Foresight Solar proposes policy change to allow investment in development stage assets – Foresight Solar (FSFL) has proposed changes to its investment policy to allow it to invest up to 5% of its gross asset value into development stage assets, being solar or battery storage system opportunities that are pre-construction and may not have secured grid connection rights or planning consent at the date of investment. Such investments may include direct investment in projects or investment via corporate development funding structures.
Based on experience and current market opportunities available, the board sees an opportunity for the company to invest in solar, BSS and co-location projects at pre-construction development stage, where they have a delivery plan and have either secured the necessary land rights, or options to obtain such land rights, but require additional work to be completed before the project is ready to commence construction. For example, this additional work may include the agreement of key contracts, the securing of planning permission, grid connections and environmental permits (or other necessary permits).
The board believes the proposed change would benefit shareholders in the following ways:
- Create access to a further pipeline of investment opportunities in which the Company has had active oversight of the development process.
- Provide the Company with an enhanced ability to secure fully consented projects through either direct acquisition of Development Stage Assets or acquisition rights under the terms of joint venture agreements (or other similar structures). As a result, the Company may be able to acquire project development rights or projects that are construction-ready at more competitive rates than those being brought to the market at ‘Ready to Build’.
- Whilst investment in the earlier stages of project development is not without risks, it can allow the Company to benefit directly from enhanced returns on a modest level of investment. This represents an attractive option for investment of surplus cash currently generated by the operational portfolio.
- Partnering with experienced developers may present opportunities to enter new markets with instant access to a pipeline of scale.
- Opportunities to develop investment opportunities and realise additional value within the Fund’s existing portfolio through proprietary development
Shareholders can vote on the proposals at the upcoming AGM due to take place on 15 June.
FSFL : Foresight Solar proposes policy change to allow investment in development stage assets