Windfall tax prediction sees minimal impact on Bluefield Solar’s NAV

Bluefield Solar raises £150m as it eyes potential acquisition opportunities

Published: 22 Nov 2022, 15:56

Predicted windfall tax to have minimal impact of Bluefield’s asset valuation. Image: Bluefield.

As a result of the Autumn Statement and the introduction of the tax, Bluefield Solar Income Fund has estimated that its audited NAV would have decreased by 3 pence per ordinary share (pps).

With the introduction of a 45% windfall tax on all electricity generators, something that has been condemned by the generation industry, Bluefield Solar has estimated that the impact of such legislation as well as the impact of removing the power price levy would see a 3.0pps reduction to 141.4pps.

As indicated via its Autumn Statement update and Development update, the company’s NAV as of 30 September 2022 stood at £884 million or 144.6pps.

According to the Fund, the levy on excess profits produced by electricity generators is set to take effect from 1 January 2023 until 31 March 2028. With this, a 45% rate will be applied to revenue from power sales that exceed a benchmark price of £75/MWh.

Bluefield Solar said this will result in a combined 70% tax rate on earnings from revenues above £75/MWh for the period the Levy applies.

The Fund attempted to estimate the impact of the legislations by the removal of the contingency applied to Q3 power forecasts until 2025 (increasing the September NAV by 11.0pps) and application of the Levy (reducing the September NAV by 14.0pps).

Bluefield Solar is additionally making positive progress with its solar PV projects with the Fund having stated that four projects, totalling 215MWp, have been granted planning permission. Connection dates for these are expected between 2025 and 2026.

A 50MWp PV plant in Yelvertoft has started construction and will connect in the fourth quarter of 2023. Mauxhall Farm, a project with a combined 44MWp PV and 25MWp of battery storage, is targeting connection in early 2024.

Bluefield Solar recently revealed that high power prices and inflation had pushed Bluefield Solar Income Fund’s NAV up by 10% providing further growth for its shareholders.

It also raised £150 million to pay down its fully drawn Revolving Credit Facility (RCF) following its acquisition of a 93MW portfolio.

According to Bluefield Solar, it now owns and operates one of the UK’s largest, diversified portfolios of solar and wind assets with a combined installed power capacity in excess of 766MWp.

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