30 JUNE 2023

Annual Report

and Financial Statements

FOR THE YEAR ENDED

COMPANY REGISTRATION NO: 56708

Table of Contents

General Information

Highlights

Corporate Summary

Chair’s Statement

Analysis of the Company’s

Investment Portfolio

Report of the Investment Adviser

Environmental, Social and Governance Report

Task Force for Climate-related Financial

Disclosures (TCFD)

Strategic Report

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 and Risk 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 2023

102

Glossary of Deﬁned Terms

105

Alternative Performance Measures

107

Annex – SFDR Periodic Disclosures

ANNUAL REPORT AND FINANCIAL STATEMENTS

MERIEL LENFESTEY

(Chair of Environmental,

Social and Governance

Committee)

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

(retired 22 February 2023)

PAUL LE PAGE

(Chair of Audit and Risk

Committee)

JOHN SCOTT

(Chair and Chair of

Nomination Committee)

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

Computershare Investor Services (Guernsey) Limited*

13 Castle Street, St Helier

Jersey, JE1 1ES

Link Market Services (Guernsey) Limited **

Mont Crevelt House, Bulwer Avenue,

St Sampson, Guernsey, GY2 4LH

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

*appointed 10 March 2023

**resigned 10 March 2023

GIOVANNI TERRANOVA

Managing Partner

ELIZABETH BURNE

(Chair of Management

Engagement and Service

Providers Committee)

MICHAEL GIBBONS CBE

(Senior Independent

Director - appointed

7 October 2022)

ANNUAL REPORT AND FINANCIAL STATEMENTS

Net Asset Value (NAV)

£854.2m £858.4m

NAV per Share

139.70p 140.39p

Dividend Target per Share

8.40pps 8.16pps

Actual Dividend Declared

8.60pps 8.20pps

Underlying

Earnings

(pre amortisation of debt)

£108.4m £66.8m

Highlights

As at 30 June 2023 / 30 June 2022

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

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

declared and paid by the Company. It is deﬁned in the Alternative Performance Measure appendix.

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

Alternative Performance Measure appendix.

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

Performance Measure appendix.

Total Shareholder

Return in year

-2.03% 14.55%

Total Return

in year

5.45% 28.16%

Total return to

Shareholders since IPO

89.79% 92.45%

Construction and Development Pipeline

•

93 MW under construction

•

595 MW approved

•

364 MW in planning

•

377 MW potential capacity

Environmental, Social

and Governance (ESG)

ESG KPIs

1.43 GW

(956 MW Solar,

473 MW battery)

Underlying Earnings

per share

(post amortisation of debt)

14.74p 9.54p

Underlying Earnings

per share

(pre amortisation of debt)

17.72p 12.04p

Over 836,231 MWh

of renewable energy

enerated.

(2022: 624,000 MWh)

Over 173,000 tonnes

of CO

e savings

achieved.

(2022: 120,000)

Equivalent of 288,000

homes powered with

renewable energy.

(2022: 215,000)

}

ESG Highlights

• Enhanced ESG governance though policy adoption, quantitative reporting against a

comprehensive set of ESG commitments and KPIs, and enhanced supply chain practices.

• 25 educational workshops delivered to local schools (2022: 0) and £253,000 paid to

community beneﬁt funds (2022: £154,000).

• 30 Biodiversity Net Gain (BNG) assesments conducted across the operational portfolio

(2022: 0).

ANNUAL REPORT AND FINANCIAL STATEMENTS

Results Summary

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

linking the underlying ﬁnancial performance of the operational projects to the dividends declared and paid by the Company. It is

deﬁned in the Alternative Performance Measure appendix.

2. 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.

For the year ended

30 June 2023

For the year ended

30 June 2022

Total operating income

£49,069,809 £176,141,970

Total comprehensive income before tax

£46,793,621 £174,572,832

Total underlying earnings (pre amortisation of debt)

£108,367,331 £66,750,110

Earnings per share (per page 54)

7.65p 34.91p

Underlying EPS available for distribution

18.13p 11.92p

Total declared dividends per share for year

8.60p 8.20p

Earnings per share carried forward (See page 20)

9.53p 3.39p

NAV per share

139.70p 140.39p

Share price at 30 June

120.00p 131.00p

Total return

5.45% 28.16%

Total Shareholder Return

(2.03)% 14.55%

Total Shareholder Return since inception

89.79% 92.45%

Dividends per share paid since inception

69.79p 61.45p

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 makes its investments via its wholly owned

subsidiary Blueﬁeld Renewables 1 Limited (BR1) and has

the ability to use long term and short term debt at the

holding company level, as well as having long term, non-

recourse debt at the SPV level.

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 within BSIF’s portfolio. 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 c.80%

of the investment portfolio held by the Company as at

year end.

In December 2020 Bluefield Renewable Developments

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

the Investment Adviser, commenced providing BSIF

with new build development opportunities in addition

to arrangements in place with the Company’s other

development partners.

ANNUAL REPORT AND FINANCIAL STATEMENTS

Introduction

The Company was founded in the summer of 2013 and the Period under

review therefore covers our tenth year of operations; our ﬁrst decade has

seen remarkable changes in electricity markets and how they are supplied,

notably the emergence of renewables as a signiﬁcant contributor to Britain’s

electricity mix, aided by the dramatic reduction in capital costs, particularly

for solar panels. Ten years ago, solar and wind power contributed only 8.5% to

indigenous electricity generation; by 2022, that number had grown to 28.8%.

By most measures, the 2022/23 year was a period of considerable success

for your Company. Irradiation levels were above expectations, wind revenues

outperformed our forecasts (despite low wind speeds), we sold our electricity

at record prices, our regulated revenues increased with inflation and our 129

solar PV plants performed well. Progress was made on a number of fronts,

but the main disappointment for your Board is the softening of the Company’s

share price (down 8.4% for the year under review), despite growing proﬁts, a

raised dividend, excellent operating ratios and a robust Net Asset Value (NAV).

The Period was not without its challenges, the problems deriving in signiﬁcant

part from the rapidly changing UK political landscape, with the chaotic

Johnson regime giving way to the short-lived Truss administration, whose

“mini Budget” was sufﬁciently badly received by ﬁnancial markets for the

Premier’s defenestration to follow in short order. None of these events can

be seen as conducive to enhancing Britain’s reputation for ﬁnancial prudence

and stability.

The fallout which has affected Blueﬁeld relates not to our operations –

demand for green electricity continues to grow, and together with others in

our sector we play our part in meeting this. The main issue we face is that our

access to equity markets is hampered by the discount to NAV at which our

shares currently trade, making it difﬁcult to raise the fresh equity which would

in other circumstances be the cornerstone of the investment programme

which is required if we are to increase our participation in the UK’s quest to

decarbonise the economy. In short, we are capital constrained at a time when

renewable electricity is in urgent need of capital investment, and there are

attractive opportunities in our pipeline.

Chair’s Statement

ANNUAL REPORT AND FINANCIAL STATEMENTS

Underlying Earnings and Dividends

The Underlying Earnings for the Period, before amortisation

of long-term debt, were £108.4 million, or 17.72pps,

and underlying earnings available for distribution, post

debt repayments of £18.3m (3.00pps), were £90.1m

(14.74pps). Thus, the Company has earned comfortably in

excess of its dividend target of 8.40pps for the year to 30

June 2023, thanks to higher power prices and the strong

operational performance of its portfolio.

This has enabled the Board to declare an increased fourth

interim dividend of 2.30pps, bringing the total dividend for

the Period to 8.60pps (30 June 2022: 8.20pps); the yield

on our shares – based on a share price of 118.20pps on

26 September – is 7.3%. The Company remains the LSE

listed solar investment company sector’s highest dividend

payer on a pence per share basis. Notwithstanding its

strong dividend cover, the Company’s established policy is

to increase distributions on a progressive basis, and it has

set a target dividend for the 2023/24 ﬁnancial year of not

less than 8.80pps. Retained earnings are being deployed

by the Company to ﬁnance further projects emerging from

its strong development pipeline.

Valuation and Discount Rate

Secondary market demand for renewable electricity

projects, at all stages of their lifecycle, remains strong;

power prices and inflation have surged, largely cancelling

out the impact of higher interest rates and operating costs.

The Investment Adviser is currently seeing solar portfolios

priced in a range of £1.20m/MW - £1.45m/MW, which is

very similar to previous years (typically £1.20m/MW -

£1.40m/MW). Higher interest rates have caused the Board

to increase the discount rate for the 30 June 2023 Directors’

Valuation to 8.0% (June 2022: 6.75%). By valuing the

Company’s operational portfolio at an enterprise value of

£1,195m (c.£1.35m/MW for the solar assets vs. £1.38m/

MW in June 2022), the Directors’ Valuation as at 30 June

2023 is in line with recent market transactions and is

consistent with the Company’s valuation approach of

‘willing buyer/willing seller’.

HIGHLIGHTS OF THE YEAR

The main features of the year under review are:

•

BSIF generated 836GWh of electricity (2021/22: 688GWh),

an increase of 22%;

•

Our installed capacity grew to 754.3MW of solar and

58.3MW of wind power (2021/22: 707.9MW and 58.3MW,

respectively);

•

The Company completed the purchase of a 46.4MW

operational solar portfolio for £56.0 million, all accredited

under the ROC regime with approximately 60% of contracted

and regulated revenues, expiring in 2035;

•

Ensuring a focus on increasing future renewable generation

and supporting the UK’s transition to Net Zero, 93MW of

new build solar entered construction and c.62MW of solar

Contracts for Difference were secured through the fourth

Allocation Round;

•

Momentum on the Company’s development pipeline

continued apace, with planning consents being secured on

some 350MW of solar projects and 19MW of battery projects,

while the wider pipeline grew to approximately 950MW of

solar and 470MW of battery storage;

•

The Net Asset Value per share fell marginally to 139.7pps

(30 June 2022: 140.39pps), reflecting higher interest and

discount rates, which offset the sharply increased electricity

prices that we have been able to capture through our

successful power sales strategy;

•

BSIF’s shares moved to a wider discount to NAV, the closing

price on 30 June 2023 being 14% below the Directors’

Valuation (30 June 2022: 7% discount);

•

Total declared dividends for the Period increased to 8.60pps

(2022/23: 8.20pps), ahead of our original target of 8.40pps;

•

The Company successfully re-ﬁnanced its £110 million three-

year term loan with NatWest during the year, increasing the

facility to £130 million and extending maturity to December

2039. Hedging on £110 million has been put in place for the

tenor of the loan, at an effective all-in cost of c.2.7%;

•

The Company also increased its £100 million revolving credit

facility (RCF) by £110 million, with an uncommitted accordion

feature allowing for a further increase of up to £30 million;

•

The term of the facility has been extended to May 2025

with the lender group being diversiﬁed further with the

introduction of Lloyds Bank plc, alongside existing lenders

RBS International and Santander UK;

•

Post period end one project received planning permission

for 70MW of solar and 40MW of battery storage, and BSIF

achieved allocations of CfDs on all 4 projects submitted

to AR5.

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

at c.£597.4 million and its leverage level stands at c.41% of GAV

(June 2022: 35% of GAV).

AERIAL VIEW AT WEST RAYNHAM

CHAIR’S STATEMENT ANNUAL REPORT AND FINANCIAL STATEMENTS

The Company’s PPA strategy of ﬁxing power prices for

between one and three years has allowed it to agree power

contracts through the months of rising prices, insulating the

portfolio from short term volatility, and enabling it to create

pricing certainty for up to 36 months ahead. The average

weighted prices for these contracts were £190.1/MWh for

June 2022, £303/MWh for January 2023 and £230/MWh for

June 2023.

Inflation

In the past 12 months UK inflation has continued at a high

level, notwithstanding a string of interest rate increases that

have taken the current Base Rate up to 5.25%, from 0.1%

less than two years ago. The UK 5 year gilt rate, which was

below 1% for some 3 years prior to January 2022, now stands

at approximately 4.5%. Current UK inflation, on an RPI basis,

is close to 9%, with CPI at 6.8%. Interest rates may have

further to rise, but for the moment at least inflation has fallen

from its peak, suggesting that the medicine prescribed by the

Bank of England is working, albeit later in the day than many

of us might have wished.

BSIF is a net beneﬁciary of inflation, since our regulated

income (principally from ROCs) is index-linked, boosting

our regulated revenues faster than the increase in our

operating costs. Our prudent approach to debt, where we

have (predominantly) ﬁxed rate and amortising long term

loans, means that the capital structure has been largely

shielded from the rises in interest rates. The flipside of this,

however, is that as gilt yields adjust upwards in the face of

inflation, bond prices go down; in tandem with others in

our sector, the price of your Company’s shares has likewise

fallen, as investors seek a concomitant increase in yield

from BSIF to preserve the risk premium between our shares

and Government bonds. We therefore ﬁnd ourselves in the

invidious position of posting excellent operating results

and having built a robust capital structure well suited to

this environment, yet watching our share price fall to a

signiﬁcant discount to NAV.

Power Prices

Increasing electricity demand and fuel supply concerns

following the onset of Russia’s war against Ukraine saw UK

electricity prices in the autumn of 2022 at record levels, with

day-ahead power prices touching c.£180/MWh in December

2022. They stabilised in the ﬁrst half of 2023, but power

prices remain signiﬁcantly higher than those seen prior to

the March 2022 invasion.

The Energy Crisis and the Levy

The fuel supply crisis precipitated by the Ukraine war resulted in

energy prices reaching unsustainably high levels and prompted the UK

Government to intervene by introducing caps on domestic electricity

prices to alleviate the widespread hardship being experienced. In

late 2022 the Government introduced the Electricity Generator

Levy (the “Levy”), to operate from January 2023 until March 2028;

the Levy is a 45% charge on revenues from the sales of electricity

in excess of £75 per MWh for generators who have in-scope annual

generation in excess of 50GWh. The Government has also stated that

it recognises the need to reform electricity market arrangements to

deliver the pace and scale of change required to meet its target of

decarbonisation of the electricity system by 2035 and continues to

assess options following a ﬁrst round of consultations in 2022. We are

active participants in this debate.

The Board

John Rennocks, having stepped down as Chair at the November 2022

AGM, retired from the Board in February. Much has already been said

about John’s contribution to the creation and development of BSIF so

I will simply repeat the deep gratitude we feel to John for what was

achieved during his tenure.

Paul Le Page, another Director who has served from the start and who

has throughout chaired our Audit and Risk Committee with remarkable

skill and diligence, will retire from the Board on 30 September 2023.

On behalf of the Board, I thank Paul most sincerely for what he has

done for BSIF in his decade of service. Libby Burne, whose principal

career has been with PwC and who joined the BSIF Board in 2021, will

succeed Paul as Audit and Risk Committee Chair.

Last October, we welcomed Michael Gibbons to the Board, and he has

assumed the role of Senior Independent Director. Michael has many

years of experience of electricity and other energy markets, which is

already proving to be invaluable to our business.

Environmental, Social and Governance (ESG)

I am delighted to present the Company’s signiﬁcantly

expanded ESG report and I applaud the commitment shown

by the Investment Adviser in ensuring that the Company

implements best practice policies in this important and

rapidly evolving area.

In addition to the Period being the Company’s ﬁrst year for

implementing and monitoring its ESG performance against

its KPIs, it was also the ﬁrst time BSIF reported against

the Level 2 requirements of the EU’s Sustainable Finance

Disclosure Regulation (“SFDR”). The Company also produced

its ﬁrst Principal Adverse Impact (“PAI”) report.

WINTER AT CAPELANDS

CHAIR’S STATEMENT ANNUAL REPORT AND FINANCIAL STATEMENTS

The AGM and Continuation Vote

The Company’s Annual General Meeting will take place at

10am on 28 November 2023 at Floor 2, Trafalgar Court, Les

Banques, St Peter Port, Guernsey. Shareholders who are

unable to be present in person are encouraged to submit

questions in advance of the meeting.

Resolution 13 is a continuation vote, seeking the support

of Shareholders for the Company to remain in business for

a further ﬁve years. Your Board believes that it has met or

exceeded all of the objectives of its original and subsequent

prospectuses, producing sector-leading returns for investors,

while assisting with the decarbonisation of the economy.

The Board is conﬁdent that BSIF is well placed to continue

investing in renewable electricity and thereby delivering value

for Shareholders; it is therefore unanimous in recommending

that Shareholders support this Resolution.

Conclusion

Our business is a relatively straightforward one – we convert

daylight and wind energy into electric power for sale to the

wholesale markets and, in the case of those plants which

were constructed at a time when incentives were required

to compensate for the high cost of equipment, we receive

subsidies, typically for 20 years from the date of plant

commissioning. In the Period, we generated 836GWh

of electricity which, if used to power electric cars, would

replace over 200 million litres of petrol. Another measure

of our output and our contribution to de-carbonising the

economy is that it represents sufﬁcient electricity to meet the

annual needs of 288,000 homes, or a city the size of Leeds.

All of our generation took place in the UK, with 84% coming

from solar PV and 16% from onshore wind. In 2022/23,

we received £107 million from the sale of electricity, £77

million from government subsidies (principally ROCs) and

£5 million from other sources which are set out in more

detail in the Investment Adviser’s report. We believe that

scale is important, and it is our intention to continue to grow

the Company through acquisition and the construction of

new assets, while pursuing our established policy of paying

progressively higher dividends.

Our Investment Adviser, Blueﬁeld Partners, is to be congrat-

ulated for what has been achieved in our ﬁrst decade. We

raised an initial £128 million in July 2013 and today your

Company has an enterprise value of £1.2 billion, having in

the past 10 years distributed over £270 million in dividends.

There are several important contributors to this result,

including Blueﬁeld Partners’ strong record in constructing

or purchasing the plants we now own, and the record of

both Blueﬁeld Services and Blueﬁeld Operations in running

these facilities at industry-leading levels of performance.

Particularly in the context of the past year, I would also

identify the forward power sales strategy implemented by

the Investment Adviser as one of the signiﬁcant successes

of the Company, providing a high degree of visibility of our

income for up to 30 months ahead.

If the world is to reduce its dependence on fossil fuels,

we will need more electricity and much of this must come

from renewable sources; there is, for example, little point in

making us abandon the internal combustion engine in favour

of electric cars if the energy for the latter has to come from a

fossil fuelled power plant. In the UK the additional power is

likely to involve substantially more solar and wind generation,

sources which remain the lowest cost generators, while

providing indigenous, clean and secure supplies of energy.

My strong belief is that BSIF has a major role to play in

the future of Britain’s rapidly changing electricity mix and

your Board looks with conﬁdence at the challenges and

opportunities which lie ahead.

John Scott

Chair

27 September 2023

SOLAR PV AT SAXLEY

CHAIR’S STATEMENT ANNUAL REPORT AND FINANCIAL STATEMENTS

SINGLE TURBINE

WIND FARM

WIND

NI SINGLE WIND

TURBINE PORTFOLIO

<5MWp

5 - 10MWp

10 - 45MWp

>45MWp

CONSTRUCTION ASSETS

MICRO SITES

SOLAR PV

Analysis of the Company’s

Investment Portfolio

As at 30 June 2023

TECHNOLOGY

Solar PV

92.8%

Wind

7.2%

2.0 ROC

3.4%

SUBSIDY

SCHEME

1.6 ROC

15.2%

1.4 ROC

40.5%

1.3 ROC

8.9%

FiT

7.6%

1.2 ROC

18.0%

4.0 ROC

0.7%

1 ROC

2.1%

0.9 ROC

3.6%

REVENUE

TYPE*

ROC Buyout

32.6%

FiT

6.8%

PPA

60.6%

Devon 5.2%

Oxfordshire

7.6%

GEOGRAPHICAL

ANALYSIS

Norfolk

13.1%

Kent

6.6%

Dorset 4.6%

Derbyshire 2.1%

Sussex 1.4%

Cambridgeshire 3.2%

Leicestershire 1.3%

Hampshire

9.1%

Gloucestershire 1.8%

Wiltshire

14.4%

Somerset 4.6%

Other Counties

11.9%

Northern Ireland 1.6%

Cornwall

6.1%

Lincolnshire

5.4%

Solar PV

956 MW

Battery

Storage

473 MW

DEVELOPMENT

PIPELINE (MW)

Total Development Pipline of 1,429 MW.

(Please see the Proprietary Pipeline section of

the Investment Adviser report for further detail)

Note: 1. All graphs, except for Development Pipeline, are based of the operational portfolio of 812.6 MW

2. Revenue Type is based on the Company’s operational portfolio and does not include estimated ROC Recycle revenue

ANNUAL REPORT AND FINANCIAL STATEMENTS

Introduction from the Managing Partner of the

Investment Adviser

The Period to 30 June 2023 has been the most successful period in BSIF’s

decade long history, with the Company delivering record earnings, record

dividend cover, its highest dividend whilst maintaining parity with its highest

recorded NAV. Conversely, it has also been the ﬁrst time the share price has

been at a signiﬁcant discount to NAV.

There is a certain irony to this as the ﬁnancial shocks to the system that

have precipitated the falls – sharp rises in gilt and interest rates – have only

heightened the Company’s ﬁve core strengths, summarised below (and

outlined in detail within the Investment Advisers report):

1. Capital Structure: since its 2013 IPO the Company has focused on a simple

and deliberate strategy of ensuring, outside of the Company’s Revolving

Credit Facility, all debt within the structure is secured at portfolio level with

ﬁxed interest rates on fully amortising terms. This is a prudent use of debt

in any environment, but with a current average cost of debt of c.3.5% on all

the Company’s long term borrowings being c.£430m as at 30 June 2023, it

looks particularly prescient in today’s higher interest rate environment.

2. Power Sales Strategy: Blueﬁeld Solar focuses on ﬁxing Power Price

Agreements contracts at the short end of the power curve (6-30 months),

through competitive tender processes, enabling it to maximise value

for shareholders from the most liquid part of the power market. This

strategy has not only underpinned the sector-leading dividends paid

since inception, but crucially has enabled the Company to secure highly

attractive power contracts when power prices reached record highs during

the period to June 2023. The result has been record full year earnings and

a c.2x covered dividend (net of debt amortisation and the EGL). This is

creating retained earnings that can be invested into new opportunities, not

least the proprietary pipeline.

Report of the

Investment Adviser

ANNUAL REPORT AND FINANCIAL STATEMENTS

3. Active Management: Active Management is a much misused term in investment. In the

context of Blueﬁeld Solar’s portfolio it means a dedicated workforce of 115 (and growing) within

Blueﬁeld Partners and Services, split across specialist teams covering primary investment,

secondary investment, ESG, development, engineering, construction management, monitoring

and reporting, debt compliance, technical asset management, operation and maintenance

and commercial with 74 different core responsibilities. These specialist units have been

established in the past decade to deliver an aligned, dedicated and diversely skilled workforce

to an increasingly complex business.

4. Proprietary Pipeline: Blueﬁeld Solar’s ability to control the pipeline has been a major

contributor to its success over the past ten years. Fusing deep rooted relationships across the

UK renewables market with the support of its specialist technical teams, Blueﬁeld has been

able to establish the DNA of the business around developing the primary pipeline. No better

highlight of this is the 1GW solar and storage proprietary pipeline the Investment Adviser has

built up exclusively for Blueﬁeld Solar. These transactions, alongside secondary opportunities

that are being evaluated, provide Blueﬁeld Solar with the platform for a further period of

signiﬁcant growth.

5. Capital Discipline: Adherence to investment principles is paramount and so despite the fast

paced growth of the solar market in the past decade, uniquely for Blueﬁeld Solar there have still

been periods where the Company elected to cease acquisitions, based on our view that nothing

we saw would provide Shareholder value. To emphasise this, between 2016 to 2020 BSIF did

not go to the market for an equity raise. This capital discipline has beneﬁtted Shareholders and

has contributed to BSIF’s outperformance. This discipline will continue, as it has been a key

pillar in enabling the Company to achieve exceptional growth – not least during and after the

Covid 19 pandemic.

The solace we take from the current situation is that these strengths, applied since the Company

was founded, cannot be easily replicated, and will continue to beneﬁt the Shareholders for many

years to come.

We have visibility over earnings that will support the ongoing progression of our dividend

and retained earnings that can deliver reinvestment into our accretive pipeline, whilst always

focusing on the capital discipline Blueﬁeld Solar is known for. And, thus, as the Chair has said in

his statement, we look forward to the future with great conﬁdence and with the expectation of a

rerating of the shares in the short term.

James Armstrong

Managing Partner, Blueﬁeld Partners LLP

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 £6.5 billion renewable funds

and/or transactions in both the UK and Europe, including over

£1.4 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 150 individual SPV acquisitions on behalf

of BSIF and European vehicles.

REPORT OF THE INVESTMENT ADVISER ANNUAL REPORT AND FINANCIAL STATEMENTS

2. Portfolio: Acquisitions, Performance and Value Enhancement

Portfolio Overview

As at 30 June 2023, the Company held an operational solar portfolio

of 129 PV plants (consisting of 87 large scale sites, 39 micro sites and

3 roof top sites), 6 wind farms and 109 small scale UK onshore wind

turbines with a total capacity of 812.6MW (30 June 2022: 766.2MW).

During the period to 30 June 2023, the combined solar and wind

portfolio generated an aggregated total of 836.2GWh (30 June 2022:

687.5GWh), representing a Generation Yield of 1,029MWh/MW.

Investment Approach and Acquisitions in the Period

The Company has taken a disciplined approach to the deployment of

capital since listing, deploying capital only when there are projects

of suitable quality at attractive returns to complement the existing

portfolio. Rigorous adherence to restrained capital deployment

inevitably means there can be periods where acquisition activity falls,

even when sector activity appears in contrast, but this controlled

approach is beneﬁcial in driving long term, sustainable growth for

Shareholders, as evidenced by Blueﬁeld Solar’s record of sector

leading returns since listing over a decade ago.

In December 2022 the Company completed the acquisition of a

46.4MW operational solar portfolio from Fengate Asset Management.

At the time of the transaction, the enterprise value of the portfolio was

£56.0 million, which included the economic beneﬁt of all cashflows

from May 2022. The portfolio contained £27.3 million of long-term

amortising debt provided by Macquarie Bank Limited.

The portfolio consists of two ground mounted solar photovoltaic

(‘PV’) plants, a 39.3MW plant (Ravensthorpe) located in Scunthorpe,

Lincolnshire and a 7.1MW facility (Roanhead) located in Barrow-in-

Furness, Cumbria. Both solar sites are accredited under the Renewable

Obligation Certiﬁcate (‘ROC’) regime with a tariff of 1.4 ROCs.

In May 2023, the Company completed the purchase of three

recently consented ready to build PV projects, totalling 97MW from

its development partners Lightrock Power and Blueﬁeld Renewable

Developments, for a total of £3.9m. The projects, which are located

in Devon, East Sussex and Shropshire, have grid connection dates

between 2024 and 2026.

£665m

Equity Deployed

£854m

Net Asset Value

£1.438m

Gross Asset Value

813MW

Operational Capacity

£273m

Total Dividends Paid

REPORT OF THE INVESTMENT ADVISER ANNUAL REPORT AND FINANCIAL STATEMENTS

Portfolio Performance and Optimisation

Solar PV Performance

In the 12-months to 30 June 2023, irradiation levels were 6.0% higher than

the Company’s forecasts and 3.1% higher than FY 2021/22, whilst generation,

being 702.4GWh, was marginally lower than expectations.

During the year, the solar portfolio achieved a Net PR of 76.16% (FY 2021/22:

79.38%) against a forecast of 80.63%, due to availability issues driven primarily

by supply chain challenges and capital improvement works. Consequently,

generation yield was 959.88MWh per MW of installed capacity, marginally

lower than recorded in the previous year.

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

2022/23

Actual

2022/23

Forecast

Delta to

Forecast

(% change)

2021/22

Actual

Delta 22/23

to 21/22

Actual (%

change)

Portfolio Total

Installed Capacity

(MW)

754.2 - - 642.9 +17.3%

Weighted Average

Irradiation (Hrs)

1,2

1,260.7 1,189.9 +6.0% 1,222.7 +3.1%

Total Generation

(MWh)

702,428 703,664 -0.2% 624,651 +12.5%

Generation Yield

(MWh/MW)

959.9 959.9 0.0% 971.6 -1.2%

Average Total Unit

Price (£/MWh)

£223.7 £187.1 +19.5% £132.4 +68.9%

Notes to Table 1.

1. Periods of irradiation where irradiance exceeds the minimum level required for

generation to occur (50W/m

)

2. Excluding grid outages and signiﬁcant periods of constraint or curtailment that were

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

3. Average Total Unit Price includes all income associated with the sale of power, all

subsidy payments, liquidated damages and insurance claims amounts. ROC recycle

revenue is included assuming a 10% recycle rate for both Actual and Forecast Revenue

4. Includes 46.4MW of solar assets acquired in December 2022, not included in the

published 2022/23 interim results

Total Revenue for the period was £157.2m, 19% higher

than forecast and 121% higher than the previous FY. PPA

agreements which commenced during the Period were the

principal reason for increased revenue, as the average power

price rose from £57/MWh in the previous FY to £141/MWh,

a 147% increase.

Operational costs for the Period (incorporating all ﬁxed,

contracted costs such as lease payments, O&M fees etc.)

totalled c.£23m, including expenditure associated with the

optimisation & enhancement projects (see below).

Solar PV Optimisation & Enhancement Activity

A core focus of the Investment Adviser’s activities is

protecting, optimising, and enhancing the value of the

Company’s operational portfolio. Principally, this is done

through in-depth performance monitoring and carefully

tailored preventative maintenance programmes, ensuring

that capital spend across the Company’s portfolio (expected

to be £4m to £5m annually over the next decade) is

completed during months of low irradiation (typically

October to February).

A rolling capital investment programme is essential for

optimising the long-term operational performance of the

portfolio. The Investment Adviser has identiﬁed that one

of the key causes of lower-than-expected availability is a

long lead time for spare parts for major High Voltage (‘HV’)

components, notably central inverters, due to industry

demand from construction projects and other operators’

repowering works.

Two signiﬁcant string-inverter repowering projects and the

replacement of 3 transformers at Hall Farm were completed

during the Period to improve both current and future

performance of the assets. Further inverter repowering and

optimisation projects are planned for FY 23/24.

As at 30 June 2023, 494.6 MW (30 June 2022: 401 MW) of

the PV portfolio have leases that allow for terms beyond 30

years (being 66% of the solar PV portfolio), of which 338.2

MW (100% of applications successful) beneﬁt from planning

terms in excess of 30 years, with the Investment Adviser

continuing to pursue lease extensions on the remaining

assets in the portfolio.

REPORT OF THE INVESTMENT ADVISER ANNUAL REPORT AND FINANCIAL STATEMENTS

Onshore Wind Performance

As at 30 June 2023, the Company held an operational

onshore wind portfolio of 135 installations, comprising 109

small scale turbines (55-250kW) and 26 turbines (850kW-

2.3MW), with an aggregated capacity 58.4MW.

During the reporting period, the portfolio generated 133.8

GWh, -16.2% below forecasts. This was largely due to

reduced wind resource, combined with lower than forecasted

availability during H1. Availability improved considerably

during H2 following the replacement of the O&M provider

2022/23

Actual

2022/23

Forecast

Delta to

Forecast

(% change)

2021/22

Actual

Delta 22/23 to

21/22 Actual

(% change)

Portfolio Total Installed Capacity (MW) 58.4 - - 30.0 +94.5%

Total Generation (MWh) 133,804.0 159,586.3 -16.2% 62,795.6 +113.1%

Generation Yield (MWh/MW) 2,292.7 2,734.5 -16.2% 2,092.5 +9.6%

Average Total Unit Price (£/MWh)

1,2

208.3 204.2 +2.0% 216.7 -3.9%

General Portfolio

OFGEM Audits

As part of the industry-wide audits of FiT and RO-accredited

generating assets, the Investment Adviser and Asset

Manager have been working closely with the regulator on

certain assets that have been selected, at random, for audit.

All OFGEM audits completed to date have been classiﬁed as

‘satisfactory’, with the respective assets’ accreditation being

fully compliant.

Health & Safety Activities

The Investment Adviser continues to ensure H&S awareness,

policies, processes and procedures remain at the forefront of

every activity around the portfolio. H&S policies and logs are

reviewed at least annually. All main contractors (including

asset management and O&M providers) are audited annually

by a qualiﬁed third-party specialist consultant, with new

retained contractors (associated with operational projects

acquired by BSIF, for example) audited immediately

following acquisition.

Cyber Security

The Investment Adviser arranged penetration testing of

48.2% of the solar PV portfolio (of those plants above 2MW)

by a specialist external consultant, as part of a periodic cyber

security review. Whilst the security across the portfolio was

satisfactory, the Investment Adviser has arranged for all the

recommendations to further enhance cyber security to be

undertaken, including both hardware and software upgrades,

with works to commence shortly. The remainder of the PV

portfolio and all wind farms will undergo similar penetration

testing in FY 2023/24.

for Delabole Wind Farm in December 2022. Signiﬁcant

liquidated damages were further recovered from the previous

O&M provider for the underperformance at Delabole.

The average onsite wind speeds recorded were similar to

FY 2021/22, which was a period of historically low wind

resource.

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

Notes to Table 2.

1. Actual & Forecast Average Total Power Price exclude ROC

Recycle estimates

2. Average Total Power Price includes LDs, Insurance &

Mutualisation Rebate

The portfolio achieved a Generation Yield of 2,293 MWh per

MW of installed capacity, equivalent to a 9.6% increase from

FY 2021/22, largely due to the improved plant availability.

Despite lower than forecast generation, the portfolio

provided total revenues of £27.9 m, with an average revenue

per MWh of £208.3, 2% above forecast.

Onshore Wind Optimisation & Enhancement Activity

In Northern Ireland, 17 of the 29 small-scale turbines have

been identiﬁed for repowering with replacement EWT 250kW

turbines. This will increase efﬁciency and output, whilst

maintaining their respective NIRO accreditation status.

As at 30 June 2023, seven turbines have been repowered

and returned to operation, with a further nine having

received planning approval for repowering, with a new 25-

year term. A further two projects have received a turbine

delivery, with repowering planned for FY 2023/24. Planning

applications for the remaining projects have been submitted

to the relevant Local Planning Authorities.

REPORT OF THE INVESTMENT ADVISER ANNUAL REPORT AND FINANCIAL STATEMENTS

3.Power Purchase Agreements

The Company actively monitors power market

conditions, ensuring that contract renewals are

spread evenly through any 12-month period with

competitive tender processes on both ﬁxed and

floating price options run for each PPA renewal in

the 3 months prior to the commencement of a new

ﬁxing period.

Flexibility within the Company’s capital structure

enables PPA counterparties to be selected on a

competitive basis and not influenced by lenders

requiring long term contracts with one offtaker.

This means the programme of achieving value

and diversiﬁcation from contracting with multiple

counterparties (which in turn reduces offtaker risk)

is executed for the beneﬁt of shareholders and not

the lenders.

By rolling PPA ﬁxes during the year and targeting

the most liquid area of the power market (one to

three years) the Company was able to complete

a number of ﬁxes during periods when wholesale

power prices were at their peak.

Evidence of this is reflected in the BSIF average

seasonal weighted power price, which for the 12

months ending 30 June 2023 increased by 147%

from the 12 months ending 30 June 2022, rising

from £57/MWh to £141/MWh. The rise in the BSIF

average seasonal weighted power price is a result

of the 156.2MW ﬁxed secured during the reporting

period from January 2023, at an average ﬁxed price

of £118.9/MWh, combined with favourable pricing

from contracts struck in the period preceding the

end of December 2022.

As at 30 June 2023, the average term of the ﬁxed-

price PPAs across the portfolio is 26.2 months

(FY 2021/22: 25.8 months) and the Company

has a price conﬁdence level of 92% to December

2023 and 86% to June 2024 (including subsidy

revenues), representing the % of the BSIF portfolio

that already has a ﬁxed price in place and thus no

exposure to power market uncertainty. Looking

ahead, the strategy has also secured power

ﬁxes and thus revenue certainty, at levels that

are materially in excess of the latest forecaster

expectations.

Table 3. PPA Fixed Power Prices (Average Vs Average for Fixes completed during Reporting Period)

Prices as at: 1 July 23 1 Jan 24 1 July 24 1 Jan 25

BSIF Portfolio Weighted Average

Contract Price (£/MWh)

158.9

(716MW)

173.5

(678MW)

149.2

(473MW)

160.8

(437MW)

Blended Average of forecasters

nominal terms power prices per

30 June 2023 valuation (£/MWh)

109 117 117 104

Footnote: MW stated in the BSIF Portfolio Weighted Average Contract price refers to the total amount of

the portfolio ﬁxed for that period.

The result is the Investment Adviser believes its PPA policy is the best strategy for Shareholders,

who are looking for stable revenues and forecastable, sustainable dividends with high visibility

of revenues on a rolling multiyear basis. It is this approach that has delivered almost a decade of

sector leading dividend cover (covered by current earnings and post debt amortisation).

SOLAR PV AT ELMS

REPORT OF THE INVESTMENT ADVISER ANNUAL REPORT AND FINANCIAL STATEMENTS

4. Power Market Summary

Since December 2022, power markets have begun to stabilise after record highs were

seen in August and December 2022, due to Russia’s continuing war against Ukraine

exacerbating concerns surrounding gas supplies to Europe ahead of Winter 2023.

Chart 1. UK Natural Gas & Wholesale Power Prices (1 July 2020 – June 2023)

Gas prices fell from their recent historic highs, as

supply increased as more liquefaction facilities

become available, with power prices predominantly

following gas markets. This is demonstrated in

Chart 2, with day-ahead baseload power prices

falling from highs of £180/MWh in mid-December

2022 to lows of £86/MWh at the end of June

2023.

In relation to medium-term market expectations,

the gas market is expected to rebalance by the mid-

2020s, with prices set to fall back to levels seen

prior to COVID. As a result, the baseload wholesale

power prices are forecast to fall by 23% on average

from 2023 to 2030, driven by lower gas prices.

Over the Company’s ten year history, building

a proprietary pipeline and then funding the

construction of new projects has been at the

heart of its success. Entering earlier in the value

chain brings some additional risk but if managed

appropriately, we believe it also allows us to

control the quality of projects far better, which

ultimately brings enhanced risk-adjusted returns to

Shareholders.

Source data: Bloomberg

5. Proprietary Pipeline

Over the past four years, the Company has

continued to implement its new build strategy

across the solar value chain to ensure that

Blueﬁeld Solar continues to build its market

share amongst UK solar power producers. We

have signed co-development agreements to

fund new sites. We have also expanded our

strategy to battery storage, which will enable

the diversiﬁcation of the BSIF’s revenues and

allow us to monetise the expected increases in

volatility of power prices in the future.

This focus on development activities has enabled

the Company to build up a signiﬁcant pipeline

of assets which can be built over the next ﬁve

years. As our projects progress, we are working

with selected construction contractors to ensure

that projects are designed and built to a high

speciﬁcation for long term performance.

We are pleased to report that the new build

strategy has delivered well on its objectives

thus far: the development pipeline now stands

at over 1.4 GW and the ﬁrst development to be

funded, Yelvertoft, - is progressing well through

construction. This 49MW project is set to be

connected to the grid towards the end of 2023

and it has entered into a Contract for Difference

(“CfD”) for its output.

The following sections provide a more detailed

update on both our construction and development

programmes.

INSPECTIONS AT YELVERTOFT

REPORT OF THE INVESTMENT ADVISER ANNUAL REPORT AND FINANCIAL STATEMENTS

Construction Consented

Construction Programme

As at the end of the period, BSIF had solar assets

with a capacity of 412MW and battery storage

assets with 183MW capacity that are fully

consented and are in pre-construction. The projects

have connection dates between 2023 and 2028.

Of these the ﬁrst projects to enter the construction

phase are Yelvertoft Solar Farm, a 49MW solar

PV park in Northamptonshire and Mauxhall Farm

Energy Park, a c.44MW solar PV project in North

East Lincolnshire. Yelvertoft signed a ﬁxed price

EPC contract with Bouygues in September 2022

and is targeting operation in Q4 2023, while

Mauxhall Farm signed a ﬁxed price EPC contract

with EQUANS in March 2023 and is expected to be

operational in Q2 2024. Mauxhall Farm is planned

to be a co-located project and construction of a

25MW battery energy storage scheme is expected

to commence shortly after the solar plant has been

commissioned.

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.

Projects with CfDs

In July 2022, the Investment Adviser successfully

secured CfDs on 62.4MW of ready to build PV plants

(Yelvertoft, Romsey extension and Oulton extension).

By securing a CfD contract, the plants will beneﬁt

from index-linked (to CPI) revenues over a 15-year

Development pipeline (MW). Total = 1,429MW

Construction

Consented

(pre-construction)

In planning

Development

(pre-planning

submission)

Development pipeline Value (£m)

Current pipeline status and valuation

duration at the AR4 solar PV strike price of £45.99/

MWh (in 2012 equivalent prices) or c.£64/MWh (in

2023 equivalent prices). The contracts commence

from 31 March 2025 and the strike prices will be

adjusted appropriately for CPI.

Post period BSIF achieved allocations of CfDs on all

4 projects submitted to AR5.

Development Programme

The Investment Adviser has been pursuing its

development strategy since 2019 to enable BSIF

to continue to be a key player in the UK renewable

energy market. Since this time, a portfolio of

approximately 950MW of solar and over 470MW

of batteries has been built up across 28 projects.

BSIF has a 5% investment limit in pre-construction

development stage activities, while less than 1% is

currently committed.

Currently, no value is attributed to projects without

planning consent. Once developments receive

planning consent, however, and move from the

development stage to pre-construction, the

Investment Adviser believes it is appropriate to

reflect this change in the Company valuation. At

this point in their lifecycle, the projects will have

received all the necessary planning consents,

land rights and valid grid connection offers and so

have discernible value beyond the direct costs of

development.

The current pipeline status and valuation is

summarised in the graphic adjacent.

Solar

Battery

Development

(pre-planning

submission)

In planning Consented

(pre-construction)

Construction

Project progress by technology

REPORT OF THE INVESTMENT ADVISER ANNUAL REPORT AND FINANCIAL STATEMENTS

6. Analysis of underlying earnings

The total generation and revenue earned in the Period by the

Company’s portfolio, split by subsidy regime, is outlined below:

Subsidy

Regime

Generation

(MWh)

PPA

Revenue (£m)

Regulated

Revenue (£m)

FiT 66,874 6.0 12.1

4.0 ROC 12,773 1.6 3.0

2.0 ROC 23,524 1.6 2.9

1.6 ROC 116,884 14.9 11.3

1.4 ROC 296,183 39.2 25.1

1.3 ROC 71,800 9.8 5.7

1.2 ROC 140,384 21.6 11.2

1.0 ROC 32,838 3.6 1.9

0.9 ROC 74,972 9.1 3.8

Total 836,232 107.4 77.0

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.

The key drivers behind the changes in Underlying Earnings between FY

2022/23 and FY 2021/22 are the combined effects of the acquisitions

within the Period and higher PPA pricing.

Underlying Portfolio Earnings

Full year to

30 June 23

(£m)

Full year to

30 June 22

(£m)

Full year to

30 June 21

(£m)

Full year to

30 June 20

(£m)

Portfolio Revenue 184.4 111.4 73.1 65.9

Liquidated damages and Other Revenue* 5.4 1.6 2.0 3.8

Net Earnings from Acquisitions in the period 0.0 0.0 5.1 0.0

Portfolio Income 189.8 113.0 80.2 69.7

Portfolio Costs -36.3 -27.8 -17.6 -14.1

Project Finance Interest Costs -13.6 -4.7 -1.8 -0.6

Total Portfolio Income Earned 139.9 80.5 60.8 55.0

Group Operating Costs#** -25.4 -8.3 -7.5 -5.8

Group Debt Costs -6.1 -5.4 -4.7 -4.6

Underlying Earnings 108.4 66.8 48.6 44.6

Group Debt Repayments -18.3 -13.8 -9.3 -9.2

Underlying Earnings available for distribution 90.1 53.0 39.3 35.3

Full year to

30 June 23

(£m)

Full year to

30 June 22

(£m)

Full year to

30 June 21

(£m)

Full year to

30 June 20

(£m)

Bought forward reserves 20.9 13.4 8.4 2.3

Total funds available for distribution -1 111.0 66.4 47.7 37.6

Target distribution*** 51.4 45.2 34.3 29.3

Actual Distribution -2 52.6 45.5 34.3 29.3

Underlying Earnings carried forward (1-2) 58.4 20.9 13.4 8.4

* Other Revenue includes ROC mutualisation, ROC recycle late payment CP20, insurance proceeds, O&M settlement agreements and

rebates received.

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

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

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

REPORT OF THE INVESTMENT ADVISER ANNUAL REPORT AND FINANCIAL STATEMENTS

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

Full year to

30 June 23

(£m)

Full year to

30 June 22

(£m)

Full year to

30 June 21

(£m)

Full year to

30 June 20

(£m)

Actual Distribution 52.6 45.5 34.3 29.3

Total funds available for distribution

(including reserves)

111.0 66.4 47.7 37.6

Average Number of shares in year* 611,452,217 554,042,715 429,266,617 370,499,622

Target Dividend (pps) 8.40 8.16 8.00 7.90

Total funds available for distribution (pps) 18.13 12.22 11.19 10.13

Total Dividend Declared & Paid (pps) 8.60 8.20 8.00 7.90

Reserves carried forward (pps) ** 9.53 3.39 2.67 2.23

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

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

June 2022 and c.496m shares for 30 June 2021).

7. NAV and Valuation of the Portfolio

The Investment Adviser is responsible for advising the Board in

determining the Directors’ Valuation and, when required, carrying out

the fair market valuation of the Company’s investments.

Valuations are carried out on a quarterly basis at 30 September,

31 December, 31 March and 30 June each year, with the Company

committed to conducting independent reviews as and when the Board

believes it beneﬁts Shareholders.

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

Investment Adviser has adopted valuation guidelines based upon

the IPEV Valuation Guidelines published by the BVCA (the British

Venture Capital Association). The application of these guidelines

is considered consistent with the requirements of compliance with

IFRS 9 and IFRS 13.

Following consultation with the Investment Adviser, the Directors’

Valuation adopted for the portfolio as at 30 June 2023 was £1,018.4m

(30 June 2022, £939.9m).

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

the last three ﬁnancial years:

Valuation Component (£m) June 2023 June 2022 June 2021

DCF Enterprise Value of

Portfolio (EV)

1,195.2 1,180.6 770.1

Consented Solar and Battery

Storage Development rights

67.5 13.8 1.8

Deduction of Project Co debt -430.8 -390.3 -119.8

Project Net Current Assets 186.5 135.8 42.4

Directors’ Valuation 1,018.4 939.9 694.5

Portfolio Size (MW) 812.6 766.2 613.0

WIND TURBINES AT HAMPOLE

REPORT OF THE INVESTMENT ADVISER ANNUAL REPORT AND FINANCIAL STATEMENTS

Discounting Methodology

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

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

current capital structure, with the result then benchmarked against

comparable market multiples, if relevant. The discount rate applied

on the project cash flows is the weighted average discount rate. In

addition, the Board continues to adopt the approach under the ‘willing

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

portfolio be appropriately benchmarked to pricing against comparable

portfolio transactions.

Key factors behind the valuation

There have been a number of key factors that have been considered in

the Investment Adviser’s recommendation to the Directors’ Valuation

(and which are quantiﬁed in the NAV movement chart page 22):

(i) The RPI inflation forecast for 2023 has been increased to 7%

(5.5% in December 2022 and 3.4% in June 2022), reflecting

expectations that UK inflation will remain higher for longer. As

evidence builds that inflation will fall during H2 2023, a rate of

3.5% has been applied for 2024 (2024 inflation forecast previously

used: 4.0% in December 2022 and 3% in June 22);

(ii) The portfolio discount rate has been increased to 8.00% (7.25%

in December 2022 and 6.75% June 2022). This is a result of

increases over the period in both the Bank of England base rate

(rising to 5.0% as at 30 June 2023 , from 3.5% as at 31 December

2022) and 15 year gilt yields (c. 4.8% as at 30 June 2023, from c.

3.9% as at 31 December 2022);

(iii) Inclusion of the latest forecasters’ curves as at 30 June 2023, and

the corresponding impact of the Electricity Generator Levy (“the

Levy”) - a 45% tax on the extraordinary returns made by electricity

generators, announced late in 2022, following sharp increases

in electricity prices. The Levy will be in place from 1 January

2023 until 31 March 2028 and is applied to returns from sale of

electricity in excess of a benchmark price of £75 per MWh, indexed

to CPI from April 2024;

(iv) The value attributed to BSIF’s development and construction

portfolio has risen during the Period, reflecting sites receiving

planning permission and further progress and investment into

construction projects;

(v) Working capital has grown in the period to June 23 reflecting

higher power prices being captured from the Company’s successful

PPA strategy.

By reflecting the core factors above within the Directors’ Valuation for

30 June 2023, the EV of the operational portfolio is £1,195.2m (June

2022: £1,180.6m) with the effective price for the solar component of

£1.35m/MW (June 2022: £1.38m/MW). These metrics sit within the

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

willing seller’ methodology upon which the Directors’ Valuation is based.

Power Prices

A blended forecast of three leading consultants is used within the

latest Directors’ Valuation , as shown in the graph below. This is based

on forecasts released in the quarter to end June 2023. For illustration

purposes, the graph below also includes the blended curve used in the

Company’s accounts for the year ended 30 June 2023.

The curves used in the 30 June 2023 Directors’ Valuation reflect the

following key updates:

1. Short-term European fuel prices – gas and coal – have fallen amid

lower gas demand, higher gas storage levels and robust LNG

deliveries, with a similar trend reflected in the wholesale power

price curve;

2. Higher renewable generation capacity deployment levels in the

medium term (with ambitions for up to c.50GW offshore wind

by 2030) as the UK strives to meet its net zero targets and fully

decarbonise its power system by 2035; and

3. Annual demand for power in Great Britain, driven principally by

electriﬁcation of heat and transport, is expected to rise from

292TWh in 2023 to 438TWh by 2035.

Change in blended power price forecasts

Please note, the blended forecast varies depending on whether the asset is a solar or a wind project, reflecting different forecasts for technology

speciﬁc capture rates. The solar forecast is shown in the chart on this page.

£/MWh - real 2023 prices

REPORT OF THE INVESTMENT ADVISER ANNUAL REPORT AND FINANCIAL STATEMENTS

Directors’ Valuation and NAV Movement (£m)

The main contributors to the increase in the Directors’ Valuation from 30 June 2022 to 30 June 2023 were an increase in

power price forecast curves provided by the Company’s three independent advisers, a new acquisition, change in development

portfolio valuation (8.6pps) and updated near-term inflation assumptions.

Directors’ Valuation movement

(£million)

As % of

valuation

30 June 2022 Valuation 939.9

New investments acquired 59.4 6.3%

Development uplift 52.8 5.6%

Cash receipts from portfolio (52.6) (5.6%)

Power curve updates

(incl. PPAs)

76.6 8.1%

Inflation updates 17.1 1.8%

Discount rate change (44.9) (4.8%)

Levy tax impact (39.8) (4.2%)

Balance of portfolio return 9.9 1.1%

30 June 2023 Valuation 1,018.4 8.3%

There have been no material changes to assumptions regarding

the future performance or cost optimisation of the portfolio when

compared to the Directors’ Valuation of 30 June 2022.

On the basis of these key assumptions, the Board believes there

remains further scope for NAV enhancement from the potential

extensions of asset life for further projects in the portfolio, as well as

cost optimisation on long term O&M fees.

The assumptions set out in this section remain subject to continuous

review by the Investment Adviser and the Board.

REPORT OF THE INVESTMENT ADVISER ANNUAL REPORT AND FINANCIAL STATEMENTS

Reconciliation of Directors’ Valuation to Balance sheet

BALANCE AT YEAR END

Category 30 June 2023 (£m) 30 June 2022 (£m)

30 June 2021

(£m)

Directors’ Valuation 1,018.4 939.9 694.5

Portfolio Holding Company Working Capital (12.5) (13.6) 26.4

Portfolio Holding Company Debt (153.0) (70.0) (250.6)

Financial Assets at Fair Value per

Balance sheet

852.9 856.3 470.3

Gross Asset Value 1,438.0 1,316.7 840.7

Gearing (% GAV*) 41% 35% 44%

* GAV is the Financial Assets, as at 30 June 2023, at Fair Value of £852.9m plus RCF of £153.0m and 3rd party

portfolio debt of £430.8m (giving total debt of £583.8m).

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.

8. Financing

Debt Strategy

Since its IPO the Company has focused on a simple and defensive

approach to debt. This means having debt agreements that have,

primarily, ﬁxed interest rates and are amortising. Debt split into (1)

long-term asset-level debt, and (2) revolving credit facility at fund-

level for short-term funding. Debt in the portfolio is generally not

subject to stringent lender requirements on PPAs, allowing BSIF to

take advantage of more competitive PPA pricing.

The Company’s weighted average cost of long-term debt is 3.5%

and is largely locked-in via ﬁxed interest rates. Whilst BSIF has some

index-linked debt, it also has signiﬁcant levels of RPI linked revenues,

leaving the Company a net beneﬁciary of inflation.

The fund’s revolving credit facility (RCF) is the only floating-rate debt

instrument in the portfolio and represents 26% of the total debt

balance. 80% of asset-level debt has a ﬁxed interest rate. 20% of

principal for long-term debt is inflation-linked.

Revolving Credit Facility

On 22 June 2023, the Company agreed a £110 million increase to

its existing committed £100 million revolving credit facility (‘RCF’),

bringing the total committed amount to £210 million. The facility also

has an uncommitted accordion feature allowing it to be increased

by up to a further £30 million. As part of the increase, the Company

has sought to broaden the lender group through the introduction of

Lloyds Bank Plc, alongside the existing lenders RBS International and

Santander UK. The term of the facility has been extended to May 2025

and the facility’s margin remains unchanged at 1.9%.

As at 30 June 2023 the Company’s subsidiary RP1 had drawn £153m

from its RCF.

External Debt

Excluding the Company’s RCF, total outstanding loans to third-party

lenders as at 30 June 2023 total £431m, with each loan secured

against a portfolio of assets and fully amortising within the life of the

respective asset’s subsidies. The average interest cost, excluding the

Company’s RCF, across the external debt facilities in the table below

is 3.54%.

REPORT OF THE INVESTMENT ADVISER ANNUAL REPORT AND FINANCIAL STATEMENTS

Debt Principal Outstanding (£m) Maturity % of Interest Fixed

(1)

All-in Interest Rate

Syndicate

Fund RCF

153 May-25 0% 8.00%

Bayern LB

Project Finance

8 Sep-29 100% 5.50%

Syndicate

Project Finance

72 Dec-33 100% 3.50%

Aviva (ﬁxed)

Project Finance

88 Sep-34 100% 2.88%

Aviva (index-linked)

Project Finance

67 Sep-34 100% 3.70%

Macquarie (ﬁxed)

Project Finance 7 Mar-35 100% 4.60%

Macquarie

(index-linked)

Project Finance

20 Mar-35 100% 4.70%

Gravis (index-linked)

Project Finance

38 Jun-35 100% 6.48%

NatWest

Project Finance

130 Dec-39 85% 2.70%

Total/Wtd Avg 584 70% 4.71%

Total/Wtd Avg

excl. RCF

431 95% 3.54%

(1) Index-linked debt treated as ﬁxed for the purposes of this table as proportion ﬁxed represents interest rate risk only

NatWest 3-year term loan maturity and reﬁnancing

On 2 May 2023, the Company announced the re-ﬁnancing of its £110

million three-year term loan with NatWest.

The original loan, 75% hedged with a swap at circa 0.35% over a

notional 18-year period, had a maturity of September 2023 and has

been increased to £130 million and extended in maturity to December

2039.

Hedging has been put in place for the tenor of the loan on £110 million,

at an effective all-in cost of c.2.7% (being margin and swap rate).

The ﬁnancing is secured against the UK-based portfolio of 31

operational PV plants with a total installed capacity of 139MW and

beneﬁtting from attractive subsidies; 29 of the assets are accredited

under the ROC regime with tariffs ranging from 1.2 - 2.0 ROCs, while

two are accredited under the FiT scheme.

The additional debt of £20 million is being used to provide ﬁnancing

for the construction of Yelvertoft, the Company’s 49MW CfD-backed

solar PV project in Northamptonshire. Once construction is complete,

expected in Q4 2023, the Company will review whether to enter

hedging arrangements on this tranche.

GAV Leverage

The Group’s total outstanding debt, as at 30 June 2023, was c.£584

million and its leverage stands at c.41% of GAV (35% as at 30 June

2022) within the 35% - 45% preferred range the Directors have

previously outlined as desirable for the Company.

REPORT OF THE INVESTMENT ADVISER ANNUAL REPORT AND FINANCIAL STATEMENTS

by policies such as the CfD scheme, which is described in

more detail in the next section of this report.

In March 2023, the UK Government stated its ambition to

increase solar capacity up to 70GW by 2035 and signalled

its support for ground and rooftop solar technologies on

brownﬁeld, industrial and low/medium grade agricultural

land. The Government’s newly created Solar Taskforce is

expected to publish a roadmap next year to drive forward its

solar growth ambitions. The Government also aims to develop

up to 50GW of offshore wind by 2030.

The chart below illustrates the distribution of total installed

capacity across different renewable generation technologies

at the end of the ﬁrst quarter of 2023 (the latest data available

at the time of this report) compared with a year earlier.

9. Market Developments

UK renewable generation capacity and deployment

Latest Government data shows that UK solar photovoltaic

(PV) capacity stands at around 15GW, across c.1.3 million

installations. Of this amount, around 7.3GW (c.48% of the

total solar capacity in the UK) and 5.1GW (34%) is accredited

under the RO and FiT schemes, respectively, and c.2.4GW

(16%) is unaccredited. Onshore and offshore wind installed

capacity stands at around 15.2GW and 13.9GW, respectively.

The UK has 2.8GW of operational battery storage capacity,

according to data from energy association RenewableUK.

The UK’s total renewable generation capacity is projected to

continue to grow over the coming years as the Government

strives to meet its net zero targets and meet power demand

from the electriﬁcation of the domestic heat, transport and

industrial sectors. Deployment is expected to be supported

Secondary market transactions,

development and construction activity

Transactional activity in the UK renewables market has eased to some

extent, as inflation and higher interest rates have increased investor

uncertainty.

Acquisitions across established technologies have totalled c.150MW

in solar, c.1.5GW in offshore wind and c.140MW onshore wind in the

Period

Activity in the UK development market has continued to be driven

by factors such as ambitious decarbonisation targets, increasing

preferences by customers for clean energy, demand for ESG

investments and the inclusion of solar PV in upcoming CfD auction

rounds. Development activity has been particularly noticeable in the

battery storage area as developers seek to provide solutions to help

manage the grid as larger quantities of intermittent renewables are

added to the system. Solar development activity has, however, slowed

recently, primarily due to grid constraints.

Some construction activity has been observed in the UK solar and

battery storage area, although this is against a backdrop of supply

chain challenges and rising interest rates. Converting the UK’s

signiﬁcant development pipeline into operational solar projects over

the next ﬁve years will require developers to adopt an innovative

approach to overcome current macroeconomic challenges as well as

challenges surrounding higher construction costs and grid connection

lead times.

With 754MW of operational solar capacity, the Company maintains a

strong position within the UK solar market, owning about 7.6% of the

country’s utility-scale solar PV capacity.

2. According to Bloomberg New Energy Finance and Blueﬁeld internal data

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

animal biomass

REPORT OF THE INVESTMENT ADVISER ANNUAL REPORT AND FINANCIAL STATEMENTS

10. Regulatory Environment

The regulatory environment remains under the spotlight

as the Government seeks to support renewable energy

deployment under particularly tough macroeconomic

conditions, including high inflation and rising interest rates.

Key themes are outlined below.

Update on Contracts for Differences (CfD)

In July 2022, the UK Government awarded support for

c.10.8GW of new build renewable generation capacity

through its CfD scheme, allocation round 4 (AR4) – with

c.7GW awarded for offshore wind projects, c.2.2GW for solar

and c.0.9MW for onshore wind. The overall budget for AR4 –

across pot 1-3 technologies – was £295m per year.

The UK Government published the CfD allocation round

5 (AR5) results on 8 September 2023. A total of 3.7GW

of renewable energy projects, with expected deliveries in

2025-28, won contracts with strike prices at or close to the

administrative strike price (ASP) caps set by the government.

Almost 2GW of solar projects won contracts at the maximum

ASP of £47/MWh (in 2012 terms), of which almost 1.4GW is

due to come on line in 2027-28 – the ﬁnal target delivery

year for the auction. Onshore wind – including remote island

wind – won 1.7GW of contracts at £52.29/MWh, while no

bids were successful from offshore wind. This was the ﬁrst

time since the launch of the CfD scheme in 2015 that no

new offshore wind projects won contracts. In the run-up to

the AR5 auction, many potential offshore wind participants

expressed concerns over the low ASPs particularly given

the high inflationary and cost of capital backdrop. The ASP

for offshore wind was set at £44/MWh (in 2012 prices) in

AR5, down from £46/MWh in AR4. Almost 7GW of offshore

wind technology was successful in AR4 which closed in

July 2022.

Further ahead, the Government is also considering

introducing non-price factor legislation for future CfD

allocation rounds (AR7 onwards, 2025-30). This would

encourage bid applicants to balance overall costs with other

non-price factors, including sustainability and enabling

system flexibility and operability.

UK Carbon Market

In July 2023, the UK Emissions Trading Scheme (UK ETS)

Authority announced several reforms to tighten limits on

power, industrial and aviation sector emissions which are

scheduled to become effective in 2024. The Authority also

plans to extend the sector coverage of the UK ETS from

2026-28 which could incentivise industries to invest in

lower-carbon footprint renewable technologies.

Electricity Generator Levy

Please refer to ‘Key factors behind the valuation’ on page 21.

Review of Electricity Market Arrangements

The Government launched its Review of Electricity Market

Arrangements (REMA) consultation last summer to identify

the necessary reforms needed to transition to a cost

effective, lower carbon and secure electricity system. In

March 2023, a summary of the 225 consultation responses

was published, with several wholesale energy market

reforms still under consideration, including zonal and

nodal market pricing. The Government intends to publish a

second REMA consultation later this year.

]

Blueﬁeld Partners LLP

27 September 2023

NI TURBINE PORTFOLIO

REPORT OF THE INVESTMENT ADVISER ANNUAL REPORT AND FINANCIAL STATEMENTS

Environmental,

Social and

Governance

Report

1. Introduction

An introduction from the Chair

Across the globe, the impacts of climate change are becoming all too

apparent. In July, on the same day that wildﬁres ravaged Sicily, in Milan planes

were grounded by hailstones the size of tennis balls. This summer, Greece,

Algeria, and Tunisia are amongst the many countries that have experienced

an unprecedented level of wildﬁres, exacerbated by extreme heat and arid

conditions, with devastating social and economic impacts. Climate change is

often thought of as something which will occur in the future, but it is happening

now, and its effects will amplify as time goes on. As President Biden said on

a recent visit to hurricane-stricken Florida, “Nobody intelligent can deny the

impact of the climate crisis anymore. Just look around.”

As we move towards a Net Zero future, the Company plays a key role in

providing low carbon energy to a decarbonising economy. However, the

transition away from fossil fuels gives rise to challenges regarding energy

security and affordability, heightened but also accelerated by the fallout from

the Russian invasion of Ukraine. The UK needs rapid, large-scale deployment

of renewable infrastructure to reach Net Zero, which will also deliver energy

security and stabilise energy pricing.

ANNUAL REPORT AND FINANCIAL STATEMENTS

Powered the equivalent of over 288,000 UK homes with

renewable electricity.

(2022: 215,000)

Achieved over 173,000 tonnes of CO

e savings.

(2022: 120,000)

Undertook physical scenario analysis for the first time

to examine the potential impacts of extreme heat on the

Company’s solar assets.

Adopted a Human Rights Policy, Sustainable Procurement Policy,

Waste Management Policy, and Supplier Code of Conduct.

The Board of the Company established an ESG Committee.

Conducted thirty Biodiversity Net Gain (BNG) assessments

across the operational portfolio.

Undertook ten independent ecological assessments.

Delivered seventeen in-school workshops and eight solar site

visits to schools surrounding the Company’s assets.

3. Based on Ofgem’s Typical Domestic Consumption Values.

4. Based on generation data aligned with an appropriate Government CO

e conversion factor.

An introduction

from the Investment Adviser

The Company has made great progress with its ESG

strategy during the reporting period. In addition to

being the ﬁrst year implementing, monitoring, and

measuring the Company’s ESG performance against

its KPIs, it was also the ﬁrst time the Company

reported in line with the Level 2 requirements of

the EU’s Sustainable Finance Disclosure Regulation

(SFDR) and produced its ﬁrst Principal Adverse

Impact (PAI) report.

In a year of ‘ﬁrsts’, the Investment Adviser has

taken a robust approach to both the Company’s

ESG commitments and regulatory requirements,

reporting comprehensively and transparently. The

Investment Adviser supported the Company with

collection of a wide range of sustainability data,

enabling the Company to make its most quantitative

ESG disclosures to date. By continuing to support

and work collaboratively with service providers, we

hope to increase the accuracy and quality of data

over time.

Blueﬁeld’s ESG team has grown and ESG has

continued to be embedded into every aspect of

our operations. The Blueﬁeld group structure, with

four separate but complementary businesses,

facilitates this process, and enables the Company

to beneﬁt from the holistic management of ESG

across the asset lifecycle. Blueﬁeld employees

share a passion towards sustainability and their

dedication is reflected in the Company’s successes

this year.

Having refreshed its ESG commitments, we look

forward to supporting the Company with the second

year of its ESG strategy, ultimately contributing to

its long-term value.

James Armstrong,

Managing Partner of Blueﬁeld Partners LLP

As growth of the renewable energy sector continues

to accelerate, the solar power industry must take

accountability and responsibility for the impacts

of its own operations. We believe consideration

of material environmental, social and governance

(ESG) factors is integral to the long-term success

of any investment fund, contributing to both risk

management and value creation.

Last year the Company developed its ESG

strategy, which included a comprehensive set

of commitments and KPIs. Delivery of these

commitments has enhanced the Company’s ESG

governance, including further developing supply

chain management processes, and putting new

policies in place. During the coming year, we

will enact these policies across the Company’s

operations, as well as continuing to deliver

additional value across our portfolio through our

nature and social initiatives. Building the Company’s

climate change resilience will also remain a priority.

The Company continues to integrate ESG across

the asset lifecycle, critically evaluating and

improving ESG processes, and with sharp focus

on risks and opportunities most material to the

Company’s operations. As the ESG landscape

evolves, the Company will continue to ensure

compliance with appropriate ESG regulation and

reporting frameworks, ensuring ESG achievements

and challenges are reported transparently to

stakeholders. Doing so will support the Company

in achieving its purpose of delivering renewable

energy responsibly, with the ambition not only to

offer a sustainable product, but also to achieve

sustainability throughout its operations.

John Scott,

Chair

2. 2023 ESG Highlights

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

How regulatory requirements have been

embedded within the Company’s ESG strategy.

Regulatory requirements were a key consideration

during development of the Company’s ESG strategy.

As a result, regulatory reporting requirements, such as

PAIs, are integrated within the Company’s commitments

and KPIs. For transparency, the Company will signpost

where information can be found if it sits outside its main

ESG report, for example as part of standalone SFDR

disclosures.

The Company is mindful that regulatory reporting time-

frames, which are typically calendar year, do not run in

tandem with the Company’s ﬁnancial reporting year. As

a result, to prevent duplicate sets of reporting for each

metric (which may become confusing to stakeholders),

the Company will typically not re-report PAI metrics in

line with its ﬁnancial year. Instead, stakeholders will be

referred to the PAI statement to obtain this information.

The exception is the Company’s GHG inventory, which is

currently being calculated in relation to both its calendar

and ﬁnancial year.

Covering the reporting period ending 30 June 2023:

3. ESG Landscape

ESG Context

As a renewable energy business, the Company is actively contributing

towards the UK’s Net Zero target, but this does not remove the

Company from its broader ESG impacts and responsibilities. As

such, the Company’s ESG strategy has identiﬁed a range of priority

topics across ESG areas, all of which will need to be considered as

part of the Company’s responsible investment approach. These have

been integrated into a comprehensive framework through which the

Company can deliver value for its stakeholders, and which will support

delivery of long-term returns for shareholders.

ESG Regulation & Framework Alignment

SFDR & EU Taxonomy

Please refer to Periodic Annex IV and the Company’s website for

further information regarding its ongoing compliance with the SFDR

and EU Taxonomy.

Please note that, as part of the Company’s implementation of the

SFDR Regulatory Technical Standards, the Company’s Article 23

pre-contractual disclosure was updated on 22 December 2022.

This involved the deletion of the sections titled ‘Promotion of

environmental and social characteristics’ and ‘Taxonomy-alignment’,

and the addition of the SFDR annex to provide the relevant

sustainability-related information in the format of the mandated

template. A section titled ‘Consideration of principal adverse impacts

of investment decisions on sustainability factors’ was also added to

inform investors of the Company’s approach to implementing the PAI

requirements.

These changes are intended to comply with the Company’s regulatory

obligations and provide greater information to investors about the

Company’s sustainability proﬁle and attributes. The most recent

versions of the Company’s sustainability-related disclosures are

available on its website.

Task Force on Climate-related Financial Disclosures (TCFD)

The Company has voluntarily adopted the recommendations of the

TCFD and its second TCFD report is presented on p.43.

UK Sustainability Disclosure Requirements & UK Green Taxonomy

The Company is following progress of the UK Sustainability Disclosure

Requirements (SDR) and UK Green Taxonomy, to ensure it is well

positioned to comply with these new rules and guidance as and when

they come into effect.

Sustainability Disclosure Standards

To better integrate ESG considerations alongside ﬁnancial report-

ing, the ISSB has recently issued two IFRS sustainability disclosure

standards: IFRS S1 and S2. The Company will assess its alignment

with the requirements of the IFRS standards over coming months, in

preparation for the adoption of these standards by the FCA.

4. The Company’s ESG Strategy

The Company’s ESG strategy reflects stakeholder

expectations and has been developed to deliver

a positive impact across the Company’s portfolio

of investments

. Material ESG topics are deﬁned

within each of the Company’s key pillars:

5. Please refer to the Company’s 2022 Annual Report

for further information on the strategy development

process.

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 nature 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 environmental

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 nature 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

NATURE

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 nature 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 most relevant United Nations Sustainable Development

Goals (UN SDGs) have been mapped against the Company’s

ESG pillars, following the alignment protocol. In total, eight

goals have been identiﬁed where the Company believes it

can have the greatest positive impact. The Company’s largest

contribution will be in relation to Goal 7, ‘Affordable and Clean

Energy’ and Goal 13, ‘Climate Action’. With over 812 MW of

installed capacity, the Company’s portfolio generated 836,231

MWh of renewable energy during the reporting period,

supporting domestic energy security and decarbonisation

of the UK energy market. The Company also endeavours to

minimise any negative impacts of its operations, as described

throughout this report.

Commitments & KPIs

Focus this year has been the collection of data to enable the

Company to report against its ESG commitments and KPIs.

As this was the ﬁrst time baseline data had been collected for

most of these KPIs, data collection processes had to be newly

established across a variety of the Company’s operations and

service providers.

Whilst relationships between the Blueﬁeld service provider

companies enabled efﬁcient data collection for a large

portion of the Company’s portfolio, data collection from

external third parties was more challenging, particularly as

many providers across the industry did not have existing data

collection processes in place. Therefore, whilst every effort

has been taken by the Investment Adviser to ensure the

accuracy of the Company’s ESG performance, the Company

will implement further processes to improve the accuracy

and quality of ESG data over time.

Key commitments for the FY 23-24 are presented in Table 1 and

a full breakdown of the Company’s commitments and KPIs, and

performance against these, is presented within the ESG Appendix

Commitments and KPIs are renewed annually to ensure alignment

with the Company’s evolving ESG approach; the Board approves

any changes made and monitors ongoing progress. As a result,

several new commitments have been adopted this year and minor

amendments made to some existing commitments and KPIs, based

on the Investment Adviser’s experience of implementing the strategy

over the last twelve months.

O: COLOUR VERSION

SDG LOGO

FOR NON-UN ENTITIES

HORIZONTAL LOGO

LOGO

The COLOUR VERSION of the Sustainable Development Goals logo

ed on a white or light grey background. See colour

values to the right.

LIGHT GREY

PM S: Cool Gray 1C

R 241 G 241 B 241

C 4 M 3 Y 3 K 0

17 ICONS: COLOUR VE RSION

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

17 ICONS: COLOUR VE RSION

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

17 ICONS: COLOUR VE RSION

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

17 ICONS: COLOUR VE RSION

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 Icon 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

17 ICONS: COLOUR VE RSION

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

Table 1 – Key ESG commitments for the 23-24 ﬁnancial year

PILLAR KEY COMMITMENTS

Climate Change

Mitigation

• Report our renewable energy generation annually.

• Invest up to £50,000 in industry collaborations annually to support the energy transition.

• Continue to build our climate resilience and inform our business strategy through climate risk

assessments and scenario analysis.

•

New commitment: Develop a Net Zero pathway.

Pioneering Positive

Local Impact

• Evaluate Biodiversity Net Gain (BNG) across the operational portfolio and achieve at least 20% BNG on

new solar developments.

• Conduct independent biodiversity assessments across at least 10% of our sites annually (relating to

assets over 1MW in capacity)

• Continue to promote positive action within the communities we operate within through community

beneﬁt funds and educational sessions.

•

New commitment: Develop a Nature Strategy, building upon our existing biodiversity commitments and

encompassing the recommendations of the TNFD.

Generating Energy

Responsibly

• Ensure 100% of our assets are covered by a Human Rights Policy, which covers UNGC principles and

OECD guidelines.

• Require adoption of our Supplier Code of Conduct by key Tier 1 and, where possible, Tier 2 suppliers.

•

New Commitment: Continue to develop our due diligence mechanisms to identify, prevent and mitigate

human rights impacts across our operations and, where possible, our supply chain.

6. 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.

7.The FY 23-24 commitments reiterated throughout the ESG report may differ slightly from those presented in the ESG Appendix; this is because some commitments have been updated for the upcoming year. The original commitments

are presented in the ESG Appendix to highlight the Company’s performance against them during the reporting period.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

5. How ESG is Embedded

ESG Oversight

The Board of the Company has ultimate responsibility and oversight of

ESG risks and opportunities, and ESG is considered by the Directors as

part of Board meetings, investment decisions and risk management.

Daily management of ESG is outsourced to the Investment Adviser,

with the Board regularly updated on ESG activity through investment

committee papers, Board meetings, ad hoc calls, and written updates.

During the reporting period, the Board established an ESG committee,

chaired by Meriel Lenfestey. The Committee provides a forum for

Figure 1 – The Company’s ESG and Climate Governance Structure

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. Whilst all Directors share responsibility and oversight of ESG matters (including those relating to climate

risks and opportunities), Meriel Lenfestey has been named Chair of the ESG Committee, which helps to further drive forward the Company’s ESG agenda. The Board delegates

certain ESG oversight matters to its principal Committees and representatives.

INVESTMENT

Responsible for considering

ESG and climate risks and

opportunities within due

diligence.

COMMERCIAL

Responsible for the management

of the portfolio (wind, solar,

battery assets) and supports the

implementation of ESG within

operational activities.

ASSET MANAGEMENT

Responsible for operational

management and compliance of

the portfolio. Support with ESG

data collection and analysis.

O&M

Responsible for operational

maintenance of solar assets.

Support with ESG data collection

and BSIF’s environmental

objectives.

DEVELOPMENT

Responsible for developing

sites for the solar and battery

pipeline. Embed community and

environmental considerations

within the development process.

The Blueﬁeld ESG Team is responsible for internalising and externalising ESG and climate progress across 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 AND CONTINUOUS IMPROVEMENT

mutual discussion, support, and challenge to the Investment Adviser

with respect to ESG matters. ESG committee meetings, of which there

are at least two a year, provide an additional forum through which the

Board engage on ESG activity.

The Investment Adviser is responsible for communicating, embedding,

and monitoring ESG initiatives across the portfolio, ensuring ESG is

considered at every stage of the asset lifecycle. ESG is included as a

standing agenda item as part of the Investment Adviser’s quarterly

Board meetings and the Investment Adviser’s ESG Manager regularly

reports progress to the Managing Partner and Group General Counsel.

The Company’s ESG Governance Structure illustrates how ESG is

integrated across portfolio-related activities, presented in Figure 1.

Responsible Investment

Please refer to p.53 and the Company’s Sustainable Investment

Policy for further information on its responsible investment approach.

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 embedded within these activities.

Reports to the BSIF Board quarterly and

anything material ad-hoc.

BLUEFIELD ESG TEAM

Responsible for driving ESG matters across key

stakeholders and business areas. Routinely

communicates progress through quarterly

Board reports, ESG Committee meetings

and ad-hoc meetings. ESG is included

within investment committee papers.

BSIF ESG COMMITTEE

Provides a forum for mutual discussion,

support and challenge to the Investment

Adviser with respect to ESG matters.

Meets at least twice a year and otherwise

as required by the Chair.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

Since IPO in 2013, the Company has

saved the equivalent of approximately

1,200,000 tonnes of CO

e from being

released into the atmosphere

Whilst the Company’s activities are central to the UK’s Net

Zero agenda, the Company recognises the potential harmful

impacts that come with being part of the renewables

industry, and that as the sector continues to grow, industry

players will need to work together to address emerging

social and environmental risks. End-of-life considerations for

renewable generation assets are an increasingly important

topic, particularly with movement towards a more circular

economy.

During the reporting period, the Company identiﬁed a

potential partnership with a UK university, focused upon

end-of-life options for solar and wind assets. The Company

has elected to allocate its ﬁrst-year research budget of up to

£50,000 to this project, noting that funds will be transferred

once the project is ﬁnalised.

8. https://www.gov.uk/government/news/uk-enshrines-

new-target-in-law-to-slash-emissions-by-78-by-2035

9. https://assets.publishing.service.gov.uk/government/

uploads/system/uploads/attachment_data/ﬁle/1147340/

powering-up-britain-joint-overview.pdf

10. Based on Ofgem’s Typical Domestic Consumption Values

11. Based on generation data aligned with an appropriate

Government CO

e conversion factor

12. Throuh the displacement of fossil fuel generated energy

supplying the grid.

Key Commitments:

• Report our renewable energy generation

annually.

• Develop a Net Zero pathway.

• Invest up to £50,000 in industry

collaborations annually to support the energy

transition.

• Continue to build our climate resilience and

inform our business strategy through climate

risk assessments and scenario analysis.

SDG Contribution:

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

are, that square must be proportional 1 x 1.

ICONS

6. CLIMATE CHANGE MITIGATION

Introduction

Critical and ambitious action is needed to address

climate change. The UK has remained ﬁrm on its Net Zero

commitment, aiming to reduce emissions by 78% by 2035

In their 2023 ‘Powering up Britain’ publication, the UK

government acknowledged the energy trilemma, and the

role renewable deployment will play in achieving interim and

long-term Net Zero targets, increasing energy independence,

and shielding the UK from volatile energy markets, ultimately

reducing energy prices

As a UK-focused renewable energy business, the Company is

well positioned to support the UK’s transition to a low carbon

economy and domestic energy security.

Advocating Renewable Energy

The Company substantially contributes to climate change

mitigation and the UK’s decarbonisation agenda through its

generation of renewable energy. During the reporting period

the Company:

•

Generated 836,231 MWh of renewable energy.

•

Powered the equivalent of over 288,000 UK homes with

renewable electricity for a year

•

Achieved over 173,000 tonnes of CO

e savings

•

Had 93MW of solar infrastructure under construction,

which on completion is estimated to generate an additional

91,000 MWh of renewable energy annually.

In recognition of its positive environmental

impact, the Company has been awarded

the following accreditations:

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

decarbonisation commitment, the Company will develop a

Net Zero pathway, and will analyse different target-setting

frameworks to ensure the decarbonisation strategy most

suitable for its investments is adopted.

Installed capacity on green

energy tariffs:

13% (as at 30 June 2022);

85% (as at 30 June 2023).

Supporting the Energy

Transition through Industry

Engagement

Case

Study

Carbon Emissions

GHG Inventory

The Company takes account of its carbon impact and reports

its emissions annually. Last year the Company commissioned

its ﬁrst Lifecycle Assessment (LCA) to estimate the emissions

associated with a solar PV asset across its lifetime. Depending

on the future energy mix modelled, the study found that the

solar farm “pays back” the total emissions consumed during

production and installation in between one to three years; a

small proportion of its expected forty-year lifespan. The study

emphasised the positive contribution that solar assets can

offer to a decarbonising grid, but also enabled the Company

to have sight of the absolute emissions impact of a solar

asset, highlighting potential opportunities for improvement.

Please refer to the Company’s TCFD Report on p.43 for its

GHG inventory.

The Company’s assets consume a small amount of electricity,

derived from the grid. To reduce Scope 2 emissions, and

ensure that its portfolio consumes energy derived from

renewable sources, the Company has been transferring its

assets onto renewable energy import tariffs, where these

are not already in place. Looking forward, to formalise its

The Investment Adviser takes a proactive approach

to supporting the energy transition, not only through

its advisory role to the Company, but also by engaging

and supporting the government to create a policy

environment which can enable Net Zero. This includes

responding to government consultations, meeting

with senior political leaders across the House to

discuss renewable energy, and working with partners

in the sector to engage in relevant discussions via

the government’s Solar Energy Taskforce. Blueﬁeld

employees are also members of the industry trade body

Solar Energy UK, and frequently engage in discussions

across the various working groups. Such enables the

Company to beneﬁt from a coherent and broad view on

a range of industry matters, whilst contributing to best

practice for the renewables sector.

Climate-related Risks and Opportunities

The assessment of climate-related risks and opportunities

is a continual process for the Company as part of its risk

management processes and strategy. Please refer to the

Company’s TCFD report on page 43 for further information.

SOLAR PV AT ROVES

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

7. PIONEERING POSITIVE LOCAL IMPACT

Introduction

The topic of nature has been a real area of focus and commitment for

the Company. Its investments have an important role to play at the local

level and the Company seeks to positively impact the communities

and environments it is a part of. The Company has strengthened how

it communicates ESG expectations with its suppliers and contractors,

who manage the Company’s investments on its behalf.

Nature

Climate change and nature are intrinsically linked. The Company aims

to make positive impact in both areas simultaneously, focusing upon

BNG across its portfolio as an additional way to help mitigate climate

change beyond its contribution to Net Zero. The Company has updated

its ESG strategy to reference ‘Nature’, recognising that biodiversity

represents a critical aspect of this and that the Company’s operations

have wider environmental impacts and dependencies.

Focus during the reporting period was delivery of the Company’s

biodiversity implementation plan (adopted alongside its Biodiversity

Policy last year), and the quantiﬁcation of biodiversity across the

portfolio.

Delivering the Biodiversity Implementation Plan

The biodiversity implementation plan was created to support the

Company in achieving the commitments made within its Biodiversity

Policy. Initial activities have focused upon how to minimise the

adverse impacts of the Company’s land management activities on

nature. During the reporting period, the Investment Adviser worked

closely with Blueﬁeld Operations Limited, the Company’s principal

O&M contractor, to undertake the following activities:

•

Mapping of the Company’s assets to identify sites located within 1km

of a biodiversity-sensitive

area and within 500m of a water course.

•

Creation of systems to record and track threatened and protected

species

identiﬁed at the Company’s assets, using data from

ecological assessments.

•

Conduct a comprehensive review of Landscape and Ecological

Management Plans (LEMPs) to support ongoing LEMP compliance,

but also assess their suitability and practicality.

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

Key Commitments:

• Evaluate Biodiversity Net Gain (BNG) across

the operational portfolio and achieve at least

20% BNG on new solar developments.

• Conduct independent biodiversity assessments

across at least 10% of our sites annually

(relating to assets over 1MW in capacity)

• Develop a Nature Strategy, building upon

our existing biodiversity commitments and

encompassing the recommendations of

the Taskforce on Nature-related Financial

Disclosures.

• Continue to promote positive action within

the communities we operate within through

community beneﬁt funds and educational

sessions.

SDG Contribution:

•

Development and adoption of hierarchies of control for herbicide

use and rodent control.

•

Review of grass and hedgerow management practices.

These activities have enabled the Company to better understand what

fauna and flora are present in the localities of its assets, enabling the

identiﬁcation of assets which could potentially have greater impacts

on, or opportunities to support, nature. Review of environmental

practices and adoption of hierarchies of control will help ensure

negative environmental impacts are minimised and a best-practice

approach to land management is taken.

Quantifying Biodiversity

Wychwood Biodiversity, a leading ecological consultant, were engaged

to undertake ten ecological assessments across the portfolio to help

build the Company’s biodiversity data set. Their ﬁndings identiﬁed:

•

Twelve red listed bird species, including yellowhammer and skylark.

•

Seventeen amber listed bird species, including marsh harrier and

sparrowhawk.

•

Fifteen butterfly species, including small heath, and ﬁve native bee

species identiﬁed from ten pollinator surveys (consisting of 129

transects).

Botany

and soil

data were also collected. These assessments,

along with eleven additional assessments conducted as part of

ongoing LEMP requirements, will be used to inform the Company’s

nature-related activities over the coming year.

13. As deﬁned by Annex I of Annex II of the Commission Delegated Regulation

(EU) 2022/1288, in addition to UK statutory land-based designations.

14. As deﬁned in Section 7 of Annex II to Delegated Regulation (EU)

2021/2139), as well as UK Biodiversity Action Plan (UKBAP) threatened

species and UK protected species.

15. Including total species diversity; total grass species; total flowering herb

species; sward height variation; and % bare ground cover.

16. Including soil type; pH; % soil organic matter; carbon content and

phosphorus, potassium, and magnesium level.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

Case

Study

Biodiversity Net Gain

The Company has been evaluating BNG across its portfolio.

BNG is calculated using the Defra Biodiversity Metric, which

assesses the change in biodiversity units from a baseline

state (i.e., before the site was built) to its post-construction

condition, when habitats speciﬁed within the planning

conditions, including within the LEMP, have been established.

In relation to its development pipeline, the Company has

committed to achieving at least 20% BNG on all new solar

developments, despite the 10% BNG provision of the UK

Environment Act not coming into effect until November 2023.

This commitment will be enacted through the Company’s

development partners and applies to all planning applications

submitted since July 2022. During the reporting period,

several prospective solar applications were submitted into

planning, all of which achieve at least a 20% BNG uplift. The

Company is closely following developments related to the

trade of BNG units, and the opportunities this may present for

the renewables industry as an additional source of revenue.

BNG assessments

were undertaken across the operational

portfolio by the land management team within Blueﬁeld

Operations Limited, who gained competency through

CIEEM training courses and engagement with third party

specialists. Thirty assessments were completed, representing

approximately 33% of the Company’s operational portfolio

(relating to sites over 1MW in capacity). A variety of the

Company’s portfolio was sampled, including sites ranging

from 1.8MW to 50MW in capacity, located across England,

Scotland, and Wales. Additional ecological data was collected

where necessary through monitoring and walkover surveys.

Table 2 – Results of retrospective Biodiversity Net Gain

(BNG) assessments undertaken across the Company’s

operational solar assets.

ON-SITE % UPLIFT

Habitat Units Hedgerow Units

Average of the 30

assessed sites

+41% +53%

These results demonstrate the potential of solar infra-

structure to support nature and achieve a considerable

uplift in biodiversity compared to a pre-construction state.

The results of the BNG assessments will be used to identify

measures to increase the BNG of lower scoring sites, with the

assessments updated over time as land conditions change.

Next steps for Nature

•

Develop a Nature Strategy, aligned with the

recommendations of the Task Force on Nature-related

Financial Disclosures (TNFD) and pulling together the

progress the Company has made over the last 18 months

in relation to its biodiversity datasets and enhanced

approach to land management.

•

Build a framework through which the Company can

manage its material nature-related risks and opportunities,

and develop nature focused commitments and KPIs to

communicate progress.

•

Complement BNG assessments with other forms of

biodiversity assessment (for example industry tools such

as SPIES assessment or Wild Power Scorecard), to ensure

a rounded approach.

Community Impact and Initiatives

Community engagement is key across all stages of the

asset lifecycle. During the reporting period, the Company

engaged Earth Energy Education, an organisation dedicated

to educating pupils on the importance of renewable energy

through engagement both in and outside of the classroom.

On behalf of the Company, Earth Energy Education

delivered 25 educational workshops, including 17 school

workshops and eight solar site visits between May 2023

and July 2023, delivering educational content to 447

different pupils. 23 Blueﬁeld employees also volunteered

as part of the site visits, providing their solar expertise

and experience of working within different functions of the

Blueﬁeld companies, engaging pupils on green careers.

STEM Webinar

17. Assumptions and limitations: assumptions on baseline environmental

conditions and habitat extents were made where data was lacking; some

data were collected outside of optimal survey seasons. In all cases, a

precautionary approach was taken.

As part of the Company’s engagement with Earth Energy

Education, a webinar was delivered to 200 pupils in July,

hosted by ﬁve Blueﬁeld employees. The webinar provided

insight into their roles, experiences of being a woman in a STEM

career, pathways into the sector and general encouragement

and awareness about STEM careers.

“My Year 4s really enjoyed

the workshop and it was

an engaging introduction to

their new Science unit for

after half-term on electricity.

The hands-on investigation

into solar panels today

was valuable for our future

learning on solar power.”

Year 4 teacher, Wantage

Primary Academy

The Company will continue to work with Earth Energy Education over the

coming year, delivering a sustainability-focused education programme

to even more pupils. Such will support the Company in strengthening

relationships with the local community and upskilling future generations on

the importance of renewables in the climate emergency.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

Case

Study

The transition to Net Zero will create signiﬁcant employment

opportunities

, and during the reporting period, the Company’s

portfolio supported the creation of 42 new positions within the

Blueﬁeld companies. Blueﬁeld has a number of initiatives in place to

encourage entry into green careers, and during the reporting period

supported:

•

Four internships, including two through the ‘100 Black Interns’

scheme.

•

One work experience placement.

•

Two apprenticeships.

•

Engaged with an environmental consultancy ﬁrm to support a

project with Norfolk and Suffolk County Councils on green skills

development in the region, including skills shortages and projected

skills needed in the future.

The Company has community beneﬁt funds in place across its portfolio,

which are usually agreed as part of the development process. During

the reporting period, the Company paid over £253,000 to community

beneﬁt funds, which are used to support a range of community

projects.

St Margaret’s Churchland, West Raynham: Grassland

Conservation Project

In 2017, the local community decided to introduce a new land

management regime to St Margaret’s Churchland, located in West

Raynham, to better support the ecology of the site. The predominant

characteristics of the site included thick, overgrown grass and little

floral diversity. After engaging with Norfolk Wildlife Trust, the grass

cutting regime of the site was altered, native hedgerow planted, and

wildflower seed sown. In Autumn 2021, grazing was also introduced.

Following these changes, wildflower meadow is now well established,

and surveys indicate that a large variety of pollinators, mammal and

birds use the area, including red and amber listed species. The ﬁrst

orchids have also been identiﬁed; likely dormant for several years but

have re-emerged due to the improved land conditions.

Since being initiated ﬁve years ago, the project has been supported

with over £5,000 of funds contributed by West Raynham Solar site,

administered through the West Raynham Solar Fund Committee. The

project has been highly successful both in its ecological objectives

and in creating community interest and involvement, with an

enthusiastic group of local volunteers who continue to support the

project.

Delivery Partnerships

To help ensure ESG expectations are upheld by suppliers, the

Company has adopted a suite of new policies, including: a Sustainable

Procurement Policy; Human Rights Policy; Waste Management Policy

and Supplier Code of Conduct. Policies were adopted by both SPV

Directors and the Board of the Company, and cover the Company’s

operational and construction assets. Focus over the coming year will

be to ensure the requirements of these policies are appropriately

disseminated and complied with, helping drive ethical practices

across the Company’s operations and supply chain.

business and supply chain risk, and whistleblowing. The Company

requested that priority suppliers, i.e., those which made up the largest

proportions of the Company’s addressable spend

, acknowledge,

sign, and conform to the Supplier Code of Conduct. During the

reporting period, twenty-six of the Company’s priority suppliers signed

the Supplier Code of Conduct, representing approximately 75% of the

Company’s 2022 addressable spend.

Health & Safety (‘H&S’) is of the highest importance to both the

Company and the Blueﬁeld service provider companies. Every

asset owning SPV holds H&S policies. Main contractors (including

the Blueﬁeld companies) undergo annual H&S audits by the SPVs,

to ensure ongoing compliance. During the reporting period, the

Investment Adviser engaged a H&S adviser to review the H&S

management system across the operating solar portfolio. The review

is ongoing and will ensure each of the SPVs are complying with the

latest H&S guidance and industry standards.

EPC contractors, O&M contractors, and Asset Managers are required

to regularly submit their H&S performance to the Company. Relating

to the reporting period:

Lost time incident rate

: 0

Number of reportable accidents (RIDDOR)

: 6

Number of near misses: 154

The majority of near misses were reported by Blueﬁeld Operations

Limited, where identifying, investigating, and reporting near miss

incidents is culturally ingrained within the organisation (helping

reduce the probability of H&S incidents occurring). Therefore, the

relatively high number of near misses is reflective of a proactive risk

management culture. Four of the RIDDOR incidents related to ﬁre

incidents (where no personnel were injured), and the remaining two

incidents involved subcontractors of the Company’s O&M and EPC

service providers. Blueﬁeld Services Limited, acting as asset manager,

continues to work with service providers to improve data collection

and reporting processes.

18. https://www.theccc.org.uk/2023/05/24/net-zero-offers-real-levelling-

up-but-government-must-get-behind-green-jobs/

19. Addressable spend relates to procurement categories that the Company

can influence, and so excludes categories such as government bodies,

business rates, tax authorities, utilities spend etc.

20. Calculated per 100,000 employees.

21. RIDDOR: Reporting of Injuries, Diseases and Dangerous Occurrences

Regulations 2013. Metric reflects incidents which occurred on the

Company’s sites.

Engaging Suppliers Through

Webinars

To support the rollout of the Supplier

Code of Conduct, the Company delivered

two webinars to priority suppliers. The webinars explained

the purpose of the Code, the key principles within it, and

the impact on suppliers. In addition to providing a forum

through which concerns could be raised, suppliers were

encouraged to adopt their own Supplier Code of Conduct if

they had not already, helping cascade best practice across

the Company’s supply chain.

The Supplier Code of Conduct sets out the values and principles the

Company expects its suppliers to follow as a minimum requirement,

and was developed in line with global frameworks, including the United

Nations Guiding Principles on Business and Human Rights (UNGP),

UN Global Compact principles (UNGC), and the OECD Guidelines. It

covers topics including ethics, human and social rights, environmental,

GRASSLAND CONSERVATION PROJECT

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

Examples of existing Human Rights

due diligence & management

mechanisms:

• Comprehensive ESG due diligence

undertaken on key third parties, such as

EPC contractors.

• Human rights considerations embedded

within pre-investment due diligence

processes.

• External ESG risk analysis conducted on

key solar and battery manufacturers.

• Social audits requested for solar

manufacturing facilities as part of EPC

engagements.

• Enhanced contractual protections.

• Adoption of the Company’s Supplier Code

of Conduct.

• Participation in industry supply chain

initiatives.

ICONS: COLOUR VERSION

ICONS

ICONS: COLOUR VERSION

ICONS

Key Commitments:

• Ensure 100% of our assets are covered

by a Human Rights Policy, which covers

UNGC principles and OECD guidelines.

• Continue to develop our due diligence

mechanisms to identify, prevent and

mitigate human rights impacts across

our operations and, where possible, our

supply chain.

• Require adoption of our Supplier Code

of Conduct by priority Tier 1 and, where

possible, Tier 2 suppliers.

SDG Contribution:

8. GENERATING ENERGY RESPONSIBLY

Human & Labour Rights

Human and labour rights remains an area of focus

for the Company. The Company’s Human Rights

Policy communicates its commitment to respect

human rights and its ambition to identify, prevent and

mitigate adverse human rights impacts throughout

its value chain. The policy was developed in line with

recognised human rights frameworks.

Whilst human rights due diligence processes are

already in place, these will be reviewed by the

Company over the coming year as commitments made

within the Human Rights Policy are embedded across

the asset lifecycle. The Company will also perform a

deeper analysis of how its operations interact with

the requirements of the UNGC and OECD Guidelines,

enabling the Company to robustly evidence its

alignment to these frameworks.

The Company acknowledges that supply chains

are complex and full transparency has not yet been

achieved, particularly in relation to solar PV modules

and batteries. The Investment Adviser is continuing

to engage with the industry response led by Solar

Energy UK and Solar Power Europe, which is focused

on developing systems and processes to improve

transparency and sustainability within the PV supply

chain. The UK solar industry’s supply chain statement,

to which the Investment Adviser is a signatory, can be

viewed

here.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

Responsible and Sustainable Procurement

Though the Company does not yet undertake direct large-

scale procurement, it has due diligence processes in place

to help ensure that the EPC contractors it engages, and the

equipment that they procure on behalf of the Company,

are not associated with material ESG risks. The Company’s

Sustainable Procurement Policy includes principles such as

assessing and managing supply chain risks; upholding human

rights; and where possible reducing the environmental

impacts of procurement activity.

To better understand its supply chains, the Company

mapped its Tier 1 supplier spend relating to the 2022

calendar year. Once consolidated, the Company identiﬁed

its priority suppliers, i.e., those which related to the largest

proportion of addressable spend. Priority suppliers were

analysed via a desktop assessment across a range of social

and environmental topics, to identify upstream risk and

improvement opportunities. Several key supply chains

were identiﬁed for further focus. The Company will map its

supply chains annually, and will map Tier 2 suppliers in key

supply chains, focusing on those engaged by the Blueﬁeld

companies in the ﬁrst instance.

9. Looking Forward

This year, the Company has enhanced its approach to material ESG

topics and reported against its KPIs for the ﬁrst time, evidencing

an improvement in ESG performance across most indicators.

The second year of the strategy will be just as ambitious, as the

Company responds to growing interest around topics such as

climate, nature, and human rights, perpetuated by evolving ESG

regulatory requirements. Though ESG remains fast-evolving, clarity

and standardisation of reporting requirements should provide much

needed guidance to ﬁnancial markets and investors on what ‘best

practice’ looks like.

The Company looks forward to continuing its sustainability journey,

constantly evaluating, and improving its practice as a renewable

energy investor which aims to truly deliver renewable energy,

responsibly.

Good Governance and Business Ethics

ESG is increasingly integrated into the Company’s

corporate governance. For example, during the reporting

period, there has been ongoing regulatory compliance

(including monitoring emerging reporting requirements

and frameworks); creation of an ESG sub-committee of

the Board; adoption of new policies; and enhanced climate

risk analysis. Commitments for the coming year will

further embed ESG within the processes and procedures

underpinning the Company’s operations.

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. The Investment Adviser has recently

implemented new policies and processes relating to

Consumer Duty.

The Board’s commitment to diversity is referenced on p.71,

and the Board actively seeks to ensure that diversity is

considered in the board succession process. The Investment

Adviser and other Blueﬁeld companies continue to enhance

their approach to Diversity, Equity, Inclusion and Belonging

(DEIB). DEIB is embedded through an equal opportunities

policy in the UK and a DEIB committee, which has developed

a strategy focused around culture, talent, and community.

Over the coming year, in addition to launching a ‘‘Women

in Leadership” programme, the Investment Adviser will

partner with GAIN (Girls are Investors) to create a paid

internship, helping increase gender diversity within the

organisation.

During the reporting period, the Bluefield

companies completed their first supply

chain audit, undertaken by an external

consultant. Supply chain management

processes were assessed in relation

to governance, sourcing, transparency

and risk, and the results will be used to

support the Company in benefiting from

robust supply chain practices.

CONSTRUCTION AT YELVERTOFT

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

ESG APPENDIX

The following table highlights the Company’s ESG performance relating to the ﬁnancial year ending 30 June 2023. Where data was available, ESG performance as of 30 June 2022 has been included, to allow comparison to be

made. Where referenced in the below table, unless otherwise stated, ‘assets’ refers to operational and construction assets.

PILLAR COMMITMENT SUPPORTING KPI/S AS AT 30 JUNE 2022 AS AT 30 JUNE 2023

CLIMATE CHANGE MITIGATION

Report our renewable energy generation annually.

Renewable energy generated (MWh) > 624,000 MWh >836,231 MWh

e savings achieved (tCO

e) >120,000 tonnes >173,000 tonnes

Equivalent houses powered (#) 215,000 288,000

Additional solar infrastructure under construction (MW) 0 MW 93MW

Estimated additional annual renewable energy generation (MWh) N/A 91,000 MWh

Battery assets under construction (MW) 0 MW 0 MW

Invest up to £50,000 in industry collaborations annually to

support the energy transition.

Revenue targeting industry collaboration (£) £0 £50,000 allocated

Report against our carbon emissions annually

Scope 1 GHG Emissions (tCO

e) N/A – methodology change 19

Scope 2 GHG Emissions (tCO

e) N/A – methodology change 1,422

Scope 3 GHG Emissions (tCO

e) N/A – methodology change 27,963

Total GHG Emissions (tCO

e) N/A – methodology change 29,404

Carbon Footprint (tCO

e) New KPI N/A Please refer to the Company’s

PAI statement.

GHG intensity (tCO

e / EUR Rev) N/A Please refer to the Company’s

PAI statement.

Develop a Net Zero pathway. Net Zero pathway developed (Y/N) N/A No

Implement renewable energy import tariffs across our

portfolio.

Installed capacity with renewable energy import tariffs (%)

13 % 85%

Relative percentage of renewable and non-renewable energy

consumed by BSIF (%)

N/A Please refer to the Company’s

PAI statement.

Share of non-renewable energy consumption and non-renewable

energy production of investee companies from non-renewable energy

sources compared to renewable energy sources (%)

N/A Please refer to the Company’s

PAI statement.

Continue to build our climate resilience and inform our

business strategy through climate risk assessments and

scenario analysis

Scenario analysis undertaken (Y/N) No Yes

Assets covered by a climate adaptation plan (%) New KPI N/A 0%

Incorporate ESG-related matters into the Company’s risk

ESG-related matters in risk register

(Y/N) Yes Yes; the number of ESG related

risks within the register was

enhanced this year.

Undertake a climate change risk and vulnerability

assessment (CRVA) in line with the TCFD recommendations.

Climate change risk and vulnerability assessment undertaken (Y/N)

No Yes

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

PILLAR COMMITMENT SUPPORTING KPI/S AS AT 30 JUNE 2022 AS AT 30 JUNE 2023

PIONEERING POSITIVE LOCAL IMPACT

Evaluate BNG across the operational portfolio and achieve at

least 20% BNG on new solar developments

New developments that have had BNG assessment (%) N/A 100%

New solar developments with at least 20% BNG achieved (%) N/A 100%

Existing sites with BNG assessment

(#) 0 30

Conduct independent biodiversity assessments across at

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

in capacity).

Operational assets independently assessed (relating to assets over

1MW in capacity) (%)

11% 11%

Notable species identiﬁed (e.g., red and amber listed species) (#) Red listed bird species: 13

Amber listed bird species: 17

Red listed bird species: 12

Amber listed bird species: 17

Assets without a biodiversity protection policy covering operational

sites owned, leased, managed in, or adjacent to, a protected area or

an area of high biodiversity value outside protected areas (%)

100% Please refer to the Company’s

PAI statement.

Develop a Nature Strategy, building upon our existing

biodiversity commitments and encompassing the

recommendations of the TNFD.

New Commitment

Nature Strategy Developed (Y/N) New KPI

N/A No

Minimise potential risks posed to threatened species by our

assets and apply industry best practice to new sites under

development.

Assets that are located in or near to

biodiversity-sensitive areas (%) N/A 22%

Assets that negatively affect biodiversity-sensitive areas (%) N/A 0% - Please refer to the

Company’s PAI statement.

Assets which are deemed to have operations that affect threatened

species (%)

N/A 0% - Please refer to the

Company’s PAI statement.

Continue to promote positive action within the communities

we operate within through community beneﬁt funds and

educational sessions.

Revenue given to partnerships beneﬁting the local community (£) £0 £20,000

Revenue paid to community beneﬁt schemes (£) > £154,000 >£253,000

Young people engaged (#) New KPI 0 647 (between May – Jul 23).

Educational workshops delivered (including site visits) (#)

New KPI

0 25, including 17 school

workshops and 8 site visits

(between May – Jul 23).

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) N/A 0

Number of reportable accidents (RIDDOR) (#) N/A 6

Number of near misses (#) N/A 154

Blueﬁeld employees who have received H&S training (%)

N/A 100% (as at 28 Sept 23)

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

PILLAR COMMITMENT SUPPORTING KPI/S AS AT 30 JUNE 2022 AS AT 30 JUNE 2023

GENERATING ENERGY RESPONSIBLY

Map our supply chains, with priority given to Tier 1 suppliers. Tier 1 supply chains mapped (%) 0% 100%

Tier 2 supply chains mapped (relating to Blueﬁeld service providers)

(%) New KPI

N/A In progress

Ensure 100% of our assets are covered by a Human Rights

Policy by June 2023, which covers UNGC principles and

OECD guidelines.

Assets with Human Rights Policy (%) 0% 100%

Continue to develop our due diligence mechanisms to

identify, prevent and mitigate human rights impacts across

our operations and, where possible, our supply chain.

New

Commitment

Assets with a due diligence process to identify, prevent, mitigate, and

address adverse human rights impacts (%)

100% 100%

Share of investments in assets without policies to monitor

compliance with the 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 (%)

N/A Please refer to the Company’s

PAI statement.

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

N/A Please refer to the Company’s

PAI statement.

Clearly communicate our ESG governance structure. Clear governance structures in ESG report (Y/N) Yes Yes

Further diversify our Board. Average ratio of female to male board members expressed as a

percentage of all board members (%)

40% 40%

Number of board positions held by a woman (#)

2 2

Number of board members from a non-white ethnic minority

background (#)

0 0

Ensure 100% of our assets are covered by a Sustainable

Procurement Policy by June 2023.

Assets with Sustainable Procurement Policy (%) 0% 100%

Adopt a Supplier Code of Conduct and require its adoption by

Tier 1 suppliers by the end of June 2023.

Tier 1 suppliers signed Supplier Code of Conduct (#)

0 26

Tier 2 suppliers signed Supplier Code of Conduct (#)

New KPI

N/A 0

Encourage our O&M contractors to use the waste hierarchy

principles.

Assets with a Waste Management Policy (%) 0% 100%

22. The Company is currently engaging with a UK University on a potential

partnership. Once ﬁnalised, the funds will be transferred.

23. Market-based emissions are shown.

24. KPI updated to reflect installed capacity instead of AUM.

25. Updated from: We will undertake scenario analysis for material physical

and transitional climate related risks and opportunities within the next

twelve months.

26. Metric updated from (#) to (Y/N). As this is now complete, this commit-

ment and KPI will be removed from the strategy moving forwards.

27. Relating to planning applications submitted by the Company’s develop-

ment partners during the reporting period.

28. Updated from: Existing sites with evidenced BNG (%)

29. ‘AUM’ replaced with ‘operational assets’.

30. ‘AUM’ replaced with ‘assets’; this change has been made throughout the

table.

31. Deﬁned as within 1KM of a biodiversity-sensitive area.

32. Updated from: We will continue to promote positive action within the

communities we operate within.

33. Suppliers relates to EPC, O&M, and Asset Management contractors.

34. Combined with the following commitment: ‘we will ensure 100% of our

assets are covered by policies covering UNGC principles and OECD Guide-

lines by June 2023’.

35. The word ‘senior’ has been removed as all Board members are non-exec-

utive directors.

36. Metric changed from (%) to (#)

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

ANNUAL REPORT AND FINANCIAL STATEMENTS

Task Force for

Climate-related

Financial

Disclosures (TCFD)

1. Introduction

The Company’s core objective, to provide attractive returns to shareholders

through investment in renewable energy infrastructure assets, sets it in an

advantageous position to capitalise upon opportunities that arise from the

transition to a low carbon economy. However, climate change is dynamic and

uncertain, and societal response will be shaped by climate events of varying

severity and impact, depending on the trajectory that global emissions take.

With this in mind, the Company is committed to ensuring a climate resilient

strategy is in place, supported by scenario analysis and risk management

processes, to strengthen its ability to deliver shareholder value in a changing

world. The following report explains how the Company is working to comply

with all eleven recommendations of the TCFD.

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2. Governance

Board oversight

The Board of the Company has ultimate responsibility for and

oversight of climate-related risks and opportunities; please refer to the

Company’s ESG report (see pages 27 - 39) for how the Board oversee

progress against ESG (including climate) commitments and KPIs. The

Board remains well informed of developing physical and transitional

risks and opportunities associated with climate change, and how

these might materialise in the Company’s short, medium, and long-

term future, through close engagement with the Investment Adviser.

Moreover, the Board receives climate risk training on an annual basis.

Given the nature of the Company, every investment decision

considered by the Board is associated with renewable energy

infrastructure or supporting technologies. Therefore, the Board is

conversant in assessing climate-related opportunities in this regard.

Increased consideration of climate-related risks, particularly physical

risks, has therefore been the main area of focus for the Company since

adopting the TCFD recommendations.

Management

The Investment Adviser is responsible for day-to-day management

of ESG, including climate matters, and progress is regularly

communicated to the Board as described on p.32. ESG is a Board

agenda item for both the Board of the Company and the Investment

Adviser, where it is discussed as part of wider strategic priorities and

risk management.

Roles and responsibilities concerning ESG matters, which include

climate, are deﬁned within the Company’s ESG structure on p.32. The

Investment Adviser oversees the implementation of the Company’s

ESG Strategy, which includes a Climate Change Mitigation pillar

and speciﬁc climate-related commitments and KPIs. In line with

this strategy, the Investment Adviser works with the Company’s

key service providers to embed climate considerations across the

investment lifecycle, including pre-investment due diligence, asset

management and reporting. Asset data collected from service

providers is collated by the Investment Adviser and used to inform

the ongoing assessment of climate-related risks and opportunities.

3. Strategy

During the reporting period, the Company used scenario

analysis

to better characterise its most material climate-

related risks and opportunities, and understand how they

could materialise over short, medium, and long-term

time horizons (2030, 2040 and 2050, respectively). Two

scenario analyses were undertaken: the ﬁrst assessed risks

associated with the transition to a low carbon economy, and

the second focused upon the impacts of “extreme heat”;

identiﬁed as a salient physical risk to the Company during

previous climate screening workshops. The scenarios used

for the analyses are outlined in table 1. The methods used to

conduct the analysis are described in the Risk Management

section (see pages 27- 42).

Table 1: Scenarios used for transitional and physical

scenario analyses, based on established climate models.

Broad alignment exists between each set of scenarios,

despite slight differences in warming implications.

37. Assumptions and limitations: The Company acknowledges the uncertainty offered by climate change scenarios, and thus the

results of the scenario analyses will be used as an approximate, rather than deﬁnitive, guide.

WARMING IMPLICATIONS

Description of Scenario Physical Transitional

Net Zero by

2050

Global cooperation for effective regulation & mitigation of emis-

sions, avoiding the worst impacts of climate change. Shifts occur

gradually toward a more sustainable & inclusive path, meeting

Paris Agreement goals.

<2°C 1.5°C

Delayed

Transition

Progress is delayed; effective policies are not introduced until

2030 or later, and in a more rapid and disruptive manner.

Warming exceeds 2°C and a degree of environmental

degradation occurs, but damages are constrained by

improvements in energy and resource use.

2-4°C <2°C

Current

policies

Continued emphasis on economic growth and technological

progress. Effective policies to decarbonise are not introduced

globally and there is continued reliance on fossil fuels, leading to

high levels of warming, which could exceed 4°C.

>4°C >3°C

During the summer of 2022,

temperatures in the UK

exceeded 40°C for the first time,

deemed by the Met Office as

“virtually impossible”

without

human-induced climate change

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Risk & Opportunities

Extreme Heat

Above a certain temperature threshold (around

25°C), heat can start to affect multiple components

of PV systems, resulting in efﬁciency losses in PV

modules, accelerated PV cell damage, and inverter

failure. As average temperatures increase with

climate change, the IPCC predicts extreme heat

events will become more frequent and severe

presenting a risk to the Company’s portfolio over

the short, medium, and long-term. Extreme heat

on PV systems was therefore the focus of the

Company’s ﬁrst physical scenario analysis.

In addition to PV systems, the impact of extreme

heat on battery storage systems was evaluated.

Analysis of technical speciﬁcations revealed that

battery storage systems are resilient to the UK

temperature ranges predicted across all three

scenarios, with in-built cooling systems able to

maintain internal ambient air temperature and

therefore optimal asset performance. Therefore,

based on the current analysis, it was concluded that

extreme heat is unlikely to present a material risk to

the operation of battery storage systems adopted

into the Company’s portfolio in the future.

38. Chapter 11: Weather and Climate Extreme Events

in a Changing Climate | Climate Change 2021: The

Physical Science Basis (ipcc.ch)

39. A milestone in UK climate history - Met Ofﬁce

Table 2: Physical scenario analysis, with focus upon the potential impact of extreme heat on the Company’s current solar PV portfolio.

DRIVER DESCRIPTION RISK IMPACT OPPORTUNITY TIME HORIZON

Extreme heat Declines in PV

performance occur

above their optimum

operating temperature

(~25°C). Increasing

average annual

temperatures are

set to heighten this

chronic risk, incurring

yield losses of varying

degrees depending on

scenario.

Yield reductions, which translate directly

into revenue losses, were forecasted in

all three scenarios modelled, with the

greatest impact felt in the >4°C scenario

in the mid-long term. County-level

generation and temperature scenarios

were mapped and overlain, revealing

the South East to be potentially most

exposed to yield-related ﬁnancial losses,

although cross-county differences were

small. The extent of ﬁnancial loss will

also depend on future energy prices,

which have displayed signiﬁcant volatility

over the past few years.

Increased temperatures are unlikely

to present as an opportunity. Extreme

heat can reduce the voltage a PV panel

can generate and lower its efﬁciency.

However, estimated ﬁnancial losses

are small compared to projected

revenues, especially with high

energy prices. Potential impact can

also be reduced through proactive

maintenance.

[L] Impact

grows over

time, reaching

peak in the

long term.

Extreme heat can

induce inverter and

transformer failure,

representing an acute

risk. Portfolio exposure

was modelled per

scenario based

on the number of

days incurred over

an extreme heat

threshold, set at 33°C

based on historic

events experienced by

the portfolio.

The analysis revealed much greater

variation in county-level yield losses,

enabling the parts of the portfolio most

exposed to this risk to be identiﬁed. In

a 2-4°C scenario, the majority of the

Company’s generation is not located in

the most affected counties. However,

a greater proportion may become

exposed in a >4°C scenario, as more

counties experience frequent and severe

heatwaves. The unpredictable nature of

acute heat events may result in non-

linear ﬁnancial impact. Further, other

risks associated with extreme heat which

were not modelled, such as equipment

damage and staff safety & productivity,

may compound costs and revenue losses.

The Company has an opportunity to

navigate the risk through enhanced

pre-investment due diligence and

targeted resilience measures for assets

within regions at greatest risk. Further,

battery technologies were assessed to

be resilient to extreme heat impacts in

all scenarios; supporting revenues into

the long-term.

[L] As above.

Changing

wind

patterns

Changes in wind

conditions may impact

generation of the Com-

pany’s wind portfolio.

Storms are likely to

become more common

and are more unpre-

dictable compared to

other physical risks.

Turbines can stop generating at high wind

speeds and there is potential for asset

damage.

The Company will undertake a second

physical scenario analysis to better

characterise the impact of changing wind

patterns on its wind portfolio.

TBC – analysis to be

conducted in FY23-24.

TBC – analysis

to be conducted

in FY23-24.

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Transition Risk

The transitional scenario analysis qualitatively assessed the impact of potential policy, regulatory, technology, and market changes associated with mitigative and adaptative responses to climate change.

Table 3: Transitional scenario analysis undertaken in relation to the Company’s investments.

DRIVER DESCRIPTION RISK IMPACT OPPORTUNITY TIME HORIZON

Technology

advances in the

energy sector

Rapid technological advances

stimulated by ambitious climate

policy action in a 1.5°C and <2°C

scenario.

Accelerated asset depreciation over the long-term, felt most

strongly in a 1.5°C or <2°C scenario, may result in signiﬁcant

expenditure to upgrade the portfolio. Service provider costs may

increase to support upskilling around new technologies; existing

risks around technical labour shortages could be exacerbated.

Novel technologies, such as Carbon Capture and Storage (CSS),

could extend the viability of the fossil fuel industry, prolonging

current competition into the long term.

Advancements in renewable technologies may result in greater

yields and therefore higher revenues. Technology advancements

in the 1.5°C and <2°C scenarios would coincide with asset end

of life for most of the portfolio; repowering assets with new

technologies could be a signiﬁcant growth opportunity. In the

>3°C scenario, efﬁciency improvements are likely, but do not

offer the same degree of transformational opportunity.

[M] [L]

Business reputation

in the low carbon

transition

Enhanced scrutiny over

the Company’s perceived

contribution to or detraction

from the transition to a low-

carbon economy is both a

risk and opportunity in each

scenario. The degree and timing

are dependent on business

responses to pressure exerted by

stakeholders.

More decisive policy action in the 1.5°C scenario encourages

intensive scrutiny in the short-term, with greater expectations

around value chain oversight. Should this result in the worst

climate damages being avoided, risks diminish as sustainability

becomes “the norm”. Reputational risks are highest in the

mid-term in the <2°C scenario, as timelines to halt warming

contract. Policy inertia could also trigger increasing pressure

on companies from non-government stakeholder groups, as

physical climate impacts heighten.

The 1.5°C scenario stimulates immediate demand for

sustainable investments and energy in the short-term; the

Company has a great opportunity to fulﬁl this, demonstrating

climate leadership. Opportunities are highest in the <2°C

scenario over the long-term, as there will be aggressive

decarbonisation to try and reach 2050 milestones. The

Company’s strong reputation will help catalyse further

investment.

[S] [M] [L]

Policy & legal

action to constrain

polluting activities

Stringency of climate policy

action is a distinguishing factor

between scenarios; knock-on

impacts could be felt in the

market and on the Company’s

reputation.

Risks are most apparent in the 1.5°C and <2°C scenarios, in the

long-term, by virtue of decisive policy action. The most extensive

policy & legal action is needed for <2°C, as prior government

inaction forces accelerated timescales to reach decarbonisation

goals. An attractive policy environment may encourage

renewables market entry by large players, including those in the

oil & gas industry, resulting in market saturation and increased

competitivity.

Opportunities associated with policy changes match or exceed

the level of risk predicted across all scenarios and time horizons.

A policy environment which favours renewables is expected to

cause carbon price spikes and channel greater investment into

renewables, both from ethical investors and due to government

incentives supporting the clean energy transition.

[L]

The level & timing

of government

market intervention

Shifts in supply and demand

for certain commodities are

expected as they are repriced in

a low-carbon economy. Resultant

impact on ﬁnancial markets

could create market uncertainty

and disruption.

Disruptive market interventions are anticipated in the medium-

term in the <2°C scenario, as governments steer the economy

to limit warming. Market volatility and supply chain shocks may

impact the Company’s key service providers and suppliers into

the long-term, due to shortages and inflated costs in spares.

Stranded assets and wider economic slowdown are possible as

disjointed policy action curtails economic growth.

A turbulent market environment could generate ample

opportunities for the Company; a sudden rush to transition

may cause spikes in the demand for renewables. Aggressive

decarbonisation in the <2°C scenario is expected to offer the

greatest opportunity. Opportunities in the >3°C scenario remain

static over the short- to long-term, as less incentive exists for

markets to shift to low carbon energy sources.

[M] [L]

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Resilience

Drawing on the results from both analyses, the

Company has assessed its resilience to climate-

related risk in each of the scenarios, summarised

below. Work will continue to integrate ﬁndings

from the scenario analyses into the Company’s risk

management processes, strategic and investment-

related decisions, and ﬁnancial planning.

Net Zero (1.5°C – 2°C)

Due to the nature of its investments, few

transitional risks are expected to present a high

risk to the Company. The greatest risks in this

scenario come from technology change in the

long-term. This could quicken the rate of asset

depreciation and require large scale investment

to install new technologies across the portfolio.

However, the Company views the accompanying

opportunity as high. Technological progress may

lead to greater yielding PV assets as well as better

battery storage solutions, combining to increase

revenues. Policy and legal shifts are also likely to

present high opportunities over the long-term,

which the Company is well placed for, as they

create conditions conducive to growth of the

portfolio.

Delayed Transition (2-4°C)

In a Delayed Transition, the medium-term is more

disruptive than the other scenarios. This is due to

signiﬁcant shifts required to move to a low-carbon

trajectory, compensating for previous inaction.

Again, this creates both risks and opportunities

to the Company. Market shifts are particularly

likely: service providers may face supply chain

issues, and revenues may be exposed to risk from

volatility in power prices. However, the opportunity

from a delayed transition is that there is a sudden

shift away from fossil fuels which is likely to cause

a demand spike for renewable energy. With the

Company’s growing portfolio and development

pipeline, it can facilitate this increased demand.

Reputational opportunities are also highest in

this scenario in the long-term, as increased value

is placed on sustainability credentials to limit

warming. In a 2-4°C scenario, chronic physical

risk increases over time as PV cells incur greater

yield losses with rising temperatures, but to a

lesser extent than in the >4° scenario. Similarly,

incidences of acute heat events are likely to

increase over time but are less impactful in this

scenario, as much of the Company’s generation

capacity is located away from the anticipated worst

affected counties.

Current Policies (>3, >4°C)

The Company is generally exposed to lower

transitional risks and opportunities in this scenario.

As a provider of renewable energy, it stands to gain

from a transition to a low carbon economy. If this

does not occur, there may be reduced opportunities

to grow the portfolio, especially compared with

other scenarios. A lack of climate policy and action

will result in the greatest increase in both average

and extreme temperature, making the physical

risk to assets most severe in this scenario. It is

anticipated that battery assets will be resilient to

these effects, therefore, the Company’s focus will

be on using the results of the climate modelling

to inform mitigation measures to enhance the

resilience of its solar portfolio to growing heat-

related risk.

4. Risk Management

Risk identiﬁcation and assessment

Risks, including those relating to climate, 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 impact of any particular

risk occurring. The risks are assessed in a pre- and post- mitigated setting, to map risks

into a composite score ranging from 1-9.

During the reporting period, the Board adopted risk time horizons; these have been

applied against all risks within the Company’s risk register. Principal and emerging risks

are disclosed annually within the Company’s Financial Accounts.

Last year, the Company undertook a climate materiality assessment to identify physical

and transitional climate-related risks considered to have the greatest potential to impact

its investments, revenues, and organisational expenditure. This year, through the means

of scenario analysis, the Investment Adviser sought to better characterise the impacts of

identiﬁed material risks.

Extreme heat was prioritised for the physical analysis, examining the impacts on solar PV

(being the dominant asset class in the Company’s portfolio) and battery storage (an asset

class it intends to grow over coming years). The scenarios used in the physical analysis

were derived from Shared Socioeconomic Pathways (SSPs)

; the transitional scenarios

were derived from global climate models produced by the Network for Greening the

Financial System (NGFS)

. The SSP pathways denote higher warming potential, which

better highlights physical risks, whilst the NGFS pathways more effectively portray

transitional impacts. The results of this analysis are presented in the ‘Strategy’ section of

this report and will continue to be developed and integrated into business strategy and

ﬁnancial planning.

On a daily basis, asset management and O&M service providers identify, escalate, and

respond to climate-related incidents impacting the Company’s assets. Irregularities

in generation are flagged in real time by monitoring teams who diagnose the issue,

classify the risk, and communicate it to asset management and O&M teams through

incident reports. Examples of risks classiﬁed as “climate-related” include string-level

identiﬁcation of inverter failures during heatwaves and downtime of wind turbines due

to storm activity.

40. The SSPs are a range of new “pathways” built by an international team of climate scientists,

economists and energy systems modellers that examine how global society, demographics

and economics might change over the next century with climate change.

41. The NGFS, established at the Paris “One Planet Summit” in 2017 by eight central banks and

supervisors, has developed global climate models to provide granular data on transition

pathways and climate impacts, to understand how climate change, climate policy and tech-

nology trends could evolve in different futures.

TASK FORCE FOR CLIMATE-RELATED FINANCIAL

DISCLOSURES (TCFD) REPORT

ANNUAL REPORT AND FINANCIAL STATEMENTS

Climate considerations are integrated into pre-

investment ESG due diligence and are a key

consideration within the Company’s ESG strategy,

ensuring the long-term management of climate

matters post-investment. Development partners,

including Blueﬁeld Renewables Development

Limited, ensure that climate factors are considered

during the development process of new assets, for

example through flood risk assessments.

The Company is also taking steps to build a more

resilient supply chain. For instance, the Company

has developed a Supplier Code of Conduct to

communicate its ESG expectations, including the

measurement and reduction of greenhouse gas

emissions.

Mitigation measures relating to transitional risks

are presented in Table 4; those relating to physical

risks are presented within the Company’s 2022

TCFD Report.

Table 4: Mitigation measures used by the Company to manage transitional climate-related risks.

TECHNOLOGY

ADVANCES

The Investment Adviser models the operational asset life, taking account of depreciation and physical degradation,

to forecast NAV and portfolio revenue. Outputs feed into the Company’s risk register and are regularly updated to

inform long-term scenario planning. This enables active risk management, including the arrangement of appropriate

contingency funds for equipment failure and longer-term decision-making around asset repowering and equipment

upgrades, helping reduce NAV depreciation. Diversiﬁcation is another important resilience mechanism, allowing the

Company to expand into alternative technologies; it has recently upscaled battery storage funding in its development

pipeline. The Company’s expanding development capacity also gives it greater scope to implement new technologies

as they become commercially viable.

BUSINESS

REPUTATION

The Company’s continued transparency regarding the climate actions it is taking, including voluntary alignment with

the TCFD, will help mitigate against reputational risks. Robust compliance with ESG regulation will further support

this. Within its ESG report, the Company reports both its achievements (through a comprehensive set of commitments

and KPIs) and challenges, ensuring a balanced perspective. These actions stand to strengthen the Company’s

reputation and ﬁnancial beneﬁt could be realised in the form of increased investment, as investor preferences shift

towards low carbon energy.

POLICY & LEGAL

ACTION

The Investment Adviser’s legal counsel keeps abreast of upcoming policy and legal changes, and external legal

and technical advisers support the Company in maintaining compliance with applicable policy and regulation. The

Company has developed a robust set of policies and procedures to externalise ESG expectations to third parties,

helping cascade best practice across the wider supply chain. As a FCA regulated entity, the Investment Adviser

evidences the highest standards of professional conduct.

MARKET

DISRUPTION

The Company’s investment strategy of owning and operating predominantly subsidised assets provides strong

visibility of revenues and helps protect the Company against future regulatory changes in power markets. The

Investment Adviser supplements this by continuously monitoring new long-term ﬁxed revenue streams that are

becoming available. For example, it has secured contracts for difference (CfD) as part of the UK Government’s fourth

allocation round, enhancing revenue visibility and security. In the future, the Company is expected to diversify its

revenue streams through investment in batteries, which beneﬁt from power price volatility. Novel revenue streams

and technologies are continually evaluated for their ability to enhance the resilience of the Company’s long-term

investment objective.

STORM CLOUDS AT GRANGE

TASK FORCE FOR CLIMATE-RELATED FINANCIAL

DISCLOSURES (TCFD) REPORT

ANNUAL REPORT AND FINANCIAL STATEMENTS

5. Metrics and Targets

Metrics

The ﬁnancial performance and overall success of the Company is intrinsically linked to

opportunities that result from the transition to a low carbon economy. The Company

monitors this through metrics relating to returns and dividends paid to shareholders,

which are underpinned by the total generation yield of the portfolio.

The Company also tracks its ESG performance against a set of commitments and KPIs,

enabling the Company to manage its ESG risks and opportunities alongside ﬁnancial

objectives. Insights from scenarios analyses will be used to inform metrics used by the

Company to assess and monitor climate-related risks and opportunities.

GHG Inventory results

The Company’s GHG inventory relating to the reporting period is presented in Table 5

calculated in line with the GHG Protocol Corporate Accounting Standard. DEFRA GHG

reporting conversion factors, DEFRA conversion factors by SIC, and AIB residual mix

emissions factor datasets were used in the analysis (corresponding with the period

emissions were incurred).

Table 5. The Company’s GHG emission inventory for the period 1 July 2022 – 30 June

2023, highlighting emission results per category.

Emissions Location-

Based (tCO

e) %

Emissions

Market-Based

(tCO

e) %

Scope 1 19 0% 19 0%

Scope 2 1,244 4% 1,422 5%

Scope 3 27,963 96% 27,963 95%

Purchased Goods &

Services

27,535 27,535

Fuel and Energy

Related Activities

427 427

Waste Generated in

Operations

1 1

Total 29,226 29,404

The Company deﬁnes its organisational boundaries

using the Operational Control approach as per

the GHG Protocol Corporate Standard. Under this

approach, the Company will account for 100% of

the GHG emissions from sources over which it has

operational control.

Table 5 presents the results of the Company’s

GHG inventory for the ﬁnancial year ended 30

June 2023. The Company has enhanced its GHG

accounting methodology since its ﬁrst inventory

(published in its previous annual report for the

ﬁnancial year ended 30 June 2022), expanding the

scope 3: Purchased Goods and Services category

boundary to include spend data from every SPV,

holding company and parent company within the

Company structure. For this reason, the results

previously published are not comparable with the

data presented in Table 5.

These changes increased the accuracy of

the Company’s inventory, and the Company

will continue to evaluate and adjust its GHG

accounting methodology as it evolves its

approach. The Company will review opportunities

to enhance the accuracy of scope 3 data, given

that this represents the majority of the footprint.

The Company is working to continually improve

its GHG inventory; however, some aspects of

data collection remained challenging, and as a

result, a small proportion of data was estimated

or extrapolated.

The Company engages an external consultant

to calculate its GHG inventory. The Company

published emissions data relating to the year

ended 31 December 2022 as part of its SFDR

PAI statement. During the calculation of the

inventory covering year ended 30 June 2023, an

error was identiﬁed within the Purchased Goods

& Services category of scope 3, which resulted

in an overstatement of the Company’s scope 3

emissions. As a result, a revised methodology

was applied to both inventories. This also involved

a review and update of the emissions factors

used within the calculations to further increase

accuracy. The Company has since updated its SFDR

PAI statement to reflect any changes concerning

the reference period ending 31 December 2022.

Climate-related targets

The Company’s refreshed ESG commitments and

KPIs are presented on p.40. Most notably, during

the coming year the Company has committed to

developing a Net Zero pathway, which will involve

the creation of decarbonisation targets, further

enhancing the metrics used by the Company to

manage climate-related risks and opportunities.

The Company will also undertake a second

physical scenario analysis, this time focused

upon the impact of changing wind patterns on the

Company’s wind assets, to provide a more holistic

view of the potential impacts of climate change on

its portfolio. The results will feed into the creation

of a climate adaptation plan for the portfolio.

42. Calculation of the carbon footprint was supported by a third party consultant, but it has not been externally veriﬁed.

1. Company’s Objectives and Strategy

The Company seeks to provide Shareholders with an attractive and

sustainable return, principally in the form of quarterly income distributions,

by investing primarily in solar energy assets located in the UK. The Company

also invests a minority of its capital into other renewable assets, including

wind and energy storage.

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

achieve the quarterly income distributions through optimisation of asset

performance, acquisitions and the use of gearing. The Company’s original

dividend target for the ﬁnancial year ended 30 June 2023 was 8.40pps.

Having now declared four interim dividends totalling 8.60pps, the Company

is pleased to have exceeded this target.

The Operational and Financial Review section on page 54 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

Strategy, Governance and

Oversight

Long Term

Finance Provider

AVIVA

O&M SERVICES

2. STRUCTURE

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

Blueﬁeld Renewables 1 Limited (BR1), in which it is the sole shareholder.

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 consists of ﬁve

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

See the Corporate Governance Report for further details.

Investment Adviser

The Investment Adviser’s key responsibilities include identifying and

recommending suitable investments for the Company and negotiating the

terms on which such investments will be made.

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. 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. BOL and BRD 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 Period the Investment Adviser was paid a fee equivalent to 0.8% of

NAV at 30 June 2023 (0.6% at 30 June 2022), reflecting the increase in the

Company’s assets. 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, New Build Development 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.

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 67.

Investment Process

Through its record of investment in the UK renewable energy market,

the Investment Adviser has developed a rigorous approach to

investment selection, appraisal and commitment.

Repeat transaction experience with specialist advisers

The Investment Adviser has worked with a range of specialist advisers

from multiple disciplines in each of the transactions it has executed in

the UK and European markets and is able to source relevant expertise

to address project issues both during and following a transaction.

Application of standardised terms developed from direct

experience

The Investment Adviser has developed standardised terms which have

been speciﬁcally tested by reference to real transaction and project

operational experience. Whilst contract terms are speciﬁcally negotiated

and tailored for each individual project, the Investment Adviser always

includes contractual protection regarding recovery of revenue losses for

underperformance and obligations for correction of defects.

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 ﬁxes a project evaluation budget as

well as conﬁrming the project proposal is in line with the Company’s

investment policy and strategy and aligned to ESG principles.

(3) Due diligence

In addition to applying its direct commercial experience in executing

renewable energy acquisitions and managing operational projects,

the Investment Adviser engages legal, technical, ESG and, where

required, insurance 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.

AERIAL VIEW AT YELVERTOFT

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. In the situation of joint ventures or

minority interests, the Company would ensure a high degree

of influence over decisions.

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. As at 30 June 2023 this is less

than 2%. The aggregate exposure to other renewable energy

assets, energy storage technologies, UK solar development

opportunities and non-UK assets will be limited to 30% of

the Company’s GAV.

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

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

than 25% of the NAV.

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

and CfDs (or any such regulatory regimes that may replace

them from time to time) alongside the sale of electricity

under power purchase agreements with counterparties such

as co-located industrial energy consumers and wholesale

energy purchasers.

The Company may invest up to 5% of GAV into developing

further UK solar development opportunities and purchase

assets pre- or post- construction in order to:

1. Maximise quality and scale of deal flow;

2. Optimise the efﬁciency of the acquisitions;

3. Minimise risk via appropriate contractual agreements; and

4. Acquire assets using prudent assumptions.

Listing Rule Investment Restrictions

The Company currently complies with the investment

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

long as they remain requirements of the FCA:

•

neither the Company nor any of its subsidiaries will conduct

any trading activity which is signiﬁcant in the context of the

Group as a whole;

•

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

assets in a way which is consistent with its objective of

spreading investment risk and in accordance with the

published investment policy; and

•

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

is made will be invested in other closed-ended investment

funds which are listed on the Ofﬁcial List.

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

investment policy of the Company will be made only with the

prior approval of the FCA and Shareholders.

4. Responsible Investment

As an investment company with a long-term horizon, the Company

is well positioned to integrate ESG considerations and evaluate

environmental and social impacts over time. ESG is embedded

within the Company’s investment process, and a standalone ESG

questionnaire ensures detailed checks are made in relation to ESG

risks and opportunities, as identiﬁed by SASB standards. Diligence

is also undertaken in relation to requirements of the EU SFDR,

including in relation to PAI indicators and climate risk screening, and

the EU Taxonomy’s Do No Signiﬁcant Harm (DNSH) criteria. ESG due

diligence may be outsourced to a competent third party, with the

resulting reports reviewed by both the Investment and ESG teams.

ESG due diligence is also undertaken on any Operations &

Maintenance (O&M) arrangements which may form part of the

investment opportunity, including in relation to topics such as

human rights, business ethics, and Health and Safety (H&S). ESG

continues to be integrated into the vetting and monitoring of third-

party service providers, including use of a comprehensive ESG due

diligence process in association with engineering, procurement, and

construction (“EPC”) site contractors. Further information on the

Company’s approach to supply chain management can be found on

p.37.

Post-acquisition, there is active management of sustainability

issues over the operational lifetime of the assets. Each asset will be

subject to routine ESG data reporting to allow the remote monitoring

of ESG performance and fulﬁlment of ESG reporting requirements.

For a full breakdown of the Company’s responsible investment

approach, please refer to the Company’s

Sustainable Investment

Policy

, available on its website.

Principles for Responsible Investment;

The Investment Adviser has been signatory to

the PRI since 2019

STRATEGIC REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

5. Operational & Financial Review for the period

Key Performance Indicators

As at 30 June

2023

As at 30 June

2022

Market Capitalisation (£’000s) 733,743 801,002

Total dividends per share

declared in relation to the year

8.60p 8.20p

NAV (£’000s) 854,189 858,391

NAV per share 139.70p 140.39p

Total Shareholder Return (2.03)% 14.55%

Market Capitalisation

(1)

The Directors regard the Company’s market capitalisation as an

important secondary indicator of the trading liquidity in its shares.

The Company’s market capitalisation – the market value of its

Ordinary Shares at the end of the Period – fell to £734m, from

£801m 12 months earlier. This reflects an increase in the discount

to underlying NAV.

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

4.9% from 8.20pps to 8.60pps.

(1) please see Alternative Performance Measures on pages 105 to 106 for

further details.

NAV

The Company’s average NAV forms the denominator of the Total

Expense Ratio calculation and is thereby a determinant of BSIF’s total

expense ratio. As the variable costs of running the company tend to

reduce with increasing NAV a larger NAV will reduce the TER. The ﬁnite

life of renewable asset leases will ultimately lead to attrition of the

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

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

this effect.

NAV Per Share

(1)

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

share movement informs our shareholders and the Board whether this

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

per share fell modestly during the year and produced a negative return

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

demand for electricity and renewable generation assets being offset

by the impact of a higher cost of capital in the sector.

Total Shareholder Return

(1)

This is measure of the combined return to Shareholders from dividend

income and share price movements and whilst this should be positive

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

sentiment can cause this number to be positive or negative. The return

of -2.03% for 2023 compared to the return of 14.55% in 2022 reflects

the signiﬁcant reduction in share price during the year to 30 June 2023

following a substantial increase in UK interest rates..

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 18 to 36 month electricity

sales contracts, with contracting periods spread quarterly across the

portfolio in order to minimise the portfolio’s sensitivity to short term

price volatility.

Summary Statement of Comprehensive Income

Year ended 30

June 2023

£ million

Year ended 30

June 2022

£ million

Total Income

(Note 4 of the ﬁnancial statements)

0.9 0.8

Change in fair value of assets

(Note 8 of the ﬁnancial statements)

48.2 175.4

Administrative expenses

(Note 5 of the ﬁnancial statements)

(2.3) (1.6)

Total comprehensive income 46.8 174.6

Earnings per share 7.65p 34.91p

Income for the period includes interest income and monitoring fees

paid by BR1 to BSIF.

The total comprehensive income before tax of £46.8 million reflects

the performance of the Company when valuation movements and

operating costs are included. Further detail on valuation movements

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

The Company’s ongoing charges ratio for the Period was 1.00%

(2022: 1.02%), calculated in accordance with the AIC recommended

methodology, which excludes non-recurring costs and uses the

average NAV in its calculation. See page 106 for a tabular calculation

of the Company’s ongoing charges ratio.

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 quarterly, as at 30 September, 31 December,

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

deems appropriate.

The fair market value adopted for the portfolio was £1,018.4m (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 to take appropriate steps

to mitigate those risks.

These inherent risks associated with investments in the renew-

able 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.

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. Technical, legal, ﬁnancial and

ESG due diligence is carried out prior to acquisition of both

secondary market and development market assets, and the

Board review market pricing comparisons where relevant

prior to transaction approval. Where large acquisitions are

planned, appropriate sensitivity scenario analysis is carried

out to properly assess the potential business risks.

2. Portfolio

Operational

Risk

Underperformance of wind,

solar or storage plant versus

expectations at acquisition.

The Investment Adviser presents quarterly operational

summaries, prepared by BSL and BOL, respectively the

Company’s Asset Manager and Operations and Maintenance

contractor, covering key performance indicators of each

project performance (including PR, availability and

generation) with updates on remediation programmes

as undertaken in order to maintain forecasted plant

performance.

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.

During the Period, whilst the principal risks for the business

have not changed, there have been signiﬁcant changes in key

assumptions as a result primarily of the continuing progress

around ESG and TCFD reporting, a bottom up review of the

risk matrix has been completed. This has led to the refreshed

summary of principal and emerging risks included in the

table below..

* 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.

SOLAR PV AT FREATHY

STRATEGIC REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

FUND OPERATIONS

Risk Potential Impact Mitigation

3. 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. High dependency on Chinese components

could impact availability of components and present potential

reputational risk.

The Company is aware of human rights risks associated with its

component supply chains, and also that these supply chains

are complex; it recognises that full traceability of components

is not currently possible.

BOL the Company’s O&M contractor has made strategic purchases of long-lead time critical components such as inverters

and transformers.

The Company has a Modern Slavery Statement and Human Rights Policy, and ‘Human & Labour Rights’ and ‘Responsible

& Sustainable Procurement’ are priority topics within the Company’s ESG strategy. The Company has placed great focus

on enhancing its supply chain management practices, including adoption and roll-out of a Supplier Code of Conduct during

the reporting period. The Investment Adviser is part of the Solar Energy UK Supply Chain Taskforce, which is focused upon

developing systems and processes to improve transparency and sustainability within the PV supply chain.

4. Valuation error Valuations of the SPV investments may be over or understated. Valuations presented by the Investment Adviser are underpinned by comparisons with other market transactions and

conﬁrmed by the use of long term DCF modelling. The valuations are reviewed and challenged by the Board as a minimum

on a semi-annual basis.

The Investment Adviser has recently improved the valuation model to reduce the risk of errors. Detailed controls and internal

review procedures are in place to mitigate the risk of error.

Given the high level of judgement and subjectivity involved in setting the assumptions that drive the model, the Board robustly

challenges assumptions made on a semi-annual basis and uses third party data wherever possible to support inputs.

For example, to mitigate the impact of future power price volatility on the Company’s portfolio valuation, blended power price

curves from three leading forecasters are used in the portfolio cash flow model. The portfolio beneﬁts from Government

subsidy in the form of FiT and ROC income.

The Board will consider the frequency of independent reviews of the ﬁnancial model in conjunction with the Investment Adviser.

EXTERNAL

Risk Potential Impact Mitigation

5. Physical and

Transitional

Climate

Related Risks

Global climate change presents both risks and opportunities to

the Company. Whilst the Company is well positioned to beneﬁt

from the opportunities arising from a decarbonising economy,

physical climate impacts, particularly extreme heat and

changing wind patterns, have the potential to cause damage to

assets and impact generation, ultimately impacting revenues.

The Company continues to improve its climate resilience. The Company has embedded climate considerations ﬁrmly within

its ESG strategy, including adopting climate-related commitments and KPIs, and voluntarily reports in line with the TCFD.

Building upon its 2022 climate materiality assessment, in 2023 the Company undertook its ﬁrst transitional and physical

scenario analyses, and this year will develop a Net Zero Pathway, in addition to a Climate Adaptation Plan for the portfolio.

The results of these activities will be used to inform the Company’s strategy and ﬁnancial planning, helping build the climate

resilience of the portfolio over time.

STRATEGIC REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

Risk Potential Impact Mitigation

6. Changing

Electricity

Market

Conditions

Annual income generation of the Company is sensitive to future

power market pricing.

Excessive movement in power prices could destabilise the

energy markets.

A major structural shift in power demand or supply may impact

the Company’s ability to meet its dividend target.

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

relevant assumptions including the discount rate. Potential acquisitions are assessed using the most recent power market

forecast data available as well as how the revenue generated from the sale of electricity and subsidies supports the Company’s

existing portfolio. This is to ensure the Company continues to beneﬁt from material levels of regulated revenues (currently c.60%

to 2035-37) which are directly correlated to inflation. A rolling programme of PPA contract expiries is maintained, ensuring that

the Company in any rolling 12 month period has limited exposure to signiﬁcant movements in near term power prices.

The Board has introduced a new policy of ﬁxing 10% of the portfolio on floating PPAs, which track the N2EX Day Ahead market

(as opposed to a ﬁxed price for the term of the PPA). The limited exposure to the Day Ahead market prices may allow the

capture of price spikes during the period of volatility in the wholesale power market.

The Company is developing new projects and has, for Yelvertoft, committed to a long term CfD. Following a review of the

beneﬁts of integrating storage technologies within its portfolio, the Company is currently developing battery storage projects

to beneﬁt 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 energy generators impacted

following the introduction of the Levy.

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

Company engages tax advisers to provide advice for all taxes across the portfolio but also to ensure compliance with regulatory

requirements. This advice has recently included the EGL implementation.

8. Changes to

Government

Plans

The UK Government is currently consulting with industry on

plans to reform the UK Electricity Market (REMA), which may

involve controls on future sales prices for renewable generators.

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

The Investment Adviser takes a proactive approach to supporting the energy transition, not only through its advisory role to

the Company, but also by engaging and supporting the Government to create a policy framework which can enable Net Zero.

This includes responding to government consultations, meeting with political leaders across the political spectrum to discuss

renewable energy and working with partners in the sector to engage in relevant discussions via the government’s Solar Energy

Taskforce.

9. Cyber risk Key stakeholders could exchange corrupt or virus infected ﬁles

with key BSIF counterparties. Malicious software or ﬁrmware

may cause damage to hardware resulting in a loss of generation

or damage to the grid.

A cyber-attack at the grid or one of the plants could lead to the

loss of generation. The grid is susceptible to cyber attacks due

to its national infrastructure importance.

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

protocols have been strengthened and all staff made aware of emerging cyber risks with mandatory training being carried out.

BSL arranged penetration testing of 48.2% of the solar PV portfolio. Recommendations are being implemented across the

portfolio, where appropriate, to improve security.

10. Reputational

risk

Adverse publicity within the Renewable Energy sector could

damage the Company’s ability to raise additional ﬁnance and/

or acquire new capacity.

Reputational risk could also arise from the Company’s

perceived contribution/detraction from the transition to a low

carbon economy. This could also lead to an adverse impact on

the share price and the inability to secure planning permission

on new developments.

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 the Broker, Stock Exchange announcements, press releases

and the Company’s website. Any incidences of adverse publicity are monitored via the Company’s PR adviser.

The Company’s continued transparency regarding its climate actions, including voluntary alignment with the TCFD and

commitments made within its ESG strategy, will help mitigate against reputational risks associated with the energy transition.

A community engagement programme is in place to strengthen local relationships.

STRATEGIC REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

EMERGING RISKS

Risk Potential Impact Mitigation

11. Access to

capital

Equity markets remain challenging.

Access to additional equity being

hampered by the discount to NAV at

which the Company’s shares currently

trade. Excessive inflation is likely to

increase the Company’s cost of capital

and cost of operations.

The Company considers all ﬁnance options available

to ensure future deals are constructed in the most cost

effective way. The current level of gearing, together

with a cash generative portfolio, will enable future

growth should appropriate acquisitions be identiﬁed.

Whilst the Company is a net beneﬁciary of inflation

it is not clear how quickly the Government’s actions

will reduce inflation; these could lead to a weaker

currency and a higher cost of capital. The Company has

increased the tenor of its interest rate hedges providing

protection in the event of inflation not subsiding, and

the possibility of more aggressive action by the Bank

of England.

12. Evolving ESG

Reporting

The number of ESG reporting

frameworks continues to increase,

with little standardisation, resulting

in increased costs and pressure on

resources.

Inadequate ESG reporting and/or non-

compliance could lead to shareholder

dissatisfaction and reduced demand for

the Company’s shares.

The Company’s Investment Adviser works closely

with legal and technical experts to remain on top

of the evolving ESG landscape and prepare for new

frameworks as they emerge. The Company’s ESG

commitments are refreshed annually, to capture

new regulatory and reporting requirements. Over the

coming months, the Company will assess its alignment

with the IFRS sustainability disclosure standards.

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 55, is taken into account.

The Board reviewed the impact of stress testing the quantiﬁable risks to the

Company’s cash flows in the previous pages and concluded that the Company,

assuming current and envisaged leverage levels, would be able to continue to

produce distributable income in the event of the following scenarios:

Strategic Report Risk Factor

Plant performance degradation of 1.0% per annum versus

0.4% per annum

2. Plant availability reduced to 95%

5. P90 irradiation

6. Power price set to £20/MWh

The Board considers that this stress testing based assessment of the

Company’s prospects is reasonable in the circumstances of the inherent

uncertainty involved. In accordance with the Articles, every ﬁve years the

Board is required to propose an ordinary resolution that the Company should

continue in business for a further ﬁve years. At the 2018 AGM a shareholder

vote resulted in a 99.46% vote to allow the Company to continue in business.

The next continuation vote is due to be held at the 2023 AGM and the Directors

have no reason to believe that shareholders will vote against continuation.

INSTALLED SOLAR PV AT YELVERTOFT

STRATEGIC REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

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 2028.

The Directors last year 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 remains 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 with a

reasonable degree of conﬁdence whilst still providing an

appropriate longer term outlook.

Conﬁrmation of longer term viability

Based upon the robust assessment of the principal and

emerging risks facing the Company and its stress testing

based assessment of the Company’s prospects, the Board

conﬁrms that it has a reasonable expectation that the

Company will be able to continue in operation and meet its

liabilities as they fall due over the period to 30 June 2028.

These inherent risks associated with investments in the

renewable energy sector could result in a material adverse

effect on the Company’s performance and value of Ordinary

Shares.

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

through continual review, policy setting and half yearly review

of the Company’s risk matrix by the Audit and Risk Committee

to ensure that procedures are in place with the intention

of minimising the impact of the above mentioned risks. The

Board last carried out a review of the risk matrix at the Audit

and Risk Committee meeting held on 29 August 2023. The

Board relies on periodic reports provided by the Investment

Adviser and Administrator regarding risks that the Company

faces. When required, external experts, including tax advisers,

legal advisers and ESG advisers, are employed.

8. Stakeholder Engagement

Directors’ Responsibilities Pursuant to Section 172 of the Companies Act 2006

The Directors of the Company, by abiding by the AIC Code, aim to achieve high standards in corporate

governance. According to the AIC Code, all member businesses, regardless of where they are headquartered,

are required to report on the items outlined in Section 172 of the UK Companies Act 2006.

Section 172 recognises that directors are responsible for acting in a way that they consider, in good faith, is

the most likely to promote the success of the company for the beneﬁt of its shareholders as a whole, with

focus on the consequences of any decision in the long term. In doing so, they are also required to consider

the broader implications of their decisions and operations on other key stakeholders and their impact on

the wider community and the environment. A key stakeholder is one that either has a direct stake in the

Company or directly impacts the long-term performance of the Company. Key decisions are those that are

either material to the company or are signiﬁcant to any of the company’s key stakeholders.

The Board considers that the interests of the Company and its stakeholders must be balanced for the

Company to succeed. As a result, the Board has summarised below some of the methods by which it

develops and maintains connections with its stakeholders, while also considering the Company’s effects on

the environment and broader society.

STAKEHOLDER GROUP METHODS OF ENGAGEMENT

Shareholders and Prospective

Investors

Our Shareholders and prospective

investors are integral to every

decision made by the Board. A

knowledgeable and supportive

shareholder base is vital to the

long-term sustainability of our

business. Understanding the views

and priorities of our Shareholders is,

therefore, crucial to retaining their

continued support.

The Company engages with its Shareholders through

the issue of regular portfolio updates in the form of RNS

announcements and quarterly factsheets.

The Company provides in-depth commentary on the

investment portfolio performance, corporate governance

and corporate outlook in its annual and interim reporting.

In addition, the Company, through its brokers and

Investment Adviser, undertakes regular meetings with

existing and prospective investors to solicit their feedback,

understand any areas of concern, and share forward-

looking investment commentary.

The Company receives quarterly feedback from its brokers

in respect of their investor engagement and investor

sentiment.

STRATEGIC REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

STAKEHOLDER GROUP METHODS OF ENGAGEMENT

Blueﬁeld Partners LLP

(the Investment Adviser)

Our Investment Adviser is fundamental to the Company’s investment and business

objectives. Key responsibilities include identifying and recommending suitable

investments for the Company to the Board and negotiating the terms on which such

investments will be made on behalf of the Board.

The Board frequently engages with the Investment Adviser through planned and ad hoc board and committee meetings

for receiving updates on operations of existing investments and acquisitions.

The Board receives quarterly Board Packs from the Investment Adviser, delivering the most pertinent and informative data

on which the Board can base its decisions.

The Investment Adviser and the Board review the Company’s power price ﬁxing strategy and portfolio valuation on a

quarterly basis and detailed cash flow forecasts are discussed prior to each dividend declaration.

The Board engages in strategic planning with the Investment Adviser with the aim of aiding the Company in attaining its

investment goals and accomplishing its purpose.

The Board engages with team members from the Investment Adviser’s subsidiaries and involved senior members of

the asset management team at BSL in the recent audit tender which enhanced the audit committee’s decision-making

process.

Ocorian Administration (Guernsey) Limited

(the Administrator, Company Secretary & Designated Manager)

Our Administrator provides essential services to the Board, ensuring that Board

procedures are followed and that it complies with the Law and applicable rules and

regulations of the GFSC and the LSE.

The Board interacts with the Administrator for day-to-day administrative, fund accounting and company secretarial

services via emails, calls and formal and informal meetings.

The Company monitors ongoing performance at regular board meetings and the Management Engagement and Service

Providers Committee (‘MESPC’) reviews terms of engagement and quality of service provision annually.

The Board worked with Ocorian to complete a detailed review of its governance and committee structure as part of its

succession planning strategy, which resulted in the formation of an improved committee structure.

Regulators

Regulators are important stakeholders in maintaining the Company’s listing and

ensuring a sufﬁcient and transparent level of disclosure in its communications and

reporting. Because of this, Shareholders obtain accurate, timely, and relevant details

regarding the Company. Regulators include the FCA in its function as the UK Listing

Authority, the FRC in its supervision of UK governance and accounting, as well as the

GFSC. Membership of the AIC and compliance with the AIC Code is a fundamental

part of ensuring the Company complies with relevant guidance and regulation.

Activities of the Audit and Risk Committee (‘ARC’), including regular review of principal and emerging risks, oversight of

the Administrator and Investment Adviser’s adherence to internal control systems and procedures, and thorough review

of the interim and annual report and ﬁnancial statements ensures compliance with required regulation.

The ARC considered and applied the FRC draft Minimum Standard in the design of its audit tender process which resulted

in a more competitive, fair, and transparent process.

Other Key Stakeholders and Advisers

(Legal Advisors, Brokers, Auditors, etc.)

Establishing a productive and collaborative working relationship with our other key

service providers and advisers ensures that we receive high quality services to help

deliver the Company’s investment and business objectives.

The Company has identiﬁed its key service providers and on an annual basis the MESPC undertakes a review of

performance based on a questionnaire through which it seeks feedback. The MESPC also regularly reviews all material

contracts for service quality and value. Conclusions and recommendations drawn by the MESPC are fed back to the Board

for approval.

The MESPC recommended the appointment of a new Registrar to enhance service levels as a result of this process.

The Board and its sub-committees engage regularly with its service providers on a formal and informal basis.

STRATEGIC REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

STAKEHOLDER GROUP METHODS OF ENGAGEMENT

Lenders

It is important to maintain a strong working relationship with our existing lenders

as it is essential for the Company to have funding available, as it is needed,

for investment and development pipeline purposes. We aim to build strong

relationships with existing lenders and potential lenders who may provide debt

facilities in the future.

The Investment Adviser provides quarterly compliance reporting to lenders in accordance with the terms of the relevant

facility agreements.

The Company consults with the lenders on matters which may require their consent under the relevant facility

agreements.

The Board reviews the Company’s re-ﬁnancing needs on a regular basis and encourages early engagement with lenders.

The recent re-ﬁnancing of the NatWest facility involved the novation of a 15-year residual tenor 0.35% interest rate swap

which the Board had originally encouraged the Adviser to secure following engagement with this lender.

Government and Policy makers

The Board believes that as the Company provides a critical element of the United

Kingdom’s electricity generation infrastructure and de-carbonisation plans that it is

important to engage with both current and prospective members of HM Government

and their departments to help to ensure that the country’s required levels of the

supply of renewable energy are achieved.

The Board encourages the Investment Adviser to engage with senior political leaders and their respective staff both

directly in face-to-face meetings and indirectly via membership of industry representative bodies such as the Solar

Industry Association.

As a result of this process the Investment Adviser has been invited to attend high-level government brieﬁngs to industry

members which have assisted the Company in its strategic planning.

PPA Counterparties

These are counterparties who purchase the electricity generated by BSIF.

The Investment Adviser ensures that when the PPAs are put in place, the end dates of the contracts are phased to ensure

a constant flow of revenue. PPA counterparties are selected on a competitive basis but with a clear focus on achieving

diversiﬁcation of counterparty risk. A quarterly update on the contracts is provided in the Investment Adviser’s Report

presented to the Board

Portfolio Level Stakeholders

This includes O&M service providers, grid connectors, planning authorities,

landowners, developers, O&M and other service providers.

The Company has agreements with O&M providers to provide active operation and maintenance services for the

operational portfolio.

The Investment Adviser engages with developers, for example Light Rock Power Ltd or Blueﬁeld Renewable

Developments, to provide new build development opportunities or run the solar farms by joint venture. These developers

interact with planning authorities, landowners and local communities and assess the viability of projects.

Community and Environment

The Company recognises that its investments can have an impact at the local

level. Community perception of renewable technology is important as it feeds into

local decision making, policy development and ultimately planning requirements.

Engagement undertaken as part of the planning process helps develop positive

relationships with local stakeholders and obtain community support. Ecological

improvements, such as enhanced biodiversity, can bring about community gain, for

example through visual accessibility to nature, education, and conservation.

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

‘Pioneering Positive Local Impact’ is a central pillar within the Company’s ESG strategy and social and environmental risks

are considered within the Company’s risk management processes.

Community stakeholders are engaged as part of the development process of new assets, and once operational,

engagement is maintained through administration of community beneﬁt funds. During the reporting period, the Company

delivered an educational programme to local schools; please refer to the ESG report for further information.

The Company’s commitment to minimising its adverse environmental impacts and, where possible, enhancing nature

across its portfolio is communicated via its publicly available Biodiversity Policy. The Company’s Sustainable Investment

Policy also describes the Company’s approach to social and environmental considerations.

STRATEGIC REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

Based on stakeholder interaction mentioned in the previous table, by way of example, a few key decisions made in the Period to meet investor objectives are described in the

following table:

KEY DECISION IMPACT ON LONG-TERM SUCCESS STAKEHOLDER CONSIDERATION

The Board has approved an annual investment cycle

to facilitate a rolling programme of capital works to

optimise and enhance performance of selected assets.

The optimisation and enhancement of the operational

portfolio will increase longevity of the assets.

The Company engaged with asset managers and O&M

service providers to identify potential projects and

appropriate works programmes, then to scope, cost

and deliver agreed works. The Board believes that

proactive optimisation of the portfolio will beneﬁt the

performance of the portfolio, and in turn, Shareholder

returns.

The Board has introduced a new policy of ﬁxing 10%

of the portfolio on floating PPAs, which track the N2EX

Day Ahead market (as opposed to a ﬁxed price for the

term of the PPA) to capture high prices during periods

of volatility in the wholesale power market.

The limited exposure to the Day Ahead market prices

may allow the capture of price spikes during the period

of volatility in the wholesale power market.

The Company engaged external advisers to assist with

the drafting of a suitable PPA template, then further

negotiated with several licensed suppliers including

EDF, Smartest and Engie. PPAs were then executed

following competitive tenders.

The Board has approved investment to increase the

capacity of two existing operational assets.

Increase of portfolio capacity through doubling installed

capacity at each site. With planning permits and grid

capacity available from the original development phase,

investment costs to extend the plants are low.

The Company, asset managers and O&M providers

maintain strong relationships with landowners which

result in further development opportunities being

offered to BSIF. Legal advisers have been engaged to

structure new lease agreements and negotiations with

EPC and ICP providers are in progress.

The Board approved a £110 million increase to its

existing committed £100 million revolving credit facility

(‘RCF’), bringing the total committed amount to £210

million. The facility also has an uncommitted accordion

feature allowing it to be increased in size by up to a

further £30 million.

Funding is available, as needed, for investment and

development pipeline purposes.

The Company has further diversiﬁed the lender group

through the engagement of Lloyds Bank Plc, alongside

the existing lenders RBS International and Santander

UK.

Enhancement of the Company’s Modern Slavery

Statement.

Human and labour rights are a key consideration for the

Company, particularly in relation to supply chains of key

infrastructure (such as solar PV panels). Association

with human rights risks may lead to lack of demand in

Company shares and reputational damage. To mitigate

risks in this area and to help ensure it is beneﬁtting

from ethical supply chains, the Company is committed

to building robust management and due diligence

practices relating to human rights, aligned with global

frameworks.

The suggestion to further enhance the Company’s

Modern Slavery Statement was made by a shareholder

during an ESG meeting with the Investment Adviser.

STRATEGIC REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

KEY DECISION IMPACT ON LONG-TERM SUCCESS STAKEHOLDER CONSIDERATION

Commitment to develop a Net Zero strategy. As a renewable energy company, the Company is well

positioned to support decarbonisation of the UK energy

sector. However, it also takes responsibility for its own

carbon emissions, and recognises the importance of

reducing these as part of evidencing its own commitment

to the Net Zero transition.

The Investment Adviser relayed to the Board

shareholders’ increasing focus on Net Zero alignment.

This was considered when the Company’s Year 2 ESG

commitments were developed and adopted.

The Board has approved the re-appointment of KPMG

Channel Islands Limited as its external auditor for

the ﬁnancial year ending 30 June 2024, subject to

shareholder approval at its 2023 Annual General

Meeting

The Company’s Audit and Risk Committee made this

recommendation because KPMG offered a compelling

case for the provision of a high-quality audit, while

offering good value to Shareholders.

Following an extensive, robust, and competitive tender

process that was overseen by the Company’s Audit

and Risk Committee, it is the Company’s intention to

re-appoint KPMG. The selection to re-appoint KPMG

was unanimously recommended by the Audit and Risk

Committee to the Board.

The Company notes that it received some votes against

KPMG’s appointment and remuneration at the AGM

held on 29 November 2022 and conﬁrms that it has

consulted with the majority of these shareholders and

determined that the issues raised related to a limited

list of approved auditors preferred by one proxy agency

and the ratio of non-audit to audit fees in 2022 when the

Company incurred corporate ﬁnance fees for its most

recent capital raises.

The Board has engaged with a PR specialist to assist

in taking proactive steps to influence HM Government

on proposed energy policies and gain support for

renewable and sustainable energy.

Educate stakeholders on importance of solar power for

energy security, reduced emissions and cost-reduction

Build pro-solar allies and generate political relationships

to aid progress on the decarbonisation of the UK energy

markets.

Paul Le Page

Director

27 September 2023

Elizabeth Burne

Director

27 September 2023

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 9, Report of the

Investment Adviser on pages 11 to 26 and in the

Strategic Report on pages 50 to 63.

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 85 to 101.

The dividends for the year are set out in the

ﬁnancial statements in Note 14 on page 98.

Share Capital

The Company has one class of Ordinary Shares.

The issued nominal value of the Ordinary Shares

represents 100% of the total issued nominal value

of all share capital. Under the Company’s Articles,

on a show of hands, each shareholder present in

person or by proxy has the right to one vote at

general meetings. On a poll, each shareholder is

entitled to one vote for every share held.

Shareholders are entitled to all dividends paid

by the Company and, on a winding up, providing

the Company has satisﬁed all of its liabilities, the

Shareholders are entitled to all of the surplus

assets of the Company. The Ordinary Shares have

no right to ﬁxed income.

Shareholdings of the Directors

The Directors hereby submit the annual report

and ﬁnancial statements of the Company for the

year ended 30 June 2023.

General Information

The Company is a non-cellular company limited

by shares incorporated in Guernsey under the

Law on 29 May 2013. The Company’s registration

number is 56708, and it has been registered and

is regulated by the GFSC as a registered closed-

ended collective investment scheme and as a

Green Fund after successful application under the

Guernsey Green Fund Rules to the GFSC on 16

April 2019. The Company’s Ordinary Shares were

admitted to the Premium Segment of the Ofﬁcial

List and to trading on the Main Market of the

London Stock Exchange following its IPO which

completed on 12 July 2013.

Principal Activities

The principal activity of the Company is to invest in

a portfolio of large scale UK based solar, wind and

renewable energy infrastructure assets.

The Company has a progressive dividend target.

The dividend target for the ﬁnancial year ended 30

June 2023 was 8.40pps. Total declared dividends

for the Period have increased to 8.60pps.

ANNUAL REPORT AND FINANCIAL STATEMENTS

The Directors of the Company and their beneﬁcial interests in the

shares of the Company as at 30 June 2023 are detailed below:

Director

Ordinary

Shares of

£1 each

held 30

June 2023

% holding

at 30 June

2023

Ordinary

Shares of

£1 each

held 30

June 2022

% holding

at 30 June

2022

John Scott* 625,619 0.10 543,312 0.09

Elizabeth Burne 15,000 0.00 15,000 0.00

Michael Gibbons - - N/A N/A

Meriel Lenfestey 7,693 0.00 7,693 0.00

Paul Le Page 35,000 0.01 35,000 0.01

John Rennocks* N/A N/A 290,388 0.05

* 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 would consider

share buy backs if it was assessed to be an economically attractive

investment opportunity. 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 29 November 2022. 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 29 November 2022 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 28

November 2023.

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 2023.

Substantial Shareholdings

As at 30 June 2023, the Company had been notiﬁed, in accordance

with chapter 5 of the Disclosure Guidance and Transparency Rules of

the following substantial voting rights over 3% as Shareholders of the

Company.

Shareholder Shareholding % Holding

BlackRock 93,066,301 15.22

Gravis Capital Management 38,053,279 6.22

Newton Investment Management 37,902,512 6.20

Hargreaves Lansdown,

stockbrokers (EO)

32,187,797 5.26

abrdn Capital 30,194,736 4.94

CCLA Investment Management 22,337,701 3.65

Legal & General Investment

Management

20,791,253 3.40

Interactive Investor (EO) 19,833,929 3.24

Total 294,367,508 48.13

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 4 September 2023, being the

most current information available.

Shareholder Shareholding % Holding

BlackRock 91,683,914 14.99

Gravis Capital Management 33,904,080 5.54

Hargreaves Lansdown,

stockbrokers (EO)

33,765,605 5.52

Newton Investment Management 32,848,618 5.37

abrdn Capital 29,402,398 4.81

CCLA Investment Management 26,183,389 4.28

Interactive Investor (EO) 20,784,520 3.40

Legal & General Investment

Management

20,337,280 3.33

Total Shares in Issue 288,909,804 47.24

REPORT OF THE DIRECTORS ANNUAL REPORT AND FINANCIAL STATEMENTS

Independent Auditor

KPMG has been the Company’s external Auditor since the

Company’s incorporation. An audit tender process was

undertaken during the year and after an extensive, robust

and competitive process, the Audit and Risk Committee

recommends retaining KPMG as Auditor, subject to

Shareholder approval at the forthcoming AGM. A resolution

will be proposed to reappoint them as Auditor and authorise

the Directors to determine the Auditor’s remuneration for the

ensuing year. The Audit and Risk Committee will periodically

review the appointment of KPMG. Further information on the

work of the Auditor is set out in the Report of the Audit and

Risk Committee on pages 76 to 79.

Articles of Incorporation

The Company’s Articles may be amended only by special

resolution of the Shareholders.

Going Concern

At 30 June 2023, the Company had invested in 129 solar

plants, 6 wind farms and 109 single stick wind turbines,

committing £992.3 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, 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 and

has served so far to increase the price of electricity. 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 potential outcome of

the Company’s mandatory ﬁve year continuation vote that

is due at the 2023 AGM and considers it highly likely that

shareholders will vote in favour of continuation, given the

strong performance of the Company and the support which

it has received from its major shareholders.

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 55 to 59 of the strategic

report and the ongoing work of the Audit and Risk Committee

in monitoring the risk management and internal control

systems on behalf of the Board, the Directors

•

are satisﬁed that they have carried out a robust assessment

of the principal 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 55 to 59.

Annual General Meeting

The AGM of the Company will be held at 10am on 28

November 2023 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

27 September 2023

Elizabeth Burne

Director

27 September 2023

REPORT OF THE DIRECTORS ANNUAL REPORT AND FINANCIAL STATEMENTS

Meriel Lenfestey

(Chair of the Environmental, Social and

Governance Committee)

Meriel Lenfestey was appointed as a non-

executive director of the Company in April 2019.

Ms Lenfestey founded Flow Interactive in 1997, a

London based Customer Experience Consultancy

assisting clients across many sectors embracing

digital transformation. Since exiting the business

in 2016 she has held a portfolio of non-executive

director and advisory roles across Energy,

Telecoms, Transport, Infrastructure, Technology

and local charities. She is a non-executive director

at International Public Partnerships (FTSE 250),

Boku (FTSE AIM), and Ikigai Ventures (FTSE All

share). She also Chairs Jersey Telecom (privately

owned) as well as acting as a non-executive

director at Art for Guernsey, a local charity. Until

February 2023 she was Chair at Gemserv. She has

an MA in Computer Related Design from the Royal

College of Art, a Financial Times Non-Executive

Director Diploma, is a Fellow of the RSA and sits

on the Guernsey IoD themselves.

Board of Directors

John Scott

(Chair and Chair of the Nomination Committee)

John Scott was appointed as a non-executive director of the Company on 12 June 2013

and is a former investment banker who spent 20 years with Lazard and has served on the

boards of several investment trusts. Mr Scott was Chair of Impax Environmental Markets

plc between May 2014 and May 2023. He has been Chair of JP Morgan Global Core Real

Assets since its flotation in 2019. In June 2017, he retired as Chair of Scottish Mortgage

Investment Trust PLC. He has an MA in Economics from Cambridge University and an MBA

from INSEAD.

Elizabeth Burne

(Chair of the Management Engagement and Service Providers Committee)

Elizabeth Burne was appointed as a non-executive director of the Company in October

2021, is a Fellow of the Association of Chartered Certiﬁed Accountants with a First Class

Honours degree in Applied Accounting and over twenty years’ experience within the ﬁnancial

services sector across the Channel Islands and Australia. Prior to becoming a non-executive

director Ms Burne was an audit director at PwC, working in alternative asset management and

insurance, assisting clients with strategic, ﬁnancial, risk and corporate governance matters.

Ms Burne holds a portfolio of non-executive directorships including HarbourVest Global

Private Equity Limited (a constituent of the FTSE 250 Index), as well as a number of private

companies in the venture capital, private equity, real estate and insurance sectors.

Michael Gibbons

(Senior Independent Director)

Michael Gibbons was appointed as a non-executive director of the Company on 7 October

2022, holds an MA from Downing College, Cambridge, is a Fellow of the Energy Institute,

and was awarded an OBE in 2008 and CBE in 2015 for services to regulatory reform.

Mr Gibbons has held a very wide range of senior appointments in the private and public

sectors, including chairing the government’s independent Regulatory Policy Committee

from 2009 – 2017. The main part of his private sector career has been in the energy

industry, taking senior positions in ICI, Powergen and Elexon, who run central systems in

the GB wholesale electricity market, and where he was Chair from 2013-2022. Mr Gibbons

has also worked on carbon capture and storage at Board level for several developers and

became Chair of the Carbon Capture and Storage Association in 2014-2017. He was also

Chair of the British Committee of the World Energy Council from 2009 to 2014.

Paul Le Page

(Chair of the Audit and Risk 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 Biotech

Opportunity 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 19 years’

Audit & Risk 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 fund research with a

specialisation in alternative assets.

MICHEAL GIBBONSELIZABETH BURNE MERIEL 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

27 September 2023

Elizabeth Burne

Director

27 September 2023

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 55 to 59; and

Having taken advice from the Audit and Risk

Committee, the Directors consider the annual

report and ﬁnancial statements, taken as a

whole, is fair, balanced and understandable and

that it provides the information necessary for

Shareholders to assess the Company’s position,

performance, business model and strategy.

By order of the Board

Responsibility

Statement of the

Directors in Respect of

the Annual Report

Paul Le Page

Director

27 September 2023

Elizabeth Burne

Director

27 September 2023

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 2023, 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 and Risk Committee on page 78.

The Board

The Directors’ biographies are provided on pages 67 which

set out the range of investment, ﬁnancial and business skills

and experience represented.

John Scott and Paul Le Page were appointed on 12 June

2013, Meriel Lenfestey was appointed on 1 April 2019,

Elizabeth Burne was appointed on 7 October 2021 and

Michael Gibbons was appointed on 7 October 2022. The

Board appointed Michael Gibbons as Senior Independent

Director effective from 29 November 2022 to fulﬁl any

function that is deemed inappropriate for the Chair to

perform.

Paul le Page will retire from the Board on 30 September

2023 and his position as Chair of the Audit & Risk Committee

will be assumed by Elizabeth Burne. The other four Directors

submit themselves for re-election at the next AGM, which is

due to take place on 28 November 2023.

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 2023, two of the directors had been on the

Board for approximately ten years; of these Paul le Page

is not seeking re-election and will retire on 30 September

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.

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.

Gender identity

Number

of Board

members

Percentage

of the

Board

Number of

senior positions

on the Board

Men 3 60% 2

Women 2 40% -

Ethnic background

White British or other White

(including minority-white groups)

5 100% 2

Other ethnic group - -% -

The Company has only two of the senior roles speciﬁed by the Listing Rules,

that is the position of Chair and Senior Independent Director. Both of these

roles are occupied by men. However, the Board considers that the chairs of its

permanent sub-committees are all senior positions. Currently the Management

Engagement and Service Providers Committee and the ESG Committee are

both chaired by women. It is intended that Elizabeth Burne has been appointed

as Chair of the Audit and Risk Committee in succession to Mr Le Page, who

retires on 30 September. The Board is cognisant that it does not currently have

minority ethnic representation and this is a key focus of its succession planning.

Directors’ Remuneration

The Chair was entitled to an annual remuneration of £68,906 (2022: £62,500).

The other Directors were entitled to an annual remuneration of £43,050 (2022:

£39,000). Paul Le Page received an additional annual fee of £8,768 (2022:

£8,000) for acting as Chair of the Audit and Risk Committee. Meriel Lenfestey

received an additional annual fee of £5,250 (2022: N/A) for acting as Chair

of the Environmental, Social and Governance Committee. Elizabeth Burne

received an additional annual fee of £3,150 (2022: N/A) for acting as Chair of the

Management Engagement and Service Providers Committee.

CORPORATE GOVERNANCE REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

The remuneration earned by each Director in the past two ﬁnancial

years was as follows:

Director

2023

2022

John Scott

(appointed Chair on 29 November 2022)

58,326 40,000

Elizabeth Burne

(appointed 7 October 2021)

45,389 29,689

Michael Gibbons

(appointed 7 October 2022)

31,267 N/A

Meriel Lenfestey 46,965 40,000

Paul Le Page 51,759 48,175

Laurence McNairn

(retired 17 February 2022)

N/A 24,892

John Rennocks

(retired 22 February 2023)

37,928 64,062

The total Directors’ fees expense for the year amounted to £271,634

(2022: £240,818). As disclosed in Note 16, John Scott and Michael

Gibbons are directors of BR1, and have received remuneration in

respect of BR1.

All of the Directors are non-executive and each is considered

independent for the purposes of Chapter 15 of the Listing Rules.

In accordance with Article 22 of AIFMD, the Company shall disclose

the total amount of remuneration for the ﬁnancial year, split into ﬁxed

and variable remuneration, paid by the AIFM to its staff, and number

of beneﬁciaries, and, where relevant, carried interest paid by the AIF.

As the Company is categorised as an internally managed Non-EU

AIFM for the purposes of AIFMD, Directors’ remuneration reflects this

amount.

Duties and Responsibilities

The Board has overall responsibility for optimising the

Company’s success by directing and supervising the affairs

of the business and meeting the appropriate interests of

shareholders and relevant stakeholders, while enhancing

the value of the Company and also ensuring the protection

of investors. A summary of the Board’s responsibilities is as

follows:

•

statutory obligations and public disclosure;

•

strategic matters and ﬁnancial reporting;

•

investment strategy and management;

•

risk assessment and management including reporting,

compliance, governance, monitoring and control; and

•

other matters having a material effect on the Company.

The Directors have access to the advice and services of the

Administrator, who is responsible to the Board for ensuring

that Board procedures are followed and that it complies with

the Law and applicable rules and regulations of the GFSC

and the LSE. Where necessary, in carrying out their duties,

the Directors may seek independent professional advice and

services at the expense of the Company.

The Company maintains appropriate directors’ and ofﬁcers’

liability insurance in respect of legal action against its Directors.

The Board’s responsibilities for the annual report are set out

in the Directors’ Responsibilities Statement on page 68. 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 2023 is set out below:

Director

Scheduled

Board Meetings

(max 4)

Ad-hoc

Board Meetings

(max 15)

Audit and Risk

Committee

Meetings

(max 9)

Management

Engagement and

Service Providers

Committee

Meetings (max 4)

ESG Committee

Meetings

(max 2)

Nomination

Committee

Meetings

(max 1)

John Scott 4 13 9 4 2 1

Elizabeth Burne 4 15 9 4 2 1

Michael Gibbons

(appointed 7 October 2022)

3 (max 3) 9 (max 11) 5 (max 5) 4 (max 4) 2 (max 2) 1 (max 1)

Meriel Lenfestey 4 13 9 4 2 1

Paul Le Page 4 15 9 4 2 1

John Rennocks

(retired 22 February 2023)

3 (max 3) 7 (max 9) 6 (max 7) 1 (max 1) 1 (max 1) 1 (max 1)

15 ad-hoc Board Meetings were held during the period to formally review and authorise each investment made by the Company

and to consider interim dividends, amongst other items.

CORPORATE GOVERNANCE REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

The Board believes that, as a whole, it comprises an appropriate

balance of skills, experience, age, knowledge and length of service.

The Board also believes that diversity of experience and approach,

including gender diversity, amongst Board members is of great

importance and it is the Company’s policy to give careful consideration

to issues of Board balance when making new appointments. Any new

Director appointed to the Board will be provided with a bespoke

induction programme tailored to the individual needs of the Director.

Performance Evaluation

In accordance with Principle 7 of the AIC Code, the Board is required

to undertake a formal and rigorous evaluation of its performance on

an annual basis. A formal evaluation of the performance of the Board

as a whole, and the Chair, is scheduled for completion by the end of

this calendar year. The evaluation is undertaken utilising self-appraisal

questionnaires and is followed by a detailed discussion of the

outcomes which includes an assessment of the Directors’ continued

independence.

Nomination Committee

The Board established a Nomination Committee in 2022. It is

chaired by John Scott and at the date of this report comprised all

of the Directors set out on page 3. The principal functions of the

Committee are to assist the Board in ﬁlling vacancies on the Board and

its committees and to review and make recommendations regarding

Board structure, size and composition. The Committee shall meet at

least once a year.

Management Engagement and Service Providers Committee

The Board established a Management Engagement and Service

Providers Committee in 2022. It is chaired by Elizabeth Burne and at

the date of this report comprised all of the Directors set out on page

3. The principal function of the Committee is to review annually the

contractual relationships with, and scrutinise and hold to account the

performance of, the Investment Adviser. Additionally, the Committee

shall review annually the performance and terms of engagement

of any other key service providers to the Company as considered

appropriate. The Committee shall meet at least once a year.

The primary matters discussed and activities undertaken by the

Committee during the year were:

•

received a presentation from the Investment Adviser summarising

their performance and key differentiating factors;

•

carried out a formal review of the Investment Advisory Agreement,

with the key outcomes of review to be ﬁnalised;

•

Board members performed on-site visits to the Investment

Adviser’s ofﬁces in Bristol as well as a local solar farm site;

•

conducted a detailed review of the performance of the Company’s

key service providers; and

•

recommended to the Board the change of registrar from Link Market

Services (Guernsey) Limited to Computershare Investor Services

(Guernsey) Limited; and

•

reviewed its terms of reference.

ESG Committee

The Board established an ESG Committee in 2022. It is chaired by

Meriel Lenfestey and at the date of this report comprised all of the

Directors set out on page 3. The principal function of the Committee

is to provide a forum for mutual discussion, support and challenge of

the Investment Adviser with respect to ESG including, with respect

to the policies adopted by the Company, in respect to investment

and divestment and by the Investment Adviser with respect to asset

management activities and their reporting on ESG matters to the

Committee and Board. The Committee will also assist on such other

matters related to ESG as may be referred to it by the Board. The

Committee shall meet at least once a year.

Internal Control and Financial Reporting

The Board acknowledges that it is responsible for establishing and

maintaining the Company’s system of internal control and reviewing

its effectiveness. Internal control systems are designed to manage

rather than eliminate the failure to achieve business objectives and

can only provide reasonable but not absolute assurance against

material misstatements or loss. The Audit and Risk Committee

reviews all controls including operations, compliance and risk

management. The key procedures which have been established to

provide internal control are:

•

the Board has delegated the day–to-day operations of the Company

to the Administrator and 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.

Committees of the Board

Audit and Risk Committee

The Board established an Audit and Risk Committee in 2013. It is

chaired by Paul Le Page and following his retirement it will be chaired

by Elizabeth Burne. At the date of this report the committee comprised

all of the Directors set out on page 3. The report of the role and activities

of this committee and its relationship with the Auditor is contained in

the Report of the Audit and Risk Committee on pages 76 to 79. The

Committee operates within clearly deﬁned terms of reference which

are available on the Company’s website (www.blueﬁeldsif.com).

WILD FLOWERS AT FREATHY

CORPORATE GOVERNANCE REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

The Board has reviewed the need for an internal audit function and

has decided that the systems and procedures employed by the

Administrator and Investment Adviser, including their own internal

controls and procedures, provide sufﬁcient assurance that a sound

system of risk management and internal control, which safeguards

shareholders’ investment and the Company’s assets, is maintained.

An internal audit function speciﬁc to the Company is therefore

considered unnecessary.

The systems of control referred to above are designed to ensure

effectiveness and efﬁcient operation, internal control and compliance

with laws and regulations. In establishing the systems of internal

control, regard is paid to the materiality of relevant risks, the likelihood

of costs being incurred and costs of control. It follows therefore that

the systems of internal control can only provide reasonable but not

absolute assurance against the risk of material misstatement or loss.

The Company has delegated the provision of all services to external

service providers whose work is overseen by the Board at its quarterly

meetings. Each year a detailed review of performance pursuant to their

terms of engagement is completed by the Management Engagement

and Service Providers Committee and recommendations made to the

Board.

Investment Advisory Agreement

In accordance with Listing Rule 15.6.2(2)R, the Directors formally

appraise the performance and resources of the Investment Adviser.

The Investment Adviser, Blueﬁeld Partners, is led by its managing

partners, James Armstrong and Giovanni Terranova, who founded

the Blueﬁeld business in 2009 following their prior work together in

European solar energy. Neil Wood, who joined in 2013, was appointed

partner in 2020 and runs the Investment Adviser alongside the two

founders. The Investment Adviser’s team has a combined record, prior

to and including Blueﬁeld Partners LLP, of investing more than £1.4

billion in renewable projects. The Investment Adviser’s non-executive

team includes Mike Rand, Blueﬁeld Partners founder and former

Managing Partner, William Doughty, the founding CEO of Semperian;

Dr. Anthony Williams, the former chair of the Risk Committee for the

Fixed Income, Currencies & Commodities Division, and Partner at

Goldman Sachs & Co; and Jon Moulton, former managing partner and

founder of Alchemy Partners.

The Board of BSIF has considered the substantial level of resource

at the disposal of the Investment Adviser and thereby available to

the Company. The Board has also looked at the extensive record of

investment and operational performance delivered by the Company,

both during the Period and in the ten years since the launch of

BSIF, and the sector-leading distributions to Shareholders. Having

considered this record, 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 55 to 59 of the Strategic Report. The Company’s

ﬁnancial instrument risks are discussed in Note 15 to the ﬁnancial

statements.

Changes in Regulation

The Board monitors and responds to changes in regulation as they

affect the Company and its policies.

AIFMD

The EU Alternative Investment Fund Managers Directive (“EU

AIFMD”) was introduced in 2014 in order to harmonise the regulation

of alternative investment fund managers (“AIFMs”) and imposed

obligations on AIFMs who manage or distribute alternative investment

funds (“AIFs”), such as the Company, in the EU (which at that time

also included the UK) or who wished to market shares in such funds

to professional investors in the EU (including the UK). Since Brexit,

EU AIFMD has been transposed into UK domestic law by virtue of the

European Union (Withdrawal) Act 2018, as amended, (“UK AIFMD”

and together with EU AIFMD, “AIFMD”), with EU AIFMD continuing

to regulate AIFMs’ activities in the EU and the marketing of an AIF’s

shares to professional investors in the EU, and UK AIFMD similarly

applying to such activities in the UK and the marketing of an AIF’s

shares to UK professional investors.

The Company was established in Guernsey in 2013 as a self-managed

Non-EU/Non-UK AIF. Additionally, upon the implementation of EU

AIFMD, the Company took advice on and implemented sufﬁcient

and appropriate policies and procedures that enable the Board to

fulﬁl its role in relation to the functions of both portfolio management

and risk management. The Company is therefore categorised as an

internally managed Non-EU/Non-UK AIFM for the purposes of AIFMD

and as such neither it nor the Investment Adviser is required to seek

authorisation under AIFMD.

The marketing of shares in AIFs that are established outside the UK

and the EU (such as the Company) to UK professional investors or to

professional investors in any EU member state is prohibited unless

certain conditions are met. Certain of these conditions are outside

the Company’s control as they are dependent on the regulators of the

relevant third country (in this case Guernsey) and the UK (or relevant

EU member state, as applicable) entering into regulatory co-operation

agreements with one another.

Currently, the Company is only able to market its shares to professional

investors in the UK and the EU to the extent that it complies with the

applicable National Private Placing Regime (“NPPR”), if any.

CORPORATE GOVERNANCE REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

The Board is currently permitted to market the Company’s shares

to professional investors in the UK pursuant to Regulation 59 of the

UK Alternative Investment Fund Managers Regulations 2013 (as

amended). In addition, the Company is also permitted to market

its shares to professional investors in The Republic of Ireland, the

Netherlands and Luxembourg pursuant to their respective NPPRs. The

Board works with the Company’s professional advisers to ensure the

necessary conditions are met, and all required notices and disclosures

are made under each applicable NPPR to enable the Company to

continue marketing its shares to professional investors in the UK and the

other relevant EU member states. In conjunction with the Company’s

professional advisers, the Board also monitors any developments in

AIFMD which might impact the Company in the future.

Any regulatory changes arising under AIFMD, the applicable NPPRs or

otherwise that limit the Company’s ability to market future issues of its

shares to professional investors in the UK and/or the EU may materially

adversely affect the Company’s ability to carry out its investment

policy successfully and to achieve its investment objectives, which in

turn may adversely affect the Company’s business, ﬁnancial condition,

results of operations, NAV and/or the market price of its shares.

FATCA and CRS

The Company is registered under FATCA and continues to comply with

FATCA and the Common Reporting Standard’s requirements to the

extent relevant to the Company.

PRIIPs

The Company is in compliance with the requirement to publish a

key information document (“KID”) under both the EU and UK PRIIPs

Regulations. The most current KIDs (one prepared in accordance with

the EU PRIIPs Regulation and the other prepared in accordance with

the UK PRIIPs Regulation) are available on the Company’s website.

Consumer Duty

On 31 July 2023 the FCA introduced a new Principle for Businesses

(Principle 12) applicable to authorised ﬁrms in the UK which carry on

‘retail market business’ and who can determine, or materially influence

retail customer outcomes. This new Principle 12 was accompanied by

a package of rules and guidance, which are collectively known as the

Consumer Duty.

The Company is not subject to the Consumer Duty as it is not an

FCA authorised ﬁrm. However, the Company is aware that its shares

may be held by or on behalf of retail customers, and that other ﬁrms

within the distribution chain of its shares are within scope of the

Consumer Duty requirements. Accordingly, it is the Board’s intention

that the Company will respond to information and other requests

from UK authorised ﬁrms in the distribution chain of the Company’s

shares in such a way as to support their compliance with the

Consumer Duty.

NMPI

The UK Financial Conduct Authority’s rules (the “FCA Rules”) restrict

the marketing within the UK of certain pooled investments or funds

referred to in the FCA Rules as “non mainstream pooled investments”

(“NMPIs”) to ordinary retail clients. These rules took effect on 1

January 2014. The Company conducts its affairs such that its shares

are excluded from the FCA’s restrictions which apply to NMPI products

because its shares are shares in an investment company which, if it

were domiciled in the UK, would currently qualify as an “investment

trust”. It is the Board’s intention that the Company will make all

reasonable efforts to continue to conduct its affairs in such a manner

that its shares can continue to be recommended by independent

ﬁnancial advisers to UK retail investors in accordance with the FCA

Rules relating to NMPIs.

Guernsey Green Fund Status

The Guernsey Green Fund aims to provide a platform for investments

into various green initiatives and gives investors a trusted and

transparent product that contributes to the internationally agreed

objectives of mitigating environmental damage and climate change.

The Company successfully obtained Guernsey Green Fund Status on

16 April 2019.

Following an application to the GFSC, the Company was deemed to

have met the following investment criteria outlined in the Guernsey

Green Fund Rules, 2021:

•

The Property of a Guernsey Green Fund shall be invested with the

aim of spreading risk and with the ultimate objective of mitigating

environmental damage resulting in a net positive outcome for the

environment;

•

A Guernsey Green Fund shall comprise 75% assets by value that

meet the Guernsey Green Fund Rules criteria. The remaining 25%

must not lessen or reduce the Guernsey Green Fund’s overall

objective of mitigating environmental damage nor comprise an

investment of a type speciﬁed within schedule 3 of the Guernsey

Green Fund Rules, 2021;

•

A Guernsey Green Fund shall only comprise assets permitted

to be held under its principal documents or prospectus and of a

nature described in its prospectus; and

•

A Guernsey Green Fund shall not be invested in contravention of

limits or restrictions imposed under its principal documents or

prospectus.

The Company fulﬁls the above investment criteria by investing in

a diversiﬁed portfolio of renewable energy assets, each located

within the UK, with a focus on utility scale assets and portfolios

on greenﬁeld sites. The Group targets long life renewable energy

infrastructure, expected to generate energy output over asset lives

of at least 25 years. The Company incorporates Environmental

Social & Governance policies into its investment processes and

is actively monitoring and working to improve its environmental

and social impact. The production of renewable energy equates

to a signiﬁcant amount of CO2 emissions saved, representing a

sustainable and ethical investment.

By order of the Board

Paul Le Page

Director

27 September 2023

Elizabeth Burne

Director

27 September 2023

CORPORATE GOVERNANCE REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

Report of the

Audit and Risk

Committee

The Audit and Risk Committee, chaired by Paul Le Page and comprising all

of the Directors set out on

page 3, operates within clearly deﬁned terms of

reference (which are available from the Company’s website, www.blueﬁeldsif.

com) and includes all matters indicated by Rule 7.1 of the UK FCA’s DTRs and

the AIC Code. It is also the formal forum through which the Auditor will report

to the Board of Directors.

The Audit and Risk Committee meets no less than three times a year, and at

such other times as the Audit and Risk Committee shall require, and meets

the Auditor at least twice a year. Any member of the Audit and Risk Committee

may request that a meeting be convened by the company secretary. The

Auditor may request that a meeting be convened if they deem it necessary.

Any Director who is not a member of the Audit and Risk Committee, the

Administrator and representatives of the Investment Adviser shall be invited

to attend the meetings as the Directors deem appropriate.

The Board has taken note of the requirement that at least one member of

the Committee should have recent and relevant ﬁnancial experience and is

satisﬁed that the Committee is properly constituted in that respect, with one

of its members who is a qualiﬁed accountant and three members with an

investment background.

ANNUAL REPORT AND 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 and Risk 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 and Risk 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 and Risk Committee seeks to display the

necessary professional scepticism their role requires.

Meetings

The Committee has met formally on 9 occasions in the year covered by

this report. The matters discussed and challenged at those meetings

were:

•

consideration and agreement of the terms of reference of the Audit

and Risk Committee for approval by the Board;

•

review of the Company’s risk 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;

•

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 and Risk 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 and Risk Committee is required to report formally

to the Board on its ﬁndings after each meeting on all matters

within its duties and responsibilities.

The Auditor is invited to attend the Audit and Risk Committee

meetings as the 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.

BLUEFIELD OPERATIONS AT ELMS

REPORT OF THE AUDIT AND RISK COMMITTEE ANNUAL REPORT AND 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

•

detailed discussions and recommendation to the

Board of the audit tender process.

The Audit and Risk Committee chair or other

members of the Audit and Risk Committee

appointed for the purpose, shall attend each

AGM of the Company, prepared to respond to

any shareholder questions on the Audit and Risk

Committee’s activities.

Primary Area of Judgement

The Audit and Risk Committee determined that the

key risk of misstatement of the Company’s ﬁnancial

statements is the fair value of the investments held

by the Company in the context of the high degree

of judgement involved in the assumptions and

estimates underlying the discounted cash flow

calculations.

As outlined in Note 8 of the ﬁnancial statements,

the fair value of the BR1’s investments

(Directors’ Valuation) as at 30 June 2023 was

£1,018,350,175 (2022: £939,947,842). 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 2023 has been determined by the

Board based on information provided by the

Investment Adviser.

The Audit and Risk Committee also reviewed and

suggested factors that could impact BR1’s portfolio

valuation and its related sensitivities to the carrying

value of the investments as required in accordance

with IPEV Valuation Guidelines.

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 and Risk Committee is driven primarily

by the Company’s assessment of its Principal and

Emerging Risks as set out on pages 55 to 59 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 and Risk Committee considers at least

once a year whether there is a need for an internal

audit function. Currently it does not consider there

to be a need for an internal audit function, given

that there are no employees in the Company and

all outsourced functions are with parties who have

their own internal controls and procedures.

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 Partner is in his second year of tenure. There are

no contractual obligations restricting the choice of external auditor.

An extensive, robust and competitive audit tender process was

undertaken during the Period and the Audit and Risk Committee

agreed that, of those ﬁrms who participated in the tender, KPMG

offered the most compelling case for the provision of a high quality

audit at good value for Shareholders and is therefore recommending

that they are re-appointed at the upcoming AGM.

The objectivity of the Auditor is reviewed by the Audit and Risk

Committee which also reviews the terms under which the external

Auditor may be appointed to perform non-audit services. The Audit

and Risk Committee reviews the scope and results of the audit,

its cost effectiveness and the independence and objectivity of

the Auditor, with particular regard to any non-audit work that the

Auditor may undertake. In order to safeguard Auditor independence

and objectivity, the Audit and Risk Committee ensures that any

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 cover only reviews

of interim ﬁnancial statements and capital raising work. Any non-audit

services conducted by the Auditor outside of these areas will require

the consent of the Audit and Risk Committee before being initiated.

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 Period,

REPORT OF THE AUDIT AND RISK COMMITTEE ANNUAL REPORT AND FINANCIAL STATEMENTS

KPMG was also engaged to provide a review of the Company’s

interim information for Shareholders. Total fees paid by

the Company and its subsidiaries amounted to £864,174

(2022: £611,400), fees for the Company itself amounted to

£157,325 for the year ended 30 June 2023 (30 June 2022:

£230,608) of which £112,325 related to audit and audit

related services to the Company (30 June 2022: £97,975)

and £45,000 in respect of non-audit services (30 June

2022: £132,633). The increase in fees paid by subsidiaries

to KPMG is due to the completion of the phased two-year

programme transitioning the audit work to KPMG in order to

further enhance audit efﬁciency, this saw an increased scope

from 92 subsidiary entities to 174 subsidiary entities audited

by KPMG.

Notwithstanding such services, which have arisen in

connection with review of the interim ﬁnancial statements,

the Audit and Risk 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 and Risk 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 and Risk Committee is satisﬁed with KPMG’s

effectiveness and independence as Auditor, having

considered the degree of diligence and professional

scepticism demonstrated by them.

In line with the FRCs recommendations on audit tendering

and in particular the requirement to put the external audit

out to tender at least every ten years, the Audit and Risk

Committee sought to conduct a tender exercise for the

external audit of the Company, as previously communicated.

This is the tenth year of KPMG’s appointment as the

Company’s auditor. The competitive audit tender exercise

actioned by the Audit and Risk Committee concluded within

the year. The tender exercise allowed sufﬁcient time such

that any potential new audit ﬁrm appointed could beneﬁt

from a cooling-off period before their appointment (should

they already be providing services to the Company and/or

Group that require such a cooling-off period).

The tender process took into consideration best practice

in line with the AIC Code and the FRC Minimum Standard

for Audit Committees. This ensured a fair, robust and

independent tender process could be commenced to ensure

the Company appointed the most suitable ﬁrm. The Audit and

Risk Committee issued a request for an introductory meeting

to ﬁve ﬁrms in December 2022, which included two smaller

ﬁrms. The two smaller ﬁrms did not wish to tender and one

big four ﬁrm that has historically provided tax advice to the

group declined to tender. Following a review by the Audit and

Risk Committee, a request for proposal was issued to two of

those ﬁrms and the current auditors KPMG in March 2023 to

invite them to tender for the external audit of the Company.

The two challenger ﬁrms were given access to a shared data

room containing information about the Company and were

also given equal amounts of exclusive time with the current

and future Audit and Risk Committee chair (Paul Le Page and

Elizabeth Burne, respectively) as well as representatives of

the Investment Adviser and Administrator to aid them in

their submissions.

Following this, members of the Audit and Risk Committee,

together with representatives of the Investment Adviser and

Administrator, who were key stakeholders in the process,

reviewed the tender submissions. The Audit and Risk

Committee invited KPMG and a challenger ﬁrm to present

their submissions in person in May 2023. After the Audit

and Risk Committee review of submissions, the Committee

members resolved to recommend the continuing appointment

of KPMG as auditors because KPMG offered the best case for

the provision of a high-quality audit, while representing best

value to Shareholders. Having satisﬁed itself that the Auditor

remains independent and effective, and having concluded a

full audit tender process, the Audit and Risk Committee has

recommended to the Board that KPMG be reappointed as

Auditor for the year ending 30 June 2024.

The Company notes that it received some votes against

KPMG’s appointment and remuneration at the AGM held on

29 November 2022 and conﬁrms that it has consulted with

the majority of these shareholders and determined that the

issues raised related to a limited list of approved auditors

preferred by one proxy agency and the ratio of non-audit to

audit fees in 2022 when the Company incurred corporate

ﬁnance fees for its most recent capital raises.

The incoming Chair of the Audit and Risk Committee will be

available at the AGM to answer any questions about the work

of the Committee.

On behalf of the Audit and Risk Committee

Paul Le Page

Chair of the Audit and Risk Committee

27 September 2023

REPORT OF THE AUDIT AND RISK COMMITTEE 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 2023, 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

statements:

• give a true and fair view of the ﬁnancial position

of the Company as at 30 June 2023, 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 2022):

ANNUAL REPORT AND FINANCIAL STATEMENTS

Valuation of ﬁnancial assets held at fair value through proﬁt or loss £852,844,000 (2022: £856,380,000)

Refer to Report of the Audit Committee on pages 76 to 79, 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 (2023: 99.8%; 2022: 99.8%).

The fair value of the immediate subsidiary, which reflects its net asset value, predominantly

comprises of the fair value (£1,018,350,000) of underlying special purpose vehicle renewable

project investments (“SPVs”) and the immediate subsidiary level debt (see note 8).

The fair value of the SPVs has been determined using the income approach, discounting the future

cash flows of underlying renewable projects (the “Valuations”), for which there is no liquid market.

The Valuations incorporate certain assumptions including discount rate, power price forecasts,

inflation, useful economic life and other macro-economic assumptions. The non-operational

renewable asset SPVs are valued at their costs as an approximation of their fair value.

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 signiﬁcant judgement involved in the

selection, and application, of appropriate assumptions. Changes to long term forecast cash flows

and/or the selection and application of different assumptions may result in a materially different

valuation of ﬁnancial assets held at fair value through proﬁt or loss.

We therefore determined that the Valuations have a high degree of estimation uncertainty giving

rise to a potential range of reasonable outcomes greater than our materiality for the ﬁnancial

statements as a whole. The ﬁnancial statements disclose in note 8 the sensitivities estimated by

the Company.

Our audit procedures included, but were not limited to:

Control evaluation:

We assessed the design and implementation of the control over the Valuation of ﬁnancial assets held at

fair value through proﬁt or loss.

Valuation model integrity and model inputs:

• We tested the valuation model for mathematical accuracy including, but not limited to, material

formulae errors;

• We 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;

• We obtained and vouched signiﬁcant additions to non operational renewable assets during the year to

supporting documentation; and

• In order to assess the reliability of management’s forecasts, for a risk based selection, we assessed the

historical accuracy of the cash flow forecasts against actual results.

Benchmarking the valuation assumptions:

With support from our KPMG valuation specialist, we challenged the appropriateness of the Company’s

valuation methodology and key assumptions including discount rate, power price forecasts, inflation,

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).

ANNUAL REPORT AND FINANCIAL STATEMENTS

INDEPENDENT AUDITOR’S REPORT

Our application of materiality and an overview of

the scope of our audit

Materiality for the ﬁnancial statements as a whole was set

at £17,400,000, determined with reference to a benchmark

of net assets of £854,189,000, of which it represents

approximately 2.0% (2022: 2.0%).

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%

(2022: 75%) of materiality for the ﬁnancial statements as

a whole, which equates to £13,000,000. 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 £870,000,

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

•

The outcome of the upcoming continuation vote.

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 also considered the risk that the outcome of the

continuation vote could affect the Company over the going

concern period, by considering outcomes of previous votes

held by the Company, inspecting summaries of discussions

held with the broker, and considering key ﬁnancial metrics

including discount of the Company’s share price against its

reported net asset value per share, over the past 12 months.

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 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

INDEPENDENT AUDITOR’S REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

may be in a position to make inappropriate accounting

entries, and the risk of bias in accounting estimates such as

the valuation of unquoted investments. On this audit we do

not believe there is a fraud risk related to revenue recognition

because the Company’s revenue streams are simple in

nature with respect to accounting policy choice, and are

easily veriﬁable to external data sources or agreements with

little or no requirement for estimation from management. We

did not identify any additional fraud risks.

We performed procedures including:

•

identifying journal entries and other adjustments to test

based on risk criteria and comparing any identiﬁed entries

to supporting documentation;

•

incorporating an element of unpredictability in our audit

procedures; and

•

assessing signiﬁcant accounting estimates for bias.

•

Further detail in respect of valuation of unquoted

investments is set out in the key audit matter section of

this report.

Identifying and responding to risks of material

misstatement due to non-compliance with laws and

regulations

We identiﬁed areas of laws and regulations that could

reasonably be expected to have a material effect on the ﬁnancial

statements from our sector experience and through discussion

with management (as required by auditing standards),

and from inspection of the Company’s regulatory and legal

correspondence, if any, and discussed with management the

policies and procedures regarding compliance with laws and

regulations. As the Company is regulated, our assessment

of risks involved gaining an understanding of the control

environment including the entity’s procedures for complying

with regulatory requirements.

The Company is subject to laws and regulations that directly

affect the ﬁnancial statements including ﬁnancial reporting

legislation and taxation legislation and we assessed the

extent of compliance with these laws and regulations as part

of our procedures on the related ﬁnancial statement items.

The Company is subject to other laws and regulations where

the consequences of non-compliance could have a material

effect on amounts or disclosures in the ﬁnancial statements,

for instance through the imposition of ﬁnes or litigation or

impacts on the Company’s ability to operate. We identiﬁed

ﬁnancial services regulation as being the area most likely

to have such an effect, recognising the regulated nature

of the Company’s activities and its legal form. Auditing

standards limit the required audit procedures to identify

non-compliance with these laws and regulations to enquiry

of management and inspection of regulatory and legal

correspondence, if any. Therefore if a breach of operational

regulations is not disclosed to us or evident from relevant

correspondence, an audit will not detect that breach.

Context of the ability of the audit to detect fraud or

breaches of law or regulation

Owing to the inherent limitations of an audit, there is an

unavoidable risk that we may not have detected some

material misstatements in the ﬁnancial statements, even

though we have properly planned and performed our audit

in accordance with auditing standards. For example, the

further removed non-compliance with laws and regulations

is from the events and transactions reflected in the ﬁnancial

statements, the less likely the inherently limited procedures

required by auditing standards would identify it.

In addition, as with any audit, there remains a higher risk of

non-detection of fraud, as this may involve collusion, forgery,

intentional omissions, misrepresentations, or the override

of internal controls. Our audit procedures are designed to

detect material misstatement. We are not responsible for

preventing non-compliance or fraud and cannot be expected

to detect non-compliance with all laws and regulations.

Other information

The directors are responsible for the other information. The

other information comprises the information included in the

annual report but does not include the ﬁnancial statements

and our auditor’s report thereon. Our opinion on the ﬁnancial

statements does not cover the other information and we

do not express an audit opinion or any form of assurance

conclusion thereon.

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 58 and 59) 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;

INDEPENDENT AUDITOR’S REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

•

the directors’ explanation in the viability statement (page

58 and 59) 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 page 58 and 59 under the Listing Rules. Based on

the above procedures, we have concluded that the above

disclosures are materially consistent with the ﬁnancial

statements and our audit knowledge.

Corporate governance disclosures

We are required to perform procedures to identify whether

there is a material inconsistency between the directors’

corporate governance disclosures and the ﬁnancial

statements and our audit knowledge.

Based on those procedures, we have concluded that each

of the following is materially consistent with the ﬁnancial

statements and our audit knowledge:

•

the directors’ statement that they consider that the

annual report and financial statements taken as a whole

is fair, balanced and understandable, and provides the

information necessary for shareholders to assess the

Company’s position and performance, business model

and strategy;

•

the section of the annual report describing the work of

the Audit Committee, including the significant issues

that the audit committee considered in relation to

the financial statements, and how these issues were

addressed; and

•

the section of the annual report that describes the

review of the effectiveness of the Company’s risk

management and internal control systems.

We are required to review the part of Corporate Governance

Statement relating to the Company’s compliance with the

provisions of the UK Corporate Governance Code speciﬁed

by the Listing Rules for our review. We have nothing to report

in this respect.

We have nothing to report on other matters on

which we are required to report by exception

We have nothing to report in respect of the following matters

where the Companies (Guernsey) Law, 2008 requires us to

report to you if, in our opinion:

•

the Company has not kept proper accounting records; or

•

the ﬁnancial statements are not in agreement with the

accounting records; or

•

we have not received all the information and explanations,

which to the best of our knowledge and belief are necessary

for the purpose of our audit.

Respective responsibilities

Directors’ responsibilities

As explained more fully in their statement set out on page

68, the directors are responsible for: the preparation of the

ﬁnancial statements including being satisﬁed that they give a

true and fair view; such internal control as they determine is

necessary to enable the preparation of ﬁnancial statements

that are free from material misstatement, whether due to

fraud or error; assessing the Company’s ability to continue as

a going concern, disclosing, as applicable, matters related to

going concern; and using the going concern basis of accounting

unless they either intend to liquidate the Company or to cease

operations, or have no realistic alternative but to do so.

Auditor’s responsibilities

Our objectives are to obtain reasonable assurance about

whether the ﬁnancial statements as a whole are free from

material misstatement, whether due to fraud or error, and

to issue our opinion in an auditor’s report. Reasonable

assurance is a high level of assurance, but does not

guarantee that an audit conducted in accordance with

ISAs (UK) will always detect a material misstatement when

it exists. Misstatements can arise from fraud or error and

are considered material if, individually or in aggregate, they

could reasonably be expected to influence the economic

decisions of users taken on the basis of the ﬁnancial

statements. .

A fuller description of our responsibilities is provided on the

FRC’s website at www.frc.org.uk/auditorsresponsibilities.

The purpose of this report and restrictions on its

use by persons other than the Company’s members

as a body

This report is made solely to the Company’s members, as

a body, in accordance with section 262 of the Companies

(Guernsey) Law, 2008. Our audit work has been undertaken

so that we might state to the Company’s members those

matters we are required to state to them in an auditor’s report

and for no other purpose. To the fullest extent permitted by

law, we do not accept or assume responsibility to anyone

other than the Company and the Company’s members, as a

body, for our audit work, for this report, or for the opinions

we have formed.

Barry Ryan

For and on behalf of KPMG Channel Islands Limited

Chartered Accountants and Recognised Auditors, Guernsey

27 September 2023

INDEPENDENT AUDITOR’S REPORT ANNUAL REPORT AND FINANCIAL STATEMENTS

Statement

of Financial

Position

As at 30 June 2023

Assets Note

30 June 2023

£’000

30 June 2022

£’000

NON-CURRENT ASSETS

Financial assets held at fair value through proﬁt or loss 8 852,844 856,380

Total non-current assets 852,844 856,380

CURRENT ASSETS

Trade and other receivables 9 910 882

Cash and cash equivalents 10 969 1,619

Total current assets 1,879 2,501

TOTAL ASSETS 854,723 858,881

Liabilities

CURRENT LIABILITIES

Other payables and accrued expenses

534 490

Total current liabilities 534 490

TOTAL LIABILITIES 534 490

NET ASSETS

854,189 858,391

Equity

Share capital 663,809 663,809

Retained earnings 190,380 194,582

TOTAL EQUITY 13 854,189 858,391

Number of Ordinary Shares in issue at year end 13 611,452,217 611,452,217

Net Asset Value per Ordinary Share (pence) 7 139.70 140.39

These ﬁnancial statements were approved and authorised

for issue by the Board of Directors on 27 September 2023

and signed on their behalf by:

Paul Le Page

Director

27 September 2023

Elizabeth Burne

Director

27 September 2023

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 2023

Income Note

Year ended

30 June 2023

£’000

Year ended

30 June 2022

£’000

Income from investments 4 900 834

Bank interest 6 -

906 834

Net gains on ﬁnancial assets held at fair value

through proﬁt or loss

8 48,164 175,308

Operating income 49,070 176,142

Expenses

Administrative expenses 5 2,277 1,569

Operating expenses 2,277 1,569

Operating proﬁt

46,793 174,573

Proﬁt and total comprehensive income for the year 46,793 174,573

Earnings per share:

Basic and diluted (pence)

12 7.65 34.91

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 2023

For the year ended 30 June 2022

Note

Number of

Ordinary Shares

Share capital

£’000

Retained earnings

£’000

Total equity

£’000

Shareholders’ equity at

1 July 2022

611,452,217 663,809 194,582 858,391

Dividends paid 13,14 - - (50,995) (50,995)

Total comprehensive income for the

period

- - 46,793 46,793

Shareholders’ equity at

30 June 2023

611,452,217 663,809 190,380 854,189

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

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 2023

Note

Year ended

30 June 2023

£’000

Year ended

30 June 2022

£’000

Cash flows from operating activities

Total comprehensive income for the year 46,793 174,573

Adjustments:

Increase in trade and other receivables (28) (109)

Increase in other payables and accrued expenses 44 85

Net gains on ﬁnancial assets held at fair value through proﬁt or loss 8 (48,164) (175,308)

Net cash used in operating activities* (1,355) (759)

Cash flows from investing activities

Purchase of ﬁnancial assets held at fair value through proﬁt or loss 8 - (250,282)

Receipts from investments held at fair value through proﬁt or loss** 8 51,700 39,492

Net cash generated from/(used in) investing activities 51,700 (210,790)

Cash flow from ﬁnancing activities

Proceeds from issue of Ordinary Shares - 251,410

Issue costs paid - (816)

Dividends paid 14 (50,995) (38,201)

Net cash generated from/(used in) investing activities (50,995) 212,393

Net increase / (decrease) in cash and cash equivalents (650) 844

Cash and cash equivalents at the start of the year 1,619 775

Cash and cash equivalents at the end of the year 10 969 1,619

The accompanying notes form an integral part of these ﬁnancial

statements.

* Net cash used in operating activities includes £900,000

(2022: £833,887) of investment income.

** Receipts from investments held at fair value through proﬁt or

loss includes £21.8 million (2022: £14.1 million) of interest.

ANNUAL REPORT AND FINANCIAL STATEMENTS

Notes

to the Financial Statements for the

year ended 30 June 2023

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 2023 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

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.

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.

Standards, interpretations and amendments to published

standards adopted in the 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 2023 or later periods.

At the date of authorisation of these ﬁnancial statements, certain new

standards, and amendments to existing standards have been published

by the IASB that are not yet effective and have not been adopted early

by the Company.

The Board expects that all relevant pronouncements will be adopted in

the Company’s accounting policies for the ﬁrst period beginning after

the effective date of the pronouncement. New standards, interpretations

and amendments are not expected to have a material impact on the

Company’s ﬁnancial statements.

b) Going concern

The Board, in its consideration of going concern, has reviewed

comprehensive cash flow forecasts prepared by the Investment

Adviser, as well as the performance of the solar and wind plants

currently in operation. 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 consulted with its broker on the likelihood of the

Company receiving support from Shareholders to allow it to continue

operations in its mandatory ﬁve year continuation vote that is due

at the 2023 AGM and regards this as very likely, given the strong

performance of the Company and the support which it has received

from its major shareholders.

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).

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.

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 8.00% (6.75% as at 30 June 2022) has been

utilised.

Use of a blended power forecast is unchanged, but the inflation

assumption has been increased to 7.0% in 2023 and 3.5% in 2024

to reflect market forecasts, after this a medium-term rate at 3%

(June 2022: 3%) has been extended to June 2029 before reverting

to a reduced long term assumption of 2.25% (June 2022: 2.25%)

thereafter.

The Directors’ Valuation as at 30 June 2023 is based on a weighted

average life of the portfolio of 28 years (vs. 25 years in June 2022),

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 2023

£’000

Year ended

30 June 2022

£’000

Monitoring fee in relation to

loans supplied (Note 16)

900 834

The Company provides monitoring and loan administration services to

BR1 (previously BSIFIL) for which an annual fee is charged, payable

in arrears.

5. Administrative expenses

Year ended

30 June 2023

£’000

Year ended

30 June 2022

£’000

Investment advisory base fee *

(see Note 16)

729 491

Legal and professional fees 300 166

Administration fees 542 395

Directors’ remuneration 272 241

Audit fees 112 98

Non-audit fees 45 40

Broker fees 50 52

Regulatory Fees 58 50

Registrar fees 88 35

Insurance 12 11

Listing fees 45 37

Other expenses 24 (47)

2,277 1,569

* The Investment advisory base fee is paid by both the Company (10%) and

BR1 (90%). The amount shown above reflects the amount paid by the

Company only. Note 16 shows the full fee paid to the Investment Adviser.

Investment Advisory Agreement

The Company, BR1 and the Investment Adviser have entered

into an Investment Advisory Agreement, under which the

Investment Adviser has overall responsibility for the non-

discretionary management of the Company’s assets and

any of BR1’s SPVs (including uninvested cash) in accordance

with the Company’s investment policies, restrictions and

guidelines.

The Investment Adviser is entitled to a base fee, which is

payable quarterly in arrears, on the following scale:

•

NAV up to and including £750,000,000, 0.8% per annum

•

NAV above £750,000,000> £1,000,000,000, 0.75% per

annum

•

NAV above £1,000,000,000, 0.65% per annum.

The fee is based on the NAV reported in the most recent

quarterly NAV calculation

On 11 June 2014, BSIFIL (as the previous holding company)

entered into a Technical Services Agreement with the

Investment Adviser, with a retrospective effective date

of 25 June 2013, in order to delegate the provision of the

consultancy services to the Investment Adviser in its capacity

as technical adviser to the SPVs. On the same date the Group

entered into a base fee offset arrangement agreement,

whereby the aggregate technical services fee and base fee

payable (under the Investment Advisory Agreement) shall

not exceed the base fee that would otherwise have been

payable to the Investment Adviser in accordance with the

Investment Advisory Agreement had no fees been payable

under the Technical Services Agreement.

The fees incurred for the Period and the amount outstanding

at the Period end are shown in Note 16.

Administration Agreement

The Administrator has been appointed to provide day-to-

day administration and company secretarial services to the

Company, as set out in the Administration Agreement dated

24 June 2013.

Under the terms of the Administration Agreement, the

Administrator is entitled to an annual fee, at a rate equivalent

to 10 basis points of NAV up to and including £100,000,000,

7.5 basis points of NAV above £100,000,000 and up to

and including £200,000,000 and 5 basis points of the

NAV above £200,000,000, subject to a minimum fee of

£100,000 per annum. The fees are for the administration,

accounting, corporate secretarial services, corporate

governance, regulatory compliance and stock exchange

continuing obligations provided to the Company. In addition,

the Administrator will receive an annual fee of £7,500 and

£3,000 for the provision of a compliance ofﬁcer and money

laundering reporting ofﬁcer, respectively.

The Administrator is entitled to an investment related

transaction fee charged on a time spent basis, which

is capped at a total of £5,000 per investment related

transaction. All reasonable costs and expenses incurred by

the Administrator in accordance with this agreement are

reimbursed to the Administrator quarterly in arrears.

The Administrator also receives a fee of £5,000 per annum

in relation to the administration of the Company’s Guernsey

Green Fund Status.

For the year ended 30 June 2023, the Company incurred

fees to the Administrator of £542,176 (2022: £395,329),

of which £135,992 (2022: £204,162) was outstanding at

Period-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 (2022: £1,200) (included

within regulatory fees).

The income from the Company’s investments is not subject

to any further tax in Guernsey although the subsidiary and

underlying SPVs, as UK based entities, are subject to the

current prevailing UK corporation tax rate. The standard rate

of UK corporation tax is 25% (2022: 19%).

NOTES TO THE FINANCIAL STATEMENTS ANNUAL REPORT AND FINANCIAL STATEMENTS

7. Net Asset Value per Ordinary Share

The calculation of NAV per Ordinary Share is based on NAV of £854,189,487 (2022: £858,390,982) and

the number of shares in issue at 30 June 2023 of 611,452,217 (2022: 611,452,217) Ordinary Shares.

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 2023

Total

£’000

30 June 2022

Total

£’000

Opening balance (Level 3) 856,380 470,282

Additions – funds passed to BR1/BSIFIL - 250,282

Change in fair value of ﬁnancial assets held at fair

value through proﬁt or loss

(3,536) 135,816

Closing balance (Level 3) 852,844 856,380

Analysis of net gains on ﬁnancial assets held at fair value through proﬁt or loss (per statement

of comprehensive income)

Year ended

30 June 2023

£’000

Year ended

30 June 2022

£’000

Unrealised change in fair value of ﬁnancial assets

held at fair value through proﬁt or loss

(3,536) 135,816

Cash receipts from non-consolidated subsidiary* 51,700 39,492

Net gains on ﬁnancial assets held at fair value

through proﬁt or loss

48,164 175,308

*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 and the fair value of BR1’s cash, working capital and debt balances. BR1 is 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. 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 93.

30 June 2023

Total

£’000

30 June 2022

Total

£’000

SPV investment portfolio, Directors’ Valuation 1,018,350 939,948

Immediate Holding Company

Cash 26,407 13,102

Working capital (38,913) (26,670)

Debt (153,000) (70,000)

(165,506) (83,568)

Financial assets at fair value

through proﬁt or loss

852,844 856,380

Fair value measurements

IFRS 13 ‘Fair Value Measurement’ requires disclosure of fair value measurement by level. The level

of fair value hierarchy within the ﬁnancial assets or ﬁnancial liabilities is determined on the basis of

the lowest level input that is signiﬁcant to the fair value measurement. Financial assets and ﬁnancial

liabilities are classiﬁed in their entirety into only one of the three levels.

The fair value hierarchy has the following levels:

•

Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities;

•

Level 2 – inputs other than quoted prices included within Level 1 that are observable for the assets

or liabilities, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

•

Level 3 – inputs for assets or liabilities that are not based on observable market data (unobservable

inputs).

The determination of what constitutes ‘observable’ requires signiﬁcant judgement by the Company. The

Company considers observable data to be market data that is readily available, regularly distributed or

updated, reliable and veriﬁable, not proprietary, and provided by independent sources that are actively

involved in the relevant market.

The only ﬁnancial instrument carried at fair value is the investment held by the Company, BR1, which

is fair valued at each reporting date. The Company’s investment has been classiﬁed within Level 3 as

BR1’s investments are not traded and contain unobservable inputs.

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 2023. 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 2022.

Before planning has been achieved, no value is attributed

(beyond costs incurred), to the Company’s development

pipeline.

However, once the projects receive planning permission

they are then valued according to the following criteria:

•

Projects purchased by the Company from developers are

valued at investment cost (deemed to approximate fair

value).

•

Other projects in the Company’s pipeline are valued on

an asset-by-asset basis and benchmarked against values

from wider market processes.

During the construction stages assets continue to be valued

at investment cost (deemed to be approximate fair value).

The Investment Adviser intends for newly built projects to be

valued on a DCF basis shortly after they become operational.

Investments that are operational are valued on a DCF basis

over the life of the asset (typically more than 25 years)

and, under the ‘willing buyer-willing seller’ methodology,

prudently benchmarked on a £/MW basis against

comparable transactions for large scale portfolios.

Each investment is subject to full UK corporate taxation at

the prevailing rate with the tax shield being limited to the

applicable capital allowances from the Company’s SPV

investments.

The Investment Adviser recommends the fair value on a

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.

This year sees the inclusion of the new Electricity Generator

Levy (“the Levy”) on excess proﬁts produced by electricity

generators as announced by the Chancellor of the

Exchequer in the Autumn Statement in November 2022.

The Levy is a temporary 45% tax on the extraordinary

returns made by electricity generators late last year while

European energy prices soared in the wake of Russia’s

invasion of Ukraine. The Levy will be in place from 1 January

2023 until 31 March 2028, with the benchmark price linked

to UK Consumer Price Inflation. The Investment Adviser

previously sought external advice from its legal and tax

advisers on how to model the Levy within the valuation

methodology.

Given discount rates are subjective, there is sensitivity within

these to the interpretation of factors outlined above.

Judgement is used by the Board in increasing the weighted

average discount rate to 8.00% as at 30 June 2023 (2022:

6.75%) with three key factors that have impacted the

adoption of this rate outlined below:

a. Transaction values are currently c.£1.20-1.45/MW for

large scale solar portfolios, which the Board have used

to determine that an effective price of £1.35m/MW is an

appropriate basis for the valuation of the BSIF portfolio as

at 30 June 2023;

b. Inclusion of the latest long term power forecasts from the

Company’s three providers;

c. Increase of inflation assumptions;

d. Increase in the cost of debt.

In order to smooth the sensitivity of the valuation to forecast

timing or opinion taken by a single forecast, the Board

continues to adopt the application of blended power curves

from three leading forecasters.

The fair values of operational SPVs are calculated on a

discounted cash flow basis in accordance with the IPEV

Valuation Guidelines. The Investment Adviser 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.

NOTES TO THE FINANCIAL STATEMENTS ANNUAL REPORT AND FINANCIAL STATEMENTS

30 JUNE 2023

30 JUNE 2022

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% (18.8) (3.07) (21.8) (3.57)

- 0.5% 19.4 3.17 23.1 3.77

Power prices

+10% 54.2 8.86 62.2 10.17

-10% (56.9) (9.31) (63.8) (10.43)

Inflation rate

+ 0.5% 31.7 5.19 25.0 4.09

- 0.5% (30.2) (4.94) (26.1) (4.28)

Energy yield

10 year P90 (105.0) (17.17) (100.2) (16.39)

10 year P10 111.9 18.30 100.5 16.43

Operational costs

+10% (9.1) (1.49) (10.5) (1.72)

-10% 9.1 1.49 10.5 1.72

Subsidiaries and Associates

The Company holds investments through subsidiary companies which

have not been consolidated as a result of the adoption of IFRS 10:

Investment entities exemption to consolidation. Below is the legal

entity name and ownership percentage for the SPVs which are all

incorporated in the UK except for Blueﬁeld Durrants GmBH which is

incorporated in Germany.

Name

Ownership

percentage

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 LakeLoke 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

NOTES TO THE FINANCIAL STATEMENTS ANNUAL REPORT AND FINANCIAL STATEMENTS

SOLAR PV AT FREATHY

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

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

KS SPV 5 Limited 100

Eagle Solar Limited 100

Kislingbury Solar Limited 100

Name

Ownership

percentage

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

WSE Hartford Wood Limited 100

Oak Renewables 2 Limited 100

Oak Renewables Limited 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

Name

Ownership

percentage

Good Energy Generating Assets No.1 Limited 100

Good Energy Holding Company No.1 Limited 100

Aisling Renewables LTD 100

Wind Energy 3 Hold Co 100

Wind Energy (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

Wind Beragh Limited 100

Wind Camlough Limited 100

Wind Cullybackey Limited 100

Wind Dungorman Limited 100

Wind Killeenan Limited 100

Wind Mowhan Limited 100

Wind Mullanmore Limited 100

Carmoney Energy Limited 100

Errigal Energy Limited 100

Galley Energy Limited 100

S&E Wind Energy Limited 100

Wind Energy 2 Hold Co 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 1 Hold Co 100

NOTES TO THE FINANCIAL STATEMENTS ANNUAL REPORT AND FINANCIAL STATEMENTS

Name

Ownership

percentage

Wind Energy Scotland (Fourteen Arce Fields) Limited 100

Wind Energy Scotland (Birkwood Mains) Limited 100

Wind Energy Scotland (Holmhead) 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 100

Lower Tean Leys Solar Farm Limited 60

Lower Mays Solar Farm Limited 100

Longpasture Solar Farm Limited 60

Leeming Solar Farm Limited 60

Wallace Wood Solar Farm Limited 60

LEO1B Energy Park Limited 60

LH DNO Grid Services Limited 60

Sweet Briar Solar Farm Limited 60

BF31 WHF Solar Limited 60

BF27 BF Solar Limited 60

BF13A TF Solar Limited 60

HW Solar Farm Limited 100

AR108 Bolt Solar Farm Limited 100

BF33C LHF Solar Limited 60

AR006 GF Solar Farm Limited 100

Name

Ownership

percentage

Mauxhall Farm Energy Park Limited 100

BF16D BHF Solar Limited 100

BF33E BHF Solar Limited 60

BF58 Hunts Airﬁeld Solar Ltd under 60

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) Limited 100

Port of Sheerness Wind Farm Limited 100

Sandys Moor Solar Limited 100

St Johns Hill Wind Holdco Limited 100

St Johns Hill Wind Limited 100

Trickey Warren Solar Limited 100

Whitton Solar Limited 100

LPF UK Equityco Limited 100

LPF UK Solar Limited 100

Name

Ownership

percentage

LPF Kinetica UK Limited 100

Kinetica 846 Limited 100

Kinetica 868 Limited 100

Twineham Energy Limited 60

Sheepwash Lane Energy Barn Limited 100

Whitehouse Farm Energy Barn Limited 100

Blueﬁeld Durrants GmBH 100

9.Trade and other receivables

30 June 2023

£’000

30 June 2022

£’000

CURRENT ASSETS

Income from investments 900 834

Other receivables 10 43

Prepayments - 5

910 882

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.

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 2023 was £968,878

(2022: £1,619,313) and approximated their fair value. Cash held by

BR1, the Company’s immediate wholly owned subsidiary, as at 30

June 2023 is shown in Note 8.

NOTES TO THE FINANCIAL STATEMENTS ANNUAL REPORT AND FINANCIAL STATEMENTS

11. Other payables and accrued expenses

30 June 2023

£’000

30 June 2022

£’000

CURRENT LIABILITIES

Investment advisory fees 164 121

Administration fees 136 204

Audit fees 109 95

Directors’ Fees 72 60

Other payables 53 10

534 490

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 2023

Year ended

30 June 2022

Proﬁt attributable to

Shareholders of the Company

£46,793,621 £174,572,832

Weighted average number of

Ordinary Shares in issue

611,452,217 500,110,688

Basic and diluted earnings

from continuing operations

and proﬁt for the year (pence

per share)

7.65 34.91

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 2023

Number

Year ended

30 June 2022

Number

Opening balance 611,452,217 406,999,622

Shares issued for cash - 204,452,595

Closing balance 611,452,217 611,452,217

Shareholders’ Equity

Year ended

30 June 2023

£’000

Year ended

30 June 2022

£’000

Opening balance 858,391 471,425

Ordinary Shares issued for cash - 255,100

Share issue costs - (4,506)

Dividends paid (50,995) (38,201)

Retained earnings 46,793 174,573

Closing balance 854,189 858,391

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 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.

On 30 September 2022, the Board declared 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 was paid on 4 November 2022 to Shareholders

on the register on 14 October 2022.

On 23 January 2023, the Board declared its ﬁrst interim dividend of

£12,840,497, in respect of the year ended 30 June 2023, equating to

2.10pps (ﬁrst interim dividend in respect of the year ended 30 June

2022: 2.03pps), which was paid on 3 March 2023 to Shareholders on

the register on 3 February 2023.

On 11 May 2023, the Board declared a second interim dividend of

£12,840,497, in respect of the year ended 30 June 2023, equating to

2.10pps (second interim dividend in respect of the year ended 30 June

2022: 2.03pps), which was paid on 12 June 2023 to Shareholders on

the register on 19 May 2023.

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.

NOTES TO THE FINANCIAL STATEMENTS ANNUAL REPORT AND FINANCIAL STATEMENTS

The Board is ultimately responsible for the overall risk management

approach within the Company. The Board has established procedures

for monitoring and controlling risk. The Company has investment

guidelines that set out its overall business strategies, its tolerance for

risk and its general risk management philosophy.

In addition, the Investment Adviser monitors and measures the overall

risk bearing capacity in relation to the aggregate risk exposure across

all risk types and activities. Further details regarding these policies are

set out below:

Market price risk

Market price risk is deﬁned as the risk that the fair value of future

cash flows of a ﬁnancial instrument held by the Company, in particular

through the Company’s subsidiary, BR1, will fluctuate because of

changes in market prices.

Market price risk will arise from changes in electricity prices whenever

PPAs expire and are renewed. The timing of these is staggered to

minimise risk.

BR1’s future SPV investments are subject to fluctuations in the price

of secondary assets which could have a material adverse effect on the

BR1’s ability to source projects that meet its investment criteria and

consequently its business, ﬁnancial position, results of operations and

business prospects.

The Company’s overall market position is monitored by the Investment

Adviser and is reviewed by the Board of Directors on an ongoing basis.

Currency risk

The Company does not have any direct currency risk exposure as all

its investments, borrowings and other transactions are in Sterling.

The Company is however indirectly exposed to currency risk on future

equipment purchases, made through BR1’s SPVs, where equipment

is imported.

Interest rate risk

Interest rate risk is the risk that the value of ﬁnancial instruments and

related income from the cash and cash equivalents will fluctuate due

to changes in market interest rates.

The Company is also exposed, through BR1, to interest rate risk on

drawings under its RCF. Please see page 23 in the Investment Adviser’s

report for details of the third party debt within the Company’s subsidiaries.

The Company’s interest bearing ﬁnancial assets consist of cash and

cash equivalents. The interest rates on the short term bank deposits

are ﬁxed and do not fluctuate signiﬁcantly with changes in market

interest rates.

The following table shows the portfolio proﬁle of the ﬁnancial assets

at year end:

Interest rate

Total as at

30 June 2023

(£’000)

Floating rate

RBSI 1.70% 753

Fixed rate

Lloyds 0.00% 216

969

Interest rate

Total as at

30 June 2022

(£’000)

Floating rate

RBSI 0.00% 1,508

Fixed rate

Lloyds 0.00% 111

1,619

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 £1,018.4m (2022: £939.9m).

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 held

performance bonds totalling £nil (2022: £1,830,000) with banks

that have a credit rating which is of investment grade.

The underlying SPVs are contracted only with investment grade

counter parties, mitigating PPA counterparty risk. The Directors do

not have any concerns around the continuing purchasing of power

through its current PPAs.

The Company’s credit risk exposure is due to a portion of the

Company’s assets being held as cash and cash equivalents and

accrued interest. The Company maintains its cash and cash

equivalents and borrowings across two different banking groups

to diversify credit risk. The total exposure to credit risk arises

from default of the counterparty and the carrying amounts of

ﬁnancial assets best represent the maximum credit risk exposure

at the period end date. As at 30 June 2023, the maximum credit

risk exposure in relation to cash and cash equivalents held by the

Company was £968,878 (2022: £1,619,313). If the cash and cash

equivalents held by BR1 are included, this increases to £27,375,878

(2022: £14,721,105). 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 2023

(£’000)

RBSI 753 - 753

Lloyds - 216 216

753 216 969

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

The carrying amount of these assets approximates their fair value.

NOTES TO THE FINANCIAL STATEMENTS ANNUAL REPORT AND FINANCIAL STATEMENTS

Less than one

year

(£’000)

Between one

and ﬁve years

(£’000)

After ﬁve

years

(£’000)

Total as at

30 June 2023

(£’000)

ASSETS

Financial assets held at fair

value through proﬁt or loss*

- - 454,460 454,460

Trade and other receivables** 910 - - 910

Cash and cash equivalents 969 - - 969

LIABILITIES

Other payables and accrued

expenses

(534) - - (534)

1,345 - 454,460 455,805

* the Company passes debt to BR1 under loan agreements; as at the year end there is an additional amount of

non-contractual cash which is not reflected above 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 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

** 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 10.

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.

Liquidity risk

Liquidity risk is the risk that the Company will not

be able to meet its liabilities as they fall due. The

Investment Adviser and the Board continuously

monitor forecasted and actual cash flows from

operating, ﬁnancing and investing activities.

As the Company’s investments, through BR1, are in

the SPVs, which are private companies that are not

publicly listed, the return from these investments is

dependent on the income generated or the disposal

of renewable energy infrastructure assets by the

SPVs and will take time to realise.

The Company, through BR1, expects to comply with

the covenants of its revolving credit facility.

The following table details the Company’s expected

maturity for its ﬁnancial assets and liabilities. These

are undiscounted contractual cash flows:

RAINBOW AT LITTLE BEAR

NOTES TO THE FINANCIAL STATEMENTS ANNUAL REPORT AND FINANCIAL STATEMENTS

100

John Scott and Michael Gibbons are Directors of BR1. They

received an annual fee of £6,565 (2022: £6,250) each

for their services to this company. Neil Wood and James

Armstrong, who are partners of the Investment Adviser, are

also Directors of BSIFIL and BR1.

The Company and BR1’s investment advisory fees for the

year amounted to £7,052,064 (2022: £5,131,527) of which

£554,919 (2022: £494,485) 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

2023, respectively.

Fees paid during the period by SPVs to BSL, a company which

has the same ownership as that of the Investment Adviser

totalled £4,456,173 (2022: £3,199,594). 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 £10,156,959 (2022: £5,788,585). 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 £1,624,024 (2022: £691,280). BRD locates

and manages a pipeline of development projects for the

Company and the amount includes £966,681 for BRD’s

share in the development project, Brick House Lane.

The Company’s monitoring fee income received from BR1

amounted to £900,000 (2022: £833,887) of which £900,257

was outstanding at the year end (2022: £833,887).

17. Subsequent events

The following events happened after the end of the Company’s

reporting period on 30th June

Post year end, on 7 August 2023, the Board declared a third interim

dividend of £12,840,497, in respect of the year ended 30 June 2023,

equating to 2.10pps (third interim dividend in respect of the year

ended 30 June 2022: 2.05pps), which was paid on 1 September

2023 to Shareholders on the register on 18 August 2023.

Post year end, John Scott bought an additional 18,310 Ordinary

Shares and Michael Gibbons bought an additional 17,800 Ordinary

Shares in the Company.

Post year end, on 27 September 2023, the Board approved a fourth

interim dividend of £14,063,401 in respect of the year ended 30

June 2023, equating to 2.30pps (fourth interim dividend in respect

of the year ended 30 June 2022: 2.09pps), which will be declared

on 28 September 2023 and paid on or around 6 November 2023 to

Shareholders on the register on 6 October 2023.

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 £68,906

(2022: £62,500). The other Directors were entitled to an

annual remuneration of £43,050 (2022: £39,000). Paul Le

Page received an additional annual fee of £8,768 (2022:

£8,000) for acting as Chair of the Audit and Risk Committee.

Meriel Lenfestey received an additional annual fee of £5,250

(2022: N/A) for acting as Chair of the Environmental, Social

and Governance Committee. Elizabeth Burne received an

additional annual fee of £3,150 (2022: N/A) for acting as

Chair of the Management Engagement and Service Providers

Committee.

The total Directors’ fees expense for the period amounted

to £271,634 (2022: £240,818) of which £71,517 was

outstanding at 30 June 2023 (2022: £59,750).

At 30 June 2023, the number of Ordinary Shares held by each

Director is as follows:

2023

Number of

Ordinary Shares

2022

Number of

Ordinary Shares

John Scott* 625,619 543,312

Elizabeth Burne 15,000 15,000

Michael Gibbons - N/A

Meriel Lenfestey 7,693 7,693

Paul Le Page 35,000 35,000

John Rennocks* N/A 290,388

683,312 891,393

*Including shares held by PCAs

MORNING FROST AT ASHLAWN

NOTES TO THE FINANCIAL STATEMENTS ANNUAL REPORT AND FINANCIAL STATEMENTS

101

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

102

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

GDPR General Data Protection Regulation

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

GW 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

kW Kilowatt peak

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

Companies Law)

LD Liquidated damages

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

103

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

104

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. (139.70-

140.39+2.05+2.09+2.10+2.10)/140.39=5.45%

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. (120.00-

131.00+2.05+2.09+2.10+2.10)/131.00=(2.03)% 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 (£854.2m) 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

105

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

MW and the plant’s expected

life divided by the total

portfolio capacity in MW.

Directors’ Valuation The gross value of the SPV

Investments held by BR1,

including their holding

companies minus Project level

debt.

An estimate of the sum that

would be realised if the

Company’s portfolio was sold

on a willing buyer, willing

seller basis.

A reconciliation of the

Directors’ Valuation to

Financial assets at fair value

through proﬁt and loss

is shown in Note 8 of the

ﬁnancial statements.

Gross Asset Value The Market Value of all Assets

within the Company.

A measure of the total value of

the Company’s Assets.

The total assets attributable

to Ordinary Shares on the

Statement of Financial

Position.

Total Outstanding Debt The total outstanding balances

of all debt held within the

Company and its subsidiaries.

A measure that is used to

establish the Company’s level

of gearing.

The sum of the Sterling

equivalent values of all loans

held within the Company.

Ongoing Charges Year to 30 June 2023

The Company

£’000s

Immediate Holding Company

£’000s

Total

£’000s

Fees to Investment Adviser 729 6,230 6,959

Legal and professional fees 240 106 346

Administration fees 542 - 542

Directors’ remuneration 272 13 285

Audit fees 112 16 128

Other ongoing expenses 257 102 359

Total ongoing expenses 2,150 6,467 8,617

Average NAV 863,508,987

Ongoing Charges (using AIC methodology) 1.00%

SUNSET AT PASHLEY

ALTERNATE PERFORMANCE MEASURES

106

ANNUAL REPORT AND FINANCIAL STATEMENTS

SFDR Periodic Disclosures (Unaudited)

As at 30 June 2023

ANNEX IV

Template periodic disclosure for the financial products referred to in Article 8, paragraphs 1, 2 and

2a, of Regulation (EU) 2019/2088 and Article 6, first paragraph, of Regulation (EU) 2020/852

Product name: Bluefield Solar Income Fund Limited (the Company)

Legal entity identifier: 2138004ATNLYEQKY4B30

Environmental and/or social characteristics

To what extent were the environmental and/or social characteristics promoted

by this financial product met?

As a renewable energy company, the Company’s investment policy only allows investment into

renewable energy assets and supporting technologies, such as energy storage. 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, which it achieves through

investment in renewable energy assets and supporting technologies.

As at 30 June 2023.

Did this financial product have a sustainable investment objective?

Yes

It made sustainable

investments with an

environmental objective: ___%

in economic activities that

qualify as environmentally

sustainable under the EU

Taxonomy

in economic activities that do

not qualify as environmentally

sustainable under the EU

Taxonomy

It promoted Environmental/Social (E/S)

characteristics and

while it did not have as its objective a

sustainable investment, it had a proportion of

97.39%

of sustainable investments

with an environmental objective in economic

activities that qualify as environmentally

sustainable under the EU Taxonomy

with an environmental objective in

economic activities that do not qualify as

environmentally sustainable under the EU

Taxonomy

with a social objective

It made sustainable investments

with a social objective: ___%

It promoted E/S characteristics, but did not

make any sustainable investments

Sustainable

investment means

an investment in an

economic activity

that contributes to

an environmental or

social objective,

provided that the

investment does not

significantly harm

any environmental or

social objective and

that the investee

companies follow

good governance

practices.

The EU Taxonomy is

a classification

system laid down in

Regulation (EU)

2020/852,

establishing a list of

environmentally

sustainable

economic activities.

That Regulation

does not lay down a

list of socially

sustainable

economic activities.

Sustainable

investments with an

environmental

objective might be

aligned with the

Taxonomy or not.

Sustainability

indicators measure

how the

environmental or

social

characteristics

promoted by the

financial product

are attained.

As at 30 June 2023

Given that the Company only invested in renewable energy assets during the reporting period

(including development stage projects), it met the environmental characteristics described above.

However, the Company recognises that it has broader environmental and social impacts, and that

these must be considered alongside good governance as part of ensuring its long-term success. The

Company’s ESG strategy has been developed with a focus upon priority ESG risks and opportunities,

considered as part of the Company’s responsible investment approach. These have been integrated

into a holistic framework through which the Company can deliver value for its stakeholders, and

which will support delivery of long-term returns for shareholders. The Company communicates its

ESG performance through a comprehensive set of commitments and KPIs. Please refer to the

Company’s 2023 ESG Report within its Annual Accounts for further information.

Please note that the Company updated its Article 23 pre-contractual disclosure on 28 September

2023. The % of sustainable investments made by the Company was reduced from 100% to 97.39%,

to account for the Company’s use of interest rate swaps. The Company’s operational portflio remains

100% aligned with the EU Taxonomy.

How did the sustainability indicators perform?

The ESG commitments and KPIs which most closely relate to the Company’s environmental

characteristics are presented below, with the Company’s performance during the reporting period

presented in the fourth column:

Commitment

KPIs

As at 30 June 2022

As at 30 June 2023

We will report our

renewable energy

generation annually.

Renewable energy

generated (MWh)

> 624,000 MWh

>836,231 MWh

CO2e savings

achieved (tCO2e)

>120,000 tonnes

>173,000 tonnes

Equivalent houses

powered (#)

215,000

288,000

Additional solar

infrastructure under

construction (MW)

0 MW

93MW

Estimated additional

annual renewable

energy generation

(MWh)

N/A

91,000 MWh

Battery assets under

construction (MW)

0 MW

‘CO2e savings’ are calculated using generation data and the appropriate greenhouse gas conversion

factor from the UK Government. ‘Equivalent number of homes powered’ is calculated using UK Office

of Gas and Electricity Markets’ (Ofgem) Typical Domestic Consumption Values for a medium-sized

household.

Please refer to the Company’s ESG report within its 2023 Annual Accounts for the Company’s

performance against its full set of commitments and KPIs, which cover a broader spectrum of

environmental, social and governance topics.

ANNUAL REPORT AND FINANCIAL STATEMENTS

107

As at 30 June 2023

…and compared to previous periods?

Please see the table above.

What were the objectives of the sustainable investments that the financial

product partially made and how did the sustainable investment contribute to such

objectives?

The Company’s investments aim to contribute substantially to the environmental objective

of climate change mitigation, as defined under the EU Taxonomy Regulation. The Company

intends to achieve these objectives through its production of clean, renewable energy, and

by investing in new renewable energy infrastructure and energy storage facilities. Such

activities will help reduce the UK’s reliance on fossil fuels and contribute to domestic energy

security. Please refer to the ‘Climate Change Mitigation’ section of the Company’s 2023 ESG

report for additional information on the Company’s contributions in this area.

During the reporting period, the Company engaged an external consultant to undertake a

review to determine the portfolio’s alignment to the EU Taxonomy. The assessment was

conducted in four parts in order to follow the EU Taxonomy Regulation:

• Assessment of the Company’s economic activities eligibility under the EU Taxonomy

Regulation.

• Review of the Company’s economic activities against the technical screening criteria (TSC),

to determine whether they make a substantial contribution to the environmental objectives

of climate change adaptation and climate change mitigation.

• A Do No Significant Harm (DNSH) assessment was carried out to confirm that the

Company’s activities do no significant harm to the environmental objectives considered

under the EU Taxonomy. It is noted that the DNSH assessment was conducted based on the

specific TSC defined and specific to the economic activity.

• Review of the Company’s procedures to ensure minimum social safeguards, as well as

compliance with the regulatory framework in which each economic activity operates.

The assessment was conducted in relation to the 2022 calendar year and included the

following economic activities: Electricity generation using solar photovoltaic technology;

Electricity generation from wind power; and Installation, maintenance, and repair of

renewable energy technologies. The economic activity of ‘Storage of electricity’ was

excluded from this assessment as the only constructed battery projects currently within the

portfolio are offline and not in use (and, if operational, would not represent a material

proportion of revenues). This economic activity will therefore form part of the Company’s

future pipeline of work.

A representative asset of each economic activity type was selected as a ‘case study’ for the

assessment, to allow for an in-depth analysis and asset-specific evidence to be reviewed. In

addition, to ensure that the information provided was as representative as possible,

relevant documentation applicable to the wider portfolio was also considered.

The results of the assessment were provided as a report from the consultant, which deemed

that the Company’s portfolio was 100% aligned with the EU Taxonomy at the time of the

As at 30 June 2023

assessment. Since then, the only operational assets acquired by the Company have been

two solar PV assets, which are deemed to meet the same sustainabilty standards as the

other solar PV assets in the Company’s portfolio. The Company therefore deems these

newly acquired assets to be Taxonomy-aligned. During the reporting period, the Company

also made investments into development projects and repowering activities associated with

existing assets.

A full breakdown of the methodology used to assess EU Taxonomy alignment is available on

the Company’s website, on the page titled ‘Sustainability-related Disclosures’. The Company

acknowledges that ongoing work will be required to maintain this level of alignment and is

committed to continual improvement in its ESG approach, in line with the commitments

made as part of its ESG strategy.

How did the sustainable investments that the financial product partially made not

cause significant harm to any environmental or social sustainable investment

objective?

As part of the investment process, diligence is undertaken in relation to the requirements

of the SFDR, including in relation to PAI indicators and climate risk screening, and the EU

Taxonomy’s DNSH criteria. This enables the Company to identify pre-investment any risks

which may impact upon the Company’s regulatory compliance, and helps maintain the

Company’s alignment with the EU Taxonomy criteria as it continues to grow its portfolio.

Once acquired into the portfolio, there is active management of sustainability issues over

the operational lifetime of the assets, in line with the Company’s ESG strategy. Each asset is

subject to routine ESG data reporting to allow the remote monitoring of ESG performance

and fulfilment of ESG reporting requirements.

Activities undertaken during the reporting period to support the Company’s alignment with

DNSH criteria include:

• Undertaking a Climate Risk and Vulnerability Assessment (CRVA) and physical and

transitional scenario analysis. This work further supports the Company’s aligment

to DNSH criteria relating to ‘Climate Change Adaptation’.

• Adopting a Sustainable Procurement Policy and identifying a potential partnership

with a UK university to support the Company’s approach to decommissioning. Such

activities further support the Company’s alignment with DNSH criteria relating to

‘Transition to a Circular Economy’.

• Adopting a Waste Management Policy, further supporting the Company’s

alignment with DNSH criteria relating to ‘Pollution Prevention and Control’.

• Undertaking independent biodiversity assessments and calculating Biodiversity

Net Gain (BNG) across its operational portfolio, and enhancing land management

activities to reduce the Company’s environmental impact, supporting the

Company’s alignment with DNSH criteria relating to ‘Protection and Restoration of

Biodiversity and Ecosystems’.

Please refer to the Company’s 2023 ESG and TCFD reports for further information on

these activities and the broader ESG progress made by the Company during the

reporting period. The Company will continue its work to ensure the ongoing

compliance of its investments with the requirements of the Taxonomy Regulation.

Principal adverse

impacts are the

most significant

negative impacts of

investment

decisions on

sustainability factors

relating to

environmental,

social and employee

matters, respect for

human rights, anti‐

corruption and anti‐

bribery matters.

SFDR PERIODIC DISCLOSURES ANNUAL REPORT AND FINANCIAL STATEMENTS

108

As at 30 June 2023

How were the indicators for adverse impacts on sustainability factors taken

into account?

As referenced, sustainability considerations are integrated into the Company’s

investment process (please refer to the Company’s Sustainable Investment Policy for

a full breakdown) and PAI indicators are included within the Company’s investment

ESG due diligence questionnaire.

Were sustainable investments aligned with the OECD Guidelines for

Multinational Enterprises and the UN Guiding Principles on Business and

Human Rights? Details:

SFDR PAI’s relating to the OECD Guidelines and UN Guiding Principles are included

within the Company’s investment ESG due diligence questionnaire. Human rights are

also considered more broadly within this, including in relation to any O&M

arrangements which may form part of the investment opportunity.

During the reporting period, the Company adopted a Human Rights Policy and Supplier

Code of Conduct, both informed by global human rights frameworks (including the

OECD Guidelines and UN Guiding Principles). Whilst human rights due diligence

processes are already in place, these will be reviewed by the Company over the coming

year as commitments made within the Human Rights Policy are embedded across the

asset lifecycle for its investments. Please refer to the ‘Generating Energy Responsibly’

section of the Company’s ESG report for further information.

How did this financial product consider principal adverse impacts on

sustainability factors?

The Company takes into consideration the PAIs of its investment decisions on sustainability factors.

On 30 June 2023, the Company published its first PAI report covering the reporting period of 1 January

to 31 December 2022, available here in the ‘Sustainability-related disclosures’ section of the

Company’s website.

The Company diligently assessed and reported against all mandatory PAI indicators and chose two

additional indicators based on their materiality to the Company’s operations (comprised of those

relating to natural species & protected areas, and human rights impacts). The Company took a detailed

approach to its PAI statement, providing sufficient explanatory information to ensure stakeholders

As at 30 June 2023

could meaningfully interpret the PAI metrics and the approach taken by the Company to calculate

these. The Company also disclosed details of any estimates or assumptions applied, to ensure

appropriate transparency.

As an investment company, the Company has no employees and management of the portfolio is

outsourced to key business partners and service providers. Through its Investment Adviser, the

Company worked collaboratively with key service providers to establish processes for the collection of

PAI data. However, PAI reporting requires a breadth and depth of data that has not been experienced

across the industry to date, and as such data collection proved challenging in some circumstances. The

Company is committed to working with and supporting its key service providers to ensure continual

improvement in the availability and quality of sustainability-related data, which is expected to improve

as data collection processes mature over time.

What were the top investments of this financial product?

Please note the below table relates to the top investments held by the Company during the

reporting period.

Calculated using investment value as a proportion of the Company’s enterprise, development, and construction

portfolio value.

Largest investments

Sector

% Assets

Country

Solar Asset

Energy

7.63%

Solar Asset

Energy

5.07%

Wind Portfolio

Energy

4.88%

Solar Asset

Energy

4.78%

Solar Asset

Energy

3.68%

Solar Asset

Energy

3.10%

Solar Development

Energy

2.45%

Wind Asset

Energy

2.10%

Solar Asset

Energy

2.00%

Solar Asset

Energy

2.00%

Solar Asset

Energy

1.95%

Solar Asset

Energy

1.91%

Solar Asset

Energy

1.73%

Solar Asset

Energy

1.72%

Solar Asset

Energy

1.68%

The EU Taxonomy sets out a “do not significant harm” principle by which

Taxonomy-aligned investments

should not significantly harm EU Taxonomy

objectives and is accompanied by specific Union criteria.

The

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

underlying the financial product that take into account the Union criteria for

environmentally sustainable economic activities. The investments underlying the

remaining portion of this financial product do not take into account the Union

criteria for environmentally sustainable economic activities.

Any other sustainable investments must also not significantly harm any

environmental or social objectives.

The list includes the

investments

constituting the

greatest proportion

of investments of

the financial product

during the reference

period which is: 1

July 2022 – 30 June

2023

SFDR PERIODIC DISCLOSURES ANNUAL REPORT AND FINANCIAL STATEMENTS

109

As at 30 June 2023

What was the proportion of sustainability-related investments?

The proportion of sustainability-related investments as at 30 June 2023 was 97.39%.This was

calculated based on the Company’s enterprise, development portfolio, and construction portfolio

value. Cash holdings were not included. The proportion of non-sustainable investments was 2.61%,

which related to the value of Interest Rate Swaps (IRS) as at 30 June 2023.

What was the asset allocation?

In which economic sectors were the investments made?

The Company invests primarily in solar energy infrastructure assets, with minority exposure

to other forms of renewable energy infrastructure (including wind assets) and supporting

technologies, such as battery storage.

To what extent were the sustainable investments with an environmental

objective aligned with the EU Taxonomy?

% of OpEx was determined based on the costs of interest rate swaps as a proportion of total Company costs

during the reporting period. % Turnover was determined based on the revenue obtained from interest rate swaps

as a proportion of total Company revenue during the reporting period.

Asset allocation

describes the

share of

investments in

specific assets.

Taxonomy-aligned

activities are

expressed as a share

of:

- turnover reflects

the “greenness” of

investee

companies today.

- capital

expenditure

(CapEx) shows the

green investments

made by investee

companies,

relevant for a

transition to a

green economy.

- operational

expenditure

(OpEx) reflects the

green operational

activities of

investee

companies.

1 Aligned with E/S characteristics includes the investments of the financial product used to attain the

environmental or social characteristics promoted by the financial product.

#2Other includes the remaining investments of the financial product which are neither aligned with the

environmental or social characteristics, nor are qualified as sustainable investments.

The category #1 Aligned with E/S characteristics covers environmentally sustainable investments.

Investments

#1 Aligned with

E/S

characteristics

#1A Sustainable

Taxonomy-aligned

#2 Other

Enabling activities

directly enable

other activities to

make a substantial

contribution to an

environmental

objective.

Transitional

activities are

activities for which

low-carbon

alternatives are not

yet available and

among others have

greenhouse gas

emission levels

corresponding to the

best performance.

As at 30 June 2023

What was the share of investments made in transitional and enabling activities?

The share of investments made in enabling activities was 0.61%

as at 30 June 2023, which

related to the Company’s battery investment value (based on operational and controlled

pipeline). No investments were made in transitional activities.

How did the percentage of investments that were aligned with the EU Taxonomy

compare with previous reference periods?

N/A – this is the first reporting period.

What was the share of sustainable investments with an environmental

objective not aligned with the EU Taxonomy?

The sustainable investments made by the Company align with an environmental objective

specified by the EU Taxonomy.

What was the share of socially sustainable investments?

The Company does not hold investments that would be considered to be socially sustainable

investments.

Based on investment value of operational and controlled pipeline capacity as a proportion of the Company’s

enterprise, development portfolio, and construction portfolio value.

The graphs below show in green the percentage of investments that were aligned with the EU Taxonomy.

As there is no appropriate methodology to determine the taxonomy-alignment of sovereign bonds*, the

first graph shows the Taxonomy alignment in relation to all the investments of the financial product

including sovereign bonds, while the second graph shows the Taxonomy alignment only in relation to the

investments of the financial product other than sovereign bonds.

*For the purpose of these graphs, ‘sovereign bonds’ consist of all sovereign exposures

98.9%

100%

97.5%

OpEx

CapEx

Turnover

90% 95% 100%

1. Taxonomy-alignment of investments

including sovereign bonds*

Taxonomy aligned investments

Other investments

98.9%

100%

97.5%

OpEx

CapEx

Turnover

90% 92% 94% 96% 98% 100%

2. Taxonomy-alignment of investments

excluding sovereign bonds*

Taxonomy aligned investments

Other investments

are

sustainable

investments with an

environmental

objective that do

not take into

account the criteria

for environmentally

sustainable

economic activities

under Regulation

(EU) 2020/852.

SFDR PERIODIC DISCLOSURES ANNUAL REPORT AND FINANCIAL STATEMENTS

110

As at 30 June 2023

What investments were included under “other”, what was their purpose and

were there any minimum environmental or social safeguards?

The investments made by the Company that are classified as non-sustainable include hedging

instruments, which are used by the Company to protect shareholders against voltaility in

interest rates.

What actions have been taken to meet the environmental and/or social

characteristics during the reference period?

Given the nature of the Company’s investments, shareholder engagement actions are not

relevant to the Company’s ESG strategy. However, on behalf of the Company, the Investment

Adviser engages with external service providers on the collection of ESG data and the continued

integration of ESG into portfolio-related activities. Such engagement enables the Company to

monitor the ESG performance of its investments over time.

How did this financial product perform compared to the reference benchmark?

The Company has not designated an index as a reference benchmark to determine its alignment

with the environmental and social characteristics that it promotes.

How does the reference benchmark differ from a broad market index?

Not applicable.

How did this financial product perform with regard to the sustainability indicators

to determine the alignment of the reference benchmark with the environmental

or social characteristics promoted?

Not applicable.

How did this financial product perform compared with the reference benchmark?

Not applicable.

How did this financial product perform compared with the broad market index?

Not applicable.

Reference

benchmarks are

indexes to

measure whether

the financial

product attains the

environmental or

social

characteristics that

they promote.

SFDR PERIODIC DISCLOSURES ANNUAL REPORT AND FINANCIAL STATEMENTS

111