London, UK, 17 November 2023

Edison issues flash on Foresight Solar Fund (FSFL): Q3 NAV and first sale of divestment programme

Foresight Solar Fund (FSFL) achieved record cash generation of £87.8m from its underlying assets to 30 September 2023, driven by favourable fixed prices, despite production being below budget. As a result, FSFL paid down £10m of its revolving credit facility (RCF) during the period. After the Q3 period, FSFL sold 50% of its 99MW Lorca portfolio in Spain for €26.9m, at a 21% premium to its Q3 holding value. The proceeds from this transaction will be used to further reduce the RCF. Global revenues are 85% contracted for 2024, ensuring forecast net dividend cover of 1.5x until at least 2025. FSFL remains on target to pay its full year dividend.

FSFL delivered on the first stages of its divestment programme, selling a 50% stake of its Lorca portfolio. The stake was sold to a specialist fund advised by EB-SIM, the sustainable investment arm of Evangelische Bank, for the sum of €26.9m for a 50% share of the three Spanish solar farms. The value of the sale was at a 21% premium to the assets’ third quarter holding value and represented an exit internal rate of return of 12.1% on funds invested to date on the stake sold. This sale further demonstrates that, despite the fact FSFL is trading at a significant discount to NAV (20.2%), renewable energy assets like these remain in high demand in the market. This, therefore, provides validation, based on market prices, for the company’s valuation at year-end. The sale will also give the investment manager confidence to continue advancing discussions for the next phases of the c 200MW divestment programme that will continue into 2024.

 
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