF33E BHF Solar Limited 100

Twineham Energy Limited 60

Sheepwash Lane Energy Barn Limited 100

Whitehouse Farm Energy Barn Limited 100

Blueﬁeld Durrants GmBH 100

Lightning 1 Energy Park Limited 100

Abbots Ann Farm Solar Park Limited 100

Canada Farm Solar Park Limited 100

Crockbaravally Wind Holdco Limited 100

Crockbaravally Wind Farm Limited 100

Dayﬁelds Solar Limited 100

Farm Power Apollo Limited 100

Freathy Solar Park Limited 100

IREEL FIT TopCo Limited 100

IREEL FIT HoldCo Limited 100

IREEL Wind TopCo Limited 100

IREEL Solar HoldCo Limited 100

IREL Solar HoldCo Limited 100

Ladyhole Solar Limited 100

Morton Wood Solar Limited 100

Nanteague Solar Limited 100

Newton Down Wind HoldCo Limited 100

Newton Down Windfarm Limited 100

Padley Wood Solar Limited 100

Peel Wind Farm (Sheerness) 100

Port of Sheerness Wind Farm Limited 100

Sandys Moor Solar Limited 100

St Johns Hill Wind Holdco Limited 100

St Johns Hill Wind Limited 100

Trickey Warren Solar Limited 100

Whitton Solar Limited 100

NOTES TO THE FINANCIAL STATEMENTS ANNUAL REPORT AND FINANCIAL STATEMENTS

9.Trade and other receivables

30 June 2022

£’000

30 June 2021

£’000

CURRENT ASSETS

Income from investments 834 740

Other receivables 43 13

Prepayments 5 20

882 773

There are no material past due or impaired receivable balances

outstanding at the period end.

The Directors consider that the carrying amount of all receivables

approximates to their fair value.

11. Other payables and accrued expenses

30 June 2022

£’000

30 June 2021

£’000

CURRENT LIABILITIES

Investment advisory fees 121 89

Administration fees 204 89

Audit fees 95 85

Directors’ Fees 60 60

Other payables 10 82

490 405

The Company has ﬁnancial risk management policies in place to ensure

that all payables are paid within the agreed credit period. The Directors

consider that the carrying amounts of all payables approximate to their

fair value.

12. Earnings per share

Year ended

30 June 2022

Year ended

30 June 2021

Proﬁt attributable to

Shareholders of the Company

£174,572,832 £24,517,576

Weighted average number of

Ordinary Shares in issue

500,110,688 392,299,622

Basic and diluted earnings

from continuing operations

and proﬁt for the year (pence

per share)

34.91 6.25

13. Share capital

The authorised share capital of the Company is represented by an

unlimited number of Ordinary Shares of no par value which, upon

issue, the Directors may designate into such classes and denominate

in such currencies as they may determine.

Number of Ordinary Shares

Year ended

30 June 2022

Number

Year ended

30 June 2021

Number

Opening balance 406,999,622 370,499,622

Shares issued for cash 204,452,595 36,500,000

Closing balance 611,452,217 406,999,622

Shareholders’ Equity

Year ended

30 June 2022

£’000

Year ended

30 June 2021

£’000

Opening balance 471,425 433,505

Ordinary Shares issued for cash 255,100 45,260

Share issue costs (4,506) (757)

Dividends paid (38,201) (31,100)

Retained earnings 174,573 24,517

Closing balance 858,391 471,425

On 21 July 2021, the Company announced the issue of 89,067,980

new Ordinary Shares, at a price of £1.18 per ordinary share, raising

gross proceeds of approximately £105.1 million. Following the issue,

the number of ordinary shares that the Company had in issue was

496,067,602.

10. Cash and cash equivalents

Cash and cash equivalents comprise cash held by

the Company and short term bank deposits held with

maturities of up to three months. The carrying amount

of these assets as at 30 June 2022 was £1,619,313

(2021: £775,016) and approximated their fair value.

Cash held by BR1, the Company’s immediate wholly

owned subsidiary, as at 30 June 2022 is shown in

Note 8.

NOTES TO THE FINANCIAL STATEMENTS ANNUAL REPORT AND FINANCIAL STATEMENTS

On 1 June 2022, the Company announced the issue of 115,384,615

new Ordinary Shares at a price of £1.30 per ordinary share raising

gross proceeds of approximately £150.0 million. Following the issue,

the number of ordinary shares that the Company has in issue is

611,452,217.

Rights attaching to shares

The Company has a single class of Ordinary Shares, which are entitled

to dividends declared by the Company. At any general meeting of

the Company, each ordinary Shareholder is entitled to have one vote

for each share held. The Ordinary Shareholders also have the right

to receive all income attributable to those shares and participate

in distributions made and such income shall be divided pari passu

among the holders of Ordinary Shares in proportion to the number of

Ordinary Shares held by them.

14. Dividends

On 7 July 2021, the Board declared a third interim dividend of

£8,139,992, in respect of the year ended 30 June 2021, equating to

2.00pps (third interim dividend in respect of the year ended 30 June

2020: 1.95pps), which was paid on 4 August 2021 to Shareholders on

the register on 16 July 2021.

On 5 October 2021, the Board declared a fourth interim dividend of

£9,921,352 in respect of the year ended 30 June 2021, equating to

2.00pps (fourth interim dividend in respect of the year ended 30 June

2020: 2.05pps), which was paid on 8 November 2021 to Shareholders

on the register on 15 October 2021.

On 31 January 2022, the Board declared its ﬁrst interim dividend of

£10,070,172, in respect of the year ended 30 June 2022, equating to

2.03pps (ﬁrst interim dividend in respect of the year ended 30 June

2021: 2.00pps), which was paid on 10 March 2022 to Shareholders

on the register on 11 February 2022.

On 4 May 2022, the Board declared a second interim dividend of

£10,070,172, in respect of the year ended 30 June 2022, equating to

2.03pps (second interim dividend in respect of the year ended 30 June

2021: 2.00pps), which was paid on 13 June 2022 to Shareholders on

the register as at 13 May 2022.

Post year end, on 2 August 2022, the Board declared a third interim

dividend of £12,534,770, in respect of the year ended 30 June 2022,

equating to 2.05pps (third interim dividend in respect of the year

ended 30 June 2021: 2.00pps), which was paid on 31 August 2022 to

Shareholders on the register on 12 August 2022.

Post year end, on 29 September 2022, the Board approved a fourth

interim dividend of £12,779,351 in respect of the year ended 30

June 2022, equating to 2.09pps (fourth interim dividend in respect

of the year ended 30 June 2021: 2.00pps), which will be declared

on 30 September 2022 and paid on or around 4 November 2022 to

Shareholders on the register on 14 October 2022.

15. Risk management policies and procedures

The Company is exposed to a variety of ﬁnancial risks, including

market risk (including price risk, currency risk and interest rate risk),

credit risk, liquidity risk and portfolio operational risk. The Investment

Adviser and the Administrator report to the Board on a quarterly basis

and provide information to the Company which allows it to monitor

and manage ﬁnancial risks relating to its operations.

The Company’s overall risk management programme focuses on the

unpredictability of ﬁnancial markets and government energy policy

and seeks to minimise potential adverse effects on the Company’s

ﬁnancial performance, as referenced in the Principal and Emerging

Risks section in the Strategic Report.

The Board is ultimately responsible for the overall risk management

approach within the Company. The Board has established procedures

for monitoring and controlling risk. The Company has investment

guidelines that set out its overall business strategies, its tolerance for

risk and its general risk management philosophy.

In addition, the Investment Adviser monitors and measures the overall

risk bearing capacity in relation to the aggregate risk exposure across

all risk types and activities. Further details regarding these policies are

set out below:

Market price risk

Market price risk is deﬁned as the risk that the fair value of future

cash flows of a ﬁnancial instrument held by the Company, in particular

through the Company’s subsidiary, BR1, will fluctuate because of

changes in market prices.

Market price risk will arise from changes in electricity prices whenever

PPAs expire and are renewed. The timing of these is staggered to

minimise risk.

BR1’s future SPV investments are subject to fluctuations in the price

of secondary assets which could have a material adverse effect on the

BR1’s ability to source projects that meet its investment criteria and

consequently its business, ﬁnancial position, results of operations and

business prospects.

The Company’s overall market position is monitored by the Investment

Adviser and is reviewed by the Board of Directors on an ongoing basis.

Currency risk

The Company does not have any direct currency risk exposure as all its

investments and transactions are in Sterling. The Company is however

indirectly exposed to currency risk on future equipment purchases,

made through BR1’s SPVs, where equipment is imported.

Interest rate risk

Interest rate risk is the risk that the value of ﬁnancial instruments and

related income from the cash and cash equivalents will fluctuate due

to changes in market interest rates.

The Company is also exposed, through BR1, to interest rate risk

on drawings under its RCF. Please see page

35 in the Investment

Adviser’s report for details of the third party debt within the Company’s

subsidiaries.

The Company’s interest bearing ﬁnancial assets consist of cash and

cash equivalents. The interest rates on the short term bank deposits

are ﬁxed and do not fluctuate signiﬁcantly with changes in market

interest rates.

NOTES TO THE FINANCIAL STATEMENTS ANNUAL REPORT AND FINANCIAL STATEMENTS

The following table shows the portfolio proﬁle of the ﬁnancial assets

at year end:

Interest rate

Total as at

30 June 2022

(£’000)

Floating rate

RBSI 0.00% 1,508

Fixed rate

Lloyds 0.00% 111

1,619

Interest rate

Total as at

30 June 2021

(£’000)

Floating rate

RBSI 0.00% 272

Fixed rate

Lloyds 0.00% 503

775

The valuation of BR1’s SPV investments is subject to variation in the

discount rate, which are themselves subject to changes in interest

rate risk due to the discount rates applied to the discounted cash

flow technique when valuing the investments. The Investment

Adviser reviews the discount rates semi-annually and takes into

consideration market activity to ensure appropriate discount rates are

recommended to the Board. The Group is exposed to interest rate risk

on the Directors’ Valuation of £939.9m (2021: £694.5m).

Credit risk

Credit risk is the risk that a counterparty will be unable to pay

amounts in full when due. At the reporting date BR1’s SPVs (2021:

BSIFIL’s SPVs) held performance bonds totalling £1,830,000

(2021: £1,411,977) with banks that have a credit rating which is of

investment grade.

The underlying SPVs are only contracted with investment grade

counter parties, mitigating PPA counterparty risk. The Directors do not

have any concerns around the continuing purchasing of power through

its current PPAs.

The Company’s credit risk exposure is due to a portion of the

Company’s assets being held as cash and cash equivalents and

accrued interest. The Company maintains its cash and cash

equivalents and borrowings across two different banking groups

to diversify credit risk. The total exposure to credit risk arises from

default of the counterparty and the carrying amounts of ﬁnancial

assets best represent the maximum credit risk exposure at the period

end date. As at 30 June 2022, the maximum credit risk exposure

in relation to cash and cash equivalents held by the Company was

£1,619,313 (2021: £775,016). If the cash and cash equivalents held

by BR1 (2021: BSIFIL) are included, this increases to £14,721,105

(2021: £23,316,642). All cash and cash equivalents held by the

Company and BR1 is with banks that have a credit rating which is of

investment grade.

Cash

£’000)

Fixed deposit

£’000)

Total as at

30 June 2022

(£’000)

RBSI 1,508 - 1,508

Lloyds - 111 111

1,508 111 1,619

Cash

£’000)

Fixed deposit

£’000)

Total as at

30 June 2021

(£’000)

RBSI 272 - 272

Lloyds - 503 503

272 503 775

The carrying amount of these assets approximates their fair value.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet

its liabilities as they fall due. The Investment Adviser and the Board

continuously monitor forecasted and actual cash flows from operating,

ﬁnancing and investing activities.

As the Company’s investments, through BR1, are in the SPVs, which

are private companies that are not publicly listed, the return from

these investments is dependent on the income generated or the

disposal of renewable energy infrastructure assets by the SPVs and

will take time to realise.

The Company, through BR1, expects to comply with the covenants of

its revolving credit facility.

AERIAL VIEW AT TRETHOSA

NOTES TO THE FINANCIAL STATEMENTS ANNUAL REPORT AND FINANCIAL STATEMENTS

The following table details the Company’s expected maturity for its ﬁnancials assets and liabilities. These are

undiscounted contractual cash flows:

Less than one

year

(£’000)

Between one and

ﬁve years

(£’000)

After ﬁve

years

(£’000)

Total as at

30 June 2022

(£’000)

ASSETS

Financial assets held at fair

value through proﬁt or loss*

- - 484,322 484,322

Trade and other receivables** 877 - - 877

Cash and cash equivalents 1,619 - - 1,619

LIABILITIES

Other payables and accrued

expenses

(490) - - (490)

2,006 - 484,322 486,328

* the Company passes debt to BR1 under loan agreements; as at the year end there is an additional amount of non-

contractual cash which is not reflected above in addition to the interest income

**excluding prepayments

As part of the ﬁnancing terms provided by all third party leaders to companies within the Group, lenders have

security packages which include charges over the shares of the borrower entity and any wholly owned subsidiaries.

Less than one

year

(£’000)

Between one and

ﬁve years

(£’000)

After ﬁve

years

(£’000)

Total as at

30 June 2021

(£’000)

ASSETS

Financial assets held at fair

value through proﬁt or loss*

- - 259,438 259,438

Trade and other receivables** 753 - - 753

Cash and cash equivalents 775 - - 775

LIABILITIES

Other payables and accrued

expenses

(405) - - (405)

1,123 - 259,438 260,561

* the Company passes debt to BR1 under loan agreements; as at the year end there is an additional amount of non-

contractual cash which is not reflected above

**excluding prepayments

Portfolio operational risk

Portfolio operational risk is deﬁned as the risk that

renewable energy infrastructure assets perform below

expectation after acquisition and revenue received from

the sale of electricity is reduced. This risk is mitigated

by BSL ensuring that operation and maintenance

contractors are compliant with their contractual

obligations including reaction times, maintenance

plans and service levels.

Concentrations of risk

Concentrations of risk arise from ﬁnancial instruments

that have similar characteristics and are affected

similarly by changes in economic or other conditions.

The concentrations of the Company’s assets by

geography, construction contractor and revenue type

are shown on page

9. This analysis forms an integral

part of the ﬁnancial statements.

Capital management policies and procedures

The Company’s capital management objectives are to

ensure that the Company will be able to continue as a

going concern while maximising the capital return to

equity Shareholders.

In accordance with the Company’s investment policy,

the Company’s principal use of cash (including the

proceeds of any share issuance and loan facilities)

is to fund BR1’s projects, as well as expenses related

to fundraising, the share issues, ongoing operational

expenses and payment of dividends and other

distributions to Shareholders in accordance with the

Company’s dividend policy.

The Board, with the assistance of the Investment

Adviser, monitors and reviews the broad structure of the

Company’s capital on an ongoing basis.

The Company has no imposed capital requirements.

The capital structure of the Company consists of issued

share capital and retained earnings.

NOTES TO THE FINANCIAL STATEMENTS ANNUAL REPORT AND FINANCIAL STATEMENTS

16. Related Party Transactions and

Directors’ Remuneration

In the opinion of the Directors, the Company has no immediate

or ultimate controlling party.

The Chair was entitled to an annual remuneration of £62,500

(2021: £62,500). The other Directors were entitled to an

annual remuneration of £39,000 (2021: £39,000). Paul Le

Page received an additional annual fee of £8,000 (2021:

£8,000) for acting as Chair of the Audit Committee. The

Board reviewed the Directors’ remuneration and following

this review from 1 January 2022 the Chair is entitled to

an annual remuneration of £65,625. The other Directors

are entitled to an annual remuneration of £41,000 and

Paul Le Page receives an extra £8,350 as Chair of the

Audit Committee. Post year end the Board established a

Management Engagement Committee and ESG Committee,

the Chair of each is entitled to an extra £3,000.

The total Directors’ fees expense for the period amounted

to £240,818 (2021: £226,500) of which £59,750 was

outstanding at 30 June 2022 (2021: £59,750).

At 30 June 2022, the number of Ordinary Shares held by

each Director is as follows:

2022

Number of

Ordinary Shares

2021

Number of

Ordinary Shares

John Rennocks* 290,388 316,011

John Scott* 543,312 512,436

Paul Le Page 35,000 35,000

Laurence McNairn N/A 441,764

Meriel Lenfestey 7,693 -

Elizabeth Burne 15,000 N/A

891,393 1,305,211

*Including shares held by PCAs

John Scott and John Rennocks are Directors of BSIFIL. They

received an annual fee of £6,250 (2021: £6,250) each for

their services to this company, from 1 January 2022 the

annual fee was increased to £6,565. Neil Wood and James

Armstrong, who are partners of the Investment Adviser, are

also Directors of BSIFIL and BR1.

The Company, BSIFIL’s and BR1’s investment advisory fees

for the year amounted to £5,131,527 (2021: £3,764,777) of

which £494,485 (2021: £299,763) was outstanding at the

year end. James Armstrong, Giovanni Terranova and Neil

Wood, who are partners of the Investment Adviser, hold a

0.03%, 0.06% and 0.01% interest in the Company as at 30

June 2022, respectively.

Fees paid during the period by SPVs to BSL, a company which

has the same ownership as that of the Investment Adviser

totalled £3,199,594 (2021: £2,914,444). BSL provides asset

management and other services relating to the operation of

daily management activities of the renewable energy project

companies.

Fees paid during the period by SPVs to BOL, a company

which has the same ownership as that of the Investment

Adviser totalled £5,788,585 (2021: £3,471,624). BOL

provides O&M and other services relating to the operation of

daily management activities of the renewable energy project

companies.

Fees paid during the period by SPVs to BRD, a company

which has the same ownership as that of the Investment

Adviser, totalled £691,280 (2021: £85,500). BRD locates

and manages a pipeline of development projects for the

Company.

The Company’s monitoring fee income received from

BSIFIL and BR1 amounted to £833,887 (2021: £739,966)

of which £833,887 was outstanding at the year end (2021:

£739,966).

17. Subsequent events

The following events happened after the end of the Company’s

reporting period on 30th June

Post year end, on 2 August 2022, the Board declared a third interim

dividend of £12,534,770, in respect of the year ended 30 June 2022,

equating to 2.05pps (third interim dividend in respect of the year

ended 30 June 2021: 2.00pps), which was paid on 31 August 2022 to

Shareholders on the register on 12 August 2022.

Post year end, on 29 September 2022, the Board approved a fourth

interim dividend of £12,779,351 in respect of the year ended 30

June 2022, equating to 2.09pps (fourth interim dividend in respect

of the year ended 30 June 2021: 2.00pps), which will be declared

on 30 September 2022 and paid on or around 4 November 2022 to

Shareholders on the register on 14 October 2022.

On 16 September 2022 the Company was admitted to the FTSE 250

and on 15 August 2022 announced it had successfully qualiﬁed 65MW

of new build PV projects to receive CfDs under the recent AR 4 auction.

TURBINE AT HAMPOLE

NOTES TO THE FINANCIAL STATEMENTS ANNUAL REPORT AND FINANCIAL STATEMENTS

100

Glossary

of Deﬁned Terms

Administrator Ocorian Administration (Guernsey) Limited

AGM The Annual General Meeting

AIC The Association of Investment Companies

AIC Code The Association of Investment Companies Code of

Corporate Governance

AIF Alternative Investment Fund

AIFM Alternative Investment Fund Manager

AIFMD The Alternative Investment Fund Management

Directive

Articles The Memorandum of 29 May 2013 as amended

and Articles of Incorporation as adopted by

special

resolution on 7 November 2016

Auditor KPMG Channel Islands Limited (see KPMG)

Aviva Investors Aviva Investors Limited

BEIS The Department for Business, Energy and

Industrial Strategy

BEPS Base erosion and proﬁt shifting

Blueﬁeld Blueﬁeld Partners LLP

Blueﬁeld Group Blueﬁeld Partners LLP and Blueﬁeld Companies

BOL Blueﬁeld Operations Limited

Board The Directors of the Company

BR1 Blueﬁeld Renewables 1 Ltd being the only direct

subsidiary of the Company

BRD Blueﬁeld Renewable Developments Ltd

Brexit Departure of the UK from the EU

BSIF Blueﬁeld Solar Income Fund Limited

BSIFIL Blueﬁeld SIF Investments Limited being the only

direct subsidiary of the Company

BSL Blueﬁeld Asset Management Services Limited

BSUoS Balancing Services Use of System charges: costs

set

to ensure that network companies can recover

their allowed revenue under Ofgem price controls

Business days Every ofﬁcial working day of the week, generally

Monday to Friday excluding public holidays

ANNUAL REPORT AND FINANCIAL STATEMENTS

101

CAGR Compound annual growth rate

Calculation Time The Calculation Time as set out in the Articles of

Incorporation

CCC Committee on Climate Change

CfD Contract for Difference

Company Blueﬁeld Solar Income Fund Limited

Companies Law The Companies (Guernsey) Law 2008, as amended

(see Law)

Consolidation Exception The 18 December 2014 further amendments to

Amendments IFRS 10 Investment Entities: Applying the Conso-

lidation Exception (Amendments to IFRS 10, IFRS

12 and IAS 28)

Cost of debt The blended cost of debt reflecting ﬁxed and

index-

linked elements

e Carbon Dioxide emissions

CRS Common Reporting Standard

C shares Ordinary Shares approved for issue at no par value

in the Company

CSR Corporate Social Responsibility

DCF Discounted Cash Flow

DECC Department of Energy and Climate Change

Defect Risk An over-reliance on limited equipment

manufacturers which could lead to large proportions

of the portfolio suffering similar defects

Directors’ Valuation Gross value of the SPV investments held by BR1,

including their holding companies.

DNO Distribution Network Operator

DSCR Debt service cover ratio

DTR The Disclosure Guidance and Transparency

Rules

of the UK’s FCA

EBITDA Earnings before interest, tax, depreciation and

amortisation

EGM Extraordinary General Meeting

EIS Enterprise Investment Scheme

EPC Engineering, Procurement & Construction

EPS Earning per share

ESG Environmental, Social & Governance

EU The European Union

EV Enterprise valuation

FAC Final Acceptance Certiﬁcate

FATCA The Foreign Account Tax Compliance Act

Financial Statements The audited annual ﬁnancial statements

FiT Feed-in Tariff

GAV Gross Asset Value

GFSC The Guernsey Financial Services Commission

GHG Greenhouse gas

GHG Protocol Supplies the world’s most widely used

greenhouse

gas accounting standards

Group Blueﬁeld Solar Income Fund Limited and Blueﬁeld

SIF Investments Limited

Guernsey Code The Guernsey Financial Services Commission

Finance Sector Code of Corporate Governance

GWh Gigawatt hour

GWp Gigawatt peak

IAS International Accounting Standard

IASB The International Accounting Standards Board

IFRS International Financial Reporting Standards as

adopted by the EU

Investment Adviser Blueﬁeld Partners LLP

IPEV Valuation Guidelines The International Private Equity and Venture

Capital

Valuation Guidelines

IPO Initial public offering

IRR Internal Rate of Return

IVSC International Valuation Standards Council

KID Key Information Document

KPI Key Performance Indicators

KPMG KPMG Channel Islands Limited (see Auditor)

kWh Kilowatt hour

kWp Kilowatt peak

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

Companies Law)

LD Liquidated damages

LIBOR London Interbank Offered Rate

Listing Rules The set of FCA rules which must be followed by all

companies listed in the UK

GLOSSARY OF DEFINED TERMS ANNUAL REPORT AND FINANCIAL STATEMENTS

102

Lloyds Lloyds Bank Group plc

LSE London Stock Exchange plc

LTF Long term facility provided by Aviva Investors

Limited

Main Market The main securities market of the LSE

MW Megawatt (a unit of power equal to one million

watts)

MWh Megawatt hour

NatWest NatWest International plc

NAV Net Asset Value as deﬁned in the prospectus

NMPI Non-mainstream Pooled Investments and Special

Purpose Vehicles and the rules around their

ﬁnancial promotion

NPPR The AIFMD National Private Placement Regime

O&M Operation and Maintenance

OECD The Organisation for Economic Cooperation and

Development

Ofﬁcial List The Premium Segment of the UK Listing

Authority’s Ofﬁcial List

Ofgem Ofﬁce of Gas and Electricity Markets

Ordinary Shares The issued ordinary share capital of the Company,

of which there is only one class

Outage Risk A higher proportion of large capacity assets hold

increased exposure to material losses due to

curtailments and periods of outage

P10 Irradiation estimate exceeded with 10%

probability

P90 Irradiation estimate exceeded with 90%

probability

PCA Persons Closely Associated

PPA Power Purchase Agreement

pps Pence per share

PR Performance ratio (the ratio of the actual and

theoretically possible energy outputs)

PRIIPS Packaged Retail and Insurance-Based Investment

Products

PV Photovoltaic

RBSI Royal Bank of Scotland International Limited

RCF Revolving Credit Facility

RO Scheme The Renewable Obligation Scheme which is the

ﬁnancial mechanism by which the UK Government

incentivises the deployment of large-scale renew-

able electricity generation by placing a mandatory

requirement on licensed UK electricity suppliers

to source a speciﬁed and annually increasing

proportion of the electricity they supply to customers

from eligible renewable sources, or pay a penalty

ROC Renewable Obligation Certiﬁcates

ROC recycle The payment received by generators from the

redistribution of the buy-out fund. Payments are

made into the buy-out fund when suppliers do not

have sufficient ROCs to cover their obligation

RPI The Retail Price Index

Santander UK Santander UK plc

SASB Sustainability Accounting Standards Board

SDG The United Nations Sustainable Development

Goals

SFDR The Sustainable Finance Disclosure Regulation

SONIA Sterling Overnight Index Average

SPA Share Purchase Agreement

SPVs The Special Purpose Vehicles which hold the

Company’s investment portfolio of underlying

operating assets

Sterling The Great British pound currency

TCFD Task Force for Climate-related Financial Disclosures

TISE The International Stock Exchange (based in the

Channel Islands)

UK The United Kingdom of Great Britain and Northern

Ireland

UK Code The United Kingdom Corporate Governance Code

UK FCA The UK Financial Conduct Authority

UNGC The United Nations Global Compact

United Nations Principles An approach to investing that aims to incorporate

for Responsible environmental, social and governance factors into

Investment

investment decisions, to better manage risk and

generate sustainable, long term returns

GLOSSARY OF DEFINED TERMS ANNUAL REPORT AND FINANCIAL STATEMENTS

103

Alternative Performance Measures

Unaudited

APM DEFINITION PURPOSE CALCULATION

Total return The percentage increase/(decrease) in NAV, inclusive of

dividends paid, in the reporting period.

A key measure of the success of the Investment Adviser’s

investment strategy.

The change in NAV for the period plus any dividends paid

divided by the initial NAV. (140.39 - 115.83+2.0+2.0+

2.03+2.03)/115.83=28.16%

Total Shareholder

Return

The percentage increase/(decrease) in share price,

inclusive of dividends paid, in the reporting period.

A measure of the return that could have been obtained by

holding a share over the reporting period.

The change in share price for the period plus any

dividends paid divided by the initial share price. (131.00

121.40+2.0+2.0+2.03+2.03)/121.40=14.55% The

measure excludes transaction costs.

Total Dividends

Declared in Period

This is the sum of the dividends that the Board has

declared relating to the reporting period.

A measure of the income that the company has paid to

shareholders that can be compared to the Company’s

target dividend.

The linear sum of each dividend declared in the reporting

period

Underlying Earnings Total net income of the Company’s investment portfolio. A measure to link the underlying ﬁnancial performance

of the operational projects to the dividends declared and

paid by the Company.

Total income of the Company’s portfolio minus Group

operating costs minus Group debt costs.

Market Capitalisation The total value of the Company’s issued share capital. This is a key indicator of the Company’s liquidity. The price per share multiplied by the number of shares in

issue.

NAV per Ordinary Share The Company’s closing NAV per share at the period end. A measure of the value of one Ordinary Share. The net assets attributable to Ordinary Shares on the

statement of ﬁnancial position (£858.4m) divided by the

number of ordinary shares in issue (611,452,217) as at

the calculation date.

Sale of Electricity The total proportion of revenue generated by the

Company’s portfolio that is attributable to electricity

sales.

A measure to understand the proportion of revenue

attributable to sales of electricity.

The amount of revenue attributable to electricity sales

divided by the total revenue generated by the Company’s

portfolio, expressed as a percentage.

Total Revenue Total net income of the Company’s investment portfolio. A measure to outline the Total revenue of the portfolio on

per MW basis.

Total income of the Company’s portfolio owned for a full

12 months.

PPA Revenue Revenue generated through PPAs. A measure to outline the revenue earned by the portfolio

from power sales.

Total revenue from all power price sales during the period

from the Company’s portfolio.

Regulated Revenue Revenue generated from the sale of FiTs and ROCs. A measure to outline the revenue earned by the portfolio

from government subsidies.

Total revenue from all subsidy income earned during the

period from the Company’s portfolio.

Ongoing charges ratio The recurring costs that the Company and its Immediate

Holding Company has incurred during the period

excluding performance fees and one off legal and

professional fees expressed as a percentage of the

Company’s average NAV for the period.

A measure of the minimum gross proﬁt that the

Company needs to produce to make a positive return for

Shareholders.

Calculated in accordance with the AIC methodology

detailed in the table below.

ANNUAL REPORT AND FINANCIAL STATEMENTS

104

APM DEFINITION PURPOSE CALCULATION

Weighted Average ROC A relative indicator of the

regulatory revenues within a

renewable portfolio.

A measure of the Company’s

portfolio earnings as a

proportion of its assets.

Total Regulated Revenue

received by the portfolio

divided by the product of the

current market value of a ROC

and the annual generation

capacity of the portfolio.

Weighted Average Life The average operational life of

the Company’s portfolio.

A measure of the Company’s

progress in extending the life

of its portfolio beyond the end

of the subsidy regime in 2036.

The sum of the product of each

plant’s operational capacity in

MWp and the plant’s expected

life divided by the total

portfolio capacity in MW.

Directors’ Valuation The gross value of the SPV

Investments held by BR1,

including their holding

companies minus Project level

debt.

An estimate of the sum that

would be realised if the

Company’s portfolio was sold

on a willing buyer, willing

seller basis.

A reconciliation of the

Directors’ Valuation to

Financial assets at fair value

through proﬁt and loss

is shown in Note 8 of the

ﬁnancial statements.

Gross Asset Value The Market Value of all Assets

within the Company.

A measure of the total value of

the Company’s Assets.

The total assets attributable

to Ordinary Shares on the

Statement of Financial

Position.

Total Outstanding Debt The total outstanding balances

of all debt held within the

Company and its subsidiaries.

A measure that is used to

establish the Company’s level

of gearing.

The sum of the Sterling

equivalent values of all loans

held within the Company.

Ongoing Charges Year to 30 June 2022

The Company

£’000s

Immediate Holding Company

£’000s

Total

£’000s

Fees to Investment Adviser 491 4,640 5,131

Legal and professional fees 159 165 324

Administration fees 395 - 395

Directors’ remuneration 240 13 253

Audit fees 98 181 279

Other ongoing expenses 60 - 60

Total ongoing expenses 1,521 4,921 6,442

Average NAV 630,257,213

Ongoing Charges (using AIC methodology) 1.02%

SOLAR PV AT REDLANDS

ALTERNATE PERFORMANCE MEASURES

105

ANNUAL REPORT AND FINANCIAL STATEMENTS